Official: Price clause needed to get fair prices

It's a myth that requiring companies to compete for task orders ensures that agencies get fair and reasonable prices for products and services, an official said today.

The Federal Acquisition Regulation doesn’t require competition at the task-order level except under certain circumstances, said Maureen Regan, counselor to the Veterans Affairs Department’s inspector general. Therefore, the General Services Administration’s price-reduction clause, which requires vendors to give the government the same price it offers its other customers, is necessary to ensure that the government gets fair and reasonable prices from vendors, she said.

Regan spoke today before the Multiple Award Schedule Advisory Panel, which is debating the usefulness of the clause.

If the panel recommends dropping the clause, Regan suggested limiting contracts to no more than three years and requiring competition for all buys from General Services Administration schedule contracts.

Some industry leaders do not support the clause, and several contracting officers at the General Services Administration have questioned whether it adds value to the multiple-award schedule program because companies must also compete for task orders.

David Bibb, GSA’s acting administrator, said the clause has created problems for the agency. Several major contract holders have left the schedule program, in part because of the clause. He said getting the best price is a worthy goal, but “we want to make sure that’s not done in a burdensome way for everybody.”

Also, panel members decided to hold meetings on Sept. 19, Sept. 22, Oct. 6 and Oct. 27.

About the Author

Matthew Weigelt is a freelance journalist who writes about acquisition and procurement.

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