After the submission of your firm’s GSA contract application, the GSA conducts a price negotiation with the applicant firm. The GSA’s purpose of this negotiation is to obtain the lowest price possible for the federal government. This negotiation takes place even though the GSA applicant has already agreed to give the federal government its best pricing relative to any given quantity ordered.
Negotiation Tips
Do your homework first – It is highly advisable that you check for like or similar products to that of your own products that are already listed on GSA Advantage. This is critical for the following reasons:
- The GSA will do this same search to make sure your GSA schedule contract price is in line with other products already listed and if your price is too high you might be priced out of the market (most purchasing agents will compare three products as justification for their end decision) and already need to lower your pricing to obtain business or your firm might fall “outside the pricing norm” and therefore be assumed to not be a true fit in the product category.
- The GSA Applicant on GSA application services will be better able to defend your products additional cost based upon quality differences that exist between your product and those products that already exist on the Schedule by doing this research. Examples of applicable product quality defenses are strength, weight, durability, warranty, product lifetime or other qualities.
- Observing the quantity discounts and or prompt payment discounts your competitors are offering the GSA will give you better insight as to past successful concessions your competitors have made. This gives you insight on GSA contract application as to what negotiated agreements were accepted by the GSA in the past. Remember more than likely your competitor’s negotiated with the same people within the GSA that you are today.
- If your firm is geographically based, understanding the number of “true” competitors to your firm in your geographical area. This is critical for developing a pricing strategy because less regional competitors could translate into higher prices / less concessions to the GSA schedule contracts for your firm.
GSA Contractors on GSA application services must be familiar with GSA Schedule Pricing Rules
To summarize it, the 5 GSA Schedule valuing rules of GSA proposal you really want to observe are:
- Reasonable and Reasonable Pricing
- Cost Increases
- Value Reductions
- Electronic Price List
- Value-based Data Reporting
It is significant that both existing and potential project workers comprehend the principles for overseeing estimating on a GSA Schedule. There is a lot of significant worth in a MAS grant insofar as your evaluating is vital and great estimating procedures are kept up with through the duration of the agreement. There is no “one size fits all” or “just set it and fail to remember it” technique with regards to valuing on an administration contract and your specialist can assist with directing you through the guidelines and give the bearing you’ll should be an effective Multiple Award Schedule worker for hire.
I always recommend to our clients that when making any price concession to the GSA with GSA schedule application they are receiving something in return. Therefore we always recommend to clients that they give the GSA bulk order discounts rather than blanket price concessions. Also receiving quicker payment terms as part of a price concession can be another factor at play. The GSA is usually receptive to these types of counter offers which add value so don’t be afraid to ask.