The Short Answer
GSA Schedule (Multiple Award Schedule / MAS) pricing works like this:
**You propose your commercial rates** based on what you charge your best commercial customers**GSA negotiates a discount** off those commercial rates (typically 10-25%)**Your GSA Schedule rates become your ceiling** -- agencies can negotiate lower but never pay above your schedule price**The Price Reduction Clause** requires you to maintain the same discount relationship to your commercial customersGSA Schedule pricing is not cost-based like traditional government contracts. It is based on your commercial pricing practices -- what you charge the private sector.
How GSA Sets Your Rates
The Commercial Sales Practice (CSP) Format
When you apply for a GSA Schedule, you submit a Commercial Sales Practice (CSP) disclosure showing:
| Disclosure | What You Provide |
|-----------|-----------------|
| **Customer categories** | Commercial, state/local, education, etc. |
| **Pricing for each category** | Your standard rates and any volume discounts |
| **Most Favored Customer (MFC)** | The customer who gets your best price |
| **Discounts and concessions** | Volume discounts, payment terms, etc. |
The Negotiation
GSA will typically demand:
A discount equal to or better than your **Most Favored Customer** discountAdditional discount for the volume the government representsDocumented rationale if your government discount is less than your best commercial discountTypical GSA Discount Ranges
| Service Type | Typical Discount off Commercial |
|-------------|-------------------------------|
| IT Professional Services | 10-20% |
| Management Consulting | 15-25% |
| Engineering Services | 10-15% |
| Products/Equipment | 15-30% |
| Training | 10-20% |
The Price Reduction Clause (PRC)
The PRC (GSA 552.238-81) is the most misunderstood aspect of GSA pricing. Here is what it actually means:
If you give a better discount to a commercial customer than you gave the government, you must give the same discount to GSA.
Example
| Scenario | Commercial Rate | GSA Rate | GSA Discount |
|----------|----------------|---------|-------------|
| **Original** | $200/hr | $170/hr | 15% |
| **You offer a commercial customer $140/hr** | $140/hr | -- | 30% |
| **PRC triggers** | $200/hr | $140/hr | New discount must match |
How to Manage the PRC
| Strategy | How It Works |
|----------|-------------|
| **Tracking basis** | Set your tracking customer carefully during negotiation |
| **Transaction-based discounts** | One-time discounts to specific customers may not trigger PRC |
| **CSP reporting** | Report changes in commercial pricing to GSA within 15 days |
| **Blanket waivers** | Some SINs have blanket PRC waivers |
Modifying GSA Pricing
Your GSA prices are not permanent. You can modify them through:
| Modification Type | When to Use | Timeline |
|------------------|-------------|----------|
| **Economic Price Adjustment (EPA)** | Annual rate increases based on indices | Submit annually with supporting data |
| **Add new SINs** | Enter new service categories | 30-90 days for review |
| **Add new labor categories** | Expand your rate card | 30-60 days |
| **Temporary price reduction** | Offer lower prices for specific orders | Immediate (does not change base rates) |
Annual Escalation
Most GSA contracts allow annual price increases tied to:
**BLS Employment Cost Index (ECI)** for services**Producer Price Index (PPI)** for productsTypical approved increases: 2-4% annually
GSA Pricing vs Traditional Government Pricing
| Factor | GSA Schedule | Traditional Contract |
|--------|-------------|---------------------|
| **Basis** | Commercial rates | Cost build-up (FAR Part 15) |
| **Disclosure** | Commercial Sales Practice | Cost Accounting Standards |
| **Negotiation** | Discount off commercial | Cost reasonableness |
| **Ceiling** | Schedule rates | Contract price |
| **Flexibility** | Agencies can negotiate below | Fixed at award |
| **Duration** | 20-year contract (with options) | 1-5 year typical |
FAQ
How does GSA pricing work?
GSA Schedule pricing is based on your commercial rates, not cost build-up. You disclose your commercial pricing practices, GSA negotiates a discount (typically 10-25% off your best commercial rates), and your schedule rates become the ceiling for government orders. The Price Reduction Clause requires you to maintain the same discount relationship -- if you offer better discounts to commercial customers, you must extend them to GSA.
Can agencies pay below GSA Schedule prices?
Yes. GSA Schedule rates are ceiling prices. Individual agencies can negotiate lower rates for specific task orders, especially for large volume or long-duration work. Your schedule price is the maximum, not the required price.
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