From the GSA Trenches: So You’re Having a Contractor Assessment

It’s that time again. Your GSA Industrial Operations Analyst (IOA) has contacted you for an “assessment of your GSA contract.” What used to be called a Contractor Assistance Visit (CAV) is now called a Contractor Assessment, and that’s just the start of the changes. The frequency of these visits has increased from twice every five-year schedule period to as frequently as annually, based upon sales volume. The assessment may take place in-person or virtually. There are two types of contractor assessments, the Annual Assessment and the End-of-Term Assessment. The type of assessment will determine the scope of review, the data collection required, the amount of preparation needed and the overall risk to your company. You need to know what’s typical for each type of assessment so you can avoid unnecessary data collection and exposure.

Sales Volume and Timing Generally Determine the Assessment Type

Contracts with higher levels of utilization (over $150,000 in annual sales) will receive more frequent attention via limited scope “Annual Assessments.” Contracts with lower levels of sales may receive less attention. Once every five years, all contractors will receive a full compliance review during the “End-of-Term Assessment” (ETAM). Contractors who fail to meet the minimum annual sales requirement of $25,000 will receive a different notification altogether – a cancellation letter due to lack of sales.

Scope and Risk

Contract Clause 552.215-71 (Examination of Records) gives the IOA access to review contractors’ records to verify compliance. The stated purpose of the assessment is to help you succeed as a contractor and to address problems before they become major issues. It is important to be aware that, if during this “helpful” assessment, it becomes clear that you are not in compliance with critical clauses, terms and conditions, and responsibilities in your contract; this will be noted and reported to your Contracting Officer. You will then be required to make corrections – including repayment, if applicable – due to any underreporting or overcharging errors discovered.

Annual Assessments primarily focus on sales tracking systems, pricing on GSA orders and prompt payment discounts (if applicable). It’s important to know that review of your commercial sales practices and discussion of the Most Favored Customer/Basis of Award is not part of the Annual Assessment. The IOA will prepare a limited scope Assessment Report, visible only within GSA and to the individual contractor, to identify areas where you are successful, as well as areas needing improvement.

End-of-Term Assessments cover the traditional array of topics you are used to from the former CAV. Most importantly, it includes a review of your commercial sales practices and price reductions in addition to the Annual Assessment topics. Service providers will also be subject to a review of Labor Category Qualifications (resumes). It’s important to know that review of your commercial sales should be limited to your Most Favored Customer/Basis of Award customers. The IOA will prepare a more detailed End-of-Term Assessment Report, again visible only within GSA and to the individual contractor.

What We Know – From the Trenches

The most frequent problem areas we’ve encountered when helping clients with Contractor Assessments are:

• Not keeping the assessment “on track” – leads to review of data outside of the defined scope, creating unnecessary risk. Review of MFC/BOA information and Resumes should only happen at End-of-Term Assessments. GSA is not entitled to your cost and pricing data.
• Not limiting the scope of the data request – contractors are asked to submit extensive documentation to the IOA electronically to review before Virtual Assessments. If appropriate, ask if sampling or a reduced evaluation period is acceptable.
• Overcharging:
  • Orders with escalation greater than that awarded on the GSA Schedule– over time those pennies add up!
  • Not offering and/or not indicating prompt payment discounts on invoices
  • Not offering quantity/volume discounts when required
  • Resumes not available or resumes do not prove staff qualifications for position billed. Subcontractors not properly mapped to GSA labor categories and fail to meet minimum qualifications
  • Triggering the Price Reductions Clause by failure to monitor Basis of Award – selling to BOA customers at higher discount than negotiated
• Underpayment: Sales tracking system did not properly identify GSA task orders so GSA sales were underreported and insufficient IFF was remitted
• Out of Scope:
  • Products, Country of Origin not compliant with TAA
  • Task order statement of work (SOW) does not reflect awarded GSA SIN(s)
  • Not identifying “Open Market” items on GSA proposals and GSA task orders
  • Actual delivery orders do not meet stated contract delivery terms
• Sales Reporting and IFF remittance issues: IFF remitted late – due on the 30, not the 31; failure to file 72A report for quarters with no sales; GSA Sales and IFF not properly allocated by SIN

No matter the type of assessment, preparation is key. Identify any potential problem areas prior to the assessment. Prepare explanations for these problems and have documentation ready. If necessary, document plans to rectify the issue and a process for avoiding such problems going forward.

Got questions? Connect with an experienced Aprio GSA Schedule advisor today. 
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