GSA needs to keep a sharper eye on reseller prices

A wide variety of pricing for the same IT on different multiple-award schedules and reseller contracts that don't generate enough sales present the General Services Administration with a significant problem, according to a report from the agency's Office of Inspector General.

The OIG evaluated how IT schedule resellers affect pricing, employees' procurement workload and the enforcement of contract clauses.

In the report, released July 22, the OIG told GSA's Federal Acquisition Service (FAS) that it must address issues in three areas to make MAS contracting vehicles work more effectively and efficiently.

Resellers in the MAS program -- which includes GSA's largest federal IT acquisition contract, IT Schedule 70 -- offer identical items under multiple contracts at prices that vary considerably, the report states. Furthermore, those prices are often higher than the same items would cost from commercial sources.

The OIG said FAS must make sure the government gets competitive pricing when a contract is awarded and must keep a sharper eye on pricing throughout the life of a contract.

The OIG also said that even though it recommended in 2007 that FAS get rid of MAS contracts that have low or non-existent sales, 1,200 IT schedule reseller contracts that don't generate enough sales to support their costs remain on the books.

The report recommends that FAS Commissioner Tom Sharpe institute procedures to ensure that price differences are backed by price analysis documentation. In addition, FAS should set performance measures for its acquisition employees to make sure they receive resellers' best pricing during negotiations.

And FAS should cancel IT schedule reseller contracts that don't meet its $25,000 minimum sales requirement.

GSA officials agreed with the recommendations and said they are addressing the concerns. In a letter to the OIG, Kay Ely, deputy assistant commissioner of FAS' Integrated Technology Services, said her organization has been reviewing MAS contracts to reduce inefficiencies and improve employees' knowledge.

For instance, IT Schedule 70 supports the MAS Competitive Pricing Initiative, and FAS has implemented XSB's web-based Price Point, which allows contracting staff to compare products and pricing.

In addition, FAS plans to launch the Formatted Pricing Tool this month. It will include standardized product information, identify duplicate contract items and speed up the posting of contract changes to the GSA Advantage system.