Exercising the GSA Contract Extension Option
Extension of your GSA contract does not happen magically and automatically. Your assigned GSA contracting officer will review your contract once again, and will see if you’d been able to deliver results and meet the conditions.
- Your contract still meets all the required terms and conditions of GSA contracting.
- During your contract period you were able to meet the minimum sales requirement which is $25,000 in sales during the first two years of your contract period, and $25,000 per year in each subsequent year.
- Your company must maintain financial health. You should not have any unpaid debts or overdue payments.
- The pricelist displays fair and reasonable pricing.
In addition, the contracting officer considers the feedback received from Administrative Report Card and during Contractor Assistance Visits.
If all conditions are met, the contract extension option is exercised. And once again we should repeat it: GSA contract extension is NOT automatic.
What You Need to Know About the Extension Option Process
Normally, a GSA contract is awarded for a 5-year time span. Before this period expires, typically 8 months prior to the expiration date, you will receive an e-mail message with the option to renew your contract. You should respond to this message within 30 days.
Your response to the renewal message should contain a Letter of Intent containing certain information and formatted properly. Once the GSA receives your Letter of Intent, a contracting officer will contact you, or the person you authorized to communicate with the GSA on your behalf. Importantly, such a person must have a valid Digital Certificate to be able to exercise the contract extension option via the eMod platform.
The contracting officer reviews your contract (see above) and probably asks you for any additional supporting documents she needs to confirm your status. This could be TAA compliance documents, or commercial practices, pricelists, price narrative, or whatever else she needs. Get ready for another round of price negotiations as well. Overall, it is in your best interest to be prepared for the GSA contract renewal, beforehand.
GSA Contract Renewal Consulting
As you see, renewing your GSA contract is not as clear-cut as it might seem at a first glance. Delegating the entire contract extension process to Price Reporter may be a relief, especially if you don’t want to submerge yourself deeply in all the nuances of Federal Acquisition Regulations.
- We can evaluate the current state of your contract and asses its readiness for extension to the next 5-year period
- We check your products and services for compliance
- Our specialists will prepare all the documents required for contract extension, including the Letter of Intent
- We can communicate with the GSA contracting officer on your behalf
Combined together, these and many other services provided by Price Reporter allow you to focus on what’s important and what you can and want to be taking care of: your business.
Renewing your GSA Contract
When GSA awards you a contract, the contract is signed for 5 years. You then have three options to renew the contract for another 5 years, totaling to 20 years. GSA contract renewal does not happen automatically. In fact, when the last year of the 5-year period comes to the end, the GSA will notify you, and offer an opportunity to renew your GSA contract. This is called an option to extend your GSA contract. The extension clause is automatically added to your contract if the contract is renewed as stated in FAR 52.217-9.
When does the GSA Renewal Process Start?
Earlier than you might think. Approximately 8 months before the expiration date of the contract, the GSA sends a message requesting a confirmation that the vendor is willing to extend his or her contract. 30 days are given to reply and send your Letter of Intent (see above).
Importantly, your company must be prepared for the upcoming renewal, in advance. Too many GSA contractors fell victims to their own unawareness, and lost the opportunity to extend their GSA contracts.
GSA Contract Renewal Process
After you received your renewal e-mail, the renewal of the GSA contract starts for you. Once again, we remind you that the renewal procedure is NOT automatic.
- GSA sends you an email asking you to confirm your intent to extend the contract.
- You send the Letter of Intent and submit a number of required documents, such as:
- Actual and up-to-date pricelist
- Certificates, licenses
- Latest past performance report
- Documents confirming TAA compliance of your products
- Financial statements
- Commercial practices
- The GSA reviews your submission (this takes 1-4 months) and the contracting officer decides to exercise the contract extension option.
When Should I Start My GSA Renewal?
The golden rule of almost any interaction with the GSA is: you should do everything beforehand, reserving yourself enough extra time. The rule also applies to the GSA contract renewal. Despite the fact that the GSA will inform you about the upcoming end of your contract within 7-8 months of expiration, your company must start the preparations even earlier. Price Reporter recommends to initiate the renewal preparations at least one year prior to the expiration date of your GSA contract. Here is why.
If you begin early, you can address many issues before the GSA even points them out. This results in faster GSA review, and eventually – effortless extension of the GSA contract.
- Poor sales. If you noticed that your GSA sales are lower then the required minimum of $25,000 per year, you will have enough time to intensify your GSA marketing efforts to secure additional sales.
- Contract modifications. Once the renewal process is initiated, you cannot make changes to the contract anymore. So, if you want to adjust something, it is time to do this prior to that.
- Prepare documents. You need a bunch of obligatory documents, so it is a good idea to do your paperwork sooner, when there is no deadline sword of Damocles hanging over you.
- Address the issues. There may be concerns in the Contractor Assessment Report or a feedback from the Contractor Assistance Visits you need to address.
Why Wouldn’t GSA Renew My Contract?
There are a number of reasons for not extending a GSA contract. Normally, if you are a legitimate and responsible contractor, the GSA will have no reasons to not renew the contract. But we recommend doing your homework and checking everything twice. Don’t be overoptimistic: too many contractors failed to renew their GSA contracts because of their carelessness. And were surprised to know they had problems that prevented renewal.
- Lack of GSA sales. As long as you possess a GSA contract, you must deliver sales. If you do not make the required minimum of $25,000 per year, your contract will not be renewed because you are underperforming as a government contractor.
- Poor financial stability. Your business must look healthy if you want to continue selling to the government.
- Compliance issues. The government cannot procure non-TAA-compliant products. If your company was TAA complaint, and then something has changed and one of your products is no longer compliant, your contract will not be extended.
- Bad reports. Unaddressed Assessment Report Card problems are also a common reason for renewal rejection. Make sure you offer a remedy for every reported issue.
- Complaints. If your company receives too many complaints from agencies, the GSA may decide to cease doing business with you and not renew your GSA contract.
The key to effortless GSA contract extension is to be prepared and address all the existing problems (if any) preliminarily. If you don’t have spare human resources to do this, you can always hire Price Reporter specialists that will guide you through the entire renewal process directly, to the positive outcome.
