GSA Application for current Federal Grantee

[barricaden]

The company I work for is non-profit organization looking to apply for a GSA Mobis Schedule 874 Contract. I have been tasked with working through the Pricing Proposal. The issue I'm having is that while we have several relatively large federal grants and contracts, we have very limited commercial work. While I believe I can come up with a pricing schedule fairly easily based on our salary structure and cost loading, I'm not sure how I can provide the required pricing backup in the form of commercial invoices and contracts given that most of our current work is federal cost-reimbursement in nature. Does anyone have any suggestions on how I should approach this problem?

Thanks!

[Heretalearn]

I'm not very familiar with the MOBIS Schedule and I don't have the solicitation open, but for what it's worth:

• I believe GSA Multiple Award Schedules are, by definition, for FAR-defined Commercial Items only. If you've never offered or sold your services commercially, you may not qualify to hold a Schedule;
  
• Read the FAR definition of Commercial Items very carefully to see if there's some wiggle room in defining your item as Commercial; I believe even if you haven't made a lot of sales, having offered the item commercially in "substantial" quantities might squeak you through, in which case a commercial catalog or price list could be helpful backup;
  
• I think for most purposes, anything not Federal is commercial; you may be able to use invoices for subcontracts from commercial prime contractors, or municipal, state, or other not-for-profit entities that are not Federal Agencies, if you have any;
  
• Look for the MOBIS Schedule holders on GSA Advantage and open their T&C docs and/or catalogs, and visit their websites; some of them may contain something helpful, though I imagine most of them aren't going to be not-for-profits with predominantly Federal contracts and grants; but who knows, maybe lots of them are.
  

[barricaden]

Thanks Heretalearn. That is helpful. In regards to your 3rd point, are you stating that any subcontract we have with a non-federal entity (even if the prime contract is federal) can be considered commercial? If so, that increases the amount quite a bit.

Regardless, we do have some other commerical work even though it is comparatively small. The problem is that even for that work we price out the projects by estimating the actual cost, loading it with overhead and indirect costs and tacking on a fee (our work is strictly service in nature). We don't maintain an active price list as we price out each job separately. I just don't fully understand how I can back up a price list (consisting of say.. an hourly rate based on position) when I don't currently invoice in that manner. Will the GSA allow me to demonstrate my past project budgets with fully loaded salaries mathematically correlates with the pricing list I generate?

[Guest Vern Edwards]

I think for most purposes, anything not Federal is commercial[.]

Huh?

[Heretalearn]

Huh?

Right. I'll rephrase. I don't have a definition or a citation. But, in my experience, when a CO makes a distinction for some reason between a Federal contract and a commercial contract, the defining element is whether the sale is directly to a Federal agency or not. In my experience, a sale to other than a Federal agency is considered to be a commercial sale.

[Heretalearn]

Thanks Heretalearn. That is helpful. In regards to your 3rd point, are you stating that any subcontract we have with a non-federal entity (even if the prime contract is federal) can be considered commercial? If so, that increases the amount quite a bit.

Regardless, we do have some other commerical work even though it is comparatively small. The problem is that even for that work we price out the projects by estimating the actual cost, loading it with overhead and indirect costs and tacking on a fee (our work is strictly service in nature). We don't maintain an active price list as we price out each job separately. I just don't fully understand how I can back up a price list (consisting of say.. an hourly rate based on position) when I don't currently invoice in that manner. Will the GSA allow me to demonstrate my past project budgets with fully loaded salaries mathematically correlates with the pricing list I generate?

Yes, I believe a subcontract with a non-Federal entity, even if the prime contract is Federal, would be considered a commercial sale for this purpose. This should help you, but it's a double-edged sword. GSA MAS's are awarded on the premise that GSA's customers (Federal entities and some other entities that are allowed to procure through the schedules) will receive a discount from the vendor's commercial prices. It seems counterintuitive, but when you're pricing a subcontract under a Federal prime contract, your customer, the prime contractor, is a commercial customer, and may not receive the GSA discount, event though the ultimate recipient of the discount would be the Federal agency. Your risk in giving the GSA discount to the prime contractor would be that you could trigger the Price Reduction Clause in your GSA Schedule contract. At least that's the way our Schedule works. We also sell services.

If you're able to provide commercial invoices, your CO may not require a commercial price list. What she may do is require a spreadsheet showing, for each position you're pricing, the starting wage and each cost element burden, including G&A and Fee. For our Schedule, the GSA discount is taken from G&A and Fee. She may ask you to back into the commercial invoice total, and show that the G&A and Fee (or whatever her price reduction trigger is going to be) on the commercial invoice is higher than it is for your GSA price. In terms of your pricing, you need to read and understand the Commercial Sales Practice format document, the Maximum Order provision, and the Price Reduction clause, and how they work together, thoroughly.

In our industry, GSA price lists are developed geographically by Wage Determination region, usually in conjunction with a GSA opportunity that's actually been issued as an RFP or RFQ. The GSA price list is developed simultaneously, but separately from the opportunity pricing, but ordinarily has to be submitted and accepted by the GSA CO prior to submission of the related proposal. Different COs may interpret an accepted price list's impact on commercial pricing differently. (Is it limited to the Wage Determination geography? Does only the Price Reduction Clause cost element impact the commercial pricing, or is the ultimate hourly billing rate compared to commercial pricing?) You may want to withdraw GSA price lists developed for bidding purposes if you lose the award, just to keep control of what's out there, and because if you don't you may have to monitor each new Wage Determination for the region and update the price list accordingly. It can get to be pretty high maintenance.

If your company is responding to the solicitation without professional guidance, you should find a book or seminar, it's not a contract to be entered into lightly. Though, upon notice, you're likely to be able to terminate the contract without cause, you can do a fair amount of financial damage to the company in the interim if you don't understand the rules, and if you're awarded a task order under the Schedule, you may be "locked in" at least for the length of the task order. GSA audits compliance with site visits and document reviews. Find out what a Schedule means for your company in terms of complying with commercial pricing restrictions, small business subcontracting goals for commercial as well as Federal subcontracts, developing procedures for and being able to demonstrate compliance with "open market" strictures and with the Trade Agreements Act.

Submitting your solicitation response isn't pass/fail. If the PCO wants you to revise or add to your response, she'll let you know.

[barricaden]

Yikes. So if we are a subcontractor (subgrantee) to a prime grantee and only bill the prime on a cost-reimbursable basis (grants being cost-reimbursement) then we'd possibly trigger the Price Reduction Clause. Looks like I have a lot to look over. Thanks for the advice.