The U.S. General Services Administration (GSA) announced a new initiative on March 24, 2025, that put its Multiple Award Schedule (MAS) contractors on notice that it is making "major changes" to "improve the effectiveness of the MAS Program" by allowing contracts that fail to meet sales thresholds to expire, addressing contractor noncompliance, reducing redundancies with other procurement channels and eliminating low-demand items that "fail to deliver meaningful procurement benefits."
As a result of this initiative, it is a good time for GSA MAS holders to focus on 1) meeting annual sales thresholds, 2) reviewing practices and procedures to avoid compliance issues with GSA MAS requirements, 3) preparing to remove underperforming contract items and 4) offering items that will be in higher demand. Contractors who do not meet annual sales targets or have a track record of noncompliance may soon find themselves outside of the Federal Supply Schedule (FSS) program, which is not a good place to be as the government consolidates the domestic procurement of common goods and services under GSA's management.
Specifically, GSA has announced it will:
- allow MAS contracts that do not meet the minimum sales thresholds in FSS Clause I-FSS-639, Contract Sales Criteria, to expire
- ensure that only productive and compliant contracts remain in the FSS program
- simplify processes, eliminate inefficiencies and ensure proper alignment of management and oversight with in the FSS program
- eliminate items with insufficient market demand or where administrative costs outweigh procurement benefits
- reduce redundancies with other procurement channels across government
Significant Change
This initiative signals notable changes for the MAS Program, which is one of the most widely used government procurement vehicles by federal, state, local and Tribal governments and other eligible buyers, exceeding $51.5 billion in sales in 2024.1 The program not only supports government operations but also contributes to the growth of businesses, particularly small and medium-sized enterprises, by providing them opportunities to engage in government contracts. Past GSA practices may have permitted contractors to fix issues of noncompliance under prior administrations. Such leniency may be a thing of the past, especially in regard to meeting the minimum annual sales threshold.
These policy changes will impact dormant or unproductive GSA MAS holders and result in terminations of MAS contracts, as well as all existing blanket purchase agreements (BPAs) under such contracts. Notably, a less collaborative or accommodating approach by GSA regarding contract noncompliance may lead to unintended consequences by, for example, disproportionately impacting small businesses who have a more difficult time meeting the minimum annual sales threshold. In fact, the GSA is in the process of issuing cancellation notices to contractors whose sales have not met the minimum threshold, as well as for many issues that the GSA may have permitted contractors to fix in past years under prior administrations. It appears that GSA will no longer permit its MAS contractors multiple attempts to correct noncompliance with the sales thresholds in FSS Clause I-FSS-639. It may also be more strict in its enforcement of other MAS contract terms and conditions.
Overall, the implications of the changes to the MAS Program are multifaceted, affecting various stakeholders within the government procurement ecosystem. Not only will the MAS contract be canceled, but all ordering activities' competed and awarded BPAs will be canceled as well. While the changes may present new opportunities for businesses, they also pose challenges that require careful navigation. As the program continues to evolve, it is crucial for contractors and government agencies to remain informed and adaptable to maximize the benefits and address any challenges that may arise. Here are some key considerations for contractors moving forward:
- Compliance and Productivity. The focus on ensuring that only "productive and compliant" contracts remain, as well as the Trump Administration's signal for stricter enforcement of standards, should cause contractors to review internal compliance mechanisms and consider whether it is necessary to invest in additional resources or expertise to meet compliance requirements.
- Elimination of Low-Demand Items. The initiative to eliminate items with insufficient market demand or where administrative costs outweigh procurement benefits could impact businesses that offer niche products or services. These businesses may need to reassess their offerings and align them more closely with market demands to avoid being affected by this policy change.
- Opportunities for Innovation. Despite the challenges, the changes could also present opportunities for businesses to innovate and differentiate themselves in the marketplace. By focusing on high-demand products and services and improving compliance, contractors can potentially enhance their competitiveness and secure a stronger position within the MAS Program.
As government procurement needs evolve, stakeholders are encouraged to engage actively with the GSA MAS program and leverage its capabilities to drive innovation and achieve strategic procurement objectives.
Notes
1 GSA press release: "GSA to rightsize Multiple Award Schedule Program," March 24, 2025.
