Wednesday, March 26, 2014

GSA Inspector General Identifies Recurring Problems in the MAS Program

Yesterday, the Inspector General's Office for GSA issued an audit report that identified several deficiencies in GSA's Multiple Award Schedule (MAS) program. Most Government contractors are familiar with the MAS program. That's where many Government contractors get their start. It has become the Government's commercial item marketplace and through it, Federal agencies spend $38 billion each year from 16,000 contractors offering 10 million different products and services. Most contractors who survive the rigors of "getting on" the GSA schedule, tend to do well - at least sufficiently well enough that they want to stay on the schedule.

When you think about the $38 billion spent by Federal agencies each year, you can assume that there is also some fraud, waste, and abuse going on within the program. That's why oversight agencies, like the Inspector General's office, spend a lot of their own time and resources monitoring and reviewing the program.

One of the underlying features of the MAS program is that the prices afforded the Government are the most favored. In other words, the Government shouldn't pay more than a contractor's most favored customer. The latest IG (Inspector General) report calls into question whether the Government is achieving most favored status. There are two findings in the report that will no doubt require contractors to do more work.

1. Nearly half of the contractors audited had inadequate sales monitoring and billing systems to ensure proper administration of the price reduction and billing provisions of their MAS contracts. The price reduction clause requires that vendors track and report any discounts, concessions, or changes in terms and conditions that disturb the Basis of Award relationship. In other words, if prices drop to the class of customers that supported the price, the Government's prices should also drop.

2. Contractors continue to provide commercial sales practices disclosures that are not current, accurate, and/or complete to support proposed prices. The IG noted that contractors sometimes like to "pick and choose" the data to support whatever price they want to charge the Government. That's not the way it works for the MAS program. The Government wants to see all of the data to ensure that it is current, accurate, and complete. If contractors desire to exclude any history from its support, there had better be a defensible reason for doing so.

The recommended corrective actions for these deficiencies will entail more oversight of GSA contractors.

There is much more to this IG report. If you want to read further, follow this link.

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