[Federal Register Volume 81, Number 121 (Thursday, June 23, 2016)]
[Rules and Regulations]
[Pages 41104-41139]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-14728]
[[Page 41103]]
Vol. 81
Thursday,
No. 121
June 23, 2016
Part IV
General Services Administration
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48 CFR Parts 501, 515, 516, et al.
General Services Administration Acquisition Regulation (GSAR);
Transactional Data Reporting; Final Rule
Federal Register / Vol. 81 , No. 121 / Thursday, June 23, 2016 /
Rules and Regulations
[[Page 41104]]
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GENERAL SERVICES ADMINISTRATION
48 CFR Parts 501, 515, 516, 538, and 552
[GSAR Change 74; GSAR Case 2013-G504; Docket No. 2014-0020; Sequence
No. 1]
RIN 3090-AJ51
General Services Administration Acquisition Regulation (GSAR);
Transactional Data Reporting
AGENCY: Office of Acquisition Policy, General Services Administration.
ACTION: Final rule.
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SUMMARY: The General Services Administration (GSA) is amending the
General Services Administration Acquisition Regulation (GSAR) to
include clauses that require vendors to report transactional data from
orders placed against certain Federal Supply Schedule (FSS) contracts,
Governmentwide Acquisition Contracts (GWACs), and Governmentwide
Indefinite-Delivery, Indefinite-Quantity (IDIQ) contracts.
Transactional data refers to the information generated when the
Government purchases goods or services from a vendor. It includes
specific details such as descriptions, part numbers, quantities, and
prices paid for the items purchased. GSA has experimented with
collecting transactional data through some of its contracts and found
it instrumental for improving competition, lowering pricing, and
increasing transparency. Accordingly, GSA will now test these
principles on a broader base of its contracting programs. This move
supports the Government's shift towards category management by allowing
it to centrally analyze what it buys and how much it pays, and thereby
identify the most efficient solutions, channels, and sources to meet
its mission critical needs.
GSA will introduce a new Transactional Data Reporting clause to its
FSS contracts in phases, beginning with a pilot for select Schedules
and Special Item Numbers. Participating vendors will no longer be
subject to the existing requirements for Commercial Sales Practices
(CSP) disclosures and Price Reductions clause (PRC) basis of award
monitoring, resulting in a substantial burden reduction. Stakeholders
have identified the CSP and PRC requirements as some of the most
burdensome under the Schedules program. These actions represent the
most significant change to the Schedules program in the past two
decades. GSA has also created a Transactional Data Reporting clause for
all new GWACs and Governmentwide IDIQ contracts and may apply the
clause to any existing contracts in this class that do not contain
other transactional data requirements.
DATES: This rule is effective June 23, 2016.
FOR FURTHER INFORMATION CONTACT: Mr. Matthew McFarland, Senior Policy
Advisor, GSA Acquisition Policy Division, at 202-690-9232 or
[email protected].
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Overview
II. Background
A. Category Management
B. Necessity and Value of Transactional Data
C. Imperative for Innovation
D. Transactional Data Reporting: Proposed Rule and Public
Meeting
III. Final Rule Overview
A. Summary of Changes Made at the Final Rule Stage
B. Alternatives Analysis
IV. Final Rule Implementation
A. GWACs and Governmentwide IDIQs
B. FSS Contracts
C. Systems
D. Procedures
V. Public Comments Overview and Discussion
VI. Executive Orders 12866 and 13563
VII. Regulatory Flexibility Act
VIII. Paperwork Reduction Act
A. New Reporting Requirements
B. Annualized Public Burden Estimates
C. Annualized Federal Government Burden Estimates
D. Differences From the Previous Burden Estimates
E. Information Collection Supporting Statement
Exhibit A: List of Comment Letters Received
I. Overview
The purpose of the Transactional Data Reporting rule is to
transform price disclosure and related policies for GSA's Federal
Supply Schedule (FSS) contracts, Governmentwide Acquisition Contracts
(GWACs), and Governmentwide Indefinite-Delivery, Indefinite Quantity
(IDIQ) contracts, in order to improve the value taxpayers receive when
purchases are made using these vehicles. The rule contains new clauses
that require vendors to electronically report certain specific details
on transactions under these GSA contracts, such as the descriptions of
goods or services acquired, part numbers, quantities, and prices paid.
GSA will use this added market intelligence to make smarter buying
decisions and share the information with its agency customers so they
can also make smarter buying decisions when utilizing GSA's contract
vehicles.((
The rule also seeks to eliminate burden associated with current
pricing disclosure and tracking requirements for thousands of entities,
particularly small businesses that sell to agencies through the FSS
program, the Government's largest purchasing channel for commercial
products and services. In Fiscal Year 2015 alone, GSA's FSS contracts
accounted for $33 billion in sales, or more than 7 percent of all
federal contract spending. Accordingly, the rule provides for a
measured and managed phase-out of disclosures and tracking currently
required by the Commercial Sales Practices (CSP) format and the Price
Reductions clause (PRC), and the associated practice of negotiating
pricing based on a model where the Government strives to secure the
vendor's most favored pricing and maintain this position for the life
of the contract. Instead, GSA is adopting a more dynamic market driven
pricing model, where vendors submit prices paid by Government customers
through a new Transactional Data Reporting clause \1\ and the
Government uses this data, along with other pricing information, to
ensure a vendor's offered price is competitive relative to other
vendors selling the same or similar items or services.
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\1\ GSAR clause 552.238-74, Industrial Funding Fee and Sales
Reporting (Alternate I) (48 CFR 552.238-74 Alternate I).
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The Transactional Data Reporting clause is being implemented under
the Schedules program on a pilot basis, to begin not less than 60 days
after the publication date of the rule. Participation in the pilot will
initially be voluntary for existing Schedule contract holders, and
those who participate and comply with the Transactional Data Reporting
requirements will not provide CSPs or be subject to the PRC basis of
award tracking customer provision. The pilot will involve eight
Schedules, including the information technology Schedule 70 and the
Professional Services Schedule (Schedule 00CORP), and will reach
approximately 30 percent of GSA's FSS contracts that account for more
than 40 percent of GSA the FSS sales volume.
FSS contracts managed by the Department of Veterans Affairs are not
included in the pilot and therefore will not be impacted by changes
made by this rule to waive application of the CSP and PRC tracking
customer provision.
For GSA's non-FSS Governmentwide vehicles, a Transactional Data
Reporting
[[Page 41105]]
clause \2\ is immediately available. The new clause will be applied to
solicitations for covered vehicles issued on or after the effective
date of the rule. Existing contract vehicles containing other
transactional data requirements have the option of incorporating the
new clause through bilateral modifications.
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\2\ GSAR clause 552.216-75, Transactional Data Reporting (48 CFR
552.216-75).
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The Transactional Data Reporting final rule follows a proposed rule
published by GSA in the Federal Register at 80 FR 11619, on March 4,
2015.\3\ The proposed rule sought to eliminate the PRC tracking
customer provision but retained the Government's right to request CSP
disclosures. In response to the proposed rule, many public commenters
concurred with the need for a change to Schedules pricing policies, as
well as the need for a model that leverages modern analytics and 21st
century technology, but a number of commenters asserted that GSA's
projections of burden reduction were significantly overstated. They
explained that the continued requirement to maintain the CSP, coupled
with the Government's right to regularly demand updated information,
would significantly limit the relief contractors would realize from
waiver of the PRC's tracking requirements. Other commenters raised
concern that elimination of these historical pricing tools would thwart
GSA's ability to gauge how its prices relate to commercial sales, and
as a result, put the Government at a greater risk of paying less
competitive prices for commercial goods and services.
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\3\ See GSAR Case 2013-G504; Docket 2014-0020; Sequence 1 (80 FR
11619 (Mar. 4, 2015)).
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After careful review of the public comments, which are discussed in
greater detail in Section V of this document,\4\ and additional
deliberation with Government stakeholders, GSA has modified the
proposed rule to authorize in the final rule the phased elimination of
both the CSP and the PRC tracking customer provision, as opposed to
just the PRC's tracking requirements, as the proposed rule would have
provided. Phase-out of these requirements will be subject to the
results of a pilot, as was discussed in the preamble to the proposed
rule. However, the pilot has been broadened to be more reflective of
the varied goods and services offered and sold through the Schedules
program, and will allow GSA to more effectively evaluate the likely
impact of the intended transformation before making any final
determinations.
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\4\ See section V. Public Comments Overview and Discussion.
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Transactional Data Reporting is an attempt to embrace modern
technology while moving away from outmoded practices. When first
introduced in the 1980s, the CSP and PRC helped GSA and its customer
agencies maintain advantageous pricing from original equipment
manufacturers that held the vast majority of FSS contracts. However,
changes in what the Government buys and shifts in the federal
marketplace have eroded the effectiveness of these tools over time.
Additionally, vendors repeatedly single out these pricing tools as
among the most complicated and burdensome requirements in federal
contracting. By contrast, Transactional Data Reporting provides a less
burdensome alternative. The rule adds a total of $15 million a year in
costs for two classes of contracts, FSS ($12 million a year) and non-
FSS ($3 million a year). FSS vendors are currently subject to the CSP
and PRC reporting requirements that are being eliminated, resulting in
a $44 million a year burden reduction. Factoring in the $12 million a
year increase for new reporting requirements, this equates to a $32
million a year net burden reduction for those FSS vendors ($12 million-
$44 million = -$32 million). However, non-FSS vendors are not subject
to the CSP and PRC requirements and therefore are not receiving any
burden reduction, but are seeing a $3 million a year reporting burden
for the new requirements. As a result, the net burden reduction reduces
to $29 million a year when accounting for all vendors subject to the
rule ($12 million + $3 million-$44 million = -$29 million).
In all, the Transactional Data Reporting rule will result in an
estimated burden reduction of $29 million a year, which consists of a
projected $15 million a year compliance burden\5\ minus the estimated
$44 million a year burden for the CSP and PRC requirements being waived
for vendors participating in the FSS pilot.\6\
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\5\ See Section VIII.B, Annualized Public Burden Estimates.
\6\ The CSP and PRC burden estimates are from Information
Collection 3090-0235, FSS Pricing Disclosures. The annual public
reporting burden for the CSP and PRC, excluding FSS vendors
participating in the Transactional Data Reporting pilot, is $57.66
million. If FSS pilot vendors were still subject to the CSP and PRC
reporting requirements, the total annual public reporting burden
would be $101.69 million. The FSS pilot vendors' share of the total
CSP and PRC reporting burden is based upon their share of the GSA
FSS fiscal year 2015 sales volume, 43.2 percent. The annual $44.03
million reporting burden reduction attributed to this rule is 43.2
percent of the $101.69 million annual reporting burden if it were
applied to the entire GSA FSS program. More information about
Information Collection 3090-0235 can be found at http://www.reginfo.gov/public by searching ``ICR'' for ``3090-0235''.
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Equally important, GSA's experience using horizontal pricing
techniques, where it compares a vendor's offered price to those offered
by other vendors, has proved to be a more effective model. This
includes a growing body of experience with transactional data that
points to improved acquisition outcomes, from smarter demand
management, to better pricing and reduced price variation, and
opportunities to develop more effective buying strategies. Section II.B
of this document provides several examples of how the Government has
successfully employed transactional data-fueled horizontal pricing
techniques.
To ensure a measured and manageable transition to use of
transactional data in lieu of the CSP and PRC, the final rule will be
implemented through a multi-layered phase-in process built around the
pilot as follows:
First, the pilot will be evaluated against a series of
metrics that will include, but not be limited to, changes in price,
sales volume, and small business participation, as well as macro use of
transactional data by category managers and teams to create smarter
buying strategies such as consumption policies. GSA's Senior
Procurement Executive will regularly evaluate progress against these
metrics in consultation with the Administrator for Federal Procurement
Policy and other interested stakeholders to determine whether to
expand, limit, or discontinue the program. No expansion of the pilot or
action to make Transactional Data Reporting a permanent fixture on the
Schedules will occur prior to the careful evaluation of at least one
year of experience with the pilot.
Second, Schedules will enter the pilot on a rolling basis.
At least thirty days prior to applying the pilot to a Schedule or
Special Item Number, vendors will be given notice on Interact, GSA's
platform for exchanging information with Schedule vendors.\7\
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\7\ GSA Interact can be accessed at https://interact.gsa.gov.
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Third, the new Transactional Data Reporting requirements
will be mandatory only for new Schedule contracts awarded after the
Schedule becomes subject to the pilot and at the time to extend the
term of the Schedule contract. Initially, vendors holding existing
contracts under pilot Schedules will be encouraged to enter via a
bilateral contract modification so they can begin to take advantage of
the
[[Page 41106]]
reduced burden of not having to comply with the CSP and PRC.
Fourth, use of the transactional data will be introduced
to federal buyers in stages, starting with category managers to provide
them with insight into the assorted options available for satisfying
common requirements and support smarter buying strategies, such as
demand management, that promote the most efficient methods for meeting
the Government's needs. The data will then be shared with FSS
contracting officers, followed by agency ordering offices. Each of
these buying groups will receive tailored training on the proper use of
transactional data. In all cases, training will emphasize that prices
paid information is just one information point that must be considered
in conjunction with other factors such as total cost, quantity
discounts, desired performance levels, unique terms and conditions or
product attributes, delivery schedule, customer satisfaction, and other
relevant information. Contracting officers will be encouraged to
discuss with the offeror perceived variances between offered prices,
transactional data, and existing contract-level prices, in order to
evaluate whether other attributes (e.g., superior warranties, quantity
discounts, etc.) justify awarding higher prices.
Finally, GSA is amending its pricing instructions in the General
Services Administration Acquisition Manual (GSAM) to place greater
emphasis on price analysis when negotiating prices with Schedule
vendors and, in particular, the need to specifically consider (i)
offered prices on FSS contracts or Governmentwide contracts for the
same or similar items or services, (ii) prices paid, as it becomes
available under this rule, and (iii) commercial data sources providing
publicly available pricing information. The GSAM guidance will also
reiterate that the contracting officer is responsible for ensuring
pricing is fair and reasonable. Accordingly, if a contracting officer
is unable to make this determination based on data available to them
through GSA's tools or available commercial pricing information, they
will retain the right, as the Federal Acquisition Regulation (FAR) has
always provided, to request additional pricing information, such as
data other than certified cost and pricing data.
A fuller discussion of these issues is presented in the following
sections of this document, including GSA's analysis of alternatives, an
overview of the rule's implementation, a discussion of public comments,
and an examination of the reporting burden.
GSA's primary statutory authorities for the FSS program are 41
U.S.C. 152(3), Competitive Procedures, and 40 U.S.C. 501, Services for
Executive Agencies. For GWACs, GSA is an executive agent designated by
the Office of Management and Budget pursuant to 40 U.S.C. 11302(e).
Furthermore, 40 U.S.C. 121(c) authorizes GSA to prescribe regulations
for its other multi-agency contracts, including Governmentwide IDIQ
contracts. Finally, this rule is included in GSA's report under
Executive Order 13563, Improving Regulation and Regulatory Review,
which directs each federal agency to consider ``how best to promote
retrospective analysis of rules that may be outmoded, ineffective,
insufficient, or excessively burdensome.'' GSA's retrospective plan and
updates to the plan can be found at www.gsa.gov/improvingregulations.
II. Background
A. Category Management
Currently, the Federal Government acquires goods and services worth
hundreds of billions in dollars through millions of individual
transactions conducted by thousands of contracting units across
hundreds of federal agencies and commissions. Most buying offices
operate independently, conducting procurements without regard to the
experiences of their counterparts. Functions such as industry outreach,
market research, requirements development, negotiations, and contract
award are repetitively performed, without coordination, across the
acquisition landscape. Ongoing contract duplication leaves vendors
navigating a diverse array of procedures and requirements, driving up
administrative costs that ultimately manifest in higher prices.
In response, the Office of Federal Procurement Policy (OFPP)
introduced a new vision for federal purchasing to fundamentally shift
managing individual purchases and prices across thousands of
procurement units to buying as one through category management.\8\ The
initiative entails grouping commonly-purchased goods and services into
centrally coordinated categories. The Category Management Leadership
Council (CMLC), established by OFPP, has defined the underlying
principles of category management, which are supported by this rule:
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\8\ See Office of Management and Budget memorandum,
``Transforming the Marketplace: Simplifying Federal Procurement to
Improve Performance, Drive Innovation and Increase Savings'',
December 4, 2014, available at http://www.whitehouse.gov/sites/default/files/omb/procurement/memo/simplifying-federal-procurement-to-improve-performance-drive-innovation-increase-savings.pdf).
1. Optimizing existing contract vehicles (including replacement
or elimination of duplicate or underperforming contracts) and
driving more optimal use of contract vehicles.
2. Improving data collection efforts and analysis to drive
improvements in categories of spend to increase savings and reduce
duplication.
3. Leveraging industry/commercial intelligence and key partner
relationships.
4. Maximizing customer insights and relationships to bring more
spend under management and improve offerings and value.
5. Growing and sharing expertise.\9\
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\9\ See ``Government-wide Category Management, Guidance
Document, Version 1.0,'' Office of Management Budget, May 2015,
available at https://hallways.cap.gsa.gov/information/Gov-wide_CM_Guidance_V1.pdf.
The CMLC has identified the following ten first-tier, or Level 1,
categories that account for $270 billion, or approximately two-thirds,
of total contract spending:
Information Technology (IT).
Professional Services.
