Violations Of GSA Contracts
The General Services Administration (“GSA”) is an independent agency of the United States government tasked with administering and supporting federal agencies and the federal workforce. The GSA supplies products for federal government offices, provides transportation and office space to federal employees, and creates government policies regarding cost reduction. In 1949, the GSA implemented the Federal Supply Schedule (“FSS”) program to enable government agencies to purchase products and services from commercial vendors through schedule contracts. As with most governmental contracts, violations of certain requirements can give rise to whistleblower claims. For example, vendors and contractors who fail to comply with the requirements set forth below may be liable under the False Claims Act and subject to GSA whistleblower lawsuits.
Under the GSA Schedules Program, the government requires vendors to treat the government as the vendor’s most favored customer (i.e., a customer or category of customers that receives the best discounts from the vendor’s commercial price list when purchasing quantities comparable to the government’s under similar terms and conditions). In this regard, GSA negotiators require discounts from the vendor’s commercial price list which are equal to or greater than the vendor’s most favored customer discounts.
Vendors who do business with the government under the GSA Schedules Program are required to treat the government as the vendor’s most favored customer through the life of the contract. Each vendor must certify that the price offered to the government is equivalent or more favorable than the price it gives to other customers. If, after the contract is awarded, a contractor gives a non-government customer a better pricing structure, then the government is entitled to a retroactive price adjustment to restore the government to its position as most favored customer.
The most common types of claims arising under the False Claims Act for fraud involving the GSA are:
- Failure to Comply with “Best Pricing” Requirements for Government Contracts;
- Failure to Comply with Price Reduction Requirements; and
- Failure to Comply with The Federal Trade Agreements Act.
In recent years, numerous GSA contractors have paid substantial fines and penalties to settle allegations of noncompliance with the requirements of the GSA Schedules Program. If you have, or think you have, witnessed a violation of a contract with the GSA, contact Michael S. Bigin or Laurence J. Hasson to discuss the possibility of bringing a lawsuit on behalf of the government to recover damages for the contractor’s improper conduct.