What is Schedules Contracting?
When most people think of government contracts, things like jets or complex military weapons systems come to mind. In reality, however, the Federal government spends billions annually on things like computer software, paper clips, and professional business consultants just to name a few. In the private sector, these types of products and services are bought from commercial businesses; the same is true with the federal government, except that many businesses selling these off-the-shelf items do so through GSA Schedules contracts.
GSA Schedules contracts are an acquisition solution developed by the U.S. General Services Administration (GSA) for providing commercial off-the-shelf products and services to the federal government at pre-negotiated prices. Formally known as Multiple Award Schedules (MAS), GSA Schedules are a group of long-term, government-wide contracts with commercial entities covering almost every good or service sold from mundane items like pens and paper to vehicles to professional consultants to computer software.
For a listing of the Schedules contracts, also known as the Federal Supply Schedules (FSS), visit GSA's e-Library. And, for examples of the products and services currently on Schedule (as well as contractors and pricing), visit GSA Advantage! and do a keyword search.
An Example of GSA Schedules Contracting
Below is an example of a basic fact scenario describing the process of how GSA Schedules contracting works. ABC, Inc. is a professional engineering firm, providing all types of engineering services to the general public. ABC, Inc. wants to start selling those services to the federal government. ABC, Inc. can either begin reviewing and responding to Requests for Proposals (RFPs) posted by different federal agencies or it can obtain a GSA MAS contract. Because ABC, Inc. wants to be able to sell its services across government in a cost-efficient and expedited manner consistent with how it sells to the general public, ABC decides to secure a GSA Schedules contract. In order to do so, ABC, Inc. would submit an offer to GSA under Schedule 871, the Schedules contract for Professional Engineering Services, and if approved by GSA would become a Schedule 871 contractor. Then, ABC will be able to sell its engineering services to entities throughout the federal government by responding to RFPs using its GSA-approved pricing or by directly soliciting the federal entities it believes would be the best sales prospects.
Getting on Schedule, or obtaining a GSA MAS contract, can be an overwhelming process. The amount of paperwork that must be completed and compiled is daunting and the regulations and statutes that apply to these contracts are as complicated and voluminous as the IRS Tax Code. While each contract has different requirements, there is a basic process for becoming and being a Schedules contractor: offer, negotiation, award, and performance.
Offer - In order to become party to a GSA MAS contract, a prospective contractor must submit an offer to GSA. This step initiates the process of obtaining a GSA MAS contract. An offer is a completed Solicitation and any required attachments submitted by an offeror under the appropriate Schedule and will form the terms and conditions of the Schedules contract. Offerors should follow all of the requirements outlined in the Solicitation.
Review/Negotiation - GSA's goal is to provide its customers with the best product or service at the lowest possible price. In order to achieve this goal, once a technical review of an offer is complete GSA may negotiate further reductions in pricing or other concessions with offerors. Negotiations are an important element of the offer process and should be carefully considered both at the negotiation and offer preparation phases.
Award - Contract award is GSA's acceptance of the offeror's proposal and price terms, incorporating any counteroffers negotiated by the parties, and the final phase of contract formation. Once GSA has accepted your offer, it will issue a unique contract number that you, as a GSA Schedules Contract Holder, may use to sell your approved products or services to the government or other eligible entities.
Contract Performance - Once you receive a contract number from GSA, you are now party to a contract with GSA and have obligations under that contract. When a federal buyer purchases a good or service from your Schedules contract, the purchase order/task order incorporates the terms of your Schedules contract and along with its unique terms creates a separate contract between you and the buyer. Contractors should not forget, however, that they have an ongoing contract (their Schedules contract) with GSA with its own unique requirements under which they must perform.
The Benefit of Becoming a Schedules Contractor
The primary benefit of becoming a Schedules contractor is that MAS contracts give businesses an advantage in the federal procurement market by providing an opportunity to sell their products or services government-wide and in an expedited manner. In other words, because Schedule contract holders have been vetted and approved and their pricing deemed fair and reasonable by GSA, it is much easier for a buyer to purchase from a Schedules contractor than from some entity that has not been approved by GSA. Why? Because orders placed against GSA MAS contracts are considered to be issued using full and open competition. Federal buyers do not have to engage in the competitive bid processes required by the Federal Acquisition Regulations (FAR) outside of the GSA Schedules or make a determination of fair and reasonable pricing when ordering from a Schedules contractor (except in limited circumstances). Schedules contractors' pricing is deemed to represent the best value and result in the lowest overall cost alternative to meet the government's needs. And GSA has developed a variety of methods, like GSA Advantage! and e-Buy, whereby federal buyers can easily purchase directly and exclusively from Schedules contract holders.
Important Aspects of GSA Schedules Contracting Commercial-Off-The-Shelf -
MAS contracts are not for goods or services specifically designed for a particular use within government. They are meant to be for products that a company also sells to the general public in an "off-the-shelf" manner. For instance, these contracts are not for highly specialized weapons systems. But, they are for IT services or software that the government may use on a weapons system project.
Not a Contract for GSA to Buy from You -
Although your MAS contract is with GSA and therefore you both have rights and obligations under this contract, those rights and obligations do not include goods or services sales transactions. GSA does not purchase from you by virtue of you obtaining an MAS contract. GSA may order from you using your MAS pricing just like any other federal agency or eligible entity, but it would be a separate contract that incorporates the terms of your Schedules contract.
Not Required to be a Schedules Contractor to Sell to Government -
Schedules contracts are not mandatory, which means ordering activities do not have to use them for procurements and commercial vendors do not have to obtain one to sell to the government. A variety of methods exist for selling goods and services to the federal government.
Not a Guarantee of Business -
While Schedules contracts provide a significant market advantage in federal procurements, they are not a guarantee of government sales. Buyers are not required to use Schedules contracts for purchases, and contractors are responsible for finding sales opportunities through online postings like e-Buy or FedBizOpps or through directly marketing to buyers.
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