Security and Protection.
Facilities & Construction.
Industrial Products and Services.
Office Management.
Transportation and Logistics Services.
Travel and Lodging.
Human Capital.
Medical.\10\
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\10\ See ``Taking Category Management Government-Wide'', January
7, 2015, available at https://www.whitehouse.gov/blog/2015/01/07/taking-category-management-government-wide-0.
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To ensure Governmentwide harmonization, Level 1 categories will be
led by a manager responsible for developing category-specific
strategies. Within each Level 1 category are several Level 2
categories. For example, the Level 1 IT category includes Level 2
categories such as IT Software and IT Consulting. In concert with their
respective category manager, Level 2 category teams will provide expert
analysis, identify best-in-class sourcing solutions, and facilitate the
dissemination of best practices, leading to smarter buying across the
Government.\11\
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\11\ See ``Government-wide Category Management, Guidance
Document, Version 1.0,'' Office of Management Budget, May 2015,
available at https://hallways.cap.gsa.gov/information/Gov-wide_CM_Guidance_V1.pdf.
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For example, OFPP issued Category Management Policy 15-1: Improving
the Acquisition and Management of Common Information Technology:
Laptops and Desktops. In Fiscal Year 2014, agencies awarded more than
10,000 contracts and orders totaling $1.1
[[Page 41107]]
billion for laptops and desktops. In addition to contract duplication,
price variation is also an issue since the prices paid for laptops of
the same configuration could range from $450 to $1,300, or almost 300
percent. A category team led by the National Aeronautics and Space
Administration (NASA), with subject matter experts from across the
Government, was established and came up with the following
requirements:
1. Standardize laptop and desktop configurations for common
requirements. Through an extensive data analysis, the category team
determined five standard configurations could satisfy 80 percent of the
Government's laptop needs.
2. Reduce the number of contracts for laptops and desktops by
consolidating purchasing and using a few number of high-performing--or
best in class--contracts. With limited exceptions, all agencies are
prohibited from issuing new solicitations for laptops and desktops, and
civilian agencies must use NASA Solutions for Enterprise-Wide
Procurement (SEWP), GSA Schedule 70, or National Institutes of Health
(NIH) Chief Information Officer-Commodities and Solutions (CIO-CS).
3. Develop and modify demand management processes to optimize price
and performance. Agencies are encouraged to adopt smarter buying
strategies, such as adopting uniform refresh cycles and aggregating
demand to support leveraged buying events.\12\
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\12\ See Office of Management and Budget Memorandum M-16-02,
``Category Management Policy 15-1: Improving the Acquisition and
Management of Common Information Technology: Laptops and Desktops'',
October 16, 2015, available at https://www.whitehouse.gov/sites/default/files/omb/memoranda/2016/m-16-02.pdf.
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In another example, the Professional Services category team within
GSA consolidated its offerings in two areas, the Professional Services
Schedule (PSS) and the One Acquisition Solution for Integrated Services
(OASIS) vehicle. The PSS is the result of combining eight separate
Schedules under one umbrella, and in the process eliminating more than
700 duplicative contracts. This promotes efficiency in a number of
ways. GSA can now focus its resources on improving the user experience
under its contracts. Vendors, especially small businesses, now need to
manage fewer contracts to fully access the professional services
market, lowering their administrative burden. Finally, customers can
meet their mission needs through a less fragmented purchasing channel.
Likewise, OASIS provides flexibility for federal buyers seeking to
streamline their acquisition strategies by eliminating duplicative
contracts. In Fiscal Year 2015, GSA supported the Army and Air Force in
moving more than $350 million in combined contract sales under the
OASIS vehicle. OASIS has also allowed the Air Force to forgo extending
five of its IDIQ contracts and the Department of Homeland Security has
chosen OASIS as the successor to its Technical, Acquisition, and
Business Support Services (TABSS) IDIQ contract.
The reduction in duplicative and inefficient contracts also removes
barriers to entry into the federal marketplace, especially for small
businesses. The Government Accountability Office (GAO) reports the
costs of being on multiple contract vehicles ranged from $10,000 to
$1,000,000 due to increased bid and proposal, and administrative
costs.\13\ Consequently, as category management streamlines procurement
channels and vendors realize lower administrative costs, small
businesses in particular will benefit from a leveling of the playing
field. Small business participation is a key component of all category
management strategies and care will be taken to ensure small businesses
maintain access to the federal marketplace as duplicative contracts are
eliminated.
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\13\ See GAO report GAO-10-367, ``Contracting Strategies, Data
and Oversight Problems Hamper Opportunities to Leverage Value of
Interagency and Enterprisewide Contracts,'' April 2010, available at
http://www.gao.gov/new.items/d10367.pdf.
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Nevertheless, as category management continues to permeate the
acquisition landscape, a critical ingredient for its success must be
obtained: Transactional data.
B. Necessity and Value of Transactional Data
A critical component of category management, and smarter buying in
general, is the availability of transactional data, which shows the
details of purchases at the line-item level. It includes details such
as descriptions, quantities, and prices paid for the items purchased.
More than providing leverage for Government buyers to negotiate lower
prices, transactional data underlies the business intelligence used to
inform smarter buying strategies.
Transactional data provides the Government insight into its
purchasing patterns, allowing it to identify the most efficient
solutions, channels, and sources to meet mission critical needs. As
previously noted, two key category management principles are optimizing
existing contract vehicles and reducing contract duplication.\14\ With
transactional data, the Government can analyze its consumption
patterns, evaluate and compare purchasing channels, and identify best-
in-class solutions. Thereafter, the Government can leverage its buying
power to achieve taxpayer savings as it concentrates its purchases
through fewer channels, which will in turn provide lower administrative
costs for federal contractors.
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\14\ See ``Government-wide Category Management, Guidance
Document, Version 1.0,'' Office of Management Budget, May 2015,
available at https://hallways.cap.gsa.gov/information/Gov-wide_CM_Guidance_V1.pdf.
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Category managers will also use transactional data to develop
demand management strategies that offer more optimal solutions for
satisfying common requirements. For example, GSA's Domestic Delivery
Services 2 (DDS2) program illustrates how transactional data can
provide valuable insight into purchasing patterns and offer
opportunities to develop more effective procurement strategies. In
Fiscal Year 2009, 90 percent of revenue through the Domestic Delivery
Services contracts was for more expensive, express air shipments, with
less costly ground shipments accounting for the remaining 10 percent.
However, after analyzing the actual buying practices through
transactional data, the Government was able to change its consumption
behavior to spend less by foregoing unnecessary express air shipments.
By Fiscal Year 2015, air shipments shrank to 60 percent of revenue and
46 percent of total shipments, while ground shipments grew to 40
percent of revenue and 54 percent of total shipments.
Transactional data can also be leveraged to reduce price variation
and lower costs. As exhibited by the 300 percent laptop price variance,
Government buyers often rely on asymmetric information, which results
from one party possessing better information than the other. In
response, GSA began pioneering transactional data reporting on several
of its contract vehicles. Combined with sourcing strategies and
enhanced competition, GSA successfully instituted dynamic pricing
models, where prices are continually adjusted based on transactional
data, resulting in less variation and lower prices. Examples of this
success include:
Office Supplies 2 (OS2) and Office Supplies 3(OS3), with
direct savings increasing from 10 percent in Fiscal Year 2010 to nearly
30 percent by Fiscal Year 2015.
Federal Strategic Sourcing Initiative (FSSI) Wireless:
This contract delivered
[[Page 41108]]
a 21 percent savings rate in its first year of operation (Fiscal Year
2014), which then increased to 26 percent by its second year. Other
agencies that adopted FSSI Wireless achieved savings up to 38 percent
from their previous contract prices while reducing the number of
devices managed.
Commercial Satellite Communications (COMSATCOM): Customers
save an average of 34 percent compared to GSA Schedule contract prices
and better understand spend details. The availability of transactional
data under COMSATCOM is already contributing to a reduction in
duplicative contracts.
However, transactional data does not transform the federal
acquisition system into a lowest-price procurement model. The Federal
Acquisition Regulation (FAR) has a stated vision ``to deliver on a
timely basis the best value product or service to the customer, while
maintaining the public's trust and fulfilling public policy
objectives.'' \15\ The Government's preference will continue to be
``best value,'' or as defined in the FAR, ``the expected outcome of an
acquisition that, in the Government's estimation, provides the greatest
overall benefit in response to the requirement.'' \16\ Transactional
data is viewed in the context of each procurement, taking into account
desired terms and conditions, performance levels, past customer
satisfaction, and other relevant information. Using and understanding
the data will help inform requirements definition and reduce excess
consumption.
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\15\ Federal Acquisition Regulation section 1.102 (48 CFR
1.102).
\16\ Federal Acquisition Regulation section 2.101 (48 CFR
2.101).
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C. Imperative for Innovation
In Fiscal Year 2015, Government agencies ordered nearly $40 billion
in goods and services through GSA's Federal Supply Schedules,
Governmentwide Acquisition Contracts (GWACs), and Governmentwide
Indefinite-Delivery, Indefinite-Quantity (IDIQ) contracts. GSA's
Federal Supply Schedule program, commonly known as GSA Schedules or
Multiple Award Schedules (MAS), accounted for approximately $33 billion
of those sales, making it the Government's most used commercial-item
purchasing channel. Consistent with the broader effort to transform the
federal marketplace, GSA is innovating its suite of Governmentwide
contract vehicles.
While GSA has a number of policies in place to help its buyers and
agency users to secure best value for the taxpayer, and other
regulatory actions in process to improve the Schedules program, two
limitations in current pricing practices make achievement of this goal
unnecessarily challenging: (1) Insufficient attention to ``horizontal
pricingI''--the ability to compare one vendor's pricing to that of
other vendors--and (2) lack of visibility into prices paid by other
customers.
Insufficient Attention to Horizontal Pricing: GSA currently relies
on a ``vertical'' pricing model to establish price reasonableness on
its FSS contracts, which entails comparing a contractor's prices and
price-related terms and conditions with those offered to their other
customers. Through analysis and negotiations, GSA establishes a
favorable pricing relationship in comparison to one of the contractor's
customers or category of customers.
Until recently, when vendors first submitted an FSS offer, minimal
consideration was given to the relative competitiveness of the vendor's
prices to other vendors (i.e., horizontal pricing). Instead, the FSS
program primarily collects aggregate sales information through
Commercial Sales Practices (CSP) disclosures, which include a broad
disclosure of discounts vendors offer to commercial customers for
similar products and services.\17\ GSA's negotiation objective is to
achieve a company's best price--i.e., the price given to its most
favored customer--who buys in quantities and under conditions similar
to those of the Government.\18\ Contractors are then required, under
the Price Reductions clause (PRC), to monitor their pricing over the
life of the contract and provide the Government with the same price
reductions that they give to the class of the contractor's commercial
customers upon which the original contract award was predicated.\19\ In
addition to the ``tracking customer'' requirement, the PRC allows
vendors to voluntarily reduce prices to the Government and for the
Government to request a price reduction at any time during the contract
period, such as where market analysis indicates that lower prices are
being offered or paid for the same items under similar conditions.
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\17\ General Services Administration Acquisition Regulation
section 515.408(a)(2) (48 CFR 515.408(a)(2)).
\18\ General Services Administration Acquisition Regulation
section 538.270 (48 CFR 538.270).
\19\ General Services Administration Acquisition Regulation
clause 552.238-75 (48 CFR 552.238-75).
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Pricing disclosures, such as the CSP and its predecessors, along
with the PRC, have served as the bedrock of the Schedules program
pricing approach for at least as far back as the 1980s. With limited
other means of data collection available, they served as a way to
ensure fair and reasonable pricing through the life of a contract with
the goal of achieving most favored customer pricing. For many years,
CSP disclosures and the PRC tracking customer feature were critical
mechanisms for achieving advantageous pricing from original equipment
manufacturers (OEMs) that held the vast majority of FSS contracts.
However, these tools predate the Federal Acquisition Streamlining Act
of 1994 (FASA) \20\ and the subsequent procedures in FAR part 12, which
aim to ``establish policies more closely resembling those of the
commercial marketplace.'' \21\ For instance, FASA required the
Government to only ask for information other than cost and pricing data
as needed.
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\20\ Public Law 103-355.
\21\ Federal Acquisition Regulation section 12.000 (48 CFR
12.000).
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Moreover, a number of factors have eroded the effectiveness of
these tools over time, including: (i) The significant growth of
contracts held by resellers with little or no commercial sales against
which to negotiate most favored customer pricing; (ii) the prevalence
of sales for commercial-off-the-shelf products or other commercial
items for which the Government is not a market driver; and (iii) the
fact that these practices tie pricing for reductions to sales of single
items and play little role in blanket purchase agreements and other
higher-volume leveraged buying by agencies to achieve greater savings
and reduce administrative costs.
When it comes to contract administration, the Government, and other
customers in the category to which the Government is most typically
aligned under the PRC, tends to receive voluntary price reductions from
the vendor as a result of general market forces. In other words, prices
are reduced under the voluntary provisions of the PRC as a result of
competitive market forces, not under the mandatory tracking customer
provisions.
Vendors have also singled out these pricing tools as among the most
complicated and burdensome requirements in federal contracting,
including during a 2014 national online dialogue sponsored by the Chief
Acquisition Officers Council to identify ways of improving how the
Government does business with its contractors. A number of contractors
contended that the one-size-fits all application of these tools to all
Schedules runs counter to
[[Page 41109]]
the spirit of the FASA and its implementing policies in FAR part 12,
such as by requesting detailed pricing information only after
determining that more readily available data is not sufficient to
establish fair and reasonable pricing. Some noted that the
proliferation of Schedule resellers has occurred, in part, out of an
effort by OEMs to shield them from what they see as an overly complex
and burdensome process that has created a punitive relationship between
the Government and its suppliers.
GSA recognized the deficiencies of its vertical pricing model and
has begun implementing horizontal pricing initiatives for its FSS
contracts. For example, over the past year GSA has launched the
Competitive Pricing Initiative (CPI) and the Contract Awarded Labor
Category Tool (CALC):
CPI aims to identify and address price variability across
the Schedules program. The initiative is built around a Formatted
Product Tool (FPT) that identifies pricing outside a range determined
to be acceptable for identical items; vendors whose prices exceed the
acceptable range are then notified of their comparative pricing.
Currently, this initiative applies only to products, while services
will be addressed at a later date. Moving forward, FSS contracting
officers will utilize available horizontal pricing data from the FPT
for certain categories of supplies when conducting price analysis, in
addition to other price analysis techniques already employed in
compliance with the FAR and GSAR. The FSS contracting officer's final
determination will also take into account non-price elements, such as
materially different terms, quantities, and market and economic
factors. CPI will also allow FSS contracting officers to identify where
a vendor's offered pricing is outside the range determined to be
acceptable for identified products and services. After a vendor has
been notified, they will be given the opportunity to use this market
intelligence to make their offered pricing more competitive. Equally
important, vendors will have the chance to advise if they have a unique
value proposition, such as speedier deliveries, guarantees, or quantity
that warrants a higher price.
CALC is a market research tool that searches a database of
awarded FSS contract prices for 48,000 labor categories from more than
5,000 FSS contracts under the Professional Services Schedule. Rather
than sifting through contract files or searching GSA Advantage![supreg]
for comparable pricing, Government contracting professionals can now
use CALC to return a multitude of comparable contract prices within a
matter of seconds. Additionally, these search results can be filtered
by relevant criteria such as years of experience and education level.
Over time, greater enhancements are anticipated, such as adding
geographic filters.
GSA has made tremendous progress on the horizontal price analysis
front over the past year, but tools such as CPI and CALC only support
segments of the FSS program and only analyze contract-level prices.
Although GSA establishes fair and reasonable prices on its
Governmentwide contracts, the program is designed with the intent of
ordering activities negotiating further discounts at the time of the
instant requirement. While in many respects this is a significant
strength of the program, at times, the absence of good pricing
information contributes to negative perceptions of the program, and as
result, contract duplication. Consequently, transactional data is
needed to perform a horizontal analysis of the actual prices paid for
goods and services acquired through GSA contract vehicles.
Lack of transparency in prices previously paid: The FAR has long
emphasized the need for contracting officers to conduct price analysis
as part of their responsibility to determine offered prices are fair
and reasonable. Price analysis requires contracting officers to obtain
and analyze data on the prices at which the same or similar items have
been sold, but until recently, little effort was made to share prices
previously paid by agencies throughout the Government. As a result,
contracting officers generally lack critical information when making
these important determinations.
Though the specifics vary, several of GSA's non-FSS contracts now
require vendors to report transactional data, including Alliant,
Alliant Small Business, Connections II, Custom SATCOM Solutions (CS2),
Custom SATCOM Solutions--Small Business (CS2-SB), Office Supply Third
Generation (OS3), and One Acquisition Solution for Integrated Services
(OASIS). However, these requirements are applied through their
respective solicitations without the benefit of a dedicated, standard
GSAR clause, resulting in inconsistency.
Continuous innovation is imperative for the FSS program. In 2010,
the Multiple Award Schedule (MAS) Blue Ribbon Advisory Panel, which
included representatives from the Government's largest buying
agencies--the Department of the Defense, Department of Homeland
Security, Department of the Interior, Department of the Treasury, and
Department of Education--and industry, recommended that ``the GSA
Administrator remove the Price Reduction Clause from the MAS program
supply contracts for products in phases as the GSA Administrator
implements recommendations for competition and price transparency at
the Schedule contract level and the order level.'' That same year, the
Government Accountability Office (GAO) issued a report recommending GSA
collect ``prices paid'' data on FSS orders and make this information
available to FSS contract negotiators and customer agencies.\22\ Over
the next few years, GSA explored alternatives for collecting
transactional data through the FSS program before ultimately deciding
to pursue incorporating a transactional data reporting requirement in
its FSS contracts.
