Good morning all.
After much lurking about this site the last couple years, I finally have questions the answers to which I haven't found on here.
First up:
We had a GSA schedule, on which is a software product, which was issued in 1997, with a contract update in 2005; in that update, "PRICE REDUCTIONS (GSAR 552.238-75) (SEP 1999) (ALTERNATE I – MAY 2004)" which states:
“The class of customer which is the basis of award for purposes of the Price Reduction
clause is State and Local Government. This clause applies to only those Business Units
or wholly owned subsidiaries within (the company) that utilize the schedule.”
“A price reduction shall apply to the resultant GSA schedule contract should any
Business Unit or wholly owned subsidiary within (the company), who utilizes the Schedule,
offer a lower price than is on the schedule to any State or Local Government. This
reduction shall apply regardless of the amount of sales recognized under such hourly
rate contract with the State or Local Government.”
“Under paragraph (d)(1), “commercial customers” are defined as State or Local
Government only. A price reduction does not apply if sales to State or Local
Governments are under firm fixed price, definite quantity contracts with specified
delivery in excess of the maximum order threshold as specified in the contract.
Under that language, if we sell the product to a "non-basis of award" customer (in this case a federal prime), at a price just higher than the GSA price, would we trigger a the price reduction clause? My understanding is that the "discount relationship" applies to the BOAwd customers, not just any customer set.
I think the rationale for selling at a just higher price than GSA was that we avoid violating the "do (you) sell at a level at or below the GSA price?" language, which seems to be an "absolute" no matter how the "customer set" is defined (i.e. BOAwd customers or not).
It doesn't feel entirely clear.
Next question(s):
The follow on GSA contract seems somewhat clearer, and on which we sell lots of software products, including the product referenced above; question as follows:
On the Commercial Sales Practices (CSP) chart, are the customers or customer sets listed in column 1 considered the BOAwd set?
If so, why would our CSP, on a different software product, list "re-sellers" with a deeper discount than is listed for "GSA discount" customers? Per the CSP, such re-sellers are offered a 27% discount, yet our proposed GSA discount is 17%.
This thread seems to indicate that "any customer", regardless of size, would suddenly set a new discount standard: http://www.wifcon.com/discussion/index.php?/topic/1174-discouting-gsa-rates/?hl=%2Bbasis+%2Baward+%2Bcustomer. The circumstances feel remarkably similar to the question I'm asking here.
Further, at this site below, the following is in the slides:
Basis of award (BOA) - The customer or customer class that most resembles the purchasing habits of the federal government upon which GSA pricing was negotiated
https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&cad=rja&uact=8&ved=0ahUKEwihu9PJlPDJAhUO52MKHUsDDmMQFggjMAA&url=http%3A%2F%2Fgtpac.org%2Fwp-content%2Fuploads%2F2011%2F10%2FContract-Administration-and-Compliance.pdf&usg=AFQjCNFNk-ycVj0N8iBu9xd86XuMhbxwVQ
All of which indicates to me that the BOAwd customer may indeed get "different" pricing from "other customer sets" (such as the difference in re-seller amount on our current schedule), I'm just struggling with how and when that might apply.
How many ways am I wrong?