Multiple Award Schedule Contracting

Changes Needed in Negotiation Objectives and Data Requirements Gao ID: GGD-93-123 August 25, 1993

Federal agencies buy billions of dollars worth of goods and services each year through the General Services Administration's (GSA) multiple award schedule program--everything from desks and paper to mainframe computers. GAO discovered that the program's prices for top-selling items were higher than those charged the public or state governments. GAO believes that the program policy statement is ambiguous as to whether GSA may consider the discounts that program offerors give to dealers, distributors, and original equipment manufacturers when GSA sets the government's negotiation objective. At times, GSA contracting staff used these customers' discounts; at other times, they did not. GAO believes that GSA should consider the discounts that offerors give to all types of customers but must take into account differences in terms and conditions between customers in the multiple award schedule program and other customers. GSA needs information from program offerors to determine the reasonableness of their prices. GAO believes that program data requirements should be clear and consistent with the negotiation objectives and should be the minimum needed to establish price fairness. GSA should be able to obtain data from manufacturers to establish the reasonableness of certain dealers' prices.

GAO found that: (1) MAS prices for top-selling items are often higher than prices offered to the general public or to some state governments; (2) higher MAS prices result from differences in contract terms and conditions and MAS dealers paying manufacturers more than non-MAS dealers for the same products; (3) the GSA procurement policy concerning best price negotiations is ambiguous; (4) GSA often uses customer discounts as the basis for its price analysis and to establish its negotiation objective; (5) although GSA needs to consider the discounts manufacturers give to all types of customers, it must take into account the differences in terms and conditions between the MAS program and other customers; (6) GSA needs to require MAS offerers to submit additional information to determine the reasonableness of their prices; and (7) MAS data requirements should be clear and consistent with GSA negotiation objectives.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

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