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\22\ See U.S. Government Accountability Office report GAO-10-
367, ``Data and Oversight Problems Hamper Opportunities to Leverage
Value of Interagency and Enterprisewide Contracts,'' April 2010,
available at http://www.gao.gov/products/GAO-10-367.
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D. Transactional Data Reporting: Proposed Rule and Public Meeting
On March 4, 2015, GSA issued a proposed rule to require
transactional data reporting on its FSS contracts and non-FSS contract
vehicles--Governmentwide Acquisition Contracts (GWACs) and
Governmentwide Indefinite-Delivery, Indefinite-Quantity (IDIQ)
contracts. The rule proposed for non-FSS contracts would have been
immediately implemented but rolled out on a pilot basis for the FSS
program under select Schedules. For FSS contracts, the requirement
would be paired with an alternate Price Reductions clause that did not
include the tracking customer feature, although GSA would have had the
right to request CSP disclosures at any time.\23\
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\23\ See GSAR Case 2013-G504 (80 FR 11619 (Mar. 4, 2015)).
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On April 17, 2015, a public meeting was held at GSA headquarters in
Washington, DC, to discuss the proposed rule. Nearly 200 companies,
organizations, Government agencies, and interest groups were
represented. In general, industry representatives opposed the
transactional data reporting requirement but supported the proposed PRC
changes. Government procurement representatives supported the rule,
while oversight entities expressed concern with the potential reporting
burden and PRC changes.\24\
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\24\ See the public meeting transcript at http://www.regulations.gov/#!documentDetail;D=GSA-GSAR-2014-0020-0024.
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[[Page 41110]]
Following an extension to the public comment period,\25\ GSA
received 26 comment letters on the proposed rule, including comments
from industry associations, contractors, individuals, Government
stakeholders, and other interested groups.
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\25\ See GSAR Case 2013-G504 (80 FR 25994 (May 6, 2015)).
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III. Final Rule Overview
GSA is adopting new requirements for transactional data reporting
on its FSS, GWAC, and Governmentwide IDIQ vehicles:
For FSS contracts, a new transactional data reporting
clause, GSAR Alternate I, 552.238-74 Industrial Funding Fee and Sales
Reporting (Federal Supply Schedule), will be paired with changes to FSS
pricing disclosure requirements. Specifically, FSS vendors subject to
the Transactional Data Reporting rule will no longer provide CSP
disclosures and will no longer be subject to the PRC tracking customer
provision. These changes will be initially implemented for select
Schedules and Special Item Numbers on a pilot basis.
For GWACs and Governmentwide IDIQs, a new clause, GSAR
552.216-75 Transactional Data Reporting, will apply to all new GWACs
and Governmentwide IDIQs and may be applied to any existing contracts
in this class that do not contain other transactional data clauses.
A. Summary of Changes Made at the Final Rule Stage
The following is a summary of changes made in response to public
comments regarding the proposed rule:
CSP Disclosures: FSS vendors will no longer provide CSP disclosures
for contracts subject to the new Transactional Data Reporting clause,
552.238-74 Alternate I. This is in addition to pairing the new
reporting clause with the new Price Reductions clause (552.238-75)
Alternate II, which does not include the basis of award tracking
customer requirement. The GSAR sections requiring CSP disclosures and
clauses 552.238-75 and 552.238-75 Alternate I (the PRC versions that
include the tracking customer provision) have been updated to exclude
contracts subject to the new FSS reporting clause, 552.238-74 Alternate
I.
GSA has also concluded the horizontal pricing ability afforded by
Transactional Data Reporting would not only exceed the PRC tracking
customer provision benefits, it could also alleviate the need for CSP
disclosures when combined with automated commercial data sources, new
data analytic tools, and improved price analysis policy. For the
Schedules pilot, pairing Transactional Data Reporting with a removal of
CSP disclosures and the PRC tracking customer provision will result in
an average annual burden reduction of approximately $32 million for
participating FSS vendors.\26\ Furthermore, implementing the FSS pilot
without the existing CSP and PRC requirements lowers the Government's
burden by about $3 million a year.\27\
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\26\ $32 million does not include costs for non-FSS contracts.
It is the result of the FSS burden of the initial pilot
implementation ($12.41 million), minus the share of the combined CSP
and PRC burden allocated to the FSS pilot vendors ($44.03 million).
The total CSP and PRC burden from Information Collection 3090-0235,
if it were applied to all GSA FSS vendors, including those
participating in the Transactional Data Reporting pilot, would be
$101.69 million. The share of that burden allocated to the FSS pilot
vendors ($44.03 million) is based on the percentage of the overall
FY15 FSS sales accounted for by the FSS pilot vendors (43.2
percent).
\27\ $3 million is the result of the Government's annual burden
for this rule ($2.34 million) minus the share of the combined CSP
and PRC burden for the Government allocated to the FSS pilot
contracts ($5.58 million).
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Data Reporting and Fee Remittance Timelines: Both Transactional
Data Reporting clauses (552.216-75 and 552.238-74 Alternate I) now
require vendors to report transactional data within 30 calendar days
after the last day of the calendar month. Additionally, the non-FSS
clause (552.216-75) now states a GSA representative will provide the
contractor with specific written procedural instructions on remitting
the Contract Access Fee (CAF) within 60 days of award or inclusion of
this clause in the contract, including the deadline by which the
contractor must remit the CAF, although the deadline specified in the
written procedural instructions will be no less than 30 days after the
last day of the month. Previously, GSA proposed for contractors subject
to both clauses to report transactional data within 15 calendar days
after the end of the calendar month. Non-FSS contractors were to remit
any CAF due within 15 calendar days after the end of the calendar
month. FSS contractors were to remit any Industrial Funding Fee (IFF)
due within 30 calendar days after the end of each quarter.
GSA increased the monthly reporting window from 15 to 30 calendar
days in response to comments stating the proposed 15-day window did not
allow enough time to compile, analyze, and report transactional data.
GSA opted to not require monthly IFF remittance because doing so would
disproportionately harm small businesses, many of whom remit fees based
on accrued billings before they actually receive payments from their
Government customers. The non-FSS clause (552.216-75) does not specify
CAF remittance frequency--those instructions will be provided within 60
days after award or inclusion of the clause in the contract--but
ensures contractors have at least 30 days after the last day of the
month to remit the CAF.
Clause Language: GSA made several revisions to the clause language
for 552.216-75 and 552.238-74 Alternate I, including a data element
``fill-in'' for additional elements that requires approval from GSA's
Senior Procurement Executive.
Paperwork Reduction Act: GSA increased its Transactional Data
Reporting burden estimates. For the proposed rule, GSA's public burden
estimates included an average initial setup time of 6 hours and average
ongoing monthly reporting times ranging from 2 minutes to 4 hours,
depending on a vendor's sales volume.\28\ In contrast, the final rule
burden estimates include initial average setup times of 8 hours for
vendors using manual systems and 240 hours for vendors using automated
systems, and average ongoing monthly reporting times ranging from 15
minutes to 48 hours, depending on a contractor's sales volume and
reporting system type.
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\28\ See GSAR Case 2013-G504; Docket 2014-0020; Sequence 1 [80
FR 11619 (Mar. 4, 2015)].
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B. Alternatives Analysis
GSA determined it is necessary to obtain and analyze transactional
data for purchases made through its contract vehicles in order to
support the Government's category management vision and improve
acquisition outcomes in general. However, following the April 17, 2015
public meeting and subsequent receipt of the public comments, GSA was
compelled to further evaluate the spectrum of alternatives for
Transactional Data Reporting, ranging from withdrawing the rule in
favor of different approaches for obtaining the data to applying the
new reporting clauses without corresponding changes to existing
disclosure requirements. Ultimately, the decision to proceed hinged on
considerations including, but not limited to, alternatives for
collecting transactional data; the burden associated with reporting
transactional data; opportunities to reduce burden through changes to
existing disclosure requirements, and the associated
[[Page 41111]]
impacts of those changes; effects on small businesses; and the benefits
of collecting transactional data for non-standard products and
services.
The Initial Regulatory Flexibility Analysis published with the
proposed rule included an evaluation of alternatives for obtaining
transactional data--internal applications; GSA ordering platforms such
as eBuy and GSA Advantage![supreg]; the SmartPay credit card purchase
program; and upgrades to the Federal Procurement Data System. GSA
previously concluded these options would not provide the breadth of
data needed to support the Government's objectives or would be unable
to do so in the foreseeable future. Since the publication of the
proposed rule, GSA reevaluated those alternatives and reached similar
conclusions. Additionally, the Government's electronic invoicing
initiative \29\ was assessed as a potential alternative. However,
following meetings regarding electronic invoicing implementation with
representatives from the Department of Defense, Department of Energy,
Department of Transportation, Department of Treasury, and Department of
Veterans Affairs, it was determined these electronic invoicing
platforms will not provide a Governmentwide transactional data
reporting solution in the near term. Consequently, GSA continued to
evaluate solutions that relied on contractor-provided transactional
data.
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\29\ See Office of Management and Budget memorandum M-15-19,
``Improving Government Efficiency and Saving Taxpayer Dollars
Through Electronic Invoicing'', July 17, 2015, available at https://www.whitehouse.gov/sites/default/files/omb/memoranda/2015/m-15-19.pdf.
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The most common concern, in terms of the number of respondents to
the proposed rule, regarded the associated burden of reporting
transactional data. In general, commenters felt the burden was
underestimated and/or the requirement was too burdensome. To address
the concerns with its Transactional Data Reporting burden estimates,
GSA reevaluated its methodology and significantly increased its burden
estimates.\30\ These higher burden projections were a significant
concern and reinforced the need to couple Transactional Data Reporting
with other significant forms of burden reduction.
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\30\ See Section VIII.B for a discussion of the burden estimates
in accordance with Paperwork Reduction Act requirements.
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A notable concern expressed by industry stakeholders was the
retention, and potential increase, of CSP disclosures. GSA noted in the
proposed rule it ``. . . would maintain the right throughout the life
of the FSS contract to ask a vendor for updates to the disclosures made
on its commercial sales format (which is used to negotiate pricing on
FSS vehicles) if and as necessary to ensure that prices remain fair and
reasonable in light of changing market conditions.'' \31\ In response,
industry stakeholders indicated retaining CSP disclosures would
undercut any burden reduction achieved by eliminating the PRC tracking
customer requirement. Specifically, respondents were concerned CSP
disclosures will still force them to monitor their commercial prices,
which ultimately causes the associated burden for both disclosure
requirements.
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\31\ See GSAR Case 2013-G504 (80 FR 25994 (May 6, 2015)).
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In the summer of 2015, GSA also began preparing its request to
renew the PRC information collection, which is identified under OMB
Control Number 3090-0235. The Paperwork Reduction Act requires federal
agencies to seek public comment on proposed collections of information
from the public and then submit an information collection request (ICR)
to the OMB Office of Information and Regulatory Affairs (OIRA). After
receiving clearance to proceed, federal agencies must seek public
comment and OIRA approval for renewal of these information collections,
typically every three years. Since the PRC information collection was
last approved in 2012, GSA needed to begin preparing its request to
renew the information collection shortly after publishing the
Transactional Data Reporting proposed rule. While GSA would have
proceeded with a renewal request regardless, the timing did allow for
the consideration of the Transactional Data Reporting comments. In
particular, GSA agreed with the general industry comment that burdens
of the PRC and CSP are related and therefore decided to include CSP
disclosure burden estimates with the PRC ICR. GSA also opted to change
the name of Information Collection 3090-0235 from ``Price Reductions
Clause'' to ``Federal Supply Schedule Pricing Disclosures'' to more
accurately reflect the scope of the information collected.
Following two Federal Register notices requesting comments on the
FSS Pricing Disclosures ICR,\32\ GSA increased its annual burden
estimates for GSA FSS vendors, including those who would participate in
the Transactional Data Reporting pilot, from $59 million \33\ to $102
million.\34\ Yet, Transactional Data Reporting alleviates the need for
these FSS pricing disclosures when combined with automated commercial
data sources, new data analytic tools, and improved price analysis
policy. As a result, GSA decided to pair Transactional Data Reporting
with the removal of CSP disclosures and the PRC tracking customer
provision, resulting in an average annual burden reduction of $32
million for participating FSS vendors.\35\ Furthermore, implementing
the FSS pilot without the existing CSP and PRC requirements lowers the
Government's burden by about $3 million a year.\36\
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\32\ See 80 FR 72060 (Nov. 18, 2015) and 81 FR 21346 (Apr. 11,
2016).
\33\ The 2012 information collection did not provide a cost
burden estimate, but if the same hourly rate ($68) was applied to
the 2012 time burden, the 2012 cost burden would have been
$59,086,560.
\34\ The annual public reporting burden for the CSP and PRC,
excluding FSS vendors participating in the Transactional Data
Reporting pilot, is $57.66 million. If FSS pilot vendors were still
subject to the CSP and PRC reporting requirements, the total annual
public reporting burden would be $101.69 million. The FSS pilot
vendors' share of the total CSP and PRC reporting burden is based
upon their share of the GSA FSS fiscal year 2015 sales volume, 43.2
percent. The annual $44.03 million reporting burden reduction
attributed to this rule is 43.2 percent of the $101.69 million
annual reporting burden if it were applied to the entire GSA FSS
program. More information about Information Collection 3090-0235 can
be found at http://www.reginfo.gov/public by searching ``ICR'' for
``3090-0235''.
\35\ $32 million does not include costs for non-FSS contracts.
It is the result of the FSS burden of the initial pilot
implementation ($12.41 million), minus the share of the combined CSP
and PRC burden allocated to the FSS pilot vendors ($44.03 million).
The total CSP and PRC burden from Information Collection 3090-0235,
if it were applied to all GSA FSS vendors, including those
participating in the Transactional Data Reporting pilot, would be
$101.69 million. The share of that burden allocated to the FSS pilot
vendors ($44.03 million) is based on the percentage of the overall
FY15 FSS sales accounted for by the FSS pilot vendors (43.2
percent).
\36\ $3 million is the result of the Government's annual burden
for this rule ($2.34 million) minus the share of the combined CSP
and PRC burden for the Government allocated to the FSS pilot
contracts ($5.58 million).
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Streamlining the existing pricing disclosure requirements is
particularly beneficial for small businesses. The current CSP and PRC
disclosure requirements are constant, meaning vendors, especially those
with a higher number of FSS contract offerings, must bear the burden
even if they have little to no sales through their FSS contracts. Thus,
small businesses are disproportionately impacted because they account
for the bulk of lower volume contracts. Moreover, small businesses,
which generally have fewer resources to devote to contract management,
will no longer be subjected to the complex CSP and PRC pricing
disclosure requirements.
[[Page 41112]]
Unlike the existing CSP and PRC disclosure requirements,
Transactional Data Reporting imposes a progressive burden--one that
increases with a vendor's sales volume. Namely, monthly reporting time
will increase with a vendor's applicable sales volume, as vendors with
lower to no reportable sales will spend little time on monthly
reporting, while those businesses with more reportable sales with will
face a higher reporting burden. Likewise, setup costs will be a major
driver of the new reporting burden, but vendors with little to no
activity on their FSS contracts will likely forgo investments in new
reporting systems because the reporting burden will not be
significantly more than that of the current quarterly sales reporting
requirements. Thus, tying the burden to sales volume is particularly
beneficial for small businesses, as they hold 80 percent of the total
contracts but account for only about 39 percent of the sales.\37\
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\37\ Based on fiscal year 2015 Federal Supply Schedule contract
data.
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Finally, consideration was given to whether Transactional Data
Reporting should be applied to all of GSA's Governmentwide contract
vehicles. Most of GSA's non-FSS Governmentwide vehicles currently have
transactional data reporting requirements that exceed those created
through this rule, but the new applicable Transactional Data Reporting
clause (GSAR clause 552.216-75) will provide a consistent reporting
mechanism for future non-FSS vehicles, or for current vehicles that
adopt the new clause. For FSS contracts, an analysis was conducted to
determine whether Transactional Data Reporting should be considered for
all FSS contracts, or only those that include products or services that
would allow straightforward comparisons, such as commodities with
standard part numbers. The second-most common comment area questioned
the utility of collecting transactional data for Schedules where
``apples-to-apples'' comparisons cannot be made, such as contracts for
professional services and complex solutions. While transactional data
is most useful for price analysis when comparing like items, it does
not mean the data is not useful when perfect comparisons cannot be
made. Government buyers and FSS contracting officers will use the data
for price analysis and market research, and category managers will use
the data for consumption analysis to form demand management strategies,
regardless of whether the data can be used for perfect comparisons. An
example is the ability to compare labor rates across contract vehicles,
which is beginning to bear fruit in the form of reduced contract
duplication. Consequently, GSA decided not to limit the prescription of
Transactional Data Reporting to certain Schedules or Special Item
Numbers.
