GSA Administration: Is it Worth the Effort?

Welcome to all... To the Premier Blog for the most boring of subjects: Federal Government Contracting. The good news is that you will find nuggets of information that you can trade in for payments from the government. Hey, send me a question or two and I'll have more fun blogging! GB. September, 2012

Many times a prospective client asks me how much of a burden (OK, how much of a pain) is maintaining a GSA contract. Below I describe the basic responsibilities of the vendor (you). By the way, I use the common acronyms, so bear with me on that.

Yes, there is a definite effort related to working with a GSA contract. Besides the initial effort of getting on schedule, an individual from the vendor would have to be assigned as Administrative Point of Contact (POC). This person would be the interface to GSA, prepare reports, and ensure that GSA receives the Industrial Funding Fee (IFF), which must be filed quarterly even if there are no sales.

Although this article is about maintaining the schedule after award, the up-front effort is not trivial.

Making the Offer: The process required to win an award obviously takes work and time up front. Although consultants like GM Beckert would do the bulk of the work, the vendor (you) will need to provide pricing data, and get a Past Performance Report from Open Ratings. You would also have to provide financial information (P/L and Balance Sheet) as part of the offer. This could take a few hours or longer depending mainly on pricing. Pricing is usually the hardest thing to nail down and will take management time as well as administrative time, but this is where a good consultant can really save time and money.

Clarifications and Negotiations: Once the offer is made, GSA will ask for clarifications; perhaps more invoices or more descriptive documents. Finally, there are negotiations, which also involve management and our involvement as a coach. Once all this is done and the contract is awarded, the vendor would go into the contract maintenance phase.

Maintenance: Now, when a GSA Contract is awarded, you will work with two GSA contracting officers. A GSA Administrative Contract Officer (ACO) will be assigned. The vendor POC will work with the GSA AOC for IFF payments, scheduled visits, audits, and contract modifications. The vendor will also work with the GSA Program Contracting Officer (PCO) for technical tasks, such as pricing and modifications. Important tasks for the vendor are:

• Filing Forms Quarterly - Reporting sales and paying the IFF. Even if sales are zero, the forms must be filed. The information is filed electronically, which saves paperwork!.

• Tracking GSA transactions - ensuring that the accounting system accurately tracks GSA sales.

• Calculating the IFF and remitting it to GSA Quarterly. The IFF is .0075 (.75%) of the GSA sales.

• As needed, responding to GSA requests for updates and information.

• Being available for an "introductory visit" and subsequent visits (usually bi-yearly) by GSA personnel.

• Responding to "Mass Modifications" where GSA changes a contract and vendors must respond and accept the changes.

• Initiating Contract Modifications - raising prices, adding/deleting items, etc. However, this is non-trivial and a service we provide at an extra charge.

• Maintaining the the vendor government information on the "System for Award Management" (SAM) website. This was formerly Central Contractor Registry (CCR) and On-Line Representations and Certifications (ORCA). Note that part of my service initially is to set all this up for you so you have a turnkey system. But on-going maintenance is up to the vendor.

• Last but not least is Marketing. the vendor must make a time and money effort to market its services to the government. Without on-going marketing, sales will be minimal.

Although this list seems extensive, many items are done rarely or very intermittently. Once the tracking system is established, it is easy to prepare the report. The administrative day to day effort is mostly in keeping track of GSA activities and ensuring the proper forms are filed quarterly. Marketing is usually handled by a marketing person or team. The good news is that the IFF reporting is now done electronically, where you would fill in the quarterly sales and IFF payment on line.

Based on these tasks, we estimate the on-going administrative burden to be around 4-8 hours per week or less, again, depending on the amount of GSA activity. At times the work load will increase, for example when GSA makes a visit (one initial visit, and then more visits if the sales are low), or an audit (usually about every two years). Of course, more activity means more work, but also more sales revenue. GSA wants to know that you have a system in place for tracking sales and IFF payments.

Administrative tasks are usually assigned to an hourly individual who has skills in record keeping and dealing with clients. It could be a member of the accounts staff, for example, or a skilled secretary. At 10% (4 hours per week) the yearly labor load will be about 200 hours, depending on level of activity.

This has been a short overview of the administrative burden a company faces when working with GSA. To me, the Return on Investment (ROI) is simply valued on the revenue received. The revenue received is a function of marketing and sales. The question is: Is it worth it for you?

My answer is that administrative costs are small compared to the revenue that can be generated by GSA, and can be calculated into the prices offered to maximize profitability. All prices offered to GSA are fully bundled, which includes Costs of Doing Business, Administrative, Management, Overhead, Profit, and so on.

I hope that this has been helpful, and our only caveat is that the statements here are based on our experience working with GSA but could vary depending on the organizational structure and level of GSA Activity. If you make sales, the administrative effort is worth it! Best wishes and good luck!