A legislative proposal to change how GSA Schedule contracts meet the terms of the Competition in Contracting Act (CICA) and a proposed rule to modify the Schedules Economic Price Adjustment Clause are among the larger changes GSA announced for the Multiple Award Schedules program at last week’s Coalition for Government Procurement Fall Conference. Under the current CICA definition, which dates back over 30 years, the use of GSA Schedule contracts is deemed to meet competition standards when doing so results in the “lowest overall cost alternative” to the government. That wording has always been widely read to include such factors as the cost of initiating, awarding, and managing a new contract, along with other factors. More recently, however, the wording had led to confusion among some GSA contracting officials and customers. GSA is asking Congress to modify this part of CICA so that using Schedule contracts will meet competition standards when doing so results in the “best value” for government buyers. GSA believes that this change will remove any ambiguities and make clear that Schedule contracts are a competitive method of acquisition.
At the same time, the agency introduced a proposed rule November 16th that will make permanent the market-based flexibility GSA introduced two years ago on contract level price adjustments made via the Schedule’s Economic Price Adjustment (EPA) clause. GSA has been operating under a regulatory deviation since the onset of substantial inflation that removed the 10% annual cap for product EPA’s, allowing for contractors hit hard by inflation to increase prices as needed based on commercial market considerations. The proposed rule seeks to make that deviation permanent and reduce the current number of EPA clauses from four to one. GSA leaders believe that the change will better reflect the commercial nature of Schedule solutions. Contractors will still have to provide appropriate documentation to contracting officials to obtain price increases. Additionally, GSA officials recommend strongly that contractors provide market-based information on overall economic and inflationary trends to justify their price increase requests. No company should take for granted that their contracting specialists or officers are up to date on overall commercial market pricing trends.
Industry should support these proposed changes via both legislative and regulatory action. GSA is trying to inject some common sense into the Schedules program and, for that, it should be applauded.
This post was originally a part of Larry Allen’s Week Ahead Newsletter. Allen Federal Business Partners provides clients with the information, training, and representation services critical to accelerating their federal market success.