MAILBAG: WAITING FOR THE CO TO APPROVE YOUR MOD

Sometime reader L. Gaga of New York, NY writes, “We submitted a price decrease request to our CO two weeks ago, but haven’t heard back.  Should we keep waiting?”  Interesting question, L.  In fact, we just had this in a recent Schedules class.  The short answer to your question is “no”.  There is usually no reason to wait for formal CO approval on a price decrease, especially if it is temporary or to maintain compliance with your GSA Schedule Price Reductions Clause.  The government likes lower prices.  The key is to ensure that the CO knows that the discount is temporary, if in fact it is, and when normal Schedule pricing will be restored.  On the other hand, you must wait for a price increase request to be approved.  This approval must come from the GSA CO, not a customer agency CO or GSA contract specialist.  Typically, your GSA Schedule price will lag behind your commercial prices.  This is because GSA wants to see evidence that you have billed, and been paid, on the higher amount before they will consider an increase to the Schedule price.  Many companies, though, go years without increasing Schedule prices and then expect to catch up all at once with one modification.  Schedule contracts typically don’t allow for prices to go up by more than 10% in any one year, though.  As such, we recommend setting a calendar reminder to review pricing on a regular basis or trying to “catch up” during your five year extension processManaging your Schedule prices properly helps your company stay in compliance.  Your boss may even exclaim, “A star is born!”