[Federal Register Volume 59, Number 36 (Wednesday, February 23, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-3707]
[[Page Unknown]]
[Federal Register: February 23, 1994]
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GENERAL SERVICES ADMINISTRATION
48 CFR Parts 538 and 552
[GSAR Notice 5-388]
RIN 3090-AF15
General Services Administration Acquisition Regulation; Multiple
Award Schedule Price Reductions Clause
AGENCY: Office of Acquisition Policy, GSA.
ACTION: Proposed rule.
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SUMMARY: This proposed rule would amend the General Services
Administration Acquisition Regulation (GSAR) to prescribe a Price
Reductions clause for use in multiple award schedule (MAS)
solicitations and contracts. The clause is a modification of that
currently in use. The modifications clarify the clause's applicability,
reduce contractor reporting requirements and eliminate MAS price
reductions based on a low price to an individual Federal agency.
DATES: Comments are due in writing on or before April 25, 1994.
ADDRESSES: Comments should be addressed to the GSA Desk Officer, room
3235, NEOB, Washington, DC 20503 and Marjorie Ashby, Office of GSA
Acquisition Policy, 18th and F Streets, NW., room 4006, Washington, DC
20405.
FOR FURTHER INFORMATION CONTACT:
Ida M. Ustad, Office of GSA Acquisition Policy (202) 501-1224.
SUPPLEMENTARY INFORMATION:
A. Background
On June 14, 1993, GSA solicited comments (58 FR 32890) on proposed
changes to the current MAS Price Reductions clause. The proposed clause
would have eliminated certain reporting requirements and increased the
time given contractors to notify the Government of price reductions.
Public comments received generally supported the changes, but felt that
further changes should be made to reduce the burden on MAS contractors.
To address these comments GSA proposes to further revise the clause to
require that the Government be extended price reductions under the same
terms and with the same effective dates which the contractor extends to
commercial customers.
The National Performance Review recommended that line managers be
given greater flexibility to buy the same or comparable MAS products
for less. In order to remove any disincentive to MAS contractors
offering agencies a lower price on individual orders, GSA proposes to
eliminate paragraph (c) of the current clause entitled ``Price
Reductions to Federal Agencies.''
B. Executive Order 12866
This rule was submitted to and approved by the Office of Management
and Budget (OMB) in accordance with Executive Order 12866, Regulatory
Planning and Review.
C. Regulatory Flexibility Act
An initial regulatory flexibility analysis has been prepared and
submitted to the Acting Chief Counsel for Advocacy of the Small
Business Administration. Copies of the initial regulatory flexibility
analysis are available from the office identified above. The initial
regulatory flexibility analysis indicates that the proposed rule will
affect contractors, including small businesses, that are awarded
contracts under GSA's MAS program. Historically, approximately seventy
percent of MAS contractors have been small businesses. Based on the
number of MAS contracts currently in effect, it is estimated that 4,288
small businesses will be impacted by the new rule.
D. Paperwork Reduction Act
The Price Reductions clause is an information collection subject to
the Paperwork Reduction Act, 44 U.S.C. 3501 et seq., and has been
submitted to OMB for approval under the Act. Comments on the
information collection requirements may be submitted to the Office of
Information and Regulatory Affairs of OMB, Attention: Desk Officer for
GSA, Washington, DC 20503. The title of the information collection is
``GSAR 552.238-75 Price Reductions.''
The Price Reductions clause is intended to ensure that the
Government maintains its price/discount (and/or term and condition)
advantage in relation to the contractor's commercial customer(s) upon
which the MAS contract is predicated. The customer or category of
customer upon which the award is predicated is identified at the
conclusion negotiations and reflected in the MAS contract.
The Price Reductions clause requires MAS contractors to notify the
contracting officer of price reductions at the same time that
commercial customers are notified.
The Price Reductions clause is needed to assure that the Government
maintains the relative discount position, negotiated at the time of
contract award, throughout the term of the contract.
The estimated annual burden for the Price Reductions clauses is
24,508 hours. This is based upon an estimated average burden per
response of 2 hours, a frequency of 2 responses per respondent, and an
estimated number of likely respondents of 6,127.
