UPC Code Requirements for GSA Contract Products

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The Reality of the Situation
In the past, the General Services Administration (GSA) has received many complaints from contract holders that they do not show in the list of competitors when similar items are brought up in a GSA Advantage! search. As it stands today items are categorized by the Name, Part Number, Product Description etc. Most often than not we receive incomplete product descriptions or inaccurate products. The system categorizes the best it can based on the information received. The GSA believes that UPC’s will help solve that issue by placing items in the correct category.

Most often contract holders don’t know they are in the wrong category or mis-categorized altogether. The result is that GSA Advantage! cannot offer all products lined up in a comparison matrix. The GSA is using a similar model to sites such as Amazon.com who use UPC to better categorize items. These issues are concerns of a lot of contract holders, the they are trying to resolve their issues by using UPC codes. Currently (February 2012) only one UPC code is required for each category, to ease into the requirement. However, by the end of 2012, each product within the group of Categories will require ALL PRODUCTS have UPC Codes.

Why this Solution will Fail
Many items on GSA are marketed through distributors and UPC codes are unused by the vast majority of the product manufacturers. These manufacturers are refusing to go through the costly and arduous procedure of applying UPC codes to all products, let alone update them throughout the years. The result of this new UPC requirement will be that each GSA Contractor will be forced to acquire UPC codes for all product lines offered under the list of required SIN’S. This  will lead to two problems for the GSA:

1)      Higher prices for the items to compensate for the added costs to list them on contract (UPC Codes are expensive), and

2)      Product numbers for the same product will have multiple UPC Codes, one for every GSA Contractor offering that item, because distributorships are common on the foodservice schedule and the manufacturers will not agree to UPC Code their products.

Therefore, you will see higher prices, and the same issues within the GSA Advantage! results will persist. The solution is to better educate contractors to comply with universal part# and description requirements in order to get their products listed with identical items. If the GSA would communicate how to conform to a universal procedure when uploading products, then it would be in the best interest of GSA Contractors to submit to follow these rules because their products would be found by customers more frequently. The UPC solution is simply asking GSA Contractors to throw their money at the GSA’s problem.

The Predictable Backlash
The costs that GSA Contractors will need to incur to maintain participation with their GSA Contract(s) will be in thousands of dollars. Depending on the number of products and which categories they fall into, the costs will go up from there. This places a strenuous burden on small businesses, while putting little strain on large companies. Therefore, this is going to have a large impact on the small businesses and set-aside companies that pursue business in the federal market. On the flip-side, the federal governments ability to locate and procure from set-aside companies will diminish shortly after the UPC requirement takes full effect. Small Businesses will, in effect, be choked out of certain GSA Schedules because of the cost requirements of the UPC Code requirement.

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