GSA Procurement:

Are Prices Negotiated for Multiple Award Schedules Reasonable?

GGD-86-99BR: Published: Jul 8, 1986. Publicly Released: Jul 22, 1986.

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In response to a congressional request, GAO surveyed the General Services Administration's (GSA) price negotiations for multiple award schedule (MAS) contracts to determine if GSA: (1) complied with existing laws and regulations when purchasing goods and services for user agencies; and (2) obtained fair and reasonable prices.

GAO noted that GSA generally complied with procurement laws and regulations in negotiating MAS contracts, except for two areas concerning contracting officers': (1) determinations of the contractors' need to provide cost or pricing data in support of their proposed prices; and (2) preparation of price negotiation memoranda. GSA awards MAS contracts only to bidders offering prices equal to or better than what the offerers grant to their most favored customers (MFC). GAO found that, in 19 of the 20 contracts it sampled, GSA negotiators obtained MFC pricing or justified obtaining less favorable prices. GAO also found that GSA could have taken several actions to obtain even better prices for MAS items, including: (1) ensuring adequate Inspector General audit coverage of offerers' price proposals; (2) having negotiators perform more thorough price analyses of offerers' price proposals by using additional price analysis techniques, and (3) having negotiators attempt to obtain the best possible prices.

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