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552.238-75 Price Reductions

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Price decreases are handled in accordance with the Price Reduction Clause.  When you were awarded your contract, you and your PCO should have established a customer or class of customer on which to base your award.  In addition, the government’s price or discount relationship to the identified customer should have been established.

That customer or class of customer, typically referred to as your ‘Basis of Award’ customer is tied to the Price Reduction Clause.  A price reduction may have occurred if at any time during the contract period you upset the pricing relationship by effectively lowering your pricing to the Basis of Award customers for orders under the maximum order threshold specified in your contract.  You are required to notify your PCO immediately, but not later than 15 calendar days after the effective date of the decrease.  If your pricing is based on your commercial price list, price reductions also occur when you lower the prices in your commercial pricelist. Subsequent to your notification, the PCO will modify your contract to reflect any price reduction. 

Please review the your contract for specific details concerning your Basis of Award customer(s) and the pricing relationship with the GSA.  GSA also recommends having a system or procedures in place to maintain the Basis of Award pricing relationship.