What is a GSA Sale? How do I determine if a sale is reportable?
MAS contractors are required to report contract sales totals on a quarterly basis and remit any associated IFF. Contract sales must be identified and segregated from non-contract sales, both government and non-government. The following sections explain in detail how to determine what is and is not a reportable sale.
What is a GSA sale:
- If you are selling a contract item, to an authorized user, at contract prices (or lower), and there is no evidence of another contract vehicle in place, the order is considered a GSA sale.
What is not a GSA sale:
- Open market items (i.e. non contract items/services, ODC & Travel) can be included with contract orders, but must be clearly marked as such on orders. Open market items are NOT reportable sales.
- Work as a subcontractor (even if the end user is a government agency) is almost never a sale under your contract, and is therefore not reportable.
How to determine if a sale is reportable
One of the most common questions about sales is how to recognize whether or not the sale falls under the MAS contract. Any one or more of the following may indicate that a sale is a MAS sale:
- Product or service is on your GSA contract
- GSA contract number is stated on the purchase order or task order
- Ordering information and terms are the same as your GSA contract
- Customer made contact with you through GSA Advantage! or eBuy
- Customer pays with the governmentwide commercial purchase card
- Pricing is at or below the MAS price
- There is no indication of any other procurement vehicle being used
- Sales to private company with a Letter of Authorization using FAR 51 or a FAR 51 Deviation
The bottom line is: when a government order fits within the MAS contract parameters, the order should be considered a MAS sale unless the ordering agency indicates otherwise. To summarize, if the product is on the MAS contract, the ordering organization is authorized to use the MAS contract, the ordering procedure used is consistent with the MAS price list, the Schedule delivery terms are used and there is no evidence of any other contracting vehicle being used by the contracting office, then the order is considered a contract sale. When in doubt, you can always ask the ordering organization if they are utilizing your GSA contract for that order. If you have questions or need further clarification, please talk to your ACO.
Open Market Items
Open Market Items are occasionally required to complete the full scope of an agency’s need. As a contractor, you may be able to provide those items, even if they are not approved under your GSA contract.
For example, an agency purchases a computer using a GSA contract; however, they also need a power strip for their new computer. The contractor has power strips in stock, but they are not available on the GSA contract. The power strip can still be combined on the same order, but is considered an open market item. In accordance with FAR 8.402(f), for administrative convenience, an ordering activity Contracting Officer may add items not on the GSA Schedule contract – e.g., open market items – to a GSA Schedule BPA or an individual task or delivery order. However, the following limitations and guidelines apply:
- The customer agency is required to follow all applicable acquisition regulations for items not on the Schedule contract (e.g., publicizing (FAR Part 5), competition requirements (FAR Part 6), acquisition of commercial items (FAR Part 12), contracting methods (FAR Parts 13, 14, and 15), and small business programs (FAR Part 19).
- The ordering activity Contracting Officer has determined the prices for the open market items are fair and reasonable.
- The items must be clearly labeled on the quote, order and invoice as open market items.
- All clauses applicable to open market items should be included in the order.
It is important to recognize that GSA has only negotiated prices or determined prices to be fair and reasonable for those supplies and services that are awarded to Schedule contracts. Therefore, the ordering activity must comply with the requirements for full and open competition, by following all applicable acquisition regulations and determining price reasonableness for open market items.
Work as subcontractor is not a GSA Sale
Work as a subcontractor (even if the end user is a government agency) is almost never a sale under your contract, and therefore is not reportable.
- There is one exception that allows work as a subcontractor to be reported under your GSA contract. The situation is rare and occurs under very specific conditions in accordance with FAR 51.1 (Contractor Use of Government Supply Sources). FAR 51.1 (contract clause 52.251-1) allows agencies to authorize Prime Contractors temporary use of a government source of supply, such as a GSA contract. These orders must be accompanied by a written Letter of Authorization from the agency, stating the Prime Contractor is authorized to utilize government sources of supply for that particular order. If a Prime Contractor places an order using your GSA contract, be sure to obtain a copy of the Letter of Authorization written by the agency and verify the order meets all requirements stated in FAR 51.1. If a Letter of Authorization is furnished and all conditions of FAR 51.1 met, you are obligated to report the sale under your contract and pay the applicable Industrial Funding Fee.
Reporting Sales for GSA MAS Contractor Team Arrangements (CTAs)
Under a Contractor Team Arrangement (CTA), two or more GSA Schedule contractors work together to meet ordering activity needs. By complementing each other's capabilities, the team offers a total solution to the ordering activity’s requirement, providing a "win-win" situation for all parties. Typically, each team member will be responsible for reporting their sales and submitting the appropriate portion of the Industrial Funding Fee (IFF) against the MAS contract.
Some contract holders elect to authorize a dealer(s) to sell products under their GSA contract on their behalf. This is a relationship that occurs when a contract holder authorizes a separate legal business entity to utilize their Multiple Award Schedule contract on their behalf. This relationship allows a contract holder to utilize the sales expertise of their dealer network to increase their GSA contract sales.
An authorized dealer must be approved by the Procurement Contracting Officer and incorporated into the contract. The authorized dealer relationship allows the dealer to act as an agent of the contract holder – and therefore all contract terms and conditions that apply to the contract holder also apply to the dealer.
A distinction should be made between authorized dealers and resellers. Some contract holders simply purchase products wholesale and resell them under their own Multiple Award Schedule contract. This is not an authorized dealer relationship.
Having an authorized dealer can cause special challenges with some of the administrative and compliance aspect of the contract. For example, the contractor’s sales tracking system must be able to recognize, track and report eligible sales for all participating dealers. This can be challenging when there are two or more organizations making sales under the contract. Additionally, the dealer and contract holder need to carefully coordinate on invoicing and billing responsibilities. Because contract holders are ultimately responsible for their authorized dealers, contract holders should carefully consider the reputational and financial risks associated with this relationship. These aspects – among others – should be considered prior to establishing the relationship.
Contractors with authorized dealers or contractors considering such a relationship should carefully review the following clauses: 552.232-83, I-FSS-600, 552.232-82 and 552.216-73.