List of Subjects in CFR Parts 538 and 552
Government procurement.
Accordingly, it is proposed that 48 CFR parts 538 and 552 be
amended as follows:
1. The authority citation for 48 CFR parts 538 and 552 continues to
read as follows:
Authority: 40 U.S.C. 486(c).
2. Section 538.203-71 is amended by revising the heading and adding
paragraph (e) to read as follows:
538.203-71 Solicitation provisions and contract clauses.
* * * * *
(e) Contracting officers shall insert the clause at 552.238-75,
Price Reductions, in all MAS solicitations and contracts.
3. Section 538.272 is added to read as follows:
538.272 MAS price reductions.
(a) Prior to the award of an MAS contract, the contracting officer
and the offeror shall reach an agreement as to the customer (or
category of customer), price lists, and discounts which will serve as
the basis of contract award. The award document shall expressly state
the price/discount relationship between the Government and the
identified commercial customer which is the basis of contract award.
The Price Reductions clause is intended to maintain this price/discount
relationship (and/or term and condition) between the Government and the
offeror's customer or category of customer upon which the MAS contract
was predicated, for the contract term.
(b) During the term of the contract any changes in discount/pricing
practices by the contractor which result or will result in a less
advantageous relationship between the Government and the customer or
category of customer upon which the MAS contract discount/price was
predicated, shall result in a price reduction to the Government to the
extent necessary to reflect the original relationship.
4. Section 552.238-76 is added to read as follows:
552.238-76 Price reductions.
As prescribed in 538.203-71(e), insert the following clause:
Price Reductions (XXX 1994)
(a) Before award of a contract, the Contracting Officer and the
Offeror will agree upon (1) the customer (or category of customers)
which will be the basis of award, and (2) the Government's price or
discount relationship to the identified customer or category of
customers. This relationship shall be maintained throughout the
contract period. Any change in the Contractor's commercial pricing
arrangement applicable to the identified customer or category of
customers, which disturbs this relationship, will constitute a price
reduction.
(b) During the contract period, the Contractor shall report to
the Contracting Officer all price reductions to the Contractor's
identified customer or category of customers upon which the contract
award was predicated. The Contractor's report shall include an
explanation of the conditions under which the reductions were made.
(c) A price reduction shall apply to purchases under this
contract if, after the date negotiations conclude, the Contractor:
(1) Reduces prices (or grants any more favorable discounts, or
terms and conditions) contained in the commercial catalog,
pricelist, schedule or other documents upon which contract award by
the Government was predicated; or
(2) Grants special discounts to the identified customer or
category of customers, upon which the contract award by the
Government was predicated, so as to disturb the discount/price
relationship of the Government to the identified customer or
category of customers.
(3) The price reduction shall be offered to the Government with
the same effective date, and for the same time period as extended to
the commercial customer or category of customers.
(d) The Contractor shall extend to the Government, any general
price reductions (including temporary reductions) offered to all
customers (or category of customers). The price reduction shall be
offered to the Government with the same effective date, under the
same terms and conditions, and for the same time period as extended
to commercial customers.
(e) The Contractor may offer the contracting officer a voluntary
Government wide price reduction at any time during the contract
period.
(f) The Contractor will notify the Contracting Officer of any
price reduction subject to this clause as soon as possible, but not
later than 15 calendar days after its effective date.
(g) The contract will be modified to reflect any price reduction
which becomes applicable in accordance with this clause.
(h) This clause does not apply to price reductions based upon:
(1) firm fixed price definite quantity contracts with specified
delivery in excess of the maximum order limitation specified in this
contract, or (2) any sale caused by an error in quotation or
billing, provided adequate documentation is furnished by the
Contractor to the Contracting Officer.
(End of Clause)
Dated: December 28, 1993.
Richard H. Hopf, III,
Associate Administrator for Acquisition Policy.
[FR Doc. 94-3707 Filed 2-22-94; 8:45 am]
BILLING CODE 6820-61-M
