As part of GSA's ongoing PRICE 2.0 initiative, the Federal Acquisition Service has introduced updates to the market threshold calculations used during catalog reviews in the FAS Catalog Platform (FCP).
The goal is understandable: leverage better market intelligence and automation to identify pricing that may not be competitive, improve pricing consistency across the Multiple Award Schedule (MAS) program, and streamline the review process for Contracting Officers.
However, as contractors begin submitting modifications under the new methodology, we are starting to see some unintended consequences.
What We Are Seeing
Although many contractors have not yet fully experienced the impact—since changes were just released—we have already received several reports indicating that the revised market thresholds are frequently lower than currently awarded GSA contract prices. In many cases, particularly for small businesses, the calculated market threshold is even below the contractor’s actual acquisition cost from manufacturers or authorized distributors. For companies operating with manufacturer-controlled pricing or limited margins, this creates a significant challenge.
A Real-World Example
ADD
During our own testing, we uploaded the same contract (SINs 325992, 332510C, and 333316P) with identical awarded pricing to generate a Compliance & Pricing (C&P) Report.
Nothing changed except the timing.
- May 27 – C&P Report generated before the updated formula.
- July 1 – C&P Report generated after the update.
The result?
The number of products identified as exceeding the market threshold increased by approximately three times.
This suggests that the revised calculation methodology is substantially more restrictive than the previous version.
Why This Matters
If contractors cannot reasonably justify prices that are already below—or even at—their acquisition costs, they may have little choice but to:
- Remove affected products from their GSA contracts.
- Delay catalog modifications while preparing detailed pricing justifications.
- Invest additional time in manual market research to support pricing.
- Forego adding new products to their MAS contracts altogether.
While the updated methodology may reduce the number of products automatically accepted without review, it could also significantly increase the amount of manual analysis required by both contractors and Contracting Officers.
Given the already substantial workload facing many Contracting Officers, this may unintentionally lengthen modification processing times rather than shorten them.
A Broader Impact on the MAS Program
Another potential consequence is reduced product availability on GSA Schedule contracts.
If contractors determine that maintaining certain products on Schedule is no longer commercially viable, federal buyers may increasingly purchase those products through other acquisition channels, including open market procurements.
That outcome would reduce the selection available through MAS and could work against GSA’s long-term objective of making the Schedule program the preferred source for federal purchasing.
We Would Like to Hear From You
If your company has recently submitted a catalog modification under the updated market threshold methodology:
- Have you noticed a significant increase in market threshold flags?
- Have any of your awarded products been identified as exceeding the new thresholds?
- Have you been required to prepare additional pricing justifications because of the changes?
We’re interested in hearing about your experience and understanding how these updates are affecting contractors across different industries.
