Using GSA in price analyses

[subconmgr]

The most recent CPSR Handbook states "GSA schedules are not be used as a basis for comparison when conducting market research".

Question: is it permissible to use GSA schedules for price comparison if the contractor has a Letter of Authorization to purchase off GSA schedules?

[Neil Roberts]

The May 2017 Handbook Appendix 11section reads as follows below ( I am not aware of a more recent version. Does the bold sentence below answer your question? It appears to me that the answer to your question is "no."

II. Practice
The CPSR Analyst needs to first determine whether an award was competed or based on sole source. If an award was not competed, the analyst must review and analyze the price analysis that was utilized to determine if the price was fair and reasonable. As required in the contractor’s policy, each of those applicable files must document the rationale used for making the pricing decision and include the source and type of data used to support the determination. The complexity and circumstances of each acquisition should determine the level of detail of the analysis required.
FAR 15.404-1(b)(2) describes examples of price analysis techniques to establish price reasonableness:
 Comparison of proposed prices received in response to the solicitation. Normally, adequate price competition establishes a fair and reasonable price.
 Comparison of proposed prices to historical prices paid for same or similar items. This method may be used for commercial items including those “of a type” or requiring minor modifications.
o The prior price must be a valid basis for comparison. If there has been a significant time lapse between the last acquisition and the present one, if the terms and conditions of the acquisition are significantly different, or if the reasonableness of the prior price is uncertain, then the prior price may not be a valid basis for comparison.
o The prior price must be adjusted to account for materially differing terms and conditions, quantities, and market economic factors.
o Expert technical advice should be obtained when analyzing similar items or commercial items that are “of a type” or requiring minor modifications, to ascertain the magnitude of changes required and to assist in pricing the required changes.
 Use of parametric estimating methods/application of rough yardsticks.
 Comparison with competitive published price lists, published market prices of commodities, similar indexes, and discount or rebate arrangements.
 Comparison of proposed prices with independent cost estimates.
 Comparison of proposed prices obtained through market research for same or similar items.
 Analysis of data other than certified cost or pricing data provided by the offeror.
In accordance with DARS class deviation memo 2014-O0011, if a contractor is authorized to use GSA schedules, then a price reasonableness determination should be made using the analysis techniques at FAR 15.404-1. GSA schedules are not be used as a basis for comparison when conducting market research.
 

[joel hoffman]

I consider GSA schedules to be something akin to “catalog list prices” - or a starting point for obtaining discounts. 

Especially applicable  for equipment/supply type items that are otherwise subject to market conditions. In my experience, contractors often don’t pay “list” prices from Grainger, for instance,  or from many other suppliers.  

 

 

[Retreadfed]

Market research and price analysis are different activities.  Subconmgr, can you tell us what part of the Handbook you have in mind?

[Desparado]

As someone who has spent time with both DoD and GSA, I have always found DoD's view of GSA's pricing to be interesting.  Now that I know how GSA gets its pricing and how they determine a price fair and reasonable (not the lowest) it is interesting to me that DoD has such an objection. Now, I totally agree that you may not want to use GSA pricing to determine the lowest price available, but I personally think that it should be perfectly acceptable to use for a fair and reasonableness determination.  Fortunately, other agencies aren't held by these same rules.