I think one of the most interesting elements of the GSA adding Ai into the procurement process is how strong past performance will likely translate into better pricing, because Ai is better than humans as assessing risk. In the past the government would reward “Exceptional” past performance by clicking the rebuy button. “You did a great job! We are giving you more work.”
With Ai now added into the GSA procurement process this performance will be actively converted into ratings and dollars. For example, if a GSA Vendor was winning contracts early on and then has several rounds of “Excellent” performance ratings that vendor could mod their pricing, at their next opportunity, to capture part of the surplus their “Exceptional Performance” is generating.
I have built the following table to explain this concept:
|
Rating |
Price (Est.) |
Premium |
Why the AI pays it |
|
Exceptional |
$1,070 – $1,150 |
+7% to +15% |
You aren't just buying the item; you're buying innovation, cost-savings elsewhere, and 0% chance of failure. |
|
Very Good |
$1,030 – $1,050 |
+3% to +5% |
You're paying for reliability. The AI calculates that the cost of managing a "Very Good" contractor is lower than a "Satisfactory" one. |
|
Satisfactory |
$1,000 |
0% (Base) |
This is the "Commodity" price. You meet the minimum requirements, but the AI assumes it will have to spend more on oversight. |
|
Marginal |
$850 – $900 |
-10% to -15% |
The AI treats this like a "Scratch and Dent" item. It will only buy this if the budget is desperate and the risk of failure is acceptable. |
|
Unsatisfactory |
$0 (Reject) |
N/A |
An AI will auto-reject this. The "cost of failure" makes the item's value negative. |
CPARS is the New Game: This means making sure Ai is getting the right data put in the CPARS (Contractor Performance Assessment Reporting System) by staying in contract, early and often, with the contracting officer making sure you are on the “Exceptional” track. Also making sure your review is entered into the system, because it is important that you receive fair credit so you can gain additional work with the agency.
Please Note: In the era of Ai “Satisfactory” rating is slow motion to finding your way out the door in federal contracting. It tells the Ai you are a commodity provider, and being the low-cost provider is rarely a viable business strategy.
If you would like to explore how getting a GSA Schedule can benefit your business, please feel free to give us a call in about 10 minutes we can help you make an assessment.
