Don’t Let Them Fool You – 5 Myths and Facts of a GSA Schedule

In the past few weeks, Arrowhead has received a handful of voice mails that go something like this, “Hi, this is <insert call center employee’s name here> from <insert some GSA Shop here>. Would your company like to tap into the $500 Billion federal contracts market? We would like to discuss with you the opportunity to get a GSA contract and how your company can become a government contractor.”  A typical response would be – whoa – heck yes I’d like to tap into that market! I’m calling them now!

Hold on, not so fast. I found these voice messages frustrating for two reasons. 1) We had more than one call with this pitch in the span of a week and 2) they obviously have NO IDEA what our company does or is about, nor did they care.  If they did, we would not be on their call list.  This second reason then began to bother me.  If they are calling Arrowhead trying to sell as a GSA Schedule, then they must be calling every other small company out there with the same pitch, not caring if a GSA Schedule is a good or bad thing for each company.

Deciding to propose for a GSA Schedule should be a well thought out, analyzed decision for any company; particularly small businesses.   Led on by myths and pots of gold at the end of the rainbow, unaware companies throw money at the GSA Shop with dreams of government work.

Unfortunately, we have had to pick up pieces left behind by these GSA Shops. Unsuspecting small businesses who really are looking to get into government work get sweet talked into a cheap GSA proposal prep deal. Many times, the Schedule is not appropriate for the business, but these GSA Shops are in the business of turning out proposals, and that’s all they do or care to do. Often times, the company finally gets on Schedule, but never ends up using it since their government customer would never use GSA to procure their goods/services in the first place.    These GSA Shops then drop away, and you’re left with a Schedule sitting on the shelf collecting dust, not dollars.

Being educated and advised before jumping into the GSA Schedule whirlpool is your best defense if you receive a call like we did. Here are a few Myths and Truths about GSA Schedules that you can vet through if you get such a pitch.

Myth #1: You must have a GSA Contract to do work with the Federal Government.

Fact:  Your company can do work with the Federal Government without a GSA Schedule.  Check out www.fbo.gov.  The majority of these procurements are being accomplished everyday not using GSA Schedules.  Your company can be a very successful contractor outside of GSA Schedules.

Myth #2: Getting on Schedule is the end of the road – you’re set now!

Fact:  You must have sales through your Schedule totalling $25,000 or more in the first two years, then $25,000 each year thereafter.  Before jumping to GSA Schedules, do you have  customers who can provide the funding to meet those goals?

Myth #3: A GSA Shop can provide you a full GSA Schedule proposal for cheap.

Fact:  If you are in the business of providing engineering services, consulting services (such as logistics), or services in general, this probably won’t happen unless you prepare your proposal in house.  Many GSA Shops are accustomed to one size fits all.  For $3,000 you won’t get much more than templates to fill out and send back.  Be aware these templates are not some company proprietary tool – they are the required documents to be completed in the GSA solicitation they just are passing on as such!  You will not get advice, guidance, assistance in writing and molding the narratives, nor assistance in ensuring your pricing will still make you money in the long run from these cheap shops.

Myth #4:  The GSA Schedule is a lucrative method to obtain government funding.

Fact:  Only if you have a high volume in sales to the federal government for a predictable product can this be possible.  GSA wants to lock you into pricing that is a discount  in addition to the prices you give your most favored customer.  For the next 15 years do you want to provide your engineering services at such low rates?  Do you want your other customers to use that rate against you in other negotiations? They will – since these rates will be publicized; anyone can access them – even your competitors.

Myth #5: Once you get your proposal in, you could be working with the government in as little as 3 months.

Fact:  Right now Schedule 871 is taking 13 months to even get to review. Once it finally lands on someone’s desk it could take months to negotiate. Then you have to find customers to buy through it.  On average, GSA is publicizing a revised review period of a minimum of 6 months.

GSA Schedules are not all bad. I will say that the GSA Schedule is beneficial to both the government customer in a number of ways. For many products (and some services), it is a quick way to sell to the government after you receive your Schedule.  It provides great commercial pricing to the government customer.  It is the bread and butter of many companies and can get you to a government customer with money to spend when not other method may be viable.

If you don’t care for extra guidance during the proposal and negotiation process, you’ve already done your analysis and determined that a GSA Schedule would be good for business; then by all means use the the GSA Shop.  They most likely will get you a Schedule since it is what they are really good at; just understand what you won’t be getting ahead of time.

Buyer beware – understand the pros and cons of GSA Schedules (we have a short white paper on the topic here – http://www.arrowheadsolutionsllc.com/GSA.html   ).   Above all, make sure you have a government market for your product/service that is willing to use a GSA Schedule.  Without customers, your GSA Schedule will be of no use regardless of how you went about winning it.

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About Stephanie Amend

Stephanie is the Principal and CEO of Arrowhead Solutions, LLC, a solutions firm specializing in assisting established small businesses be successful government contractors.

2 comments

  1. Stephanie you are right on!! I am contacted at least a couple times a week by “GSA Shops” who don’t take the time to look at my website and find that our Summit Team assists companies with GSA Schedule proposals! We are very careful to help small businesses discern whether a GSA Schedule Contract fits into their business model and most importantly if there are truly customers/sales opportunities. Quite often small businesses find that it is not a good business decision to try to sell via a GSA Schedule Contract.

    Thanks for identifying some of the harsh realities related to selling to the government via GSA Schedule Contracts!

  2. Outstanding post & excellent information.

    A GSA Sched is not for everyone.

    Companies must do their homework first to determine if their customers even use the GSA Sched. (Some departments do not like & do not use the GSA Sched).

    Companies must also determine their ROI for the Sched. It is a big investment of time and there are ample risks associated with:
    GSA audits (when, not if);
    GSA sales quotas (over 40% of companies are being revoked for not meeting the $25k threshold);
    GSA pricing (locking you in a lower margins);
    GSA’s IFF tax (.75% of your GSA sales gets paid to GSA quarterly);
    GSA’s terms & conditions (many legal & financial issues);
    GSA long processing/wait time;
    no guarantee of obtaining a Schedule upon proposal submission;
    and others….!!!

    All in all, the Sched is just a marketing tool and should be carefully considered prior to pursuing. It is not a necessity.
    Thanks for sharing such valuable information.

    Jennifer Schaus
    Jennifer Schuas & Associates
    Washington, DC
    http://www.JenniferSchaus.com
    B2G NETWORKING: http://JenniferSchaus3.eventbrite.com

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