Raising Your GSA Contract Pricing

There are two options when you need to raise your GSA Contract pricing, and this decision must be made when you are acquiring your GSA Contract. Here is the GSA’s text on the subject, directly from the GSA Schedule 70 Solicitation (but this is universal to all GSA Schedules):

A. If pricing proposed in Price Proposal Template is based on a commercial price list, submit a copy of the company’s current, dated price list, catalog, or standard rate sheet (note that this must be an existing, stand-alone document, and not prepared for purposes of this solicitation). Future price adjustments for pricing based on a commercial price list are subject to clause 552.216-70 Economic Price Adjustment – Multiple Award Schedule Contracts.

OR

B. If pricing proposed in the Price Proposal Template is based on commercial market prices, future price adjustments are subject to clause I-FSS-969 Economic Price Adjustment – FSS Multiple Award Schedule. The Offeror must either propose a fixed annual escalation rate or identify a relevant market indicator (e.g., the Bureau of Labor Statistics Employment Cost Index).

Here are your two options when raising your GSA Contract pricing, in English:

(1)   Modifications based on Commercial Escalations – With this option, as your GSA prices change commercially, you can adjust your GSA prices accordingly. This requires a Modification to your GSA Contract, which is a very basic process.

(2) Annual Escalation – With this option, you set out a plan where your GSA prices escalate x% every year, I have noticed that the escalation is usually between 1-4%, and the GSA can negotiate down the escalation rate. This may seem appealing, but if you do not follow this commercially, then it is not the way to go.

What if you have established GSA Contract Pricing, and you want to adjust your prices?

Raising your GSA Contract pricing is handled through the modification process if you have not gone with the Annual Escalation method (some schedules do not offer this). Processing a modification with the GSA is much simpler than acquiring the contract, but it can still be difficult.You will need to offer up invoices to justify pricing and display capabilities.

What do you do if you have no sales yet to offer up to the GSA?

You will probably have been rejected a few times before you get to this stage. I would suggest calling your Contracting Officer (CO) at the GSA, and explaining your situation. Tell them that your Commercial prices have changed accordingly, and you are simply trying to reflect these changes on your GSA Contract pricing. Your CO may stick to their guns and require some sales to prove the prices went up, but maybe they will come down on the invoice number requirement.

Conclusion

Every Schedule is different in how they allow GSA Contract pricing changes, so you will want to study the section of the solicitation that addresses this (its a big document so just search “Economic Price Adjustment” and you should be able to find it quicker). Also read through the Modification Documents package that you use. There will be some valuable information in there. Your best resource is your CO, call them and ask direct questions, especially if you have experienced a rejection.

You can also leverage the experience of an experienced GSA specialist (like me) to raise your GSA Contract pricing. Just Schedule a time to talk, and we will discuss the best approach to reach your goals.

References:

GSA Interact – Economic Price Adjustments – How it works/what is expected of the contractor/seller?

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