GSA takes hard line on price negotiations

Government contract specialists are taking a tough stance in price negotiations with many information technology vendors in the wake of several high-profile investigations involving allegations of deceptive pricing, reports Federal Times.

Since last year, four large IT firms ? Sun Microsystems, Canon, EMC and Cisco ? have either walked away from contract talks with the government's primary contracting agency, the General Services Administration, or had their contracts canceled. All of the companies except Canon were under investigation by either the GSA inspector general or the Justice Department over alleged deceptive pricing.

Before many large contracts are signed by GSA, auditors from the agency's IG office conduct so-called pre-award audits of those vendors' proposed prices to ensure they are fair and reasonable. The audits often recommend what the contracting officers should ask for regarding price.

GSA contracting officers are increasingly asking the agency's inspector general's office for pre-award pricing audits to see what discounts companies are giving to their commercial customers, said one source.