Baker Tilly Presents: GSA Schedule Reseller-Manufacturer Relationships...Risky Business?

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  • GSA Schedule Reseller-Manufacturer RelationshipsRisky Business?

    Breakout Session #: C05

    Jeff Clayton and Rob Austin

    Date: Monday, July 25

    Time: 4:00pm5:15pm

  • VA OIG Report on FSS Contracts with Resellers From a 2007 Veterans Administration Office of Inspector General report on FSS contracts:

    The manufacturers are large businesses who are using resellers to shield themselves (the manufacturers) from FSS pricing provisions that ensure fair and reasonable prices for Government customers. As a result of this non-commercial practice, FSS customers pay inflated prices and lose the pricing protections the FSS contract was designed to provide.


  • Polling Question Instructions


    Text JEFFREYCLAYT124 to the five-digit number 22333 to join session Text your answer to 22333. Only one response per poll.

    Standard text messaging rates apply No spamming Completely anonymous

    Questions during the presentation? Text them to 22333

  • Polling Question

    Which of your speakers once fell into the Baltimore Harbor?


  • Where did you travel from?


  • Would you rather learn about resellers and manufacturers right now, or head to happy



  • Introduction


    Rob Austin, CFCM Director

    Jeff Clayton Principal

  • Agenda

    Overview of Reseller Manufacturer Relationship

    CSP Disclosure Requirements Contracting and Compliance Requirements Best Practices Current Trends


  • Reseller

    GSA Schedule contract holder

    Sell the manufacturers product (or service) to the end user

    Can add value through marketing and customer relationships and industry knowledge

    Manufacturer Manufacturers products or

    performs services Supplies product or services

    to reseller Does not own the relationship

    with the ultimate end user


    Overview of Reseller Manufacturer Relationship

  • Polling Question

    How do you sell to the Government?

    A. Direct B. Through a Reseller C. Both D. N/A (e.g., Government, Media)


  • CSP Disclosure Requirements Resellers If a Reseller has significant sales of the products, they

    submit a current, accurate and complete Commercial Sales Practice (CSP) Format and disclosures for each product/SIN offered.

    Only required if the manufacturers sales under any resulting contract are expected to exceed $500,000. (Note: GSA can request a CSP even if sales

  • Requirements CSP-1 Format




    FOB Point Concessions % of Gross

    Distributors (sell only to


    Dealers/Resellers (resell to end users)

    VAR/System Integrators

    Original Equipment


    State & Local Governments

    Educational &Nonprofit


    National & Corporate Accounts

    Commercial End Users

    Other: (Specify)

    Proposed GSA Discounts

  • Requirements - Reseller

    Pay IFF Monitor Discounting Practices Obtain Letter of Supply Certify Country of Origin Monitor Sales for the Purposes of the Price

    Reductions Clause



    SIN # Manufacturer /

    Supplier MFR

    Part #

    Product Name/


    Retail Price/ MSRP/ MLP

    Dealer's Actual Cost / Price

    Dealer's Discount (% from Retail Price)

    Proposed GSA Price

    (w/out IFF)

    Proposed GSA

    Discount (% from Retail Price)

    Proposed GSA Price (with IFF of

    .75%) Country of Origin Warranty

    Reseller Price List Example


  • Requirements - Manufacturer Manufacturer must do the following:


    Supply sufficient quantities Uninterrupted supply Disclose future pricing changes

    Agree to:

    Newly manufactured Commercially sold TAA compliant


    Discounts offered Point(s) of production Disclose:

  • Best Practices - Resellers Establishing Basis of Award and Price Reductions Clause

    mechanisms Establish system for Manufacturer to alert about price

    changes Awareness and certification of manufacturers COO

    policies Structured manufacturer agreement Systems and processes to address compliance

    requirements Support value added to supply chain Prompt payment of IFF


  • Best Practices - Manufacturers

    Current, accurate and complete CSP Disclosures

    Structured Reseller agreements Internal controls to monitor:

    Pricing Government sales records Reseller Discounts Country of Origin Updates


  • Current Trends

    VA vs. GSA VA OIG Report 2007

    Heightened GSA Focus Increased enforcement activity

    Baker Tilly Experiences Recent GSA OIG/DOJ activity


  • Polling Question

    Which of the following cases is related to the Reseller-Manufacturer relationship?

    A. Oracle B. Samsung C. Carahsoft D. Fastenal


  • VMware, Inc. and Carahsoft

    In June 2015, the Department of Justice announced the two companies agreed to pay $75.5 million to resolve allegations that they violated the False Claims Act (FCA). Did so by misrepresenting their Commercial

    Sales Practice (CSP) disclosures and overcharging the Government.


  • Questions?


  • Jeff Clayton, Principal

    Jeff Clayton is a principal in the Government Contractor Advisory Services Practice at Baker Tilly. He has more than seventeen years experience providing a broad range of pricing, contract compliance and dispute/litigation related services to government contractors and their legal counsel. Jeff has extensive experience working with contractors and their counsel during Office of Inspector General (OIG) audits, Department of Justice (DOJ) investigations, and in defense of qui tam suits brought under the False Claims Act.

    Rob Austin, Director

    Rob is a director in the Government Contractor Advisory Services Practice at Baker Tilly. He has more than ten years of experience providing specialized pricing, compliance, negotiation, audit and litigation support services to government contractors across a variety of industries Rob significant experience supporting FSS contractors through the Mandatory Disclosure program and providing litigation support in support Federal False Claims Act allegations.


    Contact Information

    Slide Number 1Slide Number 2VA OIG Report on FSS Contracts with ResellersPolling Question InstructionsPolling QuestionSlide Number 6Slide Number 7IntroductionAgendaOverview of Reseller Manufacturer RelationshipPolling QuestionCSP Disclosure RequirementsRequirements CSP-1 FormatRequirements - ResellerReseller Price List ExampleRequirements - ManufacturerBest Practices - ResellersBest Practices - ManufacturersCurrent TrendsPolling QuestionVMware, Inc. and CarahsoftQuestions?Contact Information