2 Breakout Session # : 2111 Presented By: Peter O’Neill Director Aronson & Company Date: April 16, 2008 Time: 2:40 – 3:40 SEVEN DEADLY SINS Perish or Prosper? GSA Schedule Contract Compliance

3 SEVEN DEADLY SINS Session Outline TRANSGRESSIONS, GATE KEEPERS, UNBECOMING, DELUSION #7 SLOTH - Lack Of File Maintenance/Contract Administration #6 ENVY - Inadequate Personnel Qualifications #5 LUST – Ignoring The Trade Agreements Act #4 ANGER – Failure To Disclose Additional Discounts #3 GLUTTONY – Insufficient Disclosure Of Commercial Pricing Practices #2 GREED - Misunderstanding the “Basis Of Award” Discounting Relationship #1 PRIDE – Excessive Belief In One’s Own Abilities

4 Hot Topics: Over Billing Price Reductions Violations Task Orders With Out Of Scope Work Non-Compliance with Trade Agreements Act Not Offering Prompt Payment Discounts Verifying Employee Qualifications LOOKING FOR TRANSGRESSIONS GSA OFFICE OF INSPECTOR GENERAL

5 Industrial Operations Analyst (IOA) Perform Contractor Assistance Visits (CAV) – Usually Annually. Primary Purpose Of Visit Is To Verify Proper Recording Of GSA Task Order Sales And Payment Of Industrial Funding Fee CAV Hot Topics –Trade Agreements Monitoring –Task order Scope Of Work –Contract Basis Of Award –Following GSA Policies and Procedures –Monitoring Employee Qualifications GATE KEEPERS Contractor Assistance Visits

6 UNBECOMING IGNORING THE SCOPE OF WORK It Is The Contractors Responsibility To Make Sure Products/Services Offered In Quotes Fall Within Scope Of Work Of GSA Schedule Contract. Contact Contracting Officer About Potential Out Of Scope Items. Keep s, Letters, Etc. In Quote File. In Today’s Diverse Contracting Environment, Contractors Should Consider Obtaining Multiple GSA Schedule Contracts.

7 DELUSION OPEN MARKET ITEMS FAR Allows For Orders Placed Under GSA Contracts To Include Items Not On Contract, Such As Materials, Other Direct Costs And Even Labor For The Administrative Convenience Of A Contracting Officer. Required Action Item: You Must Identify Non-GSA Schedule Items As Open Market Items In Quotes And Invoices.

8 SEVEN DEADLY SINS - #7 SLOTH Avoidance Of Physical Work

9 SEVEN DEADLY SINS – SLOTH(#7) Lack Of File Maintenance/Contract Administration Most GSA Schedule Contractors Contract Files are nonexistent or incomplete. Contract Files Should Contain The Original Proposal, Clarifications Prior To Award, Final Proposal Revision (FPR) Documenting Negotiations, Signed SF1449 Award Document And Copies Of All Contract Modifications.

10 SEVEN DEADLY SINS – SLOTH(#7) Lack Of File Maintenance/Contract Administration Who Is Your GSA Contract Administrator? GSA Communicates Primarily With The Contract Administer, Frequently By . Failure To Update The Contract Administrator Point Of Contract May Result In Missing Important Contract Changes And Deadlines.

11 SEVEN DEADLY SINS - #6 ENVY The Desire For Others’ Traits, Status Or Abilities

12 SEVEN DEADLY SINS – ENVY(#6) Inadequate Personnel Qualifications Contractors Must Be Able To Prove They Are Utilizing Employees That Meet The GSA Contract Labor Category Requirements. Failure To Sell Qualified Personnel May Result In Unexpected Fraud Claims. Agencies Cannot Override GSA Labor Category Qualifications. Suggestions: − Update Employee Resume During Annual Review. − Add Education/Experience Substitutions To Your GSA Contract. − Use HR System To Map Employees To GSA Contract Labor Categories

13 SEVEN DEADLY SINS - #5 LUST Great Eagerness Or Enthusiasm For Something

14 SEVEN DEADLY SINS – LUST (#5) Ignoring Trade Agreements Act The Government Is Actively Enforcing the Trade Agreements Act (TAA) Through Periodic Audits. The GSA OIG Has Issued Over 40 Administrative Subponeas For TAA Related Information. GSA Schedule Contractors Must Certify That All Products/Services Included On Their Contracts Are Produced In TAA Compliant Countries. Failure To DO So May Result In Fines, Penalties Or Cancellation Of Contract (FAR ).

15 SEVEN DEADLY SINS – LUST (#5) Ignoring The Trade Agreements Act Setting Up Policies and Procedures And Monitoring TAA Compliance Is The Only Way Contractors Can Succeed. Some Easy Steps To Take Today Are: 1)Annually Update Letters Of Supply From Manufacturer. 2)Spot Check Products In Warehouse For Country of Origin.

16 SEVEN DEADLY SINS - #4 ANGER (Wrath) Fury Often Marked For A Desire Of Vengeance

17 SEVEN DEADLY SINS – ANGER(#4) Failure To Disclose Additional Discounts Don’t Forget About GSA Contract Prompt Payment Discounts Which Must Be Disclosed On: 1)Task Order Quotes, And 2)Task Order Invoices

18 SEVEN DEADLY SINS – ANGER(#4) Failure To Disclose Additional Discounts If Your Contract Contains Dollar Volume Discounts: Deduct Dollar Volume Discounts From The TOTAL Of GSA Schedule Items Quoted/Invoiced Do Not Compute Discount On A Line Item Basis As Auditors May Consider This Spot Discounting

19 SEVEN DEADLY SINS - #3 GLUTTONY Desire To Consume More Than One Requires

20 SEVEN DEADLY SINS-GLUTTONY(#3) Insufficient Disclosure Of Commercial Pricing Practices GSA Contracts Contain A Document Called The “Commercial Sales Practices” Which Requires Contractors To Disclose And Document All Discounting Policies and Pricing Practices. These Practices Must Be Updated Throughout The Life Of The Contract. Audit Findings Indicate That Contractors Often Do Not Fully Disclose Pricing Practices For All Customers, Resulting In Defective Pricing Questions And An Expansion Of The Scope Of Audit.

21 SEVEN DEADLY SINS - #2 GREED A Desire for Material Wealth or Gain

22 SEVEN DEADLY SINS – GREED(#2) Misunderstanding the “Basis Of Award” Discounting Relationship Your GSA Contract Prices Are Linked To A Most Favored Customer (MFC). During Negotiations A “Basis Of Award” Discounting Relationship Was Established With The MFC Pricing. Contractors Must Monitor Prices And Discounts To Verify That The Discount Relationship Agreed Upon In Contract Is Being Maintained.

23 SEVEN DEADLY SINS – GREED(#2) Misunderstanding the “Basis Of Award” Discounting Relationship Don’t Get Greedy …Circumstances That Typically Trigger A Price Reduction: − Subcontracting To Prime Contractor Is Considered A Commercial Sale By GSA − Changing Commercial Customer Discounting Practices Without Notifying GSA

24 SEVEN DEADLY SINS - #1 PRIDE An Excessive Belief In One’s Own Abilities

25 SEVEN DEADLY SINS – PRIDE(#1) If your not sure about how to manage the contract, work with your internal contracts team to get training and support.

26 Questions Point of Contact Pete O’Neill Tel: (301)