GSA tightens enforcement of minimum sales requirements for schedule holders

The General Services Administration is stepping up enforcement of a clause that requires schedule contract holders to meet a minimum amount of business, or GSA will kick them off the program.

The clause is not a new requirement, but it is one that GSA under the Trump administration is enforcing for cost savings, sources said.

Companies need to report sales of a minimum of $100,000 for their base five-year period, then $125,000 for each of the three additional five-year option periods. If they do not meet that minimum, GSA will not exercise the next option of their schedule contract.

The clause has always been there, but enforcement has been lax. GSA became even more lenient during the COVID-19 pandemic.

But the Department of Government Efficiency is looking for areas to cut costs and the schedule apparently is low-hanging fruit.

One industry source does not disagree with the move.

“The admin costs associated with maintaining schedules is significant,” that first source said

“I don’t believe it is a bad idea,” a second source said, again citing the administrative costs.

“I don’t think it is unreasonable expectation that by the first five years that a contractor closes at least $100,000 through the vehicle,” the second source said.

It appears that GSA is enforcing the clause as schedule contracts come up for renewal, so do not expect GSA to cancel a lot of contracts at once. Instead, GSA is looking back as each renewal comes up.

The number of companies submitting proposals to win a GSA schedule also has not slowed down. That means the total number of GSA schedule holders may stay even over time, a third source said.

One unintended consequence may affect companies that win a schedule but never intend to sell to federal customers. Instead, they use the schedule as a credential to show state and local governments that they are qualified contractors.

These companies will lose that marketing tool if they do not win some federal business.

We have asked GSA for a comment and will update this story if we hear back.