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What is Best Value Pricing?

Best value pricingThe General Services Administration’s (GSA) goal with all GSA Schedule contracts is to ensure the best value pricing possible for government buyers. When negotiating contracts, the GSA requires that companies offer pricing comparable or better than what is given to their most favored non-government customers. This is a major reason why GSA Schedule contracts are such a popular vehicle for government procurement.

The requirement of best value pricing for GSA Schedule contracts should not hurt vendors because they only need to supply the best pricing that they already offer to other customers. In addition, generally orders received from government agencies are much higher in value compared to those from non-government customers, so offering deeper discounting incentivizes contractors to win larger government opportunities. Government agencies are encouraged to seek further price reductions before placing an order through GSA Schedule contracts. Agencies are required to seek further price reductions when placing orders over the Simplified Acquisition Threshold (SAT) or when establishing Blanket Purchase Agreements (BPAs). Contractors are not required to offer further reductions from their stated GSA Schedule prices, but may often do so to increase their chances of winning a bid.

It is imperative that companies cooperate with GSA in offering their best prices for GSA Schedule contracts. Contractors may always offer lower than their GSA prices, but they cannot offer higher. They must always give a greater discount than their Most Favored Customer (MFC) as determined by GSA. If GSA has reason to believe that a contractor is not offering the best price, they may audit the company which can have serious legal and financial ramifications. Companies should work with professional GSA Schedule consultants to make sure they are complying with all the proper GSA requirements and regulations to avoid being audited

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