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What does a GSA Contract Allow for Profit Percentage?
People are most interested in my outrageous claim that I helped a client get a 25% margin on a cost plus. Before we explain how the stars lined up to do that, let me ask if GSA has told you 2%, 8%, 10%, 12% etc.? They aren't kidding. Do they have that right? No. You must bluff them, scare them, sue them, or accept it. We have done all of the above or at least threatened and have gotten 15%, 25% and 29%.
But if you are trying to put Notes on GSA at 12% and I have it on at 10%, you will lose unless you can sell GSA on the value added. This is very tough, since they automatically say no 38 times and don't understand what you are saying anyway. NSA wanted to put some goodies on Air Force One. It was all classified, since we can't let the KGB know we have an Air Force One that might have some computers and communications stuff, can we? Because it is classified, no CBD. Hence, you will never see it. Many good and evil things can hide behind classification, can't they?
They wanted a million or two worth of standard off-the-shelf stuff. How do we get to the cost plus? They wanted it modified to do other stuff, too. This is a million more plus 25%. They say no. We say thanks and leave. They called us back and agreed. How did we sell this? Shortage of qualified skilled people. If we do this work for NSA, we can't get the next version of the commercial product out, can we? We don't want your contract at 10% or 15% or 20%. They accepted and we did the job. The HPA and others probably can waive anything not required by law. In fact, everything in an RFP is negotiable except that required by law.
Written by Terry Miller. Published by Organizational Communications, Inc. Republished with permission.
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