IV. Final Rule Implementation
A. GWAC and Governmentwide IDIQ Contracts
GSAR clause 552.216-75 Transactional Data Reporting is immediately
available for GSA's GWACs and non-FSS Governmentwide IDIQ contracts. It
will be applied to all new vehicles in this class--those vehicles with
solicitations issued on or after the effective date of this rule--but
the current contract vehicles with alternative transactional data
provisions may opt to continue using existing reporting requirements.
The clause requires contractors to report eleven standard data elements
and includes a ``fill-in'' for additional data elements. However, GSA's
Senior Procurement Executive must approve any data elements beyond the
standard elements in order for them to be included with a tailored
version of the clause. The determination regarding additional data
elements will consider the benefits, alternatives, burden, and need for
additional rulemaking.
B. FSS Contracts
The new FSS Transactional Data Reporting clause (GSAR clause
552.238-74, Alternate I), along with the corresponding changes to
existing pricing disclosure requirements, will be introduced in phases,
beginning with a pilot for select Schedules and Special Item Numbers
(SINs). The clause requires vendors to report eleven standard data
elements and includes a ``fill-in'' for additional data elements.
However, GSA's Senior Procurement Executive must approve any data
elements beyond the standard elements in order for them to be included
with a tailored version of the clause. The determination regarding
additional data elements will consider the benefits, alternatives,
burden, and need for additional rulemaking.
The pilot will begin no sooner than July 1, 2016--details will be
released at a later date--and will include the following Schedules and
SINs:
Schedule 03FAC, Facilities Maintenance and Management: All
SINs.
Schedule 51 V, Hardware Superstore: All SINs.
Schedule 58 I, Professional Audio/Video, Telemetry/
Tracking, Recording/Reproducing and Signal Data Solutions: All SINs.
Schedule 72, Furnishing and Floor Coverings: All SINs.
Schedule 73, Food Service, Hospitality, Cleaning Equipment
and Supplies, Chemicals and Services: All SINs.
Schedule 75, Office Products: All SINs.
Schedule 00CORP, The Professional Services Schedule:
Professional Engineering Services (PES) SINs.
Schedule 70, General Purpose Information Technology
Equipment, Software, and Services: SINs 132 8 (Purchase of New
Equipment); 132 32, 132 33, and 132 34 (Software); and 132 54 and 132
55 (Commercial Satellite Communications (COMSATCOM)).
The new reporting clause and corresponding pricing disclosure
changes will be applied to newly-awarded contracts for the applicable
Schedules/SINs. Existing contracts for the pilot Schedules/SINs will
adopt the new reporting clause and corresponding pricing disclosure
changes after the execution of a bilateral modification between the
vendor and Government.
For the two pilot Schedules that include only select SINs--The
Professional Services Schedule and Schedule 70--contracts subject to
the Transactional Data Reporting that include those SINs will report
transactional data for all SINs under those contracts. For example, a
vendor holding a Schedule 70 contract consisting of SINs 132 33
(Perpetual Software License), 132 34 (Maintenance of Software as a
Service), and 132 51 (Information Technology Professional Services)
will be subject to the Transactional Data Reporting pilot because of
the inclusion of Software SINs 132 33 and 132 34. However, this vendor
will report transactional data for all SINs--132 33, 132 34, and 132
51. Likewise, vendors holding Professional Services Schedule contracts
that include a Professional Engineering Services SIN in conjunction
with other SINs under that Schedule (e.g., Environmental Services,
Mission Oriented Business Integrated Services, etc.) will report
transactional data for all SINs under the contract.
The initial pilot will reach approximately 30 percent of GSA's FSS
contracts, including Schedules/SINs covering a wide array of goods and
services that account for approximately 43 percent of the GSA Schedules
sales volume. This scope will enable GSA to evaluate the effectiveness
of Transactional Data Reporting before deciding whether to expand,
limit, or discontinue the program. Evaluation
[[Page 41113]]
metrics will include, but not be limited to, changes in price, sales
volume, and small business participation, as well as macro use of
transactional data by category managers and teams to create smarter
buying strategies such as consumption policies. GSA's Senior
Procurement Executive will regularly evaluate progress against these
metrics in consultation with the Administrator for Federal Procurement
Policy and other interested stakeholders to determine whether to
expand, limit, or discontinue the program. No expansion of the pilot or
action to make Transactional Data Reporting a permanent fixture on the
Schedules will occur prior to the careful evaluation of at least one
year of experience with the pilot.
C. Systems
Vendors subject to the new Transactional Data Reporting clauses
will be required to electronically report the data, as outlined in the
applicable clauses, thirty (30) days after the end of the preceding
month; reporting instructions will be posted on the Vendor Support
Center Web site (https://vsc.gsa.gov). To facilitate Transactional Data
Reporting, GSA is launching a new portal that has several differences
from the existing 72A Sales Reporting System,\38\ including the
following:
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\38\ See the 72A Sales Reporting System, accessible at https://72a.gsa.gov.
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A single sign-on for all contracts. The current system
requires a different sign-on for each contract.
Electronic Data Interchange (EDI) upload capability.
A spreadsheet template that can be downloaded, filled, and
uploaded in lieu of manual data entry.
Vendors with $0 sales during a reporting period can now
click a single field to complete the report, as opposed to the current
72A requirement of submitting $0 for each SIN.
The new FSS Transactional Data Reporting clause (552.238-74
Alternate I) requires monthly reporting but quarterly fee remittance,
which will also be processed through the new portal. As sales are
reported, the portal will calculate a running balance and remind users
to submit payment within 30 days after the end of the quarters ending
March 31, June 30, September 30, and December 31. However, vendors will
have the option to pay-as-you-go, meaning they can voluntarily remit
the fees as sales are reported, rather than doing so on a quarterly
basis. Portal instructions and training will be posted to GSA's Vendor
Support Center.\39\
---------------------------------------------------------------------------
\39\ See the Vendor Support Center, accessible at https://vsc.gsa.gov.
---------------------------------------------------------------------------
Transactional data collected through the portal will be accessible
only by authorized users and protected in accordance with GSA's
information technology security policies. Additionally, GSA intends to
share transactional data to the maximum extent allowable to promote
transparency and competition while respecting that some data could be
exempt from disclosure. Accordingly, a public data extract, containing
information that would otherwise be releasable under the Freedom of
Information Act (FOIA), will be created for use by the general public;
\40\ details about the public data extract will be released through a
forthcoming notice in the Federal Register. The data released to the
public will provide valuable market intelligence that can be used by
vendors for crafting more efficient, targeted business development
strategies that incur lower administrative costs. This will be
particularly beneficial for small businesses, which often do not have
the resources to invest in dedicated business development staff or
acquire business intelligence through third-parties.
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\40\ 5 U.S.C. 552.
---------------------------------------------------------------------------
D. Procedures
GSA, like other agencies, will use transactional data to support
its contracting officers in making smarter decisions when purchasing
goods and services. However, GSA's FSS contracting officers will also
take this data into consideration when awarding FSS contracts and
evaluating requests to adjust pricing and add new items to current
contracts. As a result, GSA is developing training for Government
buyers and implementing new procedures for its FSS contracting
officers. Training and guidance deployed in connection with this rule
emphasizes the importance of considering the best overall value (not
just unit price) for each procurement, taking into account desired
terms and conditions, performance levels, past customer satisfaction,
and other relevant information.
Training: GSA is updating relevant courseware on the Federal
Acquisition Institute (FAI) and Defense Acquisition University (DAU)
portals to educate both customers and GSA contracting officers on how
to use the data. Similarly, the courseware on how to use the FSS
program and other non-FSS GWACs and multi-agency IDIQs will be updated
to educate customers on the new requirements and how they can use the
data collected to buy smarter. The external courseware will also
highlight the additional value transactional data offers to GSA's FSS
and non-FSS contracting programs and emphasize it must be viewed in the
context of each procurement, taking into account desired terms and
conditions, performance levels, past customer satisfaction, and other
relevant information.
Additionally, FAS also has an internal training course aimed at GSA
contracting officers awarding and administering FSS contracts--this
course will be updated to educate contracting officers on how to
conduct analysis on transactional data, as well as how to use these
analyses to achieve better pricing on the contracts.
Guidance: FSS contracting officers follow policy from GSA's
supplement to the FAR, the General Services Administration Acquisition
Manual (GSAM), when evaluating offers for FSS contracts. This includes
the GSAR, GSA's regulatory FAR supplement, and non-regulatory
acquisition policy, commonly referred to as GSAM guidance.\41\
Regulations, such as the GSAR, require formal rulemaking, while non-
regulatory policy, like GSAM guidance, does not.\42\ For example, GSA
contracting officer responsibilities are found at the non-regulatory
GSAM 501.602,\43\ while the regulatory CSP instructions are found at
GSAR 515.408.\44\
---------------------------------------------------------------------------
\41\ See General Services Administration Acquisition Manual
section 501.170, available at https://www.acquisition.gov/?q=browsegsam.
\42\ 41 U.S.C. 1707.
\43\ See General Services Administration Acquisition Manual
section 501.602, available at https://www.acquisition.gov/?q=browsegsam.
\44\ 48 CFR 515.408.
---------------------------------------------------------------------------
In addition to the regulatory changes made through this final rule,
non-regulatory instructions for GSA category managers and FSS
contracting officers are being incorporated into the GSAM. The category
manager guidance will include instructions to use transactional data
for category analysis, as well as approval requirements for adding data
elements to the new Transactional Data Reporting clauses, including
approvals by the head of contracting activity and GSA's Senior
Procurement Executive and coordination with the applicable category
manager. The FSS contracting officer guidance will give instructions
for evaluating offers for FSS contracts when transactional data is
available.
One of the objectives of the new FSS contracting officer guidance
is to align
[[Page 41114]]
FSS offer evaluation procedures with the FAR. Accordingly, FSS
contracting officers will be instructed to evaluate the data in the
context of each offer, taking into account desired terms and
conditions, quantity discounts, unique attributes, socio-economic
considerations, and other relevant information. Contracting officers
are encouraged to discuss with the offeror perceived variances between
offered prices, transactional data, and existing contract-level prices,
in order to evaluate whether other attributes (e.g., superior
warranties, quantity discounts, etc.) justify awarding higher prices.
The new guidance will include an order of preference for
information to be used when evaluating FSS offers and establishing
negotiating objectives, including the following:
1. Using data that is readily available, in accordance with FAR
15.404-1(b)(2)(ii),\45\ including prices paid information on contracts
for the same or similar items; contract-level prices on other FSS
contracts or Governmentwide contracts for the same or similar items,
and commercial data sources providing publicly available pricing
information.
---------------------------------------------------------------------------
\45\ Federal Acquisition Regulation 15.404-1(b)(2)(ii) (48 CFR
15.404-1(b)(2)(ii)).
---------------------------------------------------------------------------
2. Performing market research to compare prices for the same or
similar items in accordance with FAR 15.404-1(b)(2)(vi).\46\
---------------------------------------------------------------------------
\46\ Federal Acquisition Regulation 15.404-1(b)(2)(iv) (48 CFR
15.404-1(b)(2)(iv)).
---------------------------------------------------------------------------
3. Requesting additional pricing information such as ``data other
than certified cost or pricing data'' (as defined at FAR 2.101 \47\)
from the offeror in accordance with FAR 15.404-1(b)(2)(vii) \48\ when
the offered prices cannot be determined to be fair and reasonable based
on the data found from other sources.
---------------------------------------------------------------------------
\47\ Federal Acquisition Regulation 2.101 (48 CFR 2.101).
\48\ Federal Acquisition Regulation section 15.401-1(b)(2)(vii)
(48 CFR 15.404-1(b)(2)(vii)).
---------------------------------------------------------------------------
Traditionally, GSAR section 538.270, Evaluation of multiple award
schedule (MAS) offers, has instructed FSS contracting officers to
require pricing information through the CSP format and seek the
offeror's best price. As these instructions are included in the
regulatory portion of the GSAM, this case includes new language for
these instructions to specify their use only when the CSP format is
included in the solicitation (i.e., for the Schedules and SINs not
included in the pilot program). The new offer evaluation instructions
belong in the non-regulatory section of the GSAM because they provide
supplementary guidance to the FAR and do not impose a regulatory burden
on the public. However, even though the GSAM guidance is not subject to
public comment and is not included with the regulatory changes of this
rule, it will be viewable in tandem with the corresponding GSAR policy
on Acquisition.gov.\49\
---------------------------------------------------------------------------
\49\ See the General Services Administration Acquisition Manual,
available at https://www.acquisition.gov/?q=browsegsam.
---------------------------------------------------------------------------
V. Public Comments Overview and Discussion
GSA received 26 comment letters in response to the proposed
rule.\50\ The breakdown along commenter categories is as follows:
---------------------------------------------------------------------------
\50\ See GSAR Case 2013-G504; 80 FR 11619 (Mar. 4, 2015).
------------------------------------------------------------------------
------------------------------------------------------------------------
Vendors......................................................... 9
Industry Associations........................................... 8
Individuals..................................................... 5
Government Stakeholders......................................... 2
Other Groups.................................................... 2
------------------------------------------------------------------------
All comments filed were considered, many of which led to the
changes described in Section III of this document.\51\ The following is
an overview of these comments and GSA's responses, organized into
groupings that are sorted by the number of commenters, with the first
grouping containing the most commenters. GSA's responses to these
comments are contained within each grouping.
---------------------------------------------------------------------------
\51\ See Section III.A, Summary of Changes Made at the Final
Rule Stage.
---------------------------------------------------------------------------
Burden.
Nineteen commenters provided comments related to the compliance
burden.\52\ Several questioned GSA's burden projections, stating the
compliance estimates were understated and the projected burden
reduction was overstated. Multiple commenters stated the Government is
shifting the burden of gathering transactional data onto vendors, with
some suggesting the burden will lead to higher prices or that vendors
should be reimbursed for costs incurred.
---------------------------------------------------------------------------
\52\ See e.g., ABA Letter, Abt Associates Letter, Allen Letter,
ARA Letter, CGP Letter, CODSIA Letter, EA Letter, Experian Letter,
GSA OIG Letter, immixGroup Letter, IOPFDA Letter, Insite.rr.com
Letter, Johnson & Johnson Letter, NDIA Letter, POGO Letter, RTI
Letter, SBA Letter, Shepra Letter, SIA Letter.
---------------------------------------------------------------------------
The proposed rule contained burden estimates in accordance with the
Paperwork Reduction Act, including a one-time average initial setup
burden of 6 hours and an average monthly reporting burden of
approximately .52 of an hour, or 31 minutes. The ongoing reporting
burden for FSS vendors, following a first-year burden for
implementation, was estimated to $7.6 million a year. However, the
proposed rule coupled the new reporting requirement with the removal of
the PRC tracking customer provision, which would have resulted in an
estimated burden reduction of $51 million a year if applied to the
entire GSA Schedules program.\53\
---------------------------------------------------------------------------
\53\ The $51 million burden reduction was the ongoing FSS
reporting burden ($7.6 million) minus the PRC burden of $58.5
million from the 2012 PRC information collection (OMB Control Number
3090-0235). The $7.6 million FSS reporting burden did not include
the burden for one-time implementation. The $51 million burden
reduction applied to the entire GSA Schedules program and was not
adjusted to only account for vendors participating in the FSS pilot.
---------------------------------------------------------------------------
Most of the commenters weighing in on the burden stated the
estimates were significantly underestimated. For example, one
association compared the proposed rule's burden estimates with the
results of a survey it conducted among some of its members to assess
the costs of implemented the requirements set forth in the proposed
rule. It reported the following for setup time:
When asked about the estimated number of hours that their
company would require for initial startup to comply with the
proposed rule, small business respondents reported that it would
take on average 232 hours. Large and medium size contractors
estimated that it would take on average 1192 hours. In the context
of an average work week, small businesses estimated that it would
take nearly 6 weeks for initial setup, which would require limited
resources to be diverted to this effort. Large and medium size
businesses reported that it would take nearly 8 months on average to
setup these systems. The proposed rule suggests that contractors
should undertake this compliance burden at ``no cost to the
government.'' \54\
---------------------------------------------------------------------------
\54\ See CGP Letter.
---------------------------------------------------------------------------
That association also reported much higher figures for its
monthly reporting estimates:
In the survey contractors also report a significantly higher
number of hours required to do the monthly transactional data
reporting than estimated in the proposed rule. Respondents were
asked in the survey to estimate the number of hours it would take
their company to report the transactional data on a monthly basis.
GSA estimated that it would only take 31 minutes per month. However,
small businesses reported that it would take 38 hours per month on
average. Large and medium size businesses estimated that it would
take an average of 68 hours per month--nearly 2 weeks to conduct the
reporting.\55\
---------------------------------------------------------------------------
\55\ Ibid.
One commenter also questioned GSA's and ordering agencies' ability
to use the data, and GSA's capability to enforce the reporting
requirements.'' \56\ Multiple commenters stated they would not realize
a net burden reduction when the PRC tracking customer provision is
removed. For example, one commenter
[[Page 41115]]
noted the PRC only requires disclosures when a price reduction is
triggered, while this rule will require monthly reporting.\57\
---------------------------------------------------------------------------
\56\ See GSA OIG Letter.
\57\ See immixGroup Letter.
---------------------------------------------------------------------------
Finally, multiple commenters stated Government is shifting the
burden of gathering transactional data onto vendors. Some commenters
said this will force industry to charge higher prices to recoup their
costs, while others argued vendors should be directly reimbursed for
reporting costs.
