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sellng to the feds

Everything you need to know about landing government video contracts.

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  1. Introduction
  2. Marketing to the Government
    1. Know the Rules!
    2. Selling to the Feds
      1. Calendar Concerns
      2. Procurement Vehicles
      3. Getting to Know You
    3. Congratulations! It's an e-Buy!
    4. Why Companies Need a Core Government Sales Group
  3. GSA Schedule Contracts
    1. Today GSA, Tomorrow the World
    2. Placing GSA Schedule Orders
    3. What GAO is Saying About Schedule Orders
    4. Incidentally Yours
    5. Leasing Nuts and Bolts
    6. Industrial Funding Fee Update
    7. Industrial Funding Fee in Legal Practice
    8. Mod Squad
    9. Back Door Schedules
  4. GSA Initiatives
    1. Evergreen, Everblue?
    2. Consolidated Contracting
    3. E-GSA
    4. GSA Is Getting It Right -- Are You?
  5. BPAs and Getting Paid
    1. BPAs 101
      1. An Introduction to Blanket Purchase Agreements
      2. GSA Schedule BPAs
      3. BPAs and the Law
    2. Ordering from BPAs
    3. Getting Paid
  6. Formal Competition
    1. GAO Bid Protest and Debriefing Procedures
    2. Filing a Timely Protest
    3. Bid Protests: What Happens After Filing
    4. Bid Protest Update
  7. Small Business Contracting
    1. Certifiably Small
    2. Small Business Contracting With the Government
    3. Small Business Subcontracting
    4. HUBba HUBba
  8. Special Requirements
    1. Are You a Sub?
    2. Federal Acquisition of Foreign Products
    3. Record Retention
    4. Procurement Integrity
    5. A Necessary Distance
    6. Suspension and Debarment
    7. The Freedom of Information Act
    8. Section 508: What You Need to Know
    9. Section 508: Now In Effect
    10. Federal Isn't the Only Avenue for Government Spending
  9. Federal Links

    Evergreen, Everblue?

    Be careful what you wish for, because sometimes you might get it. It's not a saying associated with government contracting, but it may well apply to the GSA Federal Supply Service's "Evergreen Contracting" program.

    The Evergreen Contracting program provides new contractors with a base five-year contract period and up to three five-year extension periods. If GSA were to exercise all three extension periods, a contractor would have the same GSA Schedule contract in place for 20 years running!

    Why did GSA introduce Evergreen Contracting?
    The GSA Schedule program has gotten very, very popular. For example, the Group 70 Information Technology Schedule program now has thousands of contractors, up from just hundreds 10 years ago. Evergreen Contracting allows GSA to reduce its workload of negotiating new contracts every five years, and also allows GSA to re-award and retain quality contractors, avoid lapses in contract coverage, and make long term BPAs easier.

    Before renewing a GSA Schedule contract for a five-year extension, GSA considers whether a) the extension is advantageous to the government; b) the contractor kept its GSA Schedule Pricelist posted and up to date on GSA Advantage!; c) the contractor's performance has been acceptable; and d) the contractor met its Small Business Subcontracting Plan goals. If a contractor meets these criteria, GSA, at its option, can renew your GSA Schedule contract for an additional five-year period.

    A 20-year contract!
    Isn't that just a dream come true for contractors accustomed to scavenging puny one-year contracts with perhaps four option years? The same GSA contract number for 20 years! By the time the GSA Schedule contract expires, you'll be retired and living in Florida.

    Maybe not
    While a 20-year GSA Schedule contract certainly provides for a steady run, it may also provides some bumps and potholes along the way. Your contract vehicle may even lose its tires! Let me explain.

    Economic Price Adjustment (EPA) Clause
    The EPA clause permits a contractor to increase its price during the contract term, but limits the contractor to a certain percentage per year (in the absence of compelling circumstances). Over time, a GSA Schedule contractor's pricing, limited by the EPA, could grow increasingly out of whack with its commercial pricing.

    To avoid selling products at too great a discount, the contractor would have to delete the item from the Schedule. Or to get a new baseline price for its whole product line, the contractor would have to terminate its GSA Schedule and submit a new proposal, which obviously defeats the whole purpose of an Evergreen Contracting clause. Oh well.

    Price Reductions
    The Evergreen Contracting clause doesn't reduce, eliminate, or otherwise ameliorate the Price Reduction clause in the Schedule contract. A contractor may still be liable for price reductions, whether purposeful or inadvertent, that occur when a contractor sells to its identified customer or category or customers at a price lower than disclosed during negotiations.

    Under the Price Reduction clause, a contractor may be liable to the government for the difference between the order price and the reduced price that the government should have gotten, but didn't, from the date of the price reduction forward to the present for all orders of the covered products or services. What if the price reduction took place in the contract year three, but wasn't discovered until contract year 11? Is the contractor liable for eight years of the price reduction?

    Audits
    Combing and multiplying the problems of the Price Reduction clause is what could happen in an audit of a 20-year contract. The audit letter could arrive in year 17 asking for records going back, well, 17 years, or only 10 years if you're lucky.

    Records would have been lost in the meantime. The personnel at your company (before it was twice sold) who negotiated the contract are no longer in your employ. Your electronic records, to the extent archived, are no longer readable by your current computer system. Meanwhile the auditor considers your failure to respond a deliberate ploy and threatens to refer the matter to the Department of Justice for prosecution of an obstruction of justice charge, a felony. You've had better days.

    OK, maybe I'm exaggerating somewhat, but maybe I'm not. No one knows, since no disputes about the EPA, Price Reduction, and audits have been litigated in the context of Evergreen Contracting. What is certain is that GSA's Evergreen Contracting will spawn a host of unintended consequences far worse than the problems it tried to solve. GSA needs to quickly rethink and revise its Evergreen Contracting program to prevent it from making everyone everblue.




Copyright Andrew Mohr 2000. All Rights Reserved Disclaimer:
This information in this site is for informational purposes only. It is not legal advice and may not be relied upon. For legal advice about any of the topics discussed in this book, please seek the advice of legal counsel.