Yes, your GSA Schedule contract most certainly affects your commercial business! The GSA Schedule contract is a fixed agreement, including set prices, terms, and conditions for doing business with the government. The Price Reduction Clause states that it is unlawful for a company to award a price reduction to a commercial client that is less than the fixed price on their GSA Schedule contract. The Price Reduction Clause can be violated when a company changes their commercial price list, in an unfavorable manner or offers larger discounts to commercial clients than government customers. This is a common way for companies on a GSA Schedule contract to be penalized, fined, and/or audited.
If there is a need for a price reduction to a contractors price list, the price reduction must be done formally through GSA. Price reductions will be awarded when prices are not deemed fair and reasonable by GSA. This can occur when there are changes in the level of effort and mix of a labor force or skill. This can also occur when there is a realization that the activity or product is being sold at a lower price elsewhere.
To understand more about how the Price Reduction Clause impacts your commercial business, visit our FAQ page.