Response: As a result of these comments, GSA reevaluated its
estimation methodology and recalculated the burden based on whether
vendors use automated or manual systems to identify and report
transactional data. An automated system is one that relies on
information technology, such as an accounting system or data management
software, to identify and compile reportable data. These systems can
tremendously streamline the reporting process but require upfront
configuration to perform the tasks, such as coding the data elements to
be retrieved. Conversely, a manual system is one that incorporates
little to no automation and instead relies on personnel to manually
identify and compile the reportable data. An example of a manual system
would be an accountant reviewing invoices to identify the reportable
data and then transferring the findings to a spreadsheet. In contrast
to automation, a manual system requires relatively little setup time
but the reporting effort will generally increase with the vendor's
sales volume.
The likelihood of a vendor adopting an automated system increases
with their applicable sales volume. Vendors with little to no
reportable data are unlikely to expend the effort needed to establish
an automated reporting system since it will be relatively easy to
identify and report a limited amount of data. In Fiscal Year 2015, 32
percent of FSS vendors reported $0 sales, while another 34 percent
reported average sales between $1 and $20,000 per month. If the rule
were applied to the entire Schedules program, approximately two-thirds,
or nearly 11,000 vendors, would have a lower reporting burden. However,
as a vendor's applicable average monthly sales increase, they will be
increasingly likely to establish an automated system to reduce the
monthly reporting burden. Consequently, vendors with higher reportable
sales will likely bear a higher setup burden to create an automated
system, or absorb a high monthly reporting burden if they choose to
rely on manual reporting methods.
This renewed analysis led GSA to increase its burden estimates.\58\
For FSS contracts in particular--
---------------------------------------------------------------------------
\58\ See Section VIII.B for a discussion of the burden estimates
in accordance with Paperwork Reduction Act requirements.
---------------------------------------------------------------------------
The projected setup time for an automated system increased
from an average of 6 hours \59\ to an average of 240 hours, and
---------------------------------------------------------------------------
\59\ The proposed rule setup time estimates did not
differentiate between manual and automated reporting systems.
---------------------------------------------------------------------------
The projected monthly reporting time range grew from 0.3
minutes-4 hours to 0.25 hours-48 hours.
However, GSA's estimates are still considerably lower than the
estimates provided through the public comments,\60\ primarily because--
---------------------------------------------------------------------------
\60\ See CGP Letter.
---------------------------------------------------------------------------
At least two-thirds of the potential Transactional Data
Reporting participants will have a relatively lower burden (e.g.,
vendors with lower or no sales), and
Vendors with higher reporting volume will face lower setup
times with a higher monthly reporting burden, or higher setup times
with a lower monthly reporting burden. In other words, vendors will not
face a higher setup burden and a higher monthly reporting burden to
comply with the rule.
This increase in the burden estimates reinforced the need to
evaluate existing pricing disclosure requirements that could be
rendered obsolete once transactional data is collected. After
evaluating these comments and submitting the Federal Supply Schedule
Pricing Disclosures information collection request (OMB control number
3090-0235),\61\ GSA concluded Transactional Data Reporting would not
only exceed the PRC tracking customer provision benefits, it would also
alleviate the need for CSP disclosures when combined with automated
commercial data sources, new data analytic tools, and improved price
analysis policy. Even with the increased Transactional Data Reporting
burden estimates, GSA projects an average annual burden reduction of
approximately $32 million for FSS pilot vendors when the new
Transactional Data Reporting requirements are paired with the removal
of CSP disclosures and the PRC tracking customer provision.\62\ As
noted in Section III of this document, this proposal is particularly
advantageous for small businesses.\63\ In order to enter the federal
marketplace through the Schedules program, small businesses have
traditionally been required to absorb the burden of gathering CSP
disclosures and developing robust PRC compliance systems before making
even a dollar in revenue through their Schedule contracts. However,
under the Transactional Data Reporting model, small businesses entering
the Schedules program would not, in most cases, be likely to make
significant upfront investments because they will only be impacted
after they have won a Schedule order. Additionally, unlike information
compiled to populate CSPs, which is created specifically for GSA, the
transactional data reported each month is readily available data used
to generate invoices.
---------------------------------------------------------------------------
\61\ More information about Information Collection 3090-0235 can
be found at http://www.reginfo.gov/public by searching ``ICR'' for
``3090-0235''.
\62\ $32 million does not include costs for non-FSS contracts.
It is the result of the FSS burden of the initial pilot
implementation ($12.41 million), minus the share of the combined CSP
and PRC burden allocated to the FSS pilot vendors ($44.03 million).
The total CSP and PRC burden from Information Collection 3090-0235,
if it were applied to all GSA FSS vendors, including those
participating in the Transactional Data Reporting pilot, would be
$101.69 million. The share of that burden allocated to the FSS pilot
vendors. ($44.03 million) is based on the percentage of the overall
FY15 FSS sales accounted for by the FSS pilot vendors (43.2
percent).
\63\ See Section III.B, Alternatives Analysis.
---------------------------------------------------------------------------
Regarding the ability of GSA and ordering agencies to use the data,
new systems are being deployed to leverage the information.
Transactional data reported in accordance with the new clauses will be
shared with authorized users to craft smarter buying strategies. GSA is
also developing data visualization tools to make the data more user
friendly. Within GSA, FAS has established a data analytics team that
will assist in the establishment and ongoing analysis of contract-level
prices. In terms of oversight, FAS will use many of the same resources
it currently deploys to ensure compliance with the existing GSAR clause
552.238-74, Industrial Funding Fee and Sales Reporting.\64\
---------------------------------------------------------------------------
\64\ General Services Administration Acquisition Regulation
clause 552.238-74 (48 CFR 552.238-74).
---------------------------------------------------------------------------
GSA is pursuing this initiative because obtaining transactional
data from its industry partners is the most feasible path the
Government can take to implement smarter buying strategies and promote
taxpayer value. GSA recognizes the burden that comes with this rule and
will continually evaluate ways to minimize the data collection.
However, this rule will not lead to higher costs and subsequently
higher prices because the changes to the CSP and PRC requirements
provide a net burden reduction. To the contrary,
[[Page 41116]]
Transactional Data Reporting, as shown by the results shared in Section
II of this document, will lead to lower prices.\65\
---------------------------------------------------------------------------
\65\ See Section II.B, Necessity and Value of Transactional
Data.
---------------------------------------------------------------------------
Using Transactional Data for Imperfect Comparisons
Fifteen commenters provided comments related to whether
transactional data is useful for making imperfect comparisons.\66\ The
proposed rule noted, ``[f]or FSS vehicles, the clause would be
introduced in phases, beginning with a pilot for select products and
commoditized services.'' \67\ Following publication of the proposed
rule, FAS posted a proposed list of Schedules to be included in the
Transactional Data Reporting pilot; the Schedules chosen primarily
contained products that generally have standard part numbers, enabling
direct comparisons between like items.\68\ However, the proposed rule
was clear the reporting requirements could expand to all Schedules,
including those for services and complex solutions.
---------------------------------------------------------------------------
\66\ See e.g., ABA Letter, Abt Associates Letter, Allen Letter,
ARA Letter, Atkins Letter, CGP Letter, CODSIA Letter, EA Letter, GSA
OIG Letter, immixGroup Letter, NDIA Letter, NMFTA Letter, RTI
Letter, Shepra Letter, SIA Letter.
\67\ See GSAR Case 2013-G504; 80 FR 11619 (Mar. 4, 2015).
\68\ GSA proposed five Schedules in a GSA Interact posting
following publication of the proposed rule. Those Schedules were 51
V, Hardware Superstore; 58 I, Professional Audio/Video, Telemetry/
Tracking, Recording/Reproducing and Signal Data Solutions; 72,
Furnishing and Floor Coverings; 73, Food Service, Hospitality,
Cleaning Equipment and Supplies, Chemicals and Services; and 75,
Office Products.
---------------------------------------------------------------------------
Commenters expressed concern that transactional data would
eventually be collected and used for goods and services that do not
lend themselves to perfect comparisons. Multiple commenters noted it
will be difficult, and in some cases impossible, to make one-to-one
comparisons for professional services and complex or customizable
products, such as laptops. For example, one commenter noted complex
service offerings are ``priced according to very specific circumstances
related to risk, security requirements, geographic area of performance,
and the qualifications of the individuals performing the work.'' \69\
Two commenters stated GSA will have difficulty standardizing labor
categories in order to make comparisons for service-related
transactional data.\70\ One commenter suggested the pilot include a
professional services Schedule to allow implementation to proceed ``in
a controlled manner allowing for continuous feedback from contractors
and reconsideration of the true intent and usability of the data that
GSA is trying to gather.'' \71\ Additionally, one commenter stated GSA
is relying on the reported success of the Office Supplies 2 (OS2)
contract as validation for transitioning to a horizontal pricing model,
which is not a representative sample of the Schedules program.\72\
---------------------------------------------------------------------------
\69\ See NDIA Letter.
\70\ See e.g., EA Letter, GSA OIG Letter.
\71\ See Abt Letter.
\72\ See GSA OIG Letter.
---------------------------------------------------------------------------
Multiple commenters stated concerns with how the Government will
use prices paid data when conducting a horizontal price analysis. One
commenter noted FAR section 15.404-1(b)(2)(ii) allows the ``comparison
of proposed prices to historical prices paid . . . for the same or
similar items'' but that paragraph (A) of this FAR section states:
The prior price must be a valid basis for comparison. If there
has been a significant time lapse between the last acquisition and
the present one, if the terms and conditions of the acquisition are
significantly different, or if the reasonableness of the prior price
is uncertain, then the prior price may not be a valid basis for
comparison.\73\ \74\
---------------------------------------------------------------------------
\73\ Federal Acquisition Regulation section 15.404-1(b)(2)(ii)
(48 CFR 15.404-1(b)(2)(ii)).
\74\ See CGP Letter.
Other commenters gave examples of other factors that should be
taken into account when making comparisons, such as differing
quantities or terms and conditions. For example, one commenter was
concerned the data would create a false expectation for the lowest
reported prices, as deep discounts can be offered on a one-time based
or in response to special promotions, ease of service, volume, or
geographic location.\75\
---------------------------------------------------------------------------
\75\ See SIA Letter.
---------------------------------------------------------------------------
Response: GSA gave consideration as to whether Transactional Data
Reporting should be considered for all FSS contracts or only those that
include products or services that would allow straightforward
comparisons, such as commodities with standard part numbers. GSA agrees
transactional data is most useful for price analysis when comparing
like items, but disagrees with the notion that the data is not useful
when perfect comparisons cannot be made. Namely, the FAR allows
comparisons of prices paid for similar items and data for dissimilar
items is useful when conducting market research or performing the
consumption analysis that underlies the formation of demand management
strategies.
Transactional data will assist Government buyers and FSS
contracting officers in using the price analysis techniques found in
FAR section 15.404-1(b)(2)(ii), as transactional data is necessary to
make a comparison of ``proposed prices to historical prices paid . . .
for the same or similar items.'' Although paragraph (A) of FAR section
FAR section 15.404-1(b)(2)(ii) notes the prior price is not a valid
basis of comparison if ``there has been a significant time lapse
between the last acquisition and the present one, if the terms and
conditions of the acquisition are significantly different, or if the
reasonableness of the prior price is uncertain . . . ,'' it does allow
for some variance in factors when making comparisons. Furthermore,
paragraph (B) of FAR section 15.404-1(b)(2)(ii) not only allows, but
requires, a prior price to ``be adjusted to account for materially
differing terms and conditions, quantities and market and economic
factors.'' In other words, when there has been no significant time
lapse, the terms and conditions of an acquisition are similar to
previous purchases, and the reasonableness of the prior price is
certain, transactional data is valid for comparisons of, if not
identical, at least similar items and can be adjusted to account for
materially different terms and conditions, quantities, and market and
economic factors.
Transactional data will also be instrumental for informing buying
decisions and crafting overarching demand management strategies,
regardless of whether the data is too dissimilar for price comparisons.
For instance, the availability of transactional data will provide
buyers visibility into the variables that drive costs, which is key to
defining requirements and developing accurate cost estimates. Likewise,
category managers will gain insight into the assorted options available
for satisfying common requirements, and then use the lessons learned to
form demand management strategies that promote the most efficient
methods for meeting the Government's needs.
Regarding the differences between the Schedules program and OS2,
GSA agrees that the success of the Federal Strategic Sourcing
Initiative (FSSI), which includes OS2, was an important factor in GSA's
decision to pursue Transactional Data Reporting for the larger
Schedules program. While GSA anticipates Transactional Data Reporting
will be successful, it recognizes its assumptions should be tested, and
therefore opted to begin with a pilot. GSA does not expect this pilot
to replicate or exceed the discounts achieved through FSSI--often up to
30 percent lower than the comparable Schedule prices--partly because of
the
[[Page 41117]]
stated differences between the Schedules program and FSSI.
In response to the suggestion that a professional services Schedule
be included in the pilot before expanding the requirements across the
program, GSA has decided to include the Professional Engineering
Services SINs from the Professional Services Schedule in the pilot. The
pilot will also now include software SINs under Schedule 70, in order
to collect data for more complex solutions. The initial pilot will now
reach approximately 30 percent of GSA's FSS contracts, including
Schedules/SINs covering a wide array of goods and services that account
for 43 percent of the Schedules sales volume. This scope will enable
GSA to evaluate the effectiveness of Transactional Data Reporting
before deciding whether to expand, limit, or discontinue the program.
Finally, GSA recognizes the complexities of employing horizontal
price analysis, whether it is through Transactional Data Reporting or
other initiatives. For example, the new CPI initiative is built around
a tool that identifies contract-level pricing outside a range
determined to be acceptable for identical items; vendors whose prices
exceed the acceptable range are then notified of their comparative
pricing. It is important to reiterate that a range is identified
because GSA appreciates the varying circumstances that can contribute
to price variation. For CPI, the FSS contracting officer's final
determination will take into account non-price elements, such as
materially different terms, quantities, and market and economic
factors. The GSAM guidance for FSS contracts, which will be viewable on
Acquisition.gov, instructs FSS contracting officers to make fair and
reasonable, not lowest-price-regardless, determinations. Contracting
officers placing orders against GSA's Schedules and other multi-agency
vehicles will continue to follow the procedures required by the FAR,
including a preference for ``best value'' solutions.\76\ Also, GSA is
deploying data visualization tools that provide context for the
transactional data for a particular good or service.
---------------------------------------------------------------------------
\76\ Federal Acquisition Regulation section 1.102 (48 CFR
1.102).
---------------------------------------------------------------------------
Public Disclosure of Transactional Data
Thirteen parties provided comments related to public disclosure of
transactional data.\77\ The proposed rule stated, ``GSA also plans to
implement an [application programming interface (API)] for buyers to
benefit from using transactional data. Through the API, GSA will make
this information accessible online for all Government buyers.'' \78\
GSA did not address in the proposed rule whether this data would be
shared with the public. Most of the commenters opposed publicly
releasing the data and stated GSA must explain how it intends to
protect it.
---------------------------------------------------------------------------
\77\ See e.g., ABA Letter, Abt Associates Letter, Allen Letter,
ARA Letter, CODSIA Letter, CGP Letter, EA Letter, immixGroup Letter,
IOPFDA Letter, NDIA Letter, NMFTA Letter, SIA Letter.
\78\ See GSAR Case 2013-G504; Docket 2014-0020; Sequence 1 (80
FR 11619 (Mar. 4, 2015)).
---------------------------------------------------------------------------
One commenter asked whether GSA will share the transactional data
with vendors,\79\ while another commenter suggested vendors should have
the same access to the data as Government buyers.\80\ Ten commenters
opposed the release of the data to the public because it will contain
proprietary and confidential business information, with most stating
vendors will face adverse impacts if the data is shared and requesting
GSA explain how it intends to protect the data from unauthorized
disclosure.\81\ The SBA Office of Advocacy also stated small businesses
are concerned about how the data will be protected.\82\ Four commenters
stated this type of data is protected from disclosure under FOIA, which
states the following are exempted: ``trade secrets and commercial or
financial information obtained from a person and privileged or
confidential.'' 83 84 One commenter noted the transactional
data currently reported under GSA's non-FSS contracts cannot be
attributed to a specific vendor.\85\ Finally, one vendor stated the
rule should provide remedies for vendors in the event of improper
disclosure.\86\
---------------------------------------------------------------------------
\79\ See ARA Letter.
\80\ See immixGroup Letter.
\81\ See e.g., ABA Letter, Abt Associates Letter, Allen Letter,
CODSIA Letter, CGP Letter, EA Letter, IOPFDA Letter, NDIA Letter,
NMFTA Letter, SBA Letter, SIA Letter.
\82\ See SBA Letter.
\83\ 5 U.S.C. 552(b)(4)
\84\ See e.g., ABA Letter, Allen Letter, EA Letter, NMFTA
Letter.
\85\ See CGP Letter.
\86\ See ABA Letter.
---------------------------------------------------------------------------
Response: Transactional data reported in accordance with this rule
will be accessible only by authorized users. GSA intends to share the
transactional data with the public to the maximum extent allowable
while respecting that some data could be exempt from disclosure.
Consequently, a data extract will be created for use by the general
public, containing information otherwise releasable under FOIA; \87\
details about the public data extract will be released through a
forthcoming notice in the Federal Register.
---------------------------------------------------------------------------
\87\ 5 U.S.C. 552.
