Group: Keep the price reduction clause

A federal advisory panel may want to reverse its recommendation to eliminate the price reduction clause in the General Services Administration's Acquisition Manual because of GSA’s recent recovery of $128 million under that provision, a watchdog group suggests.

“Boy, we're glad taxpayers are protected by that clause. But not for long if a government panel has its way!” Scott Amey, general counsel for the Project on Government Oversight, wrote on the group’s online blog April 16. "Maybe after the announcement of a $100 (plus) million recovery, the [Multiple Award Schedule Panel] will rethink its recommendation."

Federal officials reached a settlement with federal contractor NetApp Inc., the Justice Department announced April 15. NetApp has agreed to pay the government $128 million, plus interest.

Earlier, the clause was criticized as obsolete and outdated and in October 2008, the advisory panel voted to recommend eliminating it. The panel’s next meeting is May 1.

Amey suggested the panel might want to rethink its position and urged the Obama administration to keep the clause.

"If President Obama is serious about contract reform, he might want to ignore the Multiple Award Schedule Panel, increase Schedule oversight to make sure contractors are playing by the rules, and find a way to eliminate GSA's administrative fee to ensure that it operates in the best interest of taxpayers,” Amey wrote.