I have read through this forum and searched for answers on this topic. While there have been several discussions surrounding this topic, I haven't quite found the answer that I'm looking for.

Question: We issued an RFQ on GSA eBuy for a labor hour type task order. There are two subcontractors, one with a GSA schedule (sub 1) and one without (sub 2). The prime provided backup documentation/quote from sub 1 which clearly shows their GSA schedule labor categories, GSA schedule rates, proposed discounted rates and proposed totals for the work being performed. For sub 2, the prime provided current invoices showing sub 2's current open market hourly rates and labor categories for the work being performed. However, on the prime's quote they applied their own GSA schedule labor categories and rates to the subs which are approximately 3% higher than the sub's proposed discounted rates. Is this allowable? We are seeking to move forward with award without negotiations.

From what I've read, most people seem to say that if the subs fall under the prime's GSA labor categories than the prime can apply their own rates. This is based on the information found here http://www.gsa.gov/portal/content/202257#3 and FAR 52.212-4 (ALT 1)(e)(1)(ii). Does this apply if a sub. has their own GSA schedule and their rates are cheaper?

A GSA contractor can only charge as much as what is on their FSS Schedule (they can always charge less, but not more). So, if they use a sub, whether it is a Schedule sub or an open market sub, if the only contractual relationship the Government has is with the one GSA contractor, that contractor can charge as much as what is on their GSA Schedule, regardless of what the sub charges. However, you can use this information when you attempt to negotiate a discount from the Schedule rate.

If it is a Contractor Teaming Arrangement (CTA), then each contractor on the team is limited by their individual FSS rates.

On a side note, the GSA contractor cannot charge for services/rateslabor categories not shown on their GSA Schedule, so if they try to charge for a sub's labor and that labor category is not on the GSA contractor's Schedule, they are not supposed to be doing so. The GSA OIG finds this violation quite frequently.

That makes sense, thank you. This is very helfpul.