Multiple Award Schedule Contracting:

Changes Needed in Negotiation Objectives and Data Requirements

GGD-93-123: Published: Aug 25, 1993. Publicly Released: Sep 28, 1993.

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Pursuant to a congressional request, GAO reviewed the efficiency and effectiveness of the General Services Administration's (GSA) multiple award schedule (MAS) program, focusing on: (1) whether multiple award schedule prices are reasonable; (2) the purpose of GSA negotiations; and (3) the type of data that should be required so that GSA can judge whether prices are reasonable.

GAO found that: (1) MAS prices for top-selling items are often higher than prices offered to the general public or to some state governments; (2) higher MAS prices result from differences in contract terms and conditions and MAS dealers paying manufacturers more than non-MAS dealers for the same products; (3) the GSA procurement policy concerning best price negotiations is ambiguous; (4) GSA often uses customer discounts as the basis for its price analysis and to establish its negotiation objective; (5) although GSA needs to consider the discounts manufacturers give to all types of customers, it must take into account the differences in terms and conditions between the MAS program and other customers; (6) GSA needs to require MAS offerers to submit additional information to determine the reasonableness of their prices; and (7) MAS data requirements should be clear and consistent with GSA negotiation objectives.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: GSA agreed with this recommendation and initiated pilot data collection efforts in both the Federal Supply Service and Information Resources Management Service. For example, the Federal Supply Service already has reduced data requirements for vendors with less than $5 million in MAS sales and is considering other changes. Evaluation of the recommendation's implementation is impossible, however, given the changes in the MAS program attributable to the Federal Acquisition Streamlining Act of 1994.

    Recommendation: The Administrator of General Services should test alternative MAS data requirements to ensure that those requirements are clear, reasonable, and the minimum necessary to establish price reasonableness.

    Agency Affected: General Services Administration

  2. Status: Closed - Not Implemented

    Comments: The Information Resource Management Service was merged into the Federal Supply Service, so this recommendation is no longer applicable.

    Recommendation: The Administrator of General Services should take steps to ensure that MAS negotiation procedures are implemented in a consistent manner by contracting staff in both the Federal Supply Service and Information Resources Management Service.

    Agency Affected: General Services Administration

  3. Status: Closed - Not Implemented

    Comments: GSA said it would consider this recommendation in light of other ongoing procurement initiatives and would await the results of its planned pilots before deciding whether to amend MAS policy, as GAO recommends. The Federal Streamlining Act of 1994 significantly altered the federal procurement system, and directly affects the MAS program and the context for this recommendation.

    Recommendation: The Administrator of General Services should amend MAS policies to clearly state that the price analysis GSA does to establish the government's MAS negotiation objectives should start with the best discount given to any of the vendor's customers, but that GSA must consider legitimate differences in terms and conditions identified and valued by the offerer when negotiating the government's MAS discount.

    Agency Affected: General Services Administration

  4. Status: Closed - Not Implemented

    Comments: GSA said it would consider this recommendation in light of other ongoing procurement initiatives and would await the results of its planned pilots before deciding whether to amend multiple award schedule policy, as GAO recommends. The Federal Streamlining Act of 1994, however, significantly altered the federal procurement system, and directly affects the multiple award schedule (MAS) program and the context for this recommendation.

    Recommendation: The Administrator of General Services should amend MAS policies to ensure that, when the contracting officer has information indicating that a prospective MAS dealer is paying more than non-MAS dealers for the same products bought at the same time under similar terms and conditions, GSA will not award a MAS contract unless the MAS dealer's proposed price to the government is less than or equal to other dealers' prices to comparable customers.

    Agency Affected: General Services Administration

  5. Status: Closed - Not Implemented

    Comments: The Federal Streamlining Act of 1994 significantly altered the federal procurement system, and directly affects the multiple award schedule (MAS) program and the context for this recommendation.

    Recommendation: The Administrator of General Services should examine the terms and conditions in the MAS program and, if they result in higher costs to the government, determine whether they are necessary and worth the additional cost.

    Agency Affected: General Services Administration

  6. Status: Closed - Not Implemented

    Comments: GSA said it had determined that there was no way to collect information on state and commercial prices electronically. Therefore, GSA said it plans to collect the information manually using discount schedule marketing data sheets, and GSA is testing this system. While this has occurred, changes to the MAS following enactment of the Federal Acquisition Streamlining Act of 1994 have substantially changed the context for this recommendation.

    Recommendation: The Administrator of General Services should periodically monitor state and commercial prices for top-selling MAS products to ensure that MAS prices are not higher than those of other customers under similar terms and conditions.

    Agency Affected: General Services Administration

  7. Status: Closed - Not Implemented

    Comments: The Federal Streamlining Act of 1994 significantly altered the federal procurement system, and directly affects the MAS program and the context for this recommendation.

    Recommendation: The Administrator of General Services should revise MAS policies to recognize that contracting officers may need to obtain manufacturer discount schedule and marketing data (DSMD) when a product is offered by a dealer who cannot establish the commerciality of its products. However, MAS policies should also state that GSA will generally not require manufacturer DSMD when a product is offered to the government by a dealer who can show product commerciality.

    Agency Affected: General Services Administration

 

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