Panel to recommend rolling back pricing clause

The Multiple Award Schedule Advisory Panel today agreed to recommend that officials remove the price reduction clause regarding products sold on the MAS program’s contracts.

The panel will recommend that the administrator of the General Services Administration “remove the price reduction clause from the products schedules in phases as the administrator implements recommendations for competition and price transparency at the schedule contract level and order level.”

Panelists added to the recommendation a phased-in approach because they recognized that the other recommendations to gather other pricing and ordering information won’t happen immediately.

“I don’t want to walk out of here today and say, ‘We just killed the clause and created a vacuum,' ” said Elliott Branch, panel chairman and executive director for contracts at the Naval Sea Systems Command.

In September, the panel approved a similar recommendation to end the price reduction clause for services. The panel added language to the recommendation to enhance competition. The panel wants to push regulations for agencies to offer proposals to all contractors or receive at least three bids. Law already requires the Defense Department to reach that level of competition before making a contract award. 

The panel today also approved several other recommendations:

• "For GSA schedules for products, the price objective is to obtain fair and reasonable prices at the time of contract formation at the schedule contract level. The price has to be reasonable not only to the basis of award customer but to commercial marketplace as well. We recommend that the GSA administrator issue clear and consistent guidance to implement the price objective including information related to thresholds of purchasing experiences."

• That GSA discloses the basis upon which the contracting officers determined that the MAS program contract prices for products are fair and reasonable.” Last month, the panel agreed to the same recommendation related to services.

• That the administrator of GSA develop a solution that captures pricing at the order level and make it available to the contracting officers at both the schedule and order levels to conduct market research, determine fair, reasonable prices at the contract level and competition at the order level.

The panel will offer its recommendations to the GSA administrator later this year as possible changes to the MAS program.