Does Your Multiple Award Schedule (MAS) Contract Need a Health Check?

At A Glance:

• Main Takeaway: Ignorance isn’t always bliss. A Multiple Award Schedule (MAS) Contract Health Check can help identify compliance risks and prevent costly consequences down the line. 
• Business Impact: Poorly negotiated MAS contract terms and conditions can negatively impact your business, especially when they aren’t clearly understood by all stakeholders. 
• Next Steps: Aprio’s GSA team can conduct a MAS Contract Health Check to help your company gain a deeper understanding of the contract terms and conditions and uncover areas for improvement to avoid costly mistakes.

Get started on your MAS Contract Health Check before your next Contractor Assessment or audit. Schedule a consultation with Aprio’s GSA specialists today.

The Full Story:

The General Services Administration’s (GSA) Multiple Award Schedule (MAS) contract is a common entry point for government contractors. MAS is an attractive contract vehicle because it streamlines the acquisition process by establishing pre-negotiated terms and conditions and pricing. Although ordering is streamlined, compliance is anything but easy. 

MAS contract requirements are complex and often differ significantly from FAR Part 15 procurements and other Government Wide Acquisition Contract (GWAC) vehicles. If your company is also a member of a Joint Venture (JV) that holds a MAS contract, this adds another layer of compliance risk as the terms of the JV MAS contract can impact your individual contract. 

Periodic compliance reviews are useful to identify and remedy potential compliance concerns. The MAS Contract Health Check is designed to assess the current terms and conditions of the contract, identify potential areas of risk, and provide recommendations for mitigating risk.

Step 1: Assess the Current Terms and Conditions of the Contract

Understanding the negotiated terms and conditions of the contract is essential for contract compliance. When awarding the contract, GSA negotiates multiple terms, which include pricing, quantity/volume discounts, prompt payment terms, basis of award and discount relationship, labor qualifications, method for price adjustments, warranty, and delivery terms. All stakeholders involved in managing the MAS contract should know and understand the terms and conditions of the contract. 

For example, if the contracts team negotiated a prompt payment discount of 1% 10, Net 30 Days, this must be communicated to the billing department, so the prompt payment terms are included on all GSA MAS invoices. When the prompt payment discount does not appear on an invoice, GSA takes the position that the agency would have paid early had they been aware of the discount. You will then have to refund the prompt payment amount, regardless of when the agency paid.

Step 2: Identify Areas of Potential Risk

There can be significant compliance risk based on the negotiated MAS contract terms and conditions. Notable areas of financial risk include the Commercial Sales Practices (CSP), Price Reductions Clause (PRC), and labor qualifications. 

MAS contracts not subject to Transactional Data Reporting (TDR) must submit a CSP summarizing the company’s discounting and pricing practices for commercial customers. An inaccurate or outdated CSP can subject your company to significant risk. The form is deceptively simple-looking, which makes it easy to submit incomplete disclosures. Different classes of commercial customers may include educational and nonprofit institutions, state and local governments, and dealers/resellers. In addition, GSA considers sales as a subcontractor to a federal prime contractor as commercial sales. 

Based on the CSP, GSA negotiates a Basis of Award (BOA) and price-discount relationship which must be maintained for the life of the contract. A broad BOA and discount relationship poses substantial risk to your company on both GSA and commercial work. Should better pricing or discounts be offered to the BOA, the PRC may be triggered, resulting in mandatory reductions to the GSA ceiling rates and potentially refunds for overcharges on existing GSA orders. 

Service providers define specific labor categories and minimum qualifications in the MAS contract. All individuals performing on GSA orders, including subcontractor resources, must meet the minimum qualifications in the MAS contract. GSA considers anyone who does not meet these requirements to be unqualified, resulting in financial penalties. The labor category descriptions and substitutions in your contract can be a risk if they are not reflective of your current staff, hiring practices, and industry standards. 

Our articles, The Price Reductions Clause and Unqualified Labor, outline the potential consequences for noncompliance in these areas and have more information on best practices for MAS contractors. 

Step 3: Recommendations for Mitigating Risk

Based on the contract terms, there might be updates to the contract that can help your company be more successful. For example, if the MAS pricing has not been updated for several years, updating GSA pricing consistent with your current commercial practices can help increase sales and profitability. Also, if your contract includes very restrictive labor category descriptions, revising the qualifications can allow for more flexibility when staffing at the order level. 

In addition, your company’s procedures may need to be revised to reduce potential risk. For example, introducing pricing practices that include a process for monitoring the discount relationship for BOA customers can significantly reduce the chances of triggering the PRC. Also, developing formal procedures for reviewing and updating resumes can help ensure staff are qualified. 

The Bottom Line:

Failure to comply with the terms and conditions of your MAS contract can lead to costly penalties. As your MAS contract sales increase, so does your risk. Don’t wait until your Contractor Assessment or when your contract is selected for an Office of Inspector General (OIG) audit to uncover compliance concerns. 

Aprio’s GSA team has the experience to identify and mitigate GSA compliance issues. Get in touch with us today to learn more about our GSA consulting services and schedule your MAS Contract Health Check.

Related Resources

• Avoid Overbillings: Understand The Role of GSA Schedule Ceiling Rates – Aprio
• Unique Considerations for Joint Venture Multiple Award Schedule Contracts – Aprio
• From Thorns to Roses: Taming Unqualified GSA Labor – Aprio