How is selling to the government different from selling commercially?

2020 proved to be a difficult, disruptive, and unstable year for business. But selling to the U.S. Government via the GSA Multiple Award Schedule, one of the largest purchasing programs in the world, provides a reliable source of business for GSA Schedule contractors as well as a great number of other advantages which we have outlined in this article.

Check if you Qualify to be a GSA Contractor

Access to government customers

The GSA Multiple Award Schedule (MAS), often referred to simply as the ‘Schedule’, is the federal government’s primary means of procuring goods and services. Purchases made through GSA MAS account for more than 20% of all federal procurement spending, totalling over $40bn annually. In order to acquire a contract to sell to government customers, your company must first become a GSA Schedule contractor.

Being awarded a GSA contract opens up a world of exclusive business opportunities with executive and federal customers. The Federal Acquisition Regulation (FAR) Scope of Contract defines which agencies can purchase products and services via GSA Schedules, and these include:

·         U.S. Senate and House of Representatives

·         Architect of the Capitol

·         Administrative Office of the U.S. Courts

·         Mixed-owned and wholly-owned government corporations

·         Library of Congress

·         National Gallery of Art

·         National Railroad Passenger Corporation (AMTRAK)

·         American National Red Cross

·         Qualified non-profits for the blind or severely handicapped (under the AbilityOne Program)

And that’s not all. GSA Schedule contractors can also provide products and services for international organisations such as:

·         United Nations

·         International Labour Organisation

·         World Health Organisation (WHO)

·         North Atlantic Treaty Organisation (NATO)

·         International Monetary Fund

·         World Tourism Organisation

Your GSA Schedule sales can be increased through the Cooperative Purchasing and Disaster Purchasing Programs, which open up GSA sales to normally ineligible customers, such as state, local and tribal governments, and educational institutions. Cooperative Purchasing supplies IT, security and law enforcement products and services. Disaster Purchasing supplies essential goods and services, that are used to respond to disasters or emergencies.

Stable business during times of hardship

The recession and COVID-19 pandemic demonstrated the fragility of commercial business during times of hardship, with the closure of hundreds of thousands of companies. Yet the U.S. Government does not face the same risks as commercial businesses, so GSA Schedule holders can feel more certain about the continuation of their activities when times are tough.

GSA is one of the few self-funding government agencies, whose operational costs are covered through the Industrial Funding Fee (IFF). Even if a government shutdown does occur, the IFF acts as an insurance policy, protecting GSA contractors. According to the General Services Administration Acquisition Manual (GSAM), GSA Schedule holders must pay the fixed-percentage IFF (currently 0.75%, applied to the final price of their contract) on either a monthly or quarterly basis. This ensures that the GSA MAS program continues to operate even in the absence of Congressional spending.

Government spending increases during troubled times such as health crises and natural or manmade disasters, as the federal government must ensure that states and localities can tackle problems in a timely and effective fashion. GSA sales opportunities are streamlined by the GSA Disaster Recovery Purchasing Program, allowing state, local and tribal governments, as well as some educational institutions to become GSA customers, and swiftly acquire quality products and services at pre-negotiated prices. These include:

·         Power generators

·         Temporary housing

·         Flood pumps

·         Medical supplies

·         Emergency training

·         Construction

·         Distribution and transportation

Access to exclusive GSA services

Online shopping services exclusive to GSA provide the ideal way to market your Schedule, and there are a number of e-marketplaces where GSA products and contracts can be advertised. Millions of products are listed and sold on GSA Advantage!  On GSA eBuy, government agencies list potential contracts, allowing GSA Schedule holders to place their bids – including bids for lucrative high-profile contracts.

The optimal time to seek federal customers

The U.S. Government’s fiscal year runs from October 1st to September 30th. The best time to submit a Request for Proposal (outlining how your product or service meets government needs) and a Request for Quotation (providing a quote and entering the bidding process) is during Quarter 4 of the government fiscal year. Federal agencies are obligated to use the remainder of their budget by September, and typically award one third of the year’s money allocated for government contracts during the period between June and September.

Rules and regulations for becoming a GSA Multiple Award Schedule holder

There are several prerequisites for being awarded a GSA MAS contract.

You must prove that you have been in business for a minimum of two years, and provide two years of financial statements, showing an annual revenue of at least $25,000. There are a few exceptions to this, for example the Start-up Springboard Program which streamlines the application process for innovative IT companies.

You must have demonstrable past performance, either with three or more government contracts or six or more federal and non-federal customers. You are required to provide invoices for any commercial products or services you intend to have on your GSA pricelist. If a third party manufactures your products, then you must obtain from them a Letter of Supply showing that they can meet the demands of the GSA Schedule.

You must be compliant with the FAR Trade Agreements Act (TAA), which stipulates that at least 50% of a final GSA product undergoes ‘substantial transformation’ in either the US or a designated country.

After applying, it can take up to twelve months for your application to be processed.

Are you interested in becoming a government contractor?

Although the bureaucratic process required to become a GSA Schedule holder is quite complex, this is necessary to ensure the reputation of the GSA, reliability of its contractors, and the consistent high-standard of goods and services that are offered. It is certainly worth the time and effort; the advantages of participating in the GSA MAS program are evident.

At Price Reporter, our professional GSA agents are on hand to assist you with the administrative, legal and technical aspects of contract management. With over a decade of experience in conducting business with the government, we have helped more than four hundred small business and large corporations to secure and maintain GSA Schedule contracts. Will you be the next?

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