---------------------------------------------------------------------------
Transparency will support a dynamic marketplace by providing
vendors with the business intelligence needed to identify customers,
determine which products should be included on their contract
pricelists, and ascertain whether their prices are competitive. This
will be particularly beneficial for small businesses, which often do
not have the resources to invest in dedicated business development
staff or acquire business intelligence through third-parties.
However, GSA recognizes some information may be protected from
public release, which led to the decision to create a public data
extract, as opposed to allowing the public the same access as
authorized users. The data extract will provide the public a filtered
view of the data, including information that is releasable under FOIA,
while protecting information that is not.
Finally, GSA is not including remedies in this rule for
unauthorized disclosure of data. GSA is taking precautions to prevent
unauthorized disclosures of data, but in the event of such an
occurrence, GSA will address remedies at that time based on the
specific circumstances and in accordance with applicable statutes and
regulations.
The Government Already Possesses the Data
Thirteen commenters stated the Government already possesses this
data.\88\ Several commenters stated the Government should develop
systems to collect its own data, with some arguing this will be a
difficult task for vendors to undertake. Commenters also suggested
alternatives to requiring vendors to report the data.
---------------------------------------------------------------------------
\88\ See e.g., Allen Letter, ARA Letter, Atkins Letter, CODSIA
Letter, CGP Letter, Falcone Letter, immixGroup Letter, IOPFDA
Letter, Mcdonald Letter, NDIA Letter, NMFTA Letter, RTI Letter,
Shepra Letter.
---------------------------------------------------------------------------
Transactional data is generated when a transaction is made between
a buyer and seller. As such, the parties of the transaction will
produce and possess this data. For federal contracting, these parties
are the Government ordering agency and the vendor. On the Government
side, this data is often found in contract writing systems and
financial systems. However, these systems are not shared across
agencies; in fact, many agencies use multiple versions of these
systems. Moreover, systems that do provide transactional data tend to
cover a narrow scope of federal spending. For instance, GSA possesses
data for transactions
[[Page 41118]]
completed through GSA Advantage![supreg], but it only accounts for
about 1 percent of Schedule sales. Hence, no mechanism exists to
compile and analyze transactional data from a wide-range of purchases
made across the Government.
Several commenters objected to GSA requiring vendors to report data
that originates from the Government. For example, one commenter stated
the Government needs to make investments in automated systems that can
provide the data without burdening vendors, and that this rule only
delays those eventual investments.\89\
---------------------------------------------------------------------------
\89\ See NDIA Letter.
---------------------------------------------------------------------------
Commenters also stated it will not be easier for vendors to provide
the data. One commenter stated many vendors do not keep this type of
data as a matter of practice, but for the vendors that do, their
reporting systems may not be compatible with GSA's reporting site.\90\
---------------------------------------------------------------------------
\90\ See CODSIA Letter.
---------------------------------------------------------------------------
Finally, commenters suggested alternatives to vendor-provided
transactional data. Two commenters stated GSA should obtain data from
the Federal Procurement Data System (FPDS); \91\ two commenters
questioned why GSA could not pull data from its GSA eLibrary and GSA
Advantage![supreg] sites; \92\ two commenters said GSA should rely on
data collected from Government purchase card transactions; \93\ one
commenter proposed GSA use free, price comparisons sites available to
the general public; \94\ and one commenter stated GSA should already
have the ability to obtain the data from other agencies, or otherwise
should not be pursuing the rule.\95\
---------------------------------------------------------------------------
\91\ See e.g., Atkins Letter, Shepra Letter.
\92\ See Atkins Letter, RTI Letter.
\93\ See e.g., Allen Letter, Mcdonald Letter.
\94\ See CGP Letter.
\95\ See NMFTA Letter.
---------------------------------------------------------------------------
GSA Response: GSA does not have the systems capability to collect
transactional data from other agencies. The Initial Regulatory
Flexibility Analysis published with the proposed rule included an
evaluation of alternatives for obtaining transactional data--internal
applications; GSA ordering platforms such as eBuy and GSA
Advantage![supreg]; the SmartPay credit card purchase program; and
upgrades to the FPDS. GSA previously concluded these options would not
provide the breadth of data needed to support the Government's
objectives or would be unable to do so in the foreseeable future. Since
the publication of the proposed rule, GSA reevaluated those
alternatives and reached similar conclusions. Particularly, in regards
to relying on purchase card data, doing so would limit the Government
to a small, non-representative sample of data that would be ineffective
for the broader goals of category management and smarter buying
strategies. Although one commenter suggested the Government should
increase its purchase card usage in order for purchase card data to be
a viable solution, doing so would require numerous regulatory,
procedural, and security changes to implement, which could not be
accomplished in the near future and therefore would not support the
Government's immediate needs.
Additionally, the Government's electronic invoicing initiative \96\
was assessed as a potential alternative. However, following meetings
regarding electronic invoicing implementation with representatives from
the Department of Defense, Department of Energy, Department of
Transportation, Department of Treasury, and Department of Veterans
Affairs, it was determined these electronic invoicing platforms will
not provide a Government-wide transactional data reporting solution in
the near term.
---------------------------------------------------------------------------
\96\ See Office of Management and Budget memorandum M-15-19,
``Improving Government Efficiency and Saving Taxpayer Dollars
Through Electronic Invoicing'', July 17, 2015, available at https://www.whitehouse.gov/sites/default/files/omb/memoranda/2015/m-15-19.pdf.
---------------------------------------------------------------------------
Lastly, GSA will consider changes, or even rescind Transactional
Data Reporting, as new data systems come online that improve the
Government's ability to aggregate and analyze its purchasing data.
Also, GSA is exploring ways to synchronize its transactional data
intake system with other applications that share common attributes in
order to reduce the number of vendor-reported data elements.
Order-Level Competition Ensures Best Value
Nine commenters stated GSA should rely on order-level competition
to ensure the Government is receiving the best value.\97\ The general
sentiment is rather than requiring pricing disclosures or Transactional
Data Reporting, GSA should promote order-level competition to meet its
pricing objectives. Many of these comments were in response to the
following passage from the proposed rule Federal Register notice:
---------------------------------------------------------------------------
\97\ See e.g., ABA Letter, Allen Letter, CODSIA Letter, CGP
Letter, EA Letter, immixGroup Letter, IOPFDA Letter, NDIA Letter,
RTI Letter.
The Government, and other customers in the category to which the
government is most typically aligned under the price reductions
clause, tend to receive voluntary price reductions from the vendor
as a result of general market forces (e.g., intense competition and
small profit margins within the IT hardware arena that cause vendors
to lower their prices for all customers voluntarily to maintain
market share). In other words, prices are reduced under the
voluntary provisions of the price reduction clause as a result of
market rate pricing changes, not under the mandatory tracking
customer provisions. GSA recently analyzed modifications issued
between October 1, 2013 and August 4, 2014 under nine of its
[Schedules] . . . GSA found that only about 3 percent of the total
price reductions received under the price reduction clause were tied
to the ``tracking customer'' feature. The vast majority
(approximately 78 percent) came as a result of commercial pricelist
adjustments and market rate changes, with the balance for other
reasons.\98\
---------------------------------------------------------------------------
\98\ See GSAR Case 2013-G504; Docket 2014-0020; Sequence 1 (80
FR 11619 (Mar. 4, 2015)).
Six of those commenters expressed support for the proposed PRC
changes in the context of the general statement that order-level
competition is the most effective method for driving down prices.\99\
---------------------------------------------------------------------------
\99\ See e.g., ABA Letter, Allen Letter, CODSIA Letter,
immixGroup Letter, NDIA Letter, RTI Letter.
---------------------------------------------------------------------------
Response: Competition at the task order level is essential for the
Government to ensure it receives the best value, which is one of the
reasons GSA is pursuing Transactional Data Reporting. In fact,
transactional data has a proven history of driving competition, which
is illustrated by the examples shown in Section II.\100\ These
successes, along with emerging technology, led to the decision to
pursue Transactional Data Reporting in lieu of continuing to require
CSP and PRC disclosures. Furthermore, this initiative promotes
objectives that are not facilitated by order-level competition, such as
transparency, demand management, and reducing contract duplication.
---------------------------------------------------------------------------
\100\ See Section II.B, Necessity and Value of Transactional
Data.
---------------------------------------------------------------------------
Commercial Sales Practices (CSP) Disclosures
Nine parties submitted comments related to the proposed rule's
retention of CSP disclosures.\101\ While the proposed rule included the
removal of the PRC tracking customer provision, it retained CSP
disclosures while noting:
---------------------------------------------------------------------------
\101\ See e.g., Abt Associates Letter, ABA Letter, CODSIA
Letter, EA Letter, Experian Letter, immixGroup Letter, Johnson &
Johnson Letter, RTI Letter, SIA Letter.
[V]endors would still be subject to the commercial sales
disclosure requirements, including the requirement to disclose
commercial sales practices when requesting a contract modification
for additional items or additional Special Item Numbers. In
addition, GSA would maintain the right throughout the life of the
FSS contract to ask a vendor for updates to the disclosures made on
its commercial sales format (which is used
[[Page 41119]]
to negotiate pricing on FSS vehicles) if and as necessary to ensure
that prices remain fair and reasonable in light of changing market
---------------------------------------------------------------------------
conditions.
Nine commenters stated removing the PRC tracking customer feature
does not relieve vendors of the burden of tracking commercial pricing,
which will still be necessary to provide CSP disclosures.\102\ Five
commenters stated the proposed rule language would lead to more
requests for CSP disclosures.\103\ For example, one commenter noted the
burden reduction achieved through the PRC changes would be in some
cases more than offset by Transactional Data Reporting requirements and
increased CSP disclosures.\104\
---------------------------------------------------------------------------
\102\ See e.g., Abt Associates Letter, ABA Letter, CODSIA
Letter, EA Letter, Experian Letter, immixGroup Letter, Johnson &
Johnson Letter, RTI Letter, SIA Letter.
\103\ See e.g., Abt Associates Letter, ABA Letter, CODSIA
Letter, EA Letter, SIA Letter.
\104\ See CODSIA Letter.
---------------------------------------------------------------------------
Response: GSA did not intend for the proposed rule language
relating to CSPs to increase disclosures. However, these comments did
lead to a reevaluation of the CSP disclosure burden and ultimately the
removal of CSP disclosures for FSS vendors subject to the Transactional
Data Reporting requirement.
As noted in Section III of this document, GSA also began preparing
its routine renewal request for the PRC information collection,
identified under OMB Control Number 3090-0235, in the summer of
2015.\105\ Since the PRC information collection was last approved in
2012, GSA needed to prepare its information collection renewal request
after publishing the Transactional Data Reporting proposed rule. While
GSA would have proceeded with a renewal request regardless, the timing
did allow for the consideration of the Transactional Data Reporting
comments. In particular, GSA agreed with the general industry comment
that burdens of the PRC and CSP are related and therefore decided to
include CSP disclosure burden estimates with the PRC information
collection request (ICR). GSA also opted to change the name of
Information Collection 3090-0235 from ``Price Reductions Clause'' to
``Federal Supply Schedule Pricing Disclosures'' to more accurately
reflect the scope of the information collected.
---------------------------------------------------------------------------
\105\ See Section III.B, Alternatives Analysis.
---------------------------------------------------------------------------
Following two Federal Register notices requesting comments on the
FSS Pricing Disclosures ICR,\106\ GSA increased its annual burden
estimates for GSA FSS contractors, including those who would
participate in the Transactional Data Reporting pilot, from $59 million
\107\ to $102 million.\108\ These higher burden projections, coupled
with the increased Transactional Data Reporting burden estimates
calculated in response to the public comments, were a significant
concern and reinforced the need to pair Transactional Data Reporting
with other significant forms of burden reductions. Therefore, GSA is
removing CSP disclosures in addition to the PRC tracking customer
provision for FSS vendors subject to the new Transactional Data
Reporting clause, resulting in an average annual burden reduction for
FSS pilot contractors of approximately $32 million.\109\ Additionally,
implementing the FSS pilot without the existing CSP and PRC
requirements lowers the Government's burden by about $3 million a
year.\110\
---------------------------------------------------------------------------
\106\ See 80 FR 72060 (Nov. 18, 2015) and 81 FR 21346 (Apr. 11,
2016).
\107\ The 2012 information collection did not provide a cost
burden estimate, but if the same hourly rate ($68) was applied to
the 2012 time burden, the 2012 cost burden would have been
$59,086,560.
\108\ The annual public reporting burden for the CSP and PRC,
excluding FSS vendors participating in the Transactional Data
Reporting pilot, is $57.66 million. If FSS pilot vendors were still
subject to the CSP and PRC reporting requirements, the total annual
public reporting burden would be $101.69 million. The FSS pilot
vendors' share of the total CSP and PRC reporting burden is based
upon their share of the GSA FSS fiscal year 2015 sales volume, 43.2
percent. The annual $44.03 million reporting burden reduction
attributed to this rule is 43.2 percent of the $101.69 million
annual reporting burden if it were applied to the entire GSA FSS
program. More information about Information Collection 3090-0235 can
be found at http://www.reginfo.gov/public by searching ``ICR'' for
``3090-0235''.
\109\ $32 million does not include costs for non-FSS contracts.
It is the result of the FSS burden of the initial pilot
implementation ($12.41 million), minus the share of the combined CSP
and PRC burden allocated to the FSS pilot vendors ($44.03 million).
The total CSP and PRC burden from Information Collection 3090-0235,
if it were applied to all GSA FSS vendors, including those
participating in the Transactional Data Reporting pilot, would be
$101.69 million. The share of that burden allocated to the FSS pilot
vendors ($44.03 million) is based on the percentage of the overall
FY15 FSS sales accounted for by the FSS pilot vendors (43.2
percent).
\110\ $3 million is the result of the Government's annual burden
for this rule ($2.34 million) minus the share of the combined CSP
and PRC burden for the Government allocated to the FSS pilot
contracts ($5.58 million).
---------------------------------------------------------------------------
Transactional Data Reporting negates the need for CSP disclosures
when used in conjunction with automated commercial data sources, new
data analytic tools, and improved price analysis policy. As discussed
in Section IV of this document,\111\ GSA is releasing new GSAM
guidance, which will be viewable on Acquisition.gov, that provides
instructions to FSS contracting officers on how to evaluate offers and
establish negotiating objectives without relying on CSP disclosures.
For example, the new guidance provides the following order of
preference for information:
---------------------------------------------------------------------------
\111\ See Section IV.D, Procedures.
---------------------------------------------------------------------------
1. Use data that is readily available, in accordance with FAR
15.404-1(b)(2)(ii),\112\ including prices paid information on contracts
for the same or similar items; contract-level prices on other FSS
contracts or Governmentwide contracts for the same or similar items,
and commercial data sources providing publicly available pricing
information.
---------------------------------------------------------------------------
\112\ Federal Acquisition Regulation section 15.404-1(b)(2)(ii)
(48 CFR 15.404-1(b)(2)(ii)).
---------------------------------------------------------------------------
2. Perform market research to compare prices for the same or
similar items in accordance with FAR 15.404-1(b)(2)(vi).\113\
---------------------------------------------------------------------------
\113\ Federal Acquisition Regulation section 15.404-1(b)(2)(iv)
(48 CFR 15.404-1(b)(2)(iv)).
---------------------------------------------------------------------------
3. Request additional pricing information such as ``data other than
certified cost or pricing data'' (as defined at FAR 2.101 \114\) from
the offeror in accordance with FAR 15.404-1(b)(2)(vii) \115\ when the
offered prices cannot be determined to be fair and reasonable based on
the data found from other sources.
---------------------------------------------------------------------------
\114\ Federal Acquisition Regulation 2.101 (48 CFR 2.101).
\115\ Federal Acquisition Regulation section 15.401-1(b)(2)(vii)
(48 CFR 15.404-1(b)(2)(vii)).
---------------------------------------------------------------------------
Small Business Impacts
Multiple commenters addressed small businesses in other comments,
but six commenters stated there are certain aspects of the rule are
especially impactful on small business.\116\ In the proposed rule, GSA
did not create separate requirements for small businesses or other
classes of vendors. Additionally, the burden analysis separated FSS
vendors into categories based on Schedule sales volume but did not
calculate separate burden estimates for small or other-than-small
businesses.
---------------------------------------------------------------------------
\116\ See e.g., ABA Letter, CGP Letter, Falcone Letter,
Insite.rr.com Letter, RTI Letter, SBA Letter.
---------------------------------------------------------------------------
Three commenters noted that this rule will make it more difficult
for small businesses to compete against other-than-small businesses in
the federal marketplace,\117\ citing an overemphasis on pricing over
value-added services. Two of those commenters stated GSA did not
adequately address small business impacts.\118\ Additionally, four
commenters expressed concern over small businesses' ability to absorb
the costs associated with the new reporting requirements, which creates
a barrier to
[[Page 41120]]
entry into the federal marketplace.\119\ Lastly, one commenter stated
the Initial Regulatory Flexibility Analysis did not provide a clear
understanding of the legal framework for requiring Transactional Data
Reporting.\120\
---------------------------------------------------------------------------
\117\ See e.g., ABA Letter, CGP Letter, SBA Letter.
\118\ See e.g., ABA Letter, SBA Letter.
\119\ See e.g., ABA Letter, Falcone Letter, Insite.rr.com
Letter, RTI Letter.
\120\ See SBA Letter.
---------------------------------------------------------------------------
Response: GSA was especially mindful of small business concerns
when forming this rule and believes small businesses will benefit
significantly by no longer being subjected to the complex CSP and PRC
pricing disclosure requirements. Moreover, under the Transactional Data
Reporting, burden is tied to sales volume, which will also benefit
small businesses, as they hold 80 percent of the total contracts and
account for 39 percent of sales.\121\ Unlike the new data reporting
requirements, the current CSP and PRC disclosure requirements are
constant, meaning vendors, especially those with a higher number of FSS
contract offerings, must bear the burden even if they have little to no
sales through their FSS contracts. Thus, small businesses are
disproportionately affected by the current reporting requirements
because they account for the bulk of lower volume contracts.
---------------------------------------------------------------------------
\121\ Based on fiscal year 2015 Federal Supply Schedule contract
data.
---------------------------------------------------------------------------
GSA intends to share transactional data to the maximum extent
allowable to promote transparency and competition while respecting that
some data could be exempt from disclosure. The data will serve as
valuable market intelligence for vendors to use for crafting more
efficient, targeted business development strategies that incur lower
administrative costs. This will be particularly beneficial for small
businesses, which often do not have the resources to invest in
dedicated business development staff or acquire business intelligence
through third-parties.
Nevertheless, GSA will be mindful of Transactional Data Reporting's
small business impacts. The initiative is being phased in on a pilot
basis. GSA's Senior Procurement Executive will regularly evaluate
progress against metrics, including small business participation, in
consultation with the Administrator for Federal Procurement Policy and
other interested stakeholders to determine whether to expand, limit, or
discontinue the program. No expansion of the pilot or action to make
Transactional Data Reporting a permanent fixture on the Schedules will
occur prior to the careful evaluation of at least one year of
experience with the pilot.
With respect to the burden analysis, GSA did not differentiate
between small businesses and other-than-small businesses in its burden
estimates because Transactional Data Reporting imposes a progressive
burden--one that increases with a vendor's sales volume. Namely,
monthly reporting time will increase with a vendor's applicable sales
volume, as vendors with lower to no reportable sales will spend little
time on monthly reporting, while those businesses with more reportable
sales will face a higher reporting burden. Likewise, setup costs will
be a major driver of the new reporting burden, but vendors with little
to no activity on their FSS contracts will likely forgo investments in
new reporting systems because the reporting burden will not be
significantly more than that of the current quarterly sales reporting
requirements.
Finally, in regards to the legal framework of the new system, GSA
will be implementing the Transactional Data Reporting clauses through
bilateral modifications on existing contracts, meaning vendors must
agree to the changes before GSA can insert a new clause in a contract.
New contracts awarded under the pilot Schedules/SINs or future
Governmentwide IDIQ vehicles will include the new Transactional Data
Reporting clauses, but vendors will have an opportunity to view the
requirements before agreeing to a contract. For the Schedules, GSA is
instituting this program to meet its obligations under 41 U.S.C.
152(3)(b), which states that orders and contracts awarded under the FSS
program must result in ``the lowest overall cost alternative to meet
the needs of the Federal Government.''
Transactional Data Reporting Will Have Adverse Impacts for the
Government
Six commenters stated Transactional Data Reporting will lead to a
counterproductive fixation on lower prices.\122\ Two commenters stated
horizontal price analysis will obscure differences in terms and
conditions and adversely impact the Government's ability to achieve the
best value.\123\ Three commenters also said there is a significant risk
of horizontal pricing forcing quality providers to leave the FSS
program because of an expectation of untenable low prices.\124\ Another
commenter stated price transparency will provide a disincentive for
offering spot discounts because doing so will create a permanent
expectation for those prices.\125\ Finally, one commenter stated this
rule may cause prices to increase because costs to comply with
Transactional Data Reporting will outweigh the potential gains achieved
through horizontal pricing.\126\
---------------------------------------------------------------------------
\122\ See e.g., ABA Letter, Allen Letter, CGP Letter, CODSIA
Letter, Experian Letter, SIA Letter.
\123\ See e.g., EA Letter, CGP Letter.
\124\ See e.g., Experian Letter, SIA Letter, CGP Letter.
\125\ See Allen Letter.
\126\ See ABA Letter.
---------------------------------------------------------------------------
Response: Horizontal pricing models that leverage transactional
data have a proven track record of lowering prices. As shown in Section
II of this document,\127\ GSA has successfully instituted horizontal
pricing models, resulting in savings of nearly 30 percent on Office
Supplies 3 (OS3), 26 percent on FSSI Wireless, and 34 percent on
COMSATCOM. These are savings that taxpayers rightfully deserve.
---------------------------------------------------------------------------
\127\ See Section II.B, Necessity and Value of Transactional
Data.
---------------------------------------------------------------------------
FSS contracting officers will be instructed to evaluate the data in
the context of each offer, taking into account not only cost and
quantity discounts, but desired terms and conditions, unique
attributes, socio-economic considerations, and other relevant
information. Contracting officers will further be encouraged to discuss
with the offeror perceived variances between offered prices,
transactional data, and existing contract-level prices, in order to
evaluate whether other attributes (e.g., superior warranties, quantity
discounts) justify awarding higher prices.
More importantly, transactional data provides benefits beyond
better pricing. For instance, it supports the key category management
principles of optimizing existing contract vehicles and reducing
contract duplication.\128\ With transactional data, the Government can
analyze its consumption patterns, evaluate and compare purchasing
channels, and identify best-in-class solutions. Thereafter, the
Government can leverage its buying power and demand management
strategies to achieve taxpayer savings as it concentrates its purchases
through fewer channels, while vendors realize lower administrative
costs. Facilitating the development of demand management strategies is
also a significant benefit. As illustrated by GSA's Domestic Delivery
Services 2 (DDS2), transactional data provided valuable insight into
how shipping
[[Page 41121]]
needs were met and helped the Government change its consumption
behavior by foregoing unnecessary express air shipments in favor of
less expensive ground shipments. By Fiscal Year 2015, air shipments
shrank from 90 percent to 60 percent of revenue and 46 percent of total
shipments, while ground shipments grew to 40 percent of revenue and 54
percent of total shipments.
---------------------------------------------------------------------------
\128\ See ``Government-wide Category Management, Guidance
Document, Version 1.0,'' Office of Management Budget, May 2015,
available at https://hallways.cap.gsa.gov/information/Gov-wide_CM_Guidance_V1.pdf.
---------------------------------------------------------------------------
Lastly, GSA recognizes the costs for compliance with the
Transactional Data Reporting requirements make it necessary to
alleviate the burden of other compliance requirements. Therefore, this
rule removes CSP disclosures and the PRC tracking customer provision
for FSS vendors subject to the new Transactional Data Reporting clause,
resulting in an average annual burden reduction of approximately $32
million for FSS pilot vendors.\129\ Additionally, implementing the FSS
pilot without the existing CSP and PRC requirements lowers the
Government's burden by about $3 million a year.\130\ These changes,
coupled with transactional data's virtues, ensure this rule will
benefit the Government and lead to savings for the American taxpayer.
---------------------------------------------------------------------------
\129\ $32 million does not include costs for non-FSS contracts.
It is the result of the FSS burden of the initial pilot
implementation ($12.41 million), minus the share of the combined CSP
and PRC burden allocated to the FSS pilot vendors ($44.03 million).
The total CSP and PRC burden from Information Collection 3090-0235,
if it were applied to all GSA FSS vendors, including those
participating in the Transactional Data Reporting pilot, would be
$101.69 million. The share of that burden allocated to the FSS pilot
vendors ($44.03 million) is based on the percentage of the overall
FY15 FSS sales accounted for by the FSS pilot vendors (43.2
percent).
\130\ $3 million is the result of the Government's annual burden
for this rule ($2.34 million) minus the share of the combined CSP
and PRC burden for the Government allocated to the FSS pilot
contracts ($5.58 million).
---------------------------------------------------------------------------
Business Liability Risk
Four parties submitted comments relating to increased business
liability risks.\131\ Two commenters stated the transactional data
vendors submit would increase the amount of information that can be
audited, and thereby, more audits, investigations, lawsuits, and other
punitive actions.\132\ The other two commenters predicted increased
allegations of fraud under the False Claims Act stemming from data
inaccuracies.
---------------------------------------------------------------------------
\131\ See e.g., Allen Letter, CODSIA Letter, CGP Letter, EA
Letter.
\132\ See Allen Letter, EA Letter.
---------------------------------------------------------------------------
Response: False Claims arise when a person ``knowingly'' deceives
the Government.\133\ As such, GSA does not anticipate increased False
Claims actions because there is no expectation of an increase in
vendors ``knowingly'' deceiving the Government. Moreover, the new
Transactional Data Reporting site will allow vendors more leeway to fix
errors than the current 72A Reporting System. While sales adjustments
submitted through the 72A system must be approved by the assigned
Industrial Operations Analyst (IOA), vendors will be able to submit
data corrections through the new site on their own, although IOAs will
be notified of corrections over a certain dollar threshold.
---------------------------------------------------------------------------
\133\ 31 U.S.C 3729.
---------------------------------------------------------------------------
Transactional Data Reporting will also provide greater ease of
compliance with the removal of CSP disclosures and the PRC tracking
customer provision. Reporting transactional data is based upon data
used to generate a standard invoice. On the other hand, navigating the
PRC and CSP requirements is complex because they require industry
partners to track their GSA pricing relative to all of their commercial
customers, and monitor and control all of their commercial sale
transactions.
Government Usage of Transactional Data
Four parties submitted comments related to the Government's
procedures for using transactional data.\134\ One commenter stated
there will be risk to the contracting officer and asked what will
happen if they do not succeed in obtaining the lowest price.\135\
Another commenter asked how the Government will account for
jurisdictional and geographic pricing variances; if there will be a
mechanism to correct erroneous data; and how does GSA plan to analyze
data that can rapidly fluctuate.\136\ Two commenters asked what tools
and training will be available to ensure price is not the sole award
criteria.\137\ Finally, one commenter stated this rule will lead to GSA
contracting officers seeking to continually renegotiate Schedule
contracts.\138\
---------------------------------------------------------------------------
\134\ See e.g., ARA Letter, EA Letter, Experian Letter,
immixGroup Letter.
\135\ See immixGroup Letter.
\136\ See ARA Letter.
\137\ See ARA Letter, Experian Letter.
\138\ See EA Letter.
---------------------------------------------------------------------------
Response: GSA is creating procedures and training to address the
use of transactional data, as outlined in Section IV.\139\ GSA will not
mandate contracting officers to receive the lowest reported price when
conducting best value procurements. In these forums, consideration will
be given to pricing variances caused by factors such as differing terms
and conditions, places of performance, and quantity.
---------------------------------------------------------------------------
\139\ See Section IV.D, Procedures.
---------------------------------------------------------------------------
GSA will offer training and guidance for category managers and
contracting officers. The Category Management Leadership Council has
released a guidance document for category managers. The document
provides ``guidance for the governance, management and operations of
category management, taking into consideration the inherent
complexities of a Federal-wide initiative.'' \140\ It does not dictate
operational contracting decisions, nor does it supersede the FAR, which
states a preference for ``best value'' solutions.\141\ GSA is also
updating relevant courseware on the Federal Acquisition Institute (FAI)
and Defense Acquisition University (DAU) portals to educate both
customers and GSA contracting officers on how to use the data.
Similarly, the courseware on how to use the FSS program and other non-
FSS GWACs and multi-agency IDIQs will be updated to educate customers
on the new requirements and how they can use the data collected to buy
smarter. The external courseware will also highlight the additional
value transactional data offers to GSA's FSS and non-FSS contracting
programs and emphasize it must be viewed in the context of each
procurement, taking into account desired terms and conditions,
performance levels, past customer satisfaction, and other relevant
information.
---------------------------------------------------------------------------
\140\ See ``Government-wide Category Management, Guidance
Document, Version 1.0,'' Office of Management Budget, May 2015,
available at https://hallways.cap.gsa.gov/information/Gov-wide_CM_Guidance_V1.pdf.
\141\ Federal Acquisition Regulation section 1.102 (48 CFR
1.102).
---------------------------------------------------------------------------
To address erroneous data, the new Transactional Data Reporting
site will allow vendors more leeway to correct mistakes than the
current 72A Reporting System. While sales adjustments submitted through
the 72A system must be approved by the assigned IOA, vendors will be
able to submit data corrections through the new site on their own,
although IOAs will be notified of corrections over a certain dollar
threshold.
As for evaluating rapidly changing data, GSA opted to require
monthly, rather than quarterly, data reporting to improve the recency
of the data. However, GSA acknowledges prices may fluctuate for reasons
including, but not limited to, changing and cyclical demand. This is
why, among other reasons such as varying attributes, that GSA does not
have an expectation to always receive the lowest reported price.
[[Page 41122]]
Finally, GSA does not intend to continually renegotiate all prices
based on transactional data; doing so would be an administrative burden
for all parties involved. However, GSA is beginning to employ automated
analysis techniques for its contract-level prices to reduce
variability. For example, the new Formatted Product Tool (FPT)
identifies pricing outside a range determined to be acceptable for
identical items; vendors whose prices exceed the acceptable range are
then notified of their comparative pricing. Currently, this initiative
applies only to products, while services will be addressed at a later
date. However, whether it be the FPT or other tools, it is important to
note GSA intends to view pricing in a range, so renegotiations will not
be triggered merely because a vendor does not meet the lowest-reported
price.
The Price Reductions Clause Tracking Customer Provision Should Not Be
Eliminated
Two commenters stated GSA should not pair Transactional Data
Reporting with the removal of the PRC tracking customer provision. The
first commenter stated prices paid by the Government do not necessarily
equate to the best price,\142\ while the second commenter stated the
proposed rule failed to justify removing the tracking customer feature
in favor of Transactional Data Reporting, noting ``there is no price
protection provision built into the alternative language of the
proposed rule.'' \143\ Both commenters stated removing the PRC would
sever the Schedules program's link to the commercial marketplace.
---------------------------------------------------------------------------
\142\ See POGO Letter.
\143\ See GSA OIG Letter.
---------------------------------------------------------------------------
GSA currently establishes price reasonableness on its FSS contracts
by comparing a contractor's prices and price-related terms and
conditions with those offered to their other customers. Through
analysis and negotiations, GSA establishes a favorable pricing
relationship in comparison to one of the contractor's customers or
category of customers. Contractors are then required, under the PRC, to
monitor their pricing over the life of the contract and provide the
Government with the same price reductions they give to the class of
commercial customers upon which the original contract award was
predicated.\144\ In addition to the tracking customer requirement, the
PRC allows vendors to voluntarily reduce prices to the Government and
for the Government to request a price reduction at any time during the
contract period, such as where market analysis indicates that lower
prices are being offered or paid for the same items under similar
conditions.
---------------------------------------------------------------------------
\144\ General Services Administration Acquisition Regulation
clause 552.238-75 (48 CFR 552.238-75).
---------------------------------------------------------------------------
In the proposed rule, GSA moved to couple the FSS Transactional
Data Reporting clause with a new alternate version of the PRC that did
not include the tracking customer provision. This new alternate PRC
would only retain the Government's right to request price reductions
and the contractor's right to offer them. The rationale for this idea
was explained in the proposed rule Federal Register notice:
GSA believes the collection and use of transactional data may be
a more efficient and effective way for driving price reductions on
FSS buys than through use of the tracking customer mechanism. In
addition to avoiding the challenges associated with the tracking
customer mechanism described above, the transactional data reporting
clause would allow for greater reliance on horizontal pricing in the
FSS program so that GSA and its customers can easily evaluate the
relative competitiveness of prices between FSS vendors. Moreover,
the transactional data reporting clause, if used as an alternative
to tracking customer mechanism, could significantly reduce
contractor burden. The Chief Acquisition Officers Council recently
conducted an Open Dialogue through an online platform on improving
how to do business with the Federal Government. Contractors pointed
to the price reductions clause as one of the most complicated and
burdensome requirements in Federal contracting, and GSA's own
estimates suggest FSS contractors spend over 860,000 hours a year
(at a cost of approximately $58.5 million) on compliance with this
clause.\145\
---------------------------------------------------------------------------
\145\ See GSAR Case 2013-G504; (80 FR 11619 (Mar. 4, 2015)).
One commenter acknowledged the benefits of transactional data to
impact pricing but stated the new Transactional Data Reporting clause
will not require vendors to offer price reductions based upon
transactional data, in contrast to the PRC, which has protections to
require FSS vendors to offer price reductions following a triggering
event. In the proposed rule, GSA also stated it found only 3 percent of
price reduction modifications were tied to the tracking customer
feature, while approximately 78 percent of those modifications were
voluntary, resulting from commercial pricelist adjustments and market
rate changes.\146\ The commenter responded to these claims by arguing
many of the voluntary price reduction modifications may have been
requested in order to comply with the PRC, as well as noting that GSA
did not quantify the savings resulting from the modifications tied to
the tracking customer feature. Additionally, the commenter stated a
more comprehensive analysis of the PRC's values and benefits is needed
before acting to remove the tracking customer feature. Finally, the
commenter questioned the methodology used to form the PRC burden
estimates included in the 2012 information collection request (ICR),
which relied upon a survey conducted by The Coalition for Government
Procurement. GSA included the 2012 ICR burden estimates in its
calculation that resulted in a net burden reduction, but the commenter
stated the underlying survey did not use a representative sample as it
included responses from less than 1 percent of FSS contractors.\147\
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\146\ Id.
\147\ See GSA OIG Letter.
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Response: Pricing disclosures, such as the CSP and PRC, have served
as the bedrock of the Schedules program pricing approach at least as
far back as the 1980s. With limited other means of data collection
available, they offered a way to ensure fair and reasonable pricing
through the life of a contract with the goal of achieving most favored
customer pricing. However, changes in the federal marketplace have
eroded the effectiveness of these practices over time. Of particular
note are the explosive growth of services, increase in share of
contracts held by resellers rather than manufacturers, and
establishment of elaborate structures by contractors seeking to limit
potential liability. Moreover, due to the various exceptions included
in the PRC, the tracking customer feature ties pricing for reductions
to sales of single items and plays little role in blanket purchase
agreement and order purchases reflecting volume sales. Further, many
products sold under the FSS program are commercial-off-the-shelf (COTS)
products or other commercial items for which the Government is not a
market driver.
Using transactional data will be a more efficient and effective way
for driving price reductions. In addition to avoiding the challenges
associated with the tracking customer mechanism described above, the
transactional data reporting clause would allow for greater reliance on
horizontal pricing in the FSS program so that GSA and its customers can
easily evaluate the relative competitiveness of prices between FSS
vendors. Although this rule removes the PRC's price protection
provision, order-level competition and transparency will proactively
achieve the same objective without relying on retroactive enforcement.
Companies seeking to win Schedules business will offer discounts or
better value than their
[[Page 41123]]
competitors. Currently, the lack of transparency encourages vendors to
offer inconsistent pricing to federal buyers. In contrast, the
availability of transactional data will mean all federal buyers may be
rewarded by the success of a single buyer. In turn, competing companies
will have a better understanding of what it takes to win federal
business and will therefore submit stronger offers. GSA's successful
use of transactional data to date has shown the benefits of horizontal
price analysis will outweigh the value of the PRC. While the Government
often recoups millions of dollars through PRC enforcement, the American
taxpayer may save billions of dollars as the Government leverages
transactional data.
However, initiating Transactional Data Reporting in conjunction
with the existing PRC and CSP disclosure requirements would be unduly
burdensome and likely counterproductive. For example, performance under
the Office Supplies 3 (OS3) vehicle began in Fiscal Year 2015. Like its
predecessor, OS2, OS3 relies on transactional data and horizontal
pricing techniques to drive savings. But unlike the Schedules-based
OS2, OS3 is a standalone IDIQ that does not include the traditional FSS
CSP and PRC requirements. As such, OS3's pricing is 17 percent lower
than its predecessor's prices.\148\ This reinforces the case for
coupling Transactional Data Reporting with the removal of the CSP and
PRC requirements, which will provide a $32 million a year burden
reduction for FSS pilot vendors.\149\
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\148\ GSA analyzed pricing awarded through August 31, 2015 in
its analysis.
\149\ $32 million does not include costs for non-FSS contracts.
It is the result of the FSS burden of the initial pilot
implementation ($12.41 million), minus the share of the combined CSP
and PRC burden allocated to the FSS pilot vendors ($44.03 million).
The total CSP and PRC burden from Information Collection 3090-0235,
if it were applied to all GSA FSS vendors, including those
participating in the Transactional Data Reporting pilot, would be
$101.69 million. The share of that burden allocated to the FSS pilot
vendors ($44.03 million) is based on the percentage of the overall
FY15 FSS sales accounted for by the FSS pilot vendors (43.2
percent).
---------------------------------------------------------------------------
To preserve its link to the commercial marketplace, GSA is posting
new GSAM guidance for FSS contracting officers to use when relying on
transactional data in lieu of CSP disclosures and the basis of award
enforced by the PRC. The new guidance will include an order of
preference for that includes prices paid information on contracts for
the same or similar items; contract-level prices on other FSS contracts
or Government-wide contracts for the same or similar items; and
commercial data sources providing publicly available pricing
information. FSS contracting officers will also still have the ability
to request additional pricing information such as ``data other than
certified cost or pricing data'' (as defined at FAR 2.101 \150\) in
accordance with FAR 15.404-1(b)(2)(vii) \151\ when the offered prices
cannot be determined to be fair and reasonable based on the data found
from other sources.
---------------------------------------------------------------------------
\150\ Federal Acquisition Regulation section 2.101 (48 CFR
2.101).
\151\ Federal Acquisition Regulation section 15.401-1(b)(2)(vii)
(48 CFR 15.404-1(b)(2)(vii)).
---------------------------------------------------------------------------
With respect to the 2012 survey sample size, GSA acknowledges this
concern but did not base its projections solely on the survey. The PRC
projections were recently reevaluated for the renewal of the related
information collection request and increased from $59 million \152\ to
$74 million, if the PRC were to apply to all GSA FSS contracts.\153\
---------------------------------------------------------------------------
\152\ The 2012 information collection did not provide a cost
burden estimate, but if the same hourly rate ($68) was applied to
the 2012 time burden, the 2012 cost burden would have been
$59,086,560.
\153\ The CSP and PRC burden estimates are from Information
Collection 3090-0235, FSS Pricing Disclosures. The total annual
public reporting burden for the CSP and PRC, excluding FSS vendors
participating in the Transactional Data Reporting pilot, is $57.66
million, $41.73 million of which is attributed to the PRC. If FSS
pilot vendors were still subject to the CSP and PRC reporting
requirements, the total annual public reporting burden would be
$101.69 million, of which $73.73 million would be attributed to the
PRC. The FSS pilot vendors' share of the total CSP and PRC reporting
burden is based upon their share of the GSA FSS fiscal year 2015
sales volume, 43.2 percent. The annual $44.03 million reporting
burden reduction attributed to this rule is 43.2 percent of the
$101.69 million annual reporting burden if it were applied to the
entire GSA FSS program. More information about Information
Collection 3090-0235 can be found at http://www.reginfo.gov/public
by searching ``ICR'' for ``3090-0235''.
---------------------------------------------------------------------------
Reporting Frequency
Two parties submitted comments related to the proposed reporting
frequency. GSA proposed for non-FSS vendors subject to the rule to
report sales monthly within 15 calendar days after the end of the
calendar month and to remit any Contract Access Fee (CAF) due within 15
calendar days after the end of the calendar month. For FSS vendors, GSA
proposed that they report sales monthly within 15 calendar days after
the end of the calendar month and to remit any Industrial Funding Fee
(IFF) due within 30 calendar days after the end of each quarter.
The first commenter stated the proposed 15-day reporting window did
not provide vendors enough time to prepare and review the data to be
reported. This commenter also stated the inconsistency between monthly
reporting and quarterly payments may be unnecessarily confusing for
vendors.\154\ The second commenter stated GSA should reconsider the
frequency, as monthly reporting is excessive, and particularly
duplicative for service-providers whose prices may not change over the
course of year; the commenter suggested having professional services
vendors only report once or twice a year.\155\
---------------------------------------------------------------------------
\154\ See ABA Letter.
\155\ See Abt Letter.
---------------------------------------------------------------------------
Response: GSA considered the comment relating to the 15-day
reporting window and agrees it is insufficient. Therefore, the new
reporting clauses require vendors to report sales within 30 calendar
days after the end of each calendar month.
With respect to monthly reporting versus quarterly payment, GSA
opted to not require monthly payment for the FSS clause (GSAR 552.238-
74 Alternate I) because doing so would be disproportionately harmful
for small businesses, many of whom remit fees based on accrued billings
before they actually receive payments from their Government customers.
Payment frequency is not addressed in the non-FSS clause (GSAR 552.216-
75) but vendors will have at least 30 days after the last day of the
month to remit fees, as applicable.
Finally, GSA chose not to require less frequent reporting because
doing so would lessen the impact of transactional data, which becomes
less actionable as time passes.
Recommended Changes to Regulatory Text
Two commenters provided suggested changes to GSA's regulatory text.
The first commenter stated GSA must update GSAR Figure 515.4-2 \156\
and GSAR section 538.272 \157\ to address the proposed PRC changes.
This commenter also stated the sections of the basic PRC that were
retained in the new PRC Alternate II, which allow the Government to
seek price reductions and a contractor to offer them, are not necessary
because both parties would normally have these rights during
negotiations.\158\
---------------------------------------------------------------------------
\156\ General Services Administration Acquisition Regulation
Figure 515.4-2 (48 CFR 515.4-2).
\157\ General Services Administration Acquisition Regulation
section 538.272 (48 CFR 538.272).
\158\ See ABA Letter.
---------------------------------------------------------------------------
The second commenter suggested two changes to the regulatory text.
The first change would replace ``Offerors must include the CAF in their
prices'' with ``The CAF will be charged as a separate and distinct line
item on every order''
[[Page 41124]]
in paragraph (c) of the proposed non-FSS Transactional Data Reporting
clause, 552.216-75. The second suggestion was to insert ``or services''
in the description of contract sales ``and sales made to other
contractors authorized under FAR part 51 or the FAR part 51 deviation
authorities'' in the last sentence of paragraph (a)(1) of the proposed
FSS Transactional Data Reporting clause, 552.238-74 Alternate 1.\159\
---------------------------------------------------------------------------
\159\ See deMers Letter.
---------------------------------------------------------------------------
Response: GSA concurs with the suggested changes for GSAR Figure
515.4-2 and GSAR section 538.272 and is subsequently amending those
sections. The prescription for Figure 515.4-2 has been revised to only
be required when the basic clause 552.238-74 Industrial Funding Fee and
Sales Reporting is in solicitations and contracts. Additionally, GSAR
section 538.272 has been changed to only apply to the basic PRC and
Alternate I; the new PRC Alternate II, created by this rule, is not
included.
As for the suggested updates to GSAR clause 552.216-75, GSA no
longer instructs offerors to include the CAF in their prices because
many non-FSS programs include the CAF as a separate line item. However,
GSA wants its non-FSS contract programs to have the flexibility to
structure the CAF to meet their business needs, so it is instead
choosing to provide the contractor with relevant instructions within 60
days of award or inclusion of this clause in the contract.
With respect to the suggestions to paragraph (a)(1) for GSAR clause
552.238-74 Alternate I, GSA has removed the definition for ``contract
sale'' and instead included similar language in paragraph (c)(3).
``Contract sale'' was removed from the definitions because this
clause requires contractors to report transactional data, not
``contract sales'' as required by the basic version of GSAR clause
552.238-74.
Transactional Data Reporting on Cost Reimbursable Contracts
Comment: Two commenters stated the rule should exclude cost
reimbursable contracts.\160\ One commenter stated cost-type contracts
should be excluded because the pricing will be based on Defense
Contract Audit Agency pricing practices. The other commenter stated
collecting data on these contracts will not be useful because the cost
elements will be unique and the contracting officer already receives
the information upfront to make pricing determinations.\161\
---------------------------------------------------------------------------
\160\ See e.g., CGP Letter, RTI Letter.
\161\ See RTI Letter.
---------------------------------------------------------------------------
Response: GSA will only collect data on cost reimbursable contracts
awarded under contracts subject to clause 552.216-75, as cost-type
contracts are not permitted under the Schedules program. GSA recognizes
cost reimbursable data may not have the same utility as data collected
under time and materials and labor hour orders, but there are still
numerous benefits. For example, the Government can use this data to
analyze its consumption patterns, evaluate and compare purchasing
channels, and identify best-in-class solutions. Thereafter, the
Government can leverage its buying power and demand management
strategies to achieve taxpayer savings as it concentrates its purchases
through fewer channels, while vendors realize lower administrative
costs.
Other Comments
The following are comments submitted by a single party and GSA's
corresponding responses.
Comment: A commenter stated vendors ``should pay back the
overcharge part of the time, back to the taxpayers with a hefty fine
included.'' \162\
---------------------------------------------------------------------------
\162\ See Lynch Letter.
---------------------------------------------------------------------------
Response: GSA does not concur because the comment is outside the
scope of this rule.
Comment: GSA cannot claim the Multiple Award Schedule Advisory
Panel recommendation as a mandate for this rule because panel members
expressed concern that price comparison tools would have to provide
accurate comparisons.\163\
---------------------------------------------------------------------------
\163\ See Allen Letter.
---------------------------------------------------------------------------
Response: The Panel reference in the proposed rule Federal Register
notice referred to a recommendation to remove the PRC ``as the GSA
Administrator implements recommendations for competition and price
transparency at the Schedule contract level and the order level.''
Comment: One commenter stated this rule is inconsistent with the
Federal Acquisition Streamlining Act of 1994 (FASA) \164\ and the
subsequent procedures in FAR Part 12, which aims to ``establish
policies more closely resembling those of the commercial marketplace.''
\165\
---------------------------------------------------------------------------
\164\ Pubic Law 103-355.
\165\ Federal Acquisition Regulation section 12.000 (48 CFR
12.000).
---------------------------------------------------------------------------
Response: GSA's intention is to further align itself with
commercial buying practices. Horizontal price analysis is a common
technique used by commercial firms and individual citizens, and one
that GSA plans to further leverage through the use of transactional
data. To the contrary, the removal of CSP disclosures and the PRC
tracking customer provision, which both predate FASA, are an attempt,
in conjunction with horizontal pricing techniques, to harmonize GSA
policies with the FAR and commercial buying practices.
Comment: One commenter expressed concern that GSA is planning to
eliminate the Schedules program and will require vendors to provide
transactional data from commercial accounts.\166\
---------------------------------------------------------------------------
\166\ See IOPFDA Letter.
---------------------------------------------------------------------------
Response: GSA is not planning on eliminating the Schedules program
and will not require vendors to provide transactional data from
commercial accounts.
Comment: GSA should slow down implementation of the rule to spend
more time working with industry on its impacts.\167\
---------------------------------------------------------------------------
\167\ Ibid.
---------------------------------------------------------------------------
Response: GSA has already undertaken a lengthy process to implement
Transactional Data Reporting, starting with the rulemaking process that
included a Federal Register notice of proposed rulemaking and a public
meeting, and continuing with a pilot that will allow GSA to evaluate
the program's effectiveness and collect stakeholder feedback as it is
implemented.
Comment: One commenter stated details regarding the pilot's
evaluation metrics and expansion are undefined.\168\
---------------------------------------------------------------------------
\168\ See GSA OIG Letter.
---------------------------------------------------------------------------
Response: GSA will use evaluation metrics including, but not be
limited to, changes in price, sales volume, and small business
participation, as well as macro use of transactional data by category
managers and teams to create smarter buying strategies such as
consumption policies. GSA's Senior Procurement Executive will regularly
evaluate progress against these metrics in consultation with the
Administrator for Federal Procurement Policy and other interested
stakeholders to determine whether to expand, limit, or discontinue the
program. No expansion of the pilot or action to make Transactional Data
Reporting a permanent fixture on the Schedules will occur prior to the
careful evaluation of at least one year of experience with the pilot.
Comment: The proposed rule does not account for the resources
expended by vendors and Government to implement
[[Page 41125]]
the requirements in the event GSA chooses to abandon the pilot and
revert back to its current practices.\169\
---------------------------------------------------------------------------
\169\ Id.
---------------------------------------------------------------------------
Response: GSA anticipates Transactional Data Reporting will be
successful but recognizes its assumptions should be tested, hence its
preference for a pilot. CSP disclosures and the basic versions of the
PRC and FSS sales reporting clause (552.238-74) are being retained
during the course of the pilot and will be available for use if GSA
chooses not to continue Transactional Data Reporting. However, the
agency is continually improving its tools and procedures and may opt to
retain facets of this rule, or rely on new tools, if either proves to
be more effective than the current pricing disclosure practices.
Impacts on industry partners will be given significant consideration as
these decisions are made.
Comment: Transactional Data Reporting should exclude blanket
purchase agreements (BPAs) because there will likely be quantity
discounts offered and fixed price-type contracts because the prices are
not relevant as the terms are determined based on unique agency
requirements.\170\
---------------------------------------------------------------------------
\170\ See CGP Letter.
---------------------------------------------------------------------------
Response: GSA is collecting contract and BPA numbers in order to
tie the transactional data to records in the Federal Procurement Data
System (FPDS). Doing so will not only make the transactional data more
useful, but will also reduce the number of data elements vendors need
to report to GSA. As FPDS is upgraded, GSA intends to evaluate whether
any of the data elements currently included in the new reporting
clauses can be excluded. For BPAs in particular, policy and training
will instruct contracting officers to evaluate the data in the context
of each offer, taking into account desired terms and conditions,
quantity discounts, unique attributes, socio-economic considerations,
and other relevant information.
Finally, GSA recognizes fixed price data will have limited value
compared to data reported for other contract types, but there are still
numerous benefits. The Government can use fixed price data to analyze
its consumption patterns, evaluate and compare purchasing channels, and
identify best-in-class solutions. Thereafter, the Government can
leverage its buying power and demand management strategies to achieve
taxpayer savings as it concentrates its purchases through fewer
channels, while vendors realize lower administrative costs. Fixed price
data will also be useful for market research; for example, the data
will be especially useful when combined with information from the eBuy
statement of work (SOW) library.
Comment: The rule should impose limits on the timeframe for which
data is reported and used by contracting officers for price analysis.
The commenter provided the following example: ``[I]f a company
currently has a contract with a 10-year period of performance and is in
contract year 4, the contractor should not be required to report prices
paid from inception-to-date. In essence, the rule should not be
retroactive.'' \171\
---------------------------------------------------------------------------
\171\ Id.
---------------------------------------------------------------------------
Response: Vendors are required to report data based on invoices
issued or payments received against applicable invoices during the
month. This ensures the data is relatively recent, which provides
buyers with a more accurate picture of the marