Top 10 Interesting Compliance Risks for GSA Contract Holder

Compliance Risks for GSA Schedule Contractors | GSA Schedule Contract Services

GSA Contract Holder – After securing a GSA Schedule contract, contractors must actively commit to ensuring that their company’s products, services, and operations adhere to GSA Compliance terms and conditions to avoid penalties. With new legislation and acquisition regulations, contractors must only conduct GSA Compliance activities to prevent the risk of losing the GSA Schedule contract.

What are GSA Compliance Risks?

Securing a GSA Schedule is no easy task. Contractors must undergo heavy screening and evaluation procedures to be awarded a GSA Contract. With that in mind, GSA contractors must keep up with all the GSA Compliance requirements to avoid running the risk of losing the elusive contract.

However important, many contractors still neglect their compliance requirements until issues finally arise. A contractor’s non-adherence to GSA Compliance regulations can harm relationships with the government, resulting in considerable fines or irreversible repercussions such as losing the contract altogether. Meanwhile, effective post-award contract management can save contractors from all these troubles.

Top 10 Compliance Risks

Among the regulations that GSA Schedule holders must follow, the following are the main areas in GSA Compliance that pose the highest risks for contractor non-compliance:

Commercial (MFC) Pricing

GSA’s regulation on commercial pricing maintains that before awarding a GSA Schedule, the GSA and contractor must agree on customers’ category. This agreement will then be the Basis of Award and GSA’s price and discount relationship to the identified customers. Furthermore, any modifications done to the contractor’s commercial pricing or discount arrangements will result in a price reduction.

The most common reason behind non-compliance to commercial pricing requirements is the lack of communication or training to employees concerning GSA’s pricing requirements. Additionally, the failure to update sales policies or workflow rules is also a reason. To prevent issues from arising in commercial pricing, contractors can perform corporate-wide training on GSA pricing compliance. Distributing materials, pricing policies, or workflow rules can help employees recall the training topics. Also, contractors must regularly review sales transactions to guarantee compliance.

GSA Pricing

GSA maintains that GSA Schedule holders can only sell to GSA “Eligible Entities” at the approved GSA price or lower. GSA Schedule contractors must exemplify compliance with their GSA Schedule scope and SINs.

To ensure GSA Compliance with GSA pricing, GSA contractors can distribute among its employees the “Eligibility to Use GSA Sources of Supply and Services” file downloadable on the GSA webpage. Contractors also need to ensure their GSA Pricing Desk approves all GSA proposals. It is also imperative that contractors review their invoicing process to ascertain correct product representation and clear delineation.

GSA Contract Holder Terms and Conditions

GSA Contract Holder Terms and Conditions are unique to each contractor’s GSA Schedule contract and differ from their commercial business. These can include:

  • Minimum Order
  • Quantity and Volume Pricing
  • Payment Terms and Invoicing
  • Delivery Cost and Schedule
  • Warranty and Return Policies
  • Installation or Maintenance
  • Labor Qualifications
  • Subcontracting Restrictions

Like most regulations, non-compliance in this area is usually a result of a lack of communication among the employees. Thus, contractors can conduct company-wide training on GSA Terms and Conditions and hand out materials for easy recall to overcome this issue.

Trade Agreements Act

Under the Trade Agreements Act (TAA), the US government will only purchase products or services that are wholly from the US or another “designated country” or have gotten substantially transformed in the US or another “designated country.”

To be in GSA Compliance in this area, GSA contract holder must not sell products or services from countries that are not a “designated country,” such as China, India. Malaysia, Russia, and Thailand. Furthermore, contractors must accurately list a Country of Origin (COO) for each product or service they offer under their GSA Schedule contract.

Ethics and Business Conduct

GSA maintains that GSA contract holders must uphold the highest degree of integrity and honesty in their endeavors. Moreover, it is a must that GSA Schedule holders practice due diligence to prevent and detect criminal conduct and behavior. GSA contractors must promote an organizational culture cultivating ethical conduct and a commitment to compliance with the law.

GSA Compliance concerning Ethics and Business conduct gets sustained by documenting regular federal contracting ethics training and communication. Contractors can also have an updated written code of business ethics and conduct, different from general ethics codes and specific to government contracting.

Human Resource Requirements

GSA Schedule contractors must adhere to governing human resource requirements associated with recruitment, minimum compensation, and employment.

Contractors must consistently research and review contract requirements concerning recruitment, minimum compensation, and employment regulations set by the GSA. For more information, GSA Schedule contractors can also reach out to DOL’s Office of Federal Contract Compliance Programs to ensure GSA Compliance.

Small Business Subcontracting Plan

GSA maintains that non-small business contractors must sign a document stating that small businesses receive the maximum practicable opportunity to participate in contract performance relative to their performance. These small businesses include:

  • Veteran-owned small businesses
  • HUBZone small businesses
  • Small disadvantaged businesses
  • Women-owned small businesses

Furthermore, the subcontracting plan necessitates contractors to solicit written self-certification of their subcontractors verifying their business size and status. In the absence of a self-certification file, the subcontractor must get tagged as a large business.

GSA’s Contractor Assistance Visit

Twice within a five-year contract term, GSA’s Industrial Operations Analyst (IOA) will conduct a Contractor Assistance Visit (CAV). This visit will assess the level of compliance of the contractor. Thus, contractors must prepare and spend enough time preparing documents and even their employees’ availability to avoid trouble.

Business Size and Status Representation

A “small business” can get categorized in terms of the average number of employees over the past year or average annual receipts the company has over the past three years. A US small business must be established for-profit and makes a significant contribution to the US economy. Moreover, contracts may set aside for small businesses with statuses such as small-disadvantaged, women-owned, veteran-owned, HubZone, among others.

To ensure GSA Compliance, small business contractors must regularly audit their eligibility to bid as a small business. Furthermore, contractors must review their employee levels and revenue figures against existing NAICS codes.

The Mandatory Disclosure Rule

Recently, GSA contract holders are now required to self-disclose sufficient evidence of violations and overpayments concerning the award or performance of a contract or subcontract.

GSA Contract Holders must keep in compliance with the Mandatory Disclosure Rule to avoid penalties. Failure to disclose credible evidence can be grounds for a GSA Schedule’s automatic suspension, or worse, debarment.

Conclusion

Although arduous, GSA Compliance and upholding GSA Schedule contracts can be worthy and beneficial. Contractors must keep in mind that it is better to comply with GSA regulations now than run the risks that go with non-compliance.

 

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