General Services Administration

Adjust GSA Advantage Prices to Reflect True Market Pricing

I am walking a fine line here and I don’t want to disclose part numbers and suppliers but can do so upon request. The prices in this example are real but the suppliers name and part numbers have been altered for confidentiality. Note: GSA Advantage is a required source of supply that has priority over commercial sources as referenced in FAR 8.002

 

Example 1:

Received quote from supplier XYZ for 10 pieces of part AAA for $43.93 each totaling $439.30. The GSA Advantage approved price from the SAME supplier XYZ for part AAA is $391.67 each. Ordering 10 pieces of part AAA from GSA Advantage will cost $3,916.70 which is 891% more expensive than using the quoted price from the same suppler outside of the GSA Advantage program.

 

Example 2:

Received quote from supplier XYZ for 54 pieces of part BBB for $3,099.72 ea totaling $167,384.88. The GSA Advantage approved price from the same supplier XYZ for 1 piece of part BBB is $24,355.54 ea. So ordering a total of 54 of part BBB costing $167,384.88 per quoted supplier XYZ prices (outside of GSA Advantage) is cheaper than ordering a quantity of 7 of part BBB off of GSA Advantage for a total of $170,488.78. If all 54 were ordered from GSA Advantage the total would be $1,315,199.16 which is 785% more expensive.

 

Reason for Such Inflated Pricing:

GSA Advantage establishes a Maximum Order Threshold (MOT) at the time of GSA Schedule award. The MOT is the level to which GSA has determined the pricing to be fair and reasonable.

Given the MOT of $500,000 for these items, according to GSA Advantage it is fair and reasonable to order up to 20 pieces of part BBB at a total of $487,110.80 despite the fact that if quoted market pricing (from same supplier XYZ) is used the cost would be only $3,099.72 ea. That means that 157 pieces of the same part BBB can be acquired for $486,656.04. One can easily make the argument that using GSA Advantage approved pricing is not in the best interests of the government and completely defies logic.

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Idea No. 6552