Benefits of Updating MAS Contracts and Risks if You Don't
Maintaining an updated GSA (General Services Administration) contract is critical to staying competitive in the federal marketplace. Contracts that are left unchanged for extended periods can lead to missed opportunities, revenue loss, and operational disruptions. With constant technological advances, regulatory changes, and market fluctuations, it’s essential to revisit and modify your GSA contract regularly.
If you haven’t modified your GSA contract recently, now might be the time. In this guide, we’ll explore the key benefits of updating your GSA contract and the risks of letting it fall out of date.
Key Benefits of Regular GSA Contract Modifications
Keeping your GSA contract updated brings numerous advantages that can help grow your federal business. Here’s why regular contract modifications are crucial:
- Stay Competitive with Updated Pricing
Federal contracts are often long-term, and pricing trends can shift significantly during the life of your contract. Regularly adjusting your pricing allows you to remain competitive and maintain profitability. Avoid waiting until you’re locked into outdated pricing—updating prices periodically ensures you stay in line with inflation and industry rates. This proactive approach helps you avoid selling your products or services at outdated, less profitable rates.
The GSA limits how much you can raise prices in a single year, so if you skip adjustments for several years, you won’t be able to make up for lost ground in one go. By staying on top of pricing modifications, you can maintain healthy margins over time and avoid the squeeze of unexpected costs.
- Add and Remove Products or Services to Stay Relevant
As technology evolves, some products or services naturally become obsolete. Regular contract modifications allow you to remove outdated offerings and replace them with new, in-demand products or services. Product additions and deletions ensure you can meet the evolving needs of federal buyers while avoiding the embarrassment of offering items you can no longer deliver.
For instance, if a product in your GSA catalog is discontinued or no longer supported, you’ll need to remove it and replace it with a newer, comparable option. Without this update, federal buyers may attempt to order products you no longer carry, resulting in missed opportunities and potential delays as you wait for GSA approval on modifications.
- Expand into New Service Areas
Many companies grow and diversify their offerings over time. If your business has expanded into new areas or industries, it’s essential to update your GSA contract to reflect these changes. Adding the appropriate Special Item Numbers (SINs) to your contract is crucial to ensuring federal buyers have access to your full suite of services.
For example, if you originally secured a GSA contract for consulting services under SIN 541611 (Management and Financial Consulting), but have since developed professional training programs, you’ll need to add SIN 611430 (Professional and Management Development Training). Without this modification, you’ll miss out on lucrative opportunities to sell these new services to federal buyers.
Regular updates to your service offerings give you the flexibility to tap into new markets and respond to shifting government needs.
- Avoid Bottlenecks During High-Demand Periods
Submitting GSA contract modifications early in the fiscal year helps you avoid delays during busy periods. Many vendors wait until the government’s end-of-fiscal-year spending rush to submit modifications, which can lead to long backlogs in processing times. By planning your updates early, you can beat the rush and ensure you’re well-positioned for high-demand periods in August and September.
The Risks of an Outdated GSA Contract
While the benefits of regular contract modifications are clear, failing to keep your GSA contract up to date can expose you to a range of risks that could harm your business. Here’s what happens if your contract falls behind:
- Loss of Access to GSA Advantage and eBuy
GSA enforces strict policies to ensure that contracts are current and compliant. If you haven’t made any modifications in the last two years, GSA may take action by removing your catalog from GSA Advantage or limiting your access to eBuy, a key platform for federal procurement. These restrictions can severely limit your visibility to federal buyers, effectively cutting off opportunities to win new contracts or fulfill existing ones.
Without access to GSA Advantage and eBuy, federal buyers won’t be able to see or purchase your products and services, putting you at a major disadvantage compared to your competitors. This can lead to a significant drop in revenue, especially if you rely heavily on federal contracts for business.
- Poor Audit Performance and Compliance Issues
GSA contracts are subject to periodic reviews known as Contractor Assistance Visits (CAVs), during which GSA auditors assess your contract’s compliance and performance. An outdated contract can lead to negative audit results, particularly if auditors find that you haven’t made required updates or adjustments. These poor results can damage your standing with GSA and may lead to additional scrutiny during future audits.
Negative audit outcomes can also affect your ability to renew or extend your GSA contract, making it more difficult to secure long-term federal business. Keeping your contract updated ensures a smooth audit process and demonstrates your commitment to compliance and best practices.
- Missed Revenue Due to Outdated Pricing
In the federal marketplace, staying profitable hinges on aligning your pricing with current market conditions. Contracts that are left unchanged for years may lock you into old pricing models, resulting in lost revenue. GSA allows only limited price increases each year, so if you’ve neglected to adjust your pricing over time, you could find yourself stuck at unsustainable rates.
For example, if you skip price increases for several years, you won’t be able to implement a large cumulative increase to catch up. Instead, GSA caps annual price adjustments, meaning you’ll miss out on the additional revenue you could have earned by making smaller, more frequent modifications. This can erode your profitability over time, making it harder to compete for federal contracts.
- Inability to Offer New Products or Services
Federal buyers expect the products and services they order through GSA contracts to be available and up to date. If you fail to remove obsolete items from your catalog or fail to add new offerings, you risk damaging your reputation and losing potential business. Imagine a scenario where a federal buyer attempts to order a product from your catalog, only to discover that it’s no longer available or supported. Not only does this disappoint the buyer, but it also creates unnecessary delays as you scramble to update your contract and secure approval for a replacement.
In contrast, regularly updating your product and service offerings keeps you in line with current demand and prevents disruptions in your sales process. Federal buyers are more likely to turn to vendors who can reliably deliver up-to-date products and services.
Conclusion: The Time to Act Is Now
GSA contract modifications aren’t just a bureaucratic formality—they’re essential for staying competitive and compliant in the federal marketplace. Regular updates allow you to align your pricing with market conditions, expand your offerings, and ensure compliance with GSA guidelines. Neglecting these updates, on the other hand, can lead to compliance issues, reduced revenue, and missed opportunities.
Start planning your FY2025 GSA contract modifications today to ensure you remain competitive, compliant, and ready to capitalize on new federal contracting opportunities.
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