GSA officials have high hopes for the Formatted Pricing Tool (FPT) they’re now rolling out. Over a half-dozen Schedules, including the IT 70 Schedule, are targeted for FPT implementation this calendar year. Despite glitches and concerns in some industry sectors that the tool is not ready for prime time, it is here. The main driver is that GSA officials believe in their core that there is simply “too much” pricing disparity among the same or similar Schedule items. Contractors can forget “market basket” pricing. GSA wants the lowest price across the board. Of course, those prices might not uniformly be as low once companies understand that specially discounted or loss leader pricing is now what the agency expects all the time. Smart companies will revise their own pricing strategies that enable them to survive, resulting in few, if any, loss leaders and fewer, less aggressive, spot discounts. The FPT wave, therefore, may be real, but brief.

Meanwhile, GSA continues to move ahead with its own Category Management (CM) initiative. Professional service leaders in the agency may seek the development of new product service codes. GSA estimates that as much as 40% of current services spending is classified in that manner, meaning that the government has no real baseline against which it can ensure that agencies are buying the services they actually need, or are getting those solutions at fair and reasonable pricing. Other CM initiatives have revolved heavily around price flattening and standardization of product categories. Despite GSA insistence that the same approach won’t be used for professional services, make sure your voice is heard. Professional service contractors have till September 15th to comment on the CM Professional Services initiative.