Fair and Reasonable Prices for Services More Difficult to Determine; Enhanced Competition at Contract and Order Stages Recommended

MR - This Research Note summarizes the key findings and recommendations of a two year study conducted by the U.S. GSA's Multiple Award Schedule Advisory panel into procurement policy regulations, solicitations, and contract provisions, which highlights distinctions between services, solutions, and products. Some key study findings include: (1) It is more difficult to determine fair and reasonable prices for services than for products; (2) Meaningful competition occurs at the contract schedule (MSA) and order levels; (3) The value of a price reduction clause as an effective procurement tool is questionable; (4) Order data is not systematically collected as it should be to leverage client purchasing power; and (5) the best method for determining a fair and reasonable price for services and products is to enhance competition at the contract and order levels, and to ensure that the process of contract and order formation is transparent to both procurement and all authorized ordering activities. Report makes 20 key recommendations to re-architect inter-agency procurement policies, processes, and workflow to increase competition and transparency, and to set the stage for transformation to strategic sourcing within the world's largest organization. (1,653 words) . . . (to read the remainder of this article, please log in below.)