Pros and Cons of Government Contracting in 2020

Pros and Cons of Government Contracting

While COVID-19 is rampant and continues wreaking havoc all over the world, many businesses are struggling to survive and retain at least a zero balance if possible. During such hard times you can easily overlook great opportunities provided by the GSA – the only self-funding government agency in the U.S. In this article, we review pros and cons of entering the GSA Multiple Award Schedules program in 2020.

Check if you Qualify to be a GSA Contractor

Getting on a GSA Schedule

Year 2020 is a perfect time to apply for the GSA Schedule program. Here is why.

Pros:

  • In times of the pandemic, the government needs various goods and services more than ever before. Medical equipment, protective wear, disinfectants, individual means of protection, hygiene stations are in high demand today along with other less obvious instruments, tools and products such as computer systems, video conferencing hardware, furniture, ready-to-eat meals, and signage.
  • In order to facilitate faster acquisition, the GSA has increased the Micro-Purchase Threshold and the Simplified Acquisition Threshold. This opens up opportunities for many small businesses to provide their products to the government within a very short timespan.
  • The fourth quarter of a fiscal year traditionally displays the highest spending, so 2020 Q4 is a great moment to enter the federal market.
  • There is a SAM.gov’s Disaster Response Registry where contractors can offer their services to federal agencies. In order to be included into the Disaster Response Registry, a contractor must only be legitimately registered at SAM.gov. On average, such registration takes 3-4 days.

Cons:

Getting on a Schedule is still not an easy task. If your company is not yet awarded, you will need to make serious efforts in order to obtain your first contract. There are ways to simplify the process, though:

  1. Hire a consultant or an agency who will take all the burden of GSA MAS Program registration from you.
  2. Become a subcontractor.

Multiple Award Schedule Consolidation

MAS Consolidation has greatly simplified the acquisition process. Small businesses have won the most from consolidation, and today the GSA reports that two thirds of Coronavirus-related contracts are fulfilled by small businesses.

Pros:

  • Thanks to MAS Consolidation, you can now get your contracts approved faster. Previously, Special Item Numbers (SIN) categories were independent of NAICS codes. Now, they precisely match each other, making it easier to locate a niche in the government contracting world, as well as simplify contract management .
  • Consolidated Multiple Award Schedule opens new possibilities for vendors. Today, you can sell the entire range of your products and services under just one Schedule contract. Previously, you would have to apply for an individual contract if some of your products fell under a different SIN category.

Cons:

  • You must keep track of your GSA sales and commercial market sales separately
  • There are sales reporting requirements
  • You need to update your catalogs and pricelists regularly

If you don’t want to create an in-house department just to manage GSA sales, you can consider delegating the above worries to an agency such as Price Reporter.

GSA Compliance

Compliance with Federal Acquisition Regulations is one of the most important matters GSA vendors should keep an eye at. In 2020, GSA standards on compliance were mitigated to simplify procurement of emergency products.

Pros:

  • GSA has extended the TAA compliance exception for crucial products. This means federal buyers can temporarily purchase non TAA-compliant products to help fight COVID-19.
  • Also, agencies are allowed to buy approved products on the exemptions list from suppliers other than AbilityOne.

Cons:

  • GSA Compliance is still tricky. There are a lot of rules and regulations to follow, even in times of the pandemic.
  • You need to maintain compliance constantly, monitor changes and industry news and quickly modify the contract, if necessary. For instance, in July 2020, the GSA, DoD and NASA released an Interim Rule that made certain telecommunication equipment non-compliant, and therefore precluded from purchasing by federal agencies. Moreover, federal contractors are prohibited from entering any contract with an entity that uses such equipment as a substantial part of any system.

Surely, you can refer to the GSA compliance checklist published here. However, that requires constant effort, and you cannot neglect GSA compliance since your contract is at stake. A single incompliance issue may result in termination of your entire GSA contract. If you aren’t ready to manage such risks, a viable strategy is to hire someone to manage the GSA Schedule contract for you.

Conclusion

While the world is shaking under the blows of the deadly pandemic, your business doesn’t have to suffer from it. In 2020, government contracting can be that life saving option for your business that can keep it alive, while COVID-19 is not yet vanquished, and for years to come after that.

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