Understanding the Competitive Pricing Initiative

Portions of this appeared originally on gsa.gov.

Federal Acquisition Service (FAS) Commissioner Tom Sharpe on Thursday, October 1, 2015, announced that “after a small dip in previous years, the $33 billion MAS program showed real growth in FY2015.”

He also further explained several changes that the FAS has made to the Multiple Award Schedules (MAS) program, focusing specifically on the Competitive Pricing Initiative (CPI).

The CPI uses a Horizontal Pricing Analysis Tool to examine current prices of identical products that suppliers, through the MAS program, offer. This initiative makes identifying prices outside of a competitive range easier, and helps guide conversations between contracting officers and schedule holders around possible price adjustments. The lower the price, the more competitive a vendor is, with the end user reaping direct savings (a savings, added Sharpe, that is essentially passed along to taxpayers).

Sharpe added that this also gives vendors a chance to better explain to the GSA what makes them uniquely qualified to provide the products and/or services (e.g., speedier delivers, guarantees, or quantities).

“By working with contractors to bring all offered prices into a competitive range, GSA and our industry partners ensure that MAS continues to be a competitive and widely-used program for faster, easier, and less costly FAR-compliant purchases,” said Sharpe. “Our goal is that this important work will ensure that MAS remains the go-to purchasing vehicle of choice for both industry and government.”

So far, the CPI has led to an estimated 1.4 million price reductions on MAS, said Sharpe.

“I cannot begin to tell you how successful this initiative was. And we are experiencing much of the same growth through the Department of Defense eMall as well,” said Steven Yudis from Capp, Inc. a small business owner who reduced prices on more than 30,000 line items and saw sales double.

Sharpe noted another benefit to the CPI: Thanks to the information it provides, vendors can better fine-tune the services and/or product they make available, eliminate items that are no longer relevant, and make sure that their contracts are in line with their company’s business strategy.

You can read more about the CPI here.

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