The most confusing aspect of a GSA proposal is the requirement to disclose your discounting practices. GSA uses the disclosures to negotiate a discount equal to or better than the best discount you have extended to your commercial customers.

Proposal writing and the subsequent verbal price negotiations with GSA are part of the sales process. The prices negotiated during this process are driven by the discounting practices you disclosed in your proposal.

Under Terms and Conditions, GSA regulations essentially state the following:

"Commercial terms and conditions may be different than the terms and conditions of GSA schedule contracts. These differences may result in GSA prices that are higher than prices offered to your favored commercial customer(s)."

But the reality is quite different. GSA will almost always say: "We are the world's biggest customer, and we should have better than your best price even if the terms and conditions vary."

GSA is an adversarial party when negotiating with you and you must convince them that the "world's biggest customer" argument doesn't apply to you.

Explain that it may apply to a large prime contractor with thousands of established federal relationships, but not to a small business new to the market.

To the small business owner, GSA may in fact be the world's most expensive market. The market is spread across thousands of agencies worldwide. Finding and selling end users in individual federal agencies requires significant business development and sales costs, and there can be a long lag time between submitting a proposal and making a profit. The cost of making individual GSA sales may far exceed the average cost of a commercial sale.

Don't be shy; bring these points up in your proposal and during verbal price negotiations. GSA regulations say that the contracting officers should listen. They just don't like to.