GSA Compliance for Contract Holders
GSA compliance for contract holders requires more than keeping your GSA pricing up-to-date on GSA Advantage! and adhering to scope, delivery and warranty terms of the contract. There are certain high risk GSA compliance areas that GSA contractors must be aware of such as Commercial Sales Practices (CSP), Price Reduction Clause, IFF payment, TAA compliance and reporting requirements. Make sure you know what the GSA compliance requirements are for your contract, or get someone to help you. High risk areas include:
- Commercial Sales Practice (CSP) A company’s commercial sales practices determine its Basis of Award (BOA) under which the GSA negotiated terms, conditions and pricing are mostly based upon. Changes to your Commercial Sales Practices may trigger a static change to the negotiated terms and pricing in accordance with the Federal Acquisition regulation (FAR), under the Price Reduction Clause. Therefore, the commercial sales practices submitted to the federal government must be accurate, current and complete.
- Price Reduction Clause (PRC) is utilizing the CSP disclosures mechanism to ensure that the government buyer is receiving a fair and reasonable price at all times. Contractors must monitor their commercial sales and take proper action whenever the PRC has been triggered. If you have a GSA contract but don’t know who your Basis of Award is, or if you’ve ever triggered the PRC – then make it a priority to find out before any of your competitors do.
(Please note: Under the False Claims Act, whistleblowers who report fraud and misconduct against the government can potentially collect their share of millions of dollars of the recovery.)
- TAA Compliance. All offered products must be TAA compliant so make sure you know where your products are manufactured before putting them on a GSA contract. For instance, selling a Made in China product through the GSA contract is a very serious GSA compliance violation.
- IFF 72a Reporting of GSA Sales. Failing to report and remit the full amount of IFF and/or report incorrectly is another serious issue. All GSA contract holders must correctly report the IFF, regardless of sales figure.
- GSA Reporting Requirements and Miscellaneous GSA Compliance adherence. Certain reporting requirements are the same for all GSA contractors regardless of size; such as the IFF reporting (mentioned above) and the SAM.gov registration. Other requirements, such as a Small Business Subcontracting Plan, E-Verify, EEO – 1, maintaining an Affirmative Action Program, and documenting a corporate Code of Business Ethics and Conduct, are dependent on different variables such as company size, value of the government contract, number of employees. Also, in case of a company merger, acquisition or name change, you may also need to novate the GSA contract in accordance with the Change of Name and/or Novation Agreement requirements in FAR.
Potential consequences for not being GSA compliant could be anything from penalties and fines, clawbacks and contract cancellations, and finally corporate suspension and debarment. High Profile GSA settlements under the False Claims Act for noncompliance and misrepresentation of commercial pricing practices include Oracle’s $200 settlement in 2011, EMC’s $87.5M settlement in 2010 and Cisco Systems and Westcon Group North America $48 million settlement in 2010. These serve as reminder to all GSA contract holders to ensure GSA compliance at all times!