Negotiating Profitable General Services Administration (GSA) Schedule Prices

GSA schedule contracts are becoming even more popular because of federal contracting offices need to contract quickly with stimulus funds. Making a profit is the Holy Grail of most businesses. Negotiating pricing with GSA can be a remarkably trying experience. GSA always wants the best price you have ever given to anyone- GSA calls this Most Favored Customer prices- and then a little bit more.

GSA has a mandate to negotiate "fair and reasonable" prices from companies making an offer for a Schedule contract. The problem is that fair and reasonable is in the eye of the beholder. GSA determines whether a company's prices are fair and reasonable based on the prices and discounts the company offers to its commercial clients. The government's negotiating philosophy is that the open market determines fair and reasonable pricing.

This negotiating philosophy is a double-edged sword. On the up side, if your company has standard prices, never offers discounts, charges high prices with a high profit margin, and has the invoices to back it all up, you're in a really good position to enter into negotiations with GSA.

If, on the other hand, you're a small company that has been working on federal contracts under the thumb of a prime contractor for the past several years, you face a monumental negotiating task. The prime has squeezed your labor rates down so low that thinking about your profit margin brings on an instant migraine. The prime is your only customer so your invoices show the low rates. Guess what happens when it comes time to negotiate with GSA? Those are the prices GSA wants to pay.

Or say you are a product company and you occasionally give large discounts to close deals in lean times. Obviously, your invoices show the low, deal-closing prices. Guess what prices GSA is going to be looking at during negotiations?

Solving the negotiating dilemma is the core of a GSA schedule offer. Call Fedmarket at 301 652 9504, press 2 for assistance in schedule price negotiations


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