The single biggest problem in making an offer for a General Service Administration (GSA) schedule contract is defining prices. GSA's expectation is that companies have a standard price list, whether it's published, or a strictly internal document, and then may or may not offer discounts to commercial, non-profit, or government customers. Companies that price "to the market" can get a GSA schedule but they have to be prepared to offer the best price ever offered to anyone or present a strong justification of why GSA should not receive the best price.

Somewhat surprisingly, in our experience many companies do not have a standard price list. The biggest single problem most companies encounter when making a price proposal to GSA is defining precisely what their customer discounts are and the terms and conditions associated with each discount. Many companies do not follow formal, precisely defined rules in offering discounts. Many do it the "American way" -offering prices that will lead to closing any given deal at the time. We call this approach Seat of the Pants pricing.

A similar problem to not having standard price lists is not having standard discounting practices. Standard discounting practices are practices that your sales force follows without exception. Many companies' discounting practices are tied to closing a deal based on current market conditions. Just as is the case with establishing standard pricing, companies pursuing a Schedule contract are probably going to have to establish standard discounting practices and strictly adhere to these practices if awarded a GSA contract. In some cases, this may hurt the company or may not even be possible. In other cases, making the sales force adhere to a set discounting structure may benefit the company.

Companies without a standard price list have to create one retroactively to quantify their discounts. Worse yet these companies have to somehow justify the standard prices that they created to define their discounts. This is one of the biggest problems GSA Schedule applicants run into- defining discounts in a meaningful and understandable way and then relating these practices to the prices offered to the government.

GSA encourages companies to mirror their commercial pricing structures in their GSA price offers; but with deeper discounts for GSA, of course. For example, companies offering tiered pricing commercially (based on quantities purchased, dollar volumes, geography, etc.) should use the same tiers in their GSA offer, but with an added dollop of incentive for GSA.

However, GSA doesn't track cumulative order volume over time because orders can be placed by any federal agency anywhere in the world. Consequently, GSA doesn't negotiate discounts that go beyond a specific order level either within an agency or across agencies. For instance, you will not be talking about additional discounts when agency orders reach a level of $1,000,000.