GSA’s Price Fair is Reasonable or not? Lets Check Them

Over so many years, people have enquired about GSA Schedule prices are fair and reasonable, and such concerns have led to the General Services Administration launching efforts, such as Transactional Data Reporting the pricing analysis, to demonstrate that it is dedicated to offering its customers “competitive” (however defined) prices. Now comes an MBA Professional Report published by the Naval Postgraduate School, which provides a business case analysis comparing GSA advantage to Amazon Business from the standpoint of prices and processes. The study was completed in response to a request from the Air Force, which is considering entering into a pilot with Amazon Business in order to strategically source micro-purchases using an online platform.

The results of the study may be surprising in light of the recent legislative activity and discussions surrounding online acquisition options for government. They also might inform those who cast a skeptical eye toward the value and vitality of the GSA Schedules Program. The authors gathered data on the top 60 commercially available items purchased by the Air Force using government purchase cards (GPCs) and compared the acquisition outcomes on GSA Advantage and Amazon Business. They found that:

• Prices were lower on GSA advantage more than 80 percent of the time.
• Although both platforms offered quantity discounts, prices on GSA Advantage were still lower than those on Amazon Business after applying the discounts.
• Shipping was both cheaper and faster on GSA Advantage than on Amazon’s platform (an average of 5.45 days with free shipping on GSA Advantage versus an average of 9.25 days at an average cost of $2.33 on Amazon).
• Every item the study reviewed was sold by at least one small business on GSA Advantage. By comparison, only 35 percent of the items were sold by a small business on Amazon. In addition, the authors had difficulty identifying the small business status of suppliers on the Amazon Business platform.

Despite the benefits that the report identifies, GSA Advantage still has areas that could be improved:

• The authors surveyed GPC holders and found that 70 percent preferred the Amazon platform to other platforms.
• Minimum order requirements on GSA advantage were unpopular among government buyers, and survey respondents felt that GSA advantage’s search function was misleading because the minimum order requirements were not displayed in the search results.
• Despite results that indicated the prices are lower on GSA Advantage —
• More than 64 percent of buyers surveyed believe that prices on Amazon.com are lower than other online ordering websites.
• Only 10 percent of survey respondents believed that GSA Advantage’s prices were lower than other online ordering sites.
• More than 90 percent of the buyers surveyed believed that product reviews are important when making purchasing decisions. GSA advantage affords limited, if any, access to product reviews, but such reviews are widely available on Amazon.