[MUSIC] Hello everyone, welcome back. Today we are going to talk about the GSA the MAS contract. As I said last session GSA is One of the very important US federal government agency, General Service Administration. So this agency GSA, they are responsible for to do most of the online Pieces registration for scheduled contract. So they have contract platform called IDIQ, indefinite delivery indefinite quantity. And then they play this crucial role to procure product and services for other agencies. So, they're becoming like intermediary, as a vision supporter for other government agency to acquire product and services. So, in other word, GSA is in the centre. The left side of the GSA will be US government agencies, all other government entity, department agency, and then the other side will be supplier. So, we had a supplier, for example, Korean company come to GSA. They will do the order validation of the mass contract, multiple award contract. The validating the schedule of the contract, technical issue, specification, pricing, and then they basically will pre qualification process for Korean company. When they're satisfied with our qualification they basically give certificate, so our company product can be online. So, the other side of the customer, we have federal government can come in and buy the product and services through the online trading platform. So, it's like a some degree eBay in the government public procurement. So, let's have a look at the detail of how these GSA MAS contract stipulate how they work. So, before getting into GSA contract, the GSA contract is not a new concept for Korean company. Most of the Korean company at least heard about it, because there was a market for Korean government agency come up with supporting or incentive plan to help Korean industry to register this business. However, registering your business through GSA MAS will take a very long time, at least one or sometime two years to go l through the vetting, and screening, and final approval process. And then, you have to actually going out to market yourself, sell the product. So, we getting into the concept, have a look at what that mean, how we can operate. So, first of all, GSA MAS contract is a very different contract than what we seen before. Normally, any contract if the government issue Request for Proposal RFP, you write the proposal, at the moment use government using one envelope two system. Basically, what I mean by that is when you write the proposal for US federal government, you have to write the technical proposal one hand, and the pricing proposal on the other hand. So, when you submit the proposal report, they will consider, evaluate, and then they will give you a contract yes or no. The party who win the contract they will get country award and then they can perform, okay? So, there is no second round, whatever is submitted by deadline, they will do final evaluation and they will select a winning party of the contract to get the contract and they perform. So, they're very straightforward, and simple in terms of the process of a contract offering, evaluation, and acceptance, contract issue, very simple four step. However, with a GSA MAS contract, this is very complicated. So, some people like to compare GSA MAS contract as a hunting license, but I think I better use it as somewhat different is thinking we better compare it as a fishing license. So, if you like to fishing in Virginia, any decent sort of fishing you like it, in the ocean, fishing whatever the case might be, you need to have a fishing license. So, before you get a fishing license, you have to apply for the applications to the fishing license. And then, once you get a fishing license, that will give you the right to go out with the designated time in place when you can go out and do the fishing. So, whether you can get one fish, or how many fish is really depend on your effort, your time because having a fishing license doesn't qualify you to have how many fish you can get. So, this contract, GSA MAS is a similar concept. It is like fishing license. So, getting all that step, procedure and process of the applying for the contract, and they will do all the validation and the vetting and screening and then confirming all your information, checking your prices, etc. So, this will take a very long time. And then, finally when they are happy with that, they will put you in the system. So, electronic catalog where your company can go on to line and then people on the other side of the river, basically the government and the customer can review and look at checking your electronic brochure. And then, basically they put that in the electronic basket, and then buy your product and services. So, what that mean is GSA MAS is like getting a fishing license. So, they only can give you the fishing license. How many you can get? It really depends on your individual effort, your time and how you come up with smart strategy to work with. So, in my experience the Korean company in this instance, and couple of other foreign entity, foreign customer. A lot of people got the wrong perception from the beginning, as if, when you have GSA MAS contract, people tend to believe this will be automatic revenue generating pigeons, is not the case at all. So, unless you have the customer lined up standby for you, those sort of things will not happen, okay? Therefore, it is very careful assessment needed before you get into programmes. So, GSA MAS is not something you can do yourself as a beginner. It's always beneficial for you to have a special advisor or someone that does this sort of work all the time. You need to get professional advise, how to apply for this program and operate. Otherwise, this can take a very long time, could cost a lot more money. And then, as I said, only get you the fishing license and then you will not have opportunity to go out, enjoy your game. Most of the company today and came across in the past, they either sold or lost their motivation to pursue, or they basically run out of fuel. They can't move forward anymore and whatever reason they have a lack of resource, whatever so GSA MAS is not for everybody. You must have a specific product and services, what the government wants to buy and how they buy, when they buy, you need a bit of background research. So, before 2019 November, GSA had many different schedules. So, schedule is basically the contract you can say. So, schedule, for example, 70 was all about IT equipment, software and services. And even with the 65 1, operating through the veteran affair schedule is the pharmaceutical drug. And the 71 of GSA was all furniture. So, anything to do with the furniture, you had to put your product under Furniture category. So, 71 is the Furniture, 70 is IT Equipment, And 51V is the Hardware Superstore. And 66, for example, scientific equipment and services. So, all these thing now combined and merged into one Schedule. So, then again, before 2019 November, GSA MAS used to have many different schedule with different industry, and the types of products and different types of services. From now after GSA came up with the modification for the contract, now GSA only have one MAS schedule, everything else goes under it. So, procedure is rather different. And also, it is depends on how you look at it. Some people think it's a lot more complicated, but some people think it's a lot easier. So, it depends on how you look at it, but whichever way you look at it, it is my advice not to get involved with this contract yourself. But if you look at the share size of market, for example, we go back to 2019 November, before November, the record the fiscal year 2017, more than $15 billion. This is a 15B for the billion dollar, right? More than $15 billion of IT equipment, software and services was acquired under GSA schedule 70. And how many vendor? As I said, this is like a fishing license. Those who got the contract with the US federal government for $15 billion, these are not all ordinary company from the street. They are the one prequalified by the GSA. They are licensed to the divisions, like they got the fishing license, and they got this much business from the government. So, if you look back over 2017 sales revenue, you know how many company or vendor produced that 5142 vendor pre register. So, you can sort of calculate how many vendor and what is the revenue versus you can imagine this still give you significant upside. Instead of having open competition with other company, once you're selected as a Pre-qualified vendor, you are well ahead of other competitor, you can do that. So, this is very interesting business arena. So, if you want to know more about the how the GSA merged this contract at one and how to operate pre, have a look at the gsa.gov. There'll be enough information about the GSA's motive and objective and operational guideline there. So, even though GSA MAS contract would emerge as one, VA scheduler mostly VA schedule is used for medical devices, medical equipment, and the pharmaceutical and drug related, or the healthcare related industry. So, VA does not have any change whatsoever. The VA schedule operate as it is. For example, the VA schedule of 65 1B is pharmaceutical drugs. 65 2A is VA the medical equipment supply. So, these are different contract mechanism, they are still operating the same as what they did last year. So, in the past, we had a lot of Korean companies. I'm not really sure how many. For example, other Asian country involved with or participate in GSA MAS contract, but one thing is very clear at the moment. Out of Korea we have a little bit over a score of the Korean company registered, meaning we have a 23, 24 company register as the official vendor of the GSA schedule. Most of them are furniture, office furniture supplier with some region, but I don't see that many other the authorized vendor from other country. But one thing we have noticed here is that, remember what we said about WTO and the GPA, Government Procurement Agreement, and the TAA, Trade Agreement Act. So, this particular visions of the MAS contract, VA and GSA, only country, listen to this part, it's very important. So, only country signed up as a signatory nation for Trade Agreement Act with the United States are eligible to do this business. One legal requirement for that particular company out of those sooners country is they have to provide a certificate of origin, actually telling US government where this product was manufactured. So, if Korean company registered their product under GSA MAS, they have legal obligation to produce certificates of origin. The product they are selling in there, or they sold through GSA system, they must provide a copy of the Certificate of Origin made in Korea. If made in Korea cannot be produced, then you breach the contract. So, for example, a couple of years ago, one of the major electronic company out of Korea, and they got a pretty large contract from US federal government to do with office equipment, electronic equipment. Unfortunately, at the time, no one maybe realized the importance of a compliance issue with that particular federal contract with the US government. And then they signed whenever they present the paper, one of the certificate they signed was compliance for TAA. So, compliance at the TAA country mean you agree to comply with the rules and regulation of being Trade Agreement Act counterpart signature countries. That mean you agreed to provide made in Korea and certificate of origin. Apparently, the product they supplied was all manufacturer in factory in China, so they brought is like intercompany transaction. So, they brought the product from China, reassembled in Korea, and they shipped the goods from Korea to United State. So, at the end of day, because the value created in Korea was not sufficient enough to produce certificate the origin, so they ended up issue certificate origin made in China. So, what will happen? So, obviously this contract was not conforming with rules or regulation. So, basically there's a non conformance issue was raised, and then they had to take all the good back. And then they rebranded, and they resupply with the good out of Korea. So, GSA is very attractive, but is very difficult contract to manage as the contract vehicle. So, I always advise you to study a lot more, and then use professional operator and then getting expert advice before you get into it. So, the importance of GSA for a Korean company, it potentially is a very good revenue generating contract vehicle. But maintaining itself it is a issue, so let's have a look at how we manage it, maintain it, and to grow this contract into much larger than what we can manage it initially. Thank you.
