How to build your GSA pricing strategies
The GSA pricing policy implies that a vendor must offer its best price to the government. Specifically, You should offer the GSA at least the same or better prices that you do to your Most Favored Customer (MFC). Unfortunately, this clause is often interpreted as “the lowest possible price.” Wrong.
The problem with just providing a bigger discount to GSA is that you can easily render your entire business with the government non-profitable. Hundreds of companies have fallen victims to this Catch-22: you must offer low prices to win the bid, but by offering low prices you undermine your own business, thereby making the whole bid-and-win process pointless. Surely, lower prices for federal agencies mean savings for the American taxpayer, but chasing the lowest bid only for the sake of staying the lowest, is not efficient.
In fact, the proper approach to setting your GSA contract rates is… to not look at the others’ prices! Well, not from the beginning. The fact is: you don’t know the structure of your competitor’s prices. You do not know their direct and indirect costs, including labour, materials, transport, and other expenditures. Hence, trying to beat their bids straight forward has no chance to succeed.
GSA pricing schedule
The better option to complete your GSA price list is to evaluate your own rates, costs, and surplus your desirable profits. Then, you can research for current or past bids, using GSA Advantage, USASpending.gov or govspend.com tools, see if you can compete without going broke, and meet the requirements of GSA at the same time. You can also use the GSA Integrated Competition Tool for that.
Also, remember that bidding the lowest is only halfway to securing a contract. Whenever you respond to an RFQ, you will eventually have to provide evidence in the form of Price Narrative and Price Proposal documents.
