Procurement

A new way to 'make it up on volume'

GSA

One of the General Services Administration's core missions is to get agencies more value for their purchasing dollar, through negotiated discounts and bulk buys.  Thanks to a suspect contract clause, however, some Multiple Award Schedule purchases are costing more when they exceed the maximum order.

An April 26 report from GSA's Office of Inspector General found that at least two vendors "claim the plain language of GSA contract clause I-FSS-125...exempts schedule orders over the maximum order from the Price Reduction clause." The OIG calculated that those vendors "have failed to pass on over $100 million in price reductions for GSA orders over the maximum order."

A maximum order is set for all GSA schedule contracts -- for IT equipment, for example, the maximum order is $500,000.  "When an order exceeds this level," the report states,  "the ordering activity is encouraged to request a lower price."

The clause in question has been in place since 1995, and was part of changes intended to encourage agencies to seek bulk-purchase discounts.   GSA, not surprisingly, contends that the vendors are deliberately misinterpreting the language to reach "the illogical conclusion that larger government orders are entitled to lesser discounts than smaller government orders."

The OIG concurred with GSA's position, but urged the agency "to publish its interpretation of this clause" and remove it from all existing contracts.

The vendors and contracts involved were not disclosed in the report.

About the Author

Connect with the FCW staff on Twitter @FCWnow.

The Fed 100

Read the profiles of all this year's winners.

Featured

  • Then-presidential candidate Donald Trump at a 2016 campaign event. Image: Shutterstock

    'Buy American' order puts procurement in the spotlight

    Some IT contractors are worried that the "buy American" executive order from President Trump could squeeze key innovators out of the market.

  • OMB chief Mick Mulvaney, shown here in as a member of Congress in 2013. (Photo credit Gage Skidmore/Flickr)

    White House taps old policies for new government makeover

    New guidance from OMB advises agencies to use shared services, GWACs and federal schedules for acquisition, and to leverage IT wherever possible in restructuring plans.

  • Shutterstock image (by Everett Historical): aerial of the Pentagon.

    What DOD's next CIO will have to deal with

    It could be months before the Defense Department has a new CIO, and he or she will face a host of organizational and operational challenges from Day One

  • USAF Gen. John Hyten

    General: Cyber Command needs new platform before NSA split

    U.S. Cyber Command should be elevated to a full combatant command as soon as possible, the head of Strategic Command told Congress, but it cannot be separated from the NSA until it has its own cyber platform.

  • Image from Shutterstock.

    DLA goes virtual

    The Defense Logistics Agency is in the midst of an ambitious campaign to eliminate its IT infrastructure and transition to using exclusively shared, hosted and virtual services.

  • Fed 100 logo

    The 2017 Federal 100

    The women and men who make up this year's Fed 100 are proof positive of what one person can make possibile in federal IT. Read on to learn more about each and every winner's accomplishments.

Reader comments

Please post your comments here. Comments are moderated, so they may not appear immediately after submitting. We will not post comments that we consider abusive or off-topic.

Please type the letters/numbers you see above

More from 1105 Public Sector Media Group