GSA 552.238-75

***

Prescribed in Need to Complete
Effective Date:	1 May 2004
Clause or Provision:	Clause
Provision or Clause Number:	552.238-75
Principle Type And/Or Purpose of Contract:
Required:	Fixed Price Service;
Applicable:
Optional:
Subject:	Independent Price Determination
ProcurementType:
Contract Threshold:
Prescription Overview:
Clause Overview:	(a) Before Award of a Contract The Contracting Officer and the Offeror will agree upon (1) the customer (or category of customers) which will be the basis of award, and (2) the Government's price or discount relationship to the identified customer (or category of customers). This relationship shall be maintained throughout the contract period. Any change in the Contractor's commercial pricing or discount arrangement applicable to the identified customer (or category of customers) which disturbs this relationship shall constitute a price reduction. (b) During the Contract Period The Contractor shall report to the Contracting Officer all price reductions to the customer (or category of customers) that was the basis of award. The Contractor's report shall include an explanation of the conditions under which the reductions were made. Price Reductions (c) (1) A price reduction shall apply to purchases under this contract if, after the date negotiations conclude, the Contractor: (i) Revises the commercial catalog, pricelist, schedule or other document upon which contract award was predicated to reduce prices; (ii) Grants more favorable discounts or terms and conditions than those contained in the commercial catalog, pricelist, schedule or other documents upon which contract award was predicated; or (iii) Grants special discounts to the customer (or category of customers) that formed the basis of award, and the change disturbs the price/discount relationship of the Government to the customer (or category of customers) that was the basis of award. (2) The Contractor shall offer the price reduction to the Government with the same effective date, and for the same time period, as extended to the commercial customer (or category of customers). (d) There shall be no price reduction for sales— (1) To commercial customers under firm, fixed-price definite quantity contracts with specified delivery in excess of the maximum order threshold specified in this contract; (2) To Federal agencies; (3) Made to State and local government entities when the order is placed under this contract (and the State and local government entity is the agreed upon customer or category of customer that is the basis of award); or (4) Caused by an error in quotation or billing, provided adequate documentation is furnished by the Contractor to the Contracting Officer. Voluntary Price Reductions (e) The Contractor may offer the Contracting Officer a voluntary Governmentwide price reduction at any time during the contract period. Notifications (f) The Contractor shall notify the Contracting Officer of any price reduction subject to this clause as soon as possible, but not later than 15 calendar days after its effective date. Contract Mofifications (g) The contract will be modified to reflect any price reduction which becomes applicable in accordance with this clause.
Important Notes/Requirements:	PRC The Price Reductions Clause (GSAM 552.238-75), or “PRC,” is GSA’s mechanism for ensuring it receives fair and reasonable pricing throughout the life of its contract. BOA The Basis of Award, or “BOA,” is a customer (or category of customers) agreed upon by the Government and the Contractor prior to the award of a GSA Schedule contract for the purposes of monitoring the PRC > The price/discount relationship between a Contractor’s GSA Schedule rates and the rates offered to its BOA customer(s) must be maintained to avoid triggering the PRC − The Contractor’s GSA Schedule rates are tied to the prices that it offers to its BOA customer(s) for the life of the contract, or until the relationship is modified − If the PRC is triggered the Contractor must notify the CO within 15 calendar days − Unreported price reductions discovered “after the fact” may expose Contractors to PRC liability that extends through the full contract term
Subcontract Threshold:
Incorporated by Reference:	No
Uniform Contract Format:
Editor:	Marshall

---

Personal notes.