The Multiple Advisory Panel heard testimony on deficiencies in the most favored customer (MFC) pricing policy in the General Services Administration’s MAS program.  The Veterans Affairs IG counselor stated that price reasonableness should be measured not only at the time of contract award but also through the contract’s duration. The IG asserted a lot of vendors wait until after contract award to give discounts to its commercial customers so as not to trigger the price reductions clause requiring the vendor to offer discounts to the government at time of award. Also, competition at the order level may not ensure fair and reasonable prices because since the FAR does not require competition for offers below the micropurchasing threshold of $3,000 if there is no statement of work and the order is not for services at an hourly rate many agency customers simply split the orders into multiple orders that fall below the threshold. Several industry groups also questioned the use of the MAS program’s information technology schedules since they are often only the “starting point” for order pricing negotiations where the customer agencies then negotiate prices at the order level despite the schedule price.

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