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Fara Fasat

Letters of Supply

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When a non-manufacturer of a product, such as a reseller or distributor, applies for a GSA contract, it must provide a Letter of Supply (LOS) from the manufacturer. An LOS typically requires 3 statements from the manufacturer: 1) that it will meet all orders, 2) that the products are Trade Agreements Act compliant, and 3) that its products meet the EPA's CPG guidelines, if applicable. 

Recently, for schedule 70, the GSA's LOS template now requires a disclosure of the manufacturer's discount to the reseller, and a price reduction notification. As far as I can tell, these are not in the templates for other schedules.

Does anyone know why these were added to the schedule 70 LOS? I have searched the GSA website, and all reference materials, and cannot find an answer.

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Does anyone know why these were added to the schedule 70 LOS? I have searched the GSA website, and all reference materials, and cannot find an answer.

You asked a question related to this one in July 2014. Why do you want to know? How would it change your life if you knew? How would it change the way you work?

If you want to know just to satisfy your own curiosity, why not do your own research? Have you called anyone in the GSA FSS program? Points of contact can be found at:

 http://www.gsa.gov/portal/category/102275.

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" You asked a question related to this one in July 2014"  No, that was a different question. The July question was about the CSP and it was satisfactorily answered. This is about what goes in an LOS, and why it is now different for schedule 70.

" Why do you want to know?"  Do we now have to justify our reasons for asking questions?

" How would it change your life if you knew?"  Is that the criterion? I believe there have been some less-than-life-changing questions (and responses) here before.

" How would it change the way you work?"  See below.

" If you want to know just to satisfy your own curiosity, why not do your own research?"  No it's not, and I did. Read my post again.

" Have you called anyone in the GSA FSS program?"  No, I'm asking here, which is what I thought was the purpose of this forum, which presumably includes GSA members who might know something about the issue.

Not that I have to justify my question, here's why: A manufacturer that wants to get its products on a GSA contract, but either does not want or is not set up to handle the administrative burdens, can list its products through a reseller. The burden got reduced to simply agreeing to the requirements in the LOS; primarily TAA compliance. Significantly, pricing issues were the GSA reseller's concern, not the manufacturer's. It was the reseller's customers, discount practices, and price reductions, that mattered, not the manufacturer's.

Now the LOS, and only for schedule 70, requires a manufacturer to to disclose its discount to the GSA reseller. This should be irrelevant to the GSA, as the basis of negotiations and of award is the reseller's discount practices. In addition, there is often more than one reseller in the distribution chain, and manufacturers typically do not disclose their discounts to other than their direct customer. Furthermore, the LOS would now require the manufacturer to notify the GSA reseller of any changes in its prices or discount practices. This erodes one of the benefits of selling products through a reseller and not holding your own GSA contract. Again, what should matter is the GSA resellers' price to its customers, which is what the GSA is.

Why is this important? All I need to say is that it is important to the manufacturers I work with. In deciding whether to disclose this information, or indeed whether to even do this any more, it is important to know more about the requirement. The LOS is a template, so is the information mandatory; a policy; a recommendation? Is there a reason for the difference between schedule 70 and all others? Can a reseller get products added without this information? These and other reasons will help in making an informed decision.

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Thanks. Here's why I asked the questions that I did, and why your response helps you. Here is your original question:

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Does anyone know why these were added to the schedule 70 LOS?

The direct answer to that direct question would be yes or no, but that's not what you wanted to know. As for "why" the requirement was added to the Schedule 70 LOS, the obvious answer is: Because GSA wants the information, undoubtedly for pricing purposes, to see what kind of deal they'd be getting in light of the discount given to the reseller. What you really wanted to know is how to avoid having to provide the discount information. Thanks to my prompting (you'd probably call it badgering) you have asked a much improved question, which, as edited, is:

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Can a reseller get products added without [disclosing the discount given to it by the manufacturer]?

Your clarification might help you get the information you want. Now all you have to do is add: If so, how can a reseller go about it?

I don't know the answers, but someone else might.

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