GSA Schedule vs Open Market

[contractshelp]

Say I have a customer who requests to purchase a COTS computer. In their market research they received a quote from a vendor for open market pricing.

After requesting quotes from randomly selected vendors off the GSA schedule 70 it became apparent that the pricing initially quoted by the open market company (which was also used for budget determinations) was significantly lower than the GSA schedule.

I know that you should not compare open market with GSA pricing and than the market research should not have included a quote in the first place, but knowing all of this, how do I truly do my due diligence to my customer. I tell them they have to spend an additional sum of money (in the thousands) instead of just buying from the lowest price?

[napolik]

Say I have a customer who requests to purchase a COTS computer. In their market research they received a quote from a vendor for open market pricing.

After requesting quotes from randomly selected vendors off the GSA schedule 70 it became apparent that the pricing initially quoted by the open market company (which was also used for budget determinations) was significantly lower than the GSA schedule.

I know that you should not compare open market with GSA pricing and than the market research should not have included a quote in the first place, but knowing all of this, how do I truly do my due diligence to my customer. I tell them they have to spend an additional sum of money (in the thousands) instead of just buying from the lowest price?

There is no reason why your market research cannot delve into Federal Supply Schedule contractors and other contractors. Further, you are not obligated to use the Federal Supply Schedul unless it is "mandatory".

If the "open market" computer is a better buy, cancel the RFQ, if you issued one, and write a memo to file saying you cancelled the RFQ because the same thing is available at a lower price on the open market. Then, do a FAR 13 competition.

[napolik]

Say I have a customer who requests to purchase a COTS computer. In their market research they received a quote from a vendor for open market pricing.

After requesting quotes from randomly selected vendors off the GSA schedule 70 it became apparent that the pricing initially quoted by the open market company (which was also used for budget determinations) was significantly lower than the GSA schedule.

I know that you should not compare open market with GSA pricing and than the market research should not have included a quote in the first place, but knowing all of this, how do I truly do my due diligence to my customer. I tell them they have to spend an additional sum of money (in the thousands) instead of just buying from the lowest price?

Take a look at B-298481, Murray-Benjamin Electric Company, LP, September 7, 2006:

"Agency is not required to order supplies under non-mandatory Federal Supply Schedule (FSS) contract, and where it is in agency?s best interests--including

need to establish ?best value? among potential offerors--agency may compete its requirements among commercial sources of supply instead of under non-

mandatory FSS."

??, while the list of required sources found in FAR sect. 8.002 places non-mandatory FSS contracts above commercial sources in priority, it does not

require an agency to order from the FSS.?

?[5] As explained by GSA, while agencies are encouraged to use the FSS, where an agency concludes that it is in its best interests to meet its needs through an open market procurement, it is free to do so.?

See also this thread: http://www.wifcon.com/discussion/index.php?showtopic=176.

[joel hoffman]

Say I have a customer who requests to purchase a COTS computer. In their market research they received a quote from a vendor for open market pricing.

After requesting quotes from randomly selected vendors off the GSA schedule 70 it became apparent that the pricing initially quoted by the open market company (which was also used for budget determinations) was significantly lower than the GSA schedule.

I know that you should not compare open market with GSA pricing and than the market research should not have included a quote in the first place, but knowing all of this, how do I truly do my due diligence to my customer. I tell them they have to spend an additional sum of money (in the thousands) instead of just buying from the lowest price?

Note that FAR Case 2007-012: Requirements for Acquisitions Pursuant to Multiple-Award Contracts (Interim) is Item II in Federal Acquisition Circular 2005-50, issued today, 16 March 2011 (see it on WIFCON Home page today) ". The language of the FAR Case includes this: "...Clarifies that ordering activities may seek a price reduction under FSS contracts at any time."

Here is what 8.405-4 – Price Reductions previously said, in part, as of yesterday: "In addition to seeking price reductions before placing an order exceeding the maximum order threshold (see 8.405-1(d)), or in conjunction with the annual BPA review, there may be other reasons to request a price reduction. For example, ordering activities should seek a price reduction when the supply or service is available elsewhere at a lower price, or when establishing a BPA to fill recurring requirements." That seems to imply to me that if you can find a lower price somewhere else, you should seek price reductions and should be able to use that as some basis of reasonableness before buying off the FSS.

Here is what the new 8.405-4 says, in pertinent part: "Ordering activities may request a price reduction at any time before placing an order, establishing a BPA, or in conjunction with the annual BPA review. However, the ordering activity shall seek a price reduction when the order or BPA exceeds the simplified acquisition threshold."

Does that help at all?