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How to Enjoy Working with GSA
The challenge of working with GSA is a never-ending source of fun and amusement. We have been helping vendors deal with GSA for 30 years now, and this work has provided insight into how companies can succeed in contracting with GSA and still maintain business with their other customers. GSA is unique among government agencies in always insisting on its famous "most favored pricing" from vendors. If a vendor gives a low price to any customer, then GSA wants that same low price. There is no statutory law that has given GSA the right to insist on most favored pricing. Instead, GSA has taken this position in much the same way as a squatter who lives on a piece of property for 50 years can claim ownership in the property. In fact some court cases have been contrary to the GSA position. One of these cases is a 1976 ruling (B-183942) that the Securities and Exchange Commission (SEC) is not entitled to most favored pricing, but only to the best pricing that can be obtained through competitive bidding.
I have found that many vendors, especially those who do not have a deep understanding of the FAR, are afraid of GSA. Some are even reluctant to deal with the GSA for fear that it will be impossible to successfully serve both GSA and their existing customers. I think that a challenge in court to the most favored pricing requirement at GSA could be successful, but so far no one has been willing to take GSA to court. This leaves vendors with the option of beating GSA at its own game. Consider for example a company wanting to offer a product with list price of $8,000 but a history of selling the item to GM for $4,000, and they want to offer it for $7,000 under GSA. The answer is to offer the item to the GM's of the world under different terms - such as 10 units rather than one. There are numerous variations on finding different terms that will preserve civilian pricing while offering a higher price to GSA, and it is easier with advance planning as to what prices and terms will be offered to whom.
Written by Terry Miller. Published by Organizational Communications, Inc. Republished with permission.
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