- Elimination of Price Reduction Clause and Other Recommendations by MAS Panel
- July 10, 2009 | Authors: Marc F. Efron; J. Catherine Kunz
- Law Firm: Crowell & Moring LLP - Washington Office
The Multiple Award Schedule ("MAS") Advisory Panel was commissioned in March 2008 by former GSA Administrator Lorita Doan to address pricing issues associated with the FSS Program. The Panel conducted a number of public hearings, during which various stakeholders were given opportunities to express their views on pricing and other issues. On June 26, 2009, the Panel issued its final report that set forth 20 recommendations. The recommendations address five categories: Price Reduction Clause, price reasonableness, disclosure, contract types, and program evaluation and review.
If adopted, the most significant recommendations for contractors are those addressing the Price Reduction Clause. The Panel has recommended
- A whole-scale elimination of the Price Reduction Clause for services contracts and gradual elimination for products contracts
- In place of the PRC, a requirement that agencies obtain at least three vendor bids for purchases of products or services over $100,000
- For solutions procurements, non-application of the PRC and a requirement that agencies obtain at least three vendor bids
The Panel's recommendations in the other four categories include:
- Issuance of clear guidance stating that the price objective of the FSS Program is to obtain fair and reasonable prices at the time of contract formation by pursuing the lowest overall cost alternative to the government
- For products acquisitions, the price objective guidance should make clear that that the price is to be reasonable not only to the basis of award customer but also to the commercial marketplace
- Regular information gathering and assessments by GSA to maintain the relevance and usefulness of the FSS Program, including enabling ordering activities to collect and report on their purchasing experiences, making pricing at the order level available to contracting officers for market research and determining fair and reasonable pricing, and regularly reviewing and refreshing prices on Schedule contracts to reflect relevant market prices.
- Consideration by GSA of the addition of cost-type SINs for services and implementation of a requirement that orders for solutions be firm-fixed-price and performance-based
- Review by GSA of the length of Schedule contracts
The current nominee for GSA Administrator, Martha Johnson, indicated during her confirmation hearing that she would consider the Panel's recommendations.