GSA Schedule Price Reduction Clause (PRC) Compliance

Our previous newsletter discussed the importance of identifying price reduction clause compliance early before the potential money claw back risk piles up.

Obviously, preventing violations by maintaining the capability to monitor discounting offers before-the-fact is far better than discovering violations after-the-fact. After-the-fact compliance violations should be reported to the GSA contracting officer as soon as they are found. This will allow you to either adjust the prices you're charging GSA now, or (if you're really lucky) to correct the problem, with the contracting officer's approval, without incurring a price reduction. In either case, it beats owing a multi-million dollar refund to GSA down the line. Boards of Directors hate surprises.

PRC compliance training is the key to avoiding financial risk. Training company management, sales management, and individual sales persons in PRC compliance procedures should be the responsibility of the GSA Compliance Officer. Suggested content for directives to the management and the company's sales staff is as follows:

  1. What is our GSA schedule and why do we have it?
  2. Use of schedules by state and local government and stimulus contracting.
  3. Price reduction Clause (PRC)
    What is it?
    How does it restrict discounting?
    What are the consequences to the company of PRC violations?
    What are the consequences to employees of PRC violations (if any)?
    Price Compliance Database and its uses in developing price quotes
  4. Other compliance requirements impacting sales and operations
    Trade Agreement Act
    GSA Order Segregation

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