contractor100

what is wrong with this?

8 posts in this topic

A major product reseller arranges with two other product resellers to offer all of its products on their GSA schedules. When an RFQ appears on ebuy, each reseller submits a bid. This ensures that the CO always receives at least three bids, meeting the FAR requirement.

Assuming there is no discussion among the three parties about the price quoted in the bids, is there anything wrong with this?

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I do not know that there is anything "wrong" with it. There are several product lines on GSA contracts with multiple resellers, so I don't know that there really is any issue.

Reading your question, it appears you are eluding to a collusion situation, and I guess my question would be, "What is the incentive for the other two companies to put those products on their schedule if the major reseller (who probably has the lower prices) does so?"

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Reading your question, it appears you are eluding to a collusion situation....

I doubt that contractor100 is "eluding" to anything, but he might be alluding to something.

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Vern, thank you for the correction... I often miss my 5th grade English teacher. <laugh>

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And if I may quote the US poet John Ashbery:

"We all bought tickets to the allusion but nothing happened"

You ask a good question, Desparado. What indeed is the incentive for the second and third resellers to add the product to their schedules and even more curious, go to the trouble and expense of putting in a bid?

Assume any of these conditions:

1 Cash payment of some kind, passed through from payments from the original manufacturer to Reseller 1

2 Quid pro quo, in that Reseller 1 does the same service for Resellers 2 and 3 with other products

2 Resellers 2 and 3 are actually subsidiaries of Reseller 1

It feels like circumvention of the three bids rule, but if Resellers can absolutely demonstrate lack of collusion on prices, it is hard to say why

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Who does the maintenance and repair on the items? The original reseller may have this capability whereas the other two do not and that is where it makes its money. The more product that gets sold, the more items that may need maintenance. Therefore, reseller 1 may not provide the items to 2 and 3 at its full price. Just a thought.

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A major product reseller arranges with two other product resellers to offer all of its products...

How is it that a "reseller" has its own products? If it does have its own products, would that not make it a seller?

Contractor100 are you envisioning a scenario where RESELLER ONE through the goodness of his/her heart wants to engender more competition for Company ABC's widgets which are sold by RESELLER ONE and so he/she convinces RESELLER TWO and RESELLER THREE to compete against him/her on GSA?

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Sorry, MBrown, just saw this.

No, Reseller One is not doing this out of the goodness of ROne's heart, ROne is doing it for money.

In this situation Reseller One is paid by Company ABC to offer Company ABC's widgets on One's GSA schedule. ABC does not want to carry its own GSA schedule for the usual reasons. Reseller One also offers ABC an even better deal (for a fee!). When a government agency wants to buy ABCs widgets, the agency can put out an RFQ on ebuy and be positive it will get three bids for ABCs widgets.

As to what Two and Three get out of this, see above.

ABC's marketing department may then sell this arrangement to potential buyers as a very easy way to buy ABCs widgets.

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