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There is much to learn about GSA contracting, specifically between your Schedule Solicitation document and the Federal Acquisition Regulations (FAR). But there is also a great deal to gain in the federal market.

An illustration is with a manufacturer who offers distributors a 50% discount, retailers a 30% discount, and the list price for general public is no discount. When negotiating with the Contracting Officer for your GSA offerred prices, this manufacturer will need to make the case that the federal purchaser is most similar to a retailer or end-user. If the manufacturer fails here, and their proposed pricing shows equal or better prices being offered to a customer other than the GSA (the distributor’s discount of 50%), then the GSA may reject the proposal, distributors will be incapable to earn a profit from Government sales, and will be cut-out of that market completely.

After negotiations are settled, and a GSA Contract is awarded, the “Basis of Award” will be on the MFC whose prices best relate to the GSA offered pricing. Additionally, if the basis of award (e.g. Commercial List Prices) are ever lowered in the future, a company is contractually obligated to reduce the GSA pricing as a ratio. So, if you lower your pricing to an end-user in an effort to make a big sale, your GSA Contract is lawfully and contractually affected by that transaction.

When one is acquiring a GSA Contract, it is likely that the pricing portion is the most essential because pricing has the most influence on your bottom line. A question which is frequently brought up is “Do I have to give the government the lowest price that I can offer?”

The answer is both yes and no. Yes, a company must offer the government pricing that is equal or better than your Most Favored Customer (MFC), however the MFC can be selected as your current customer with purchasing patterns most comparable to those predicted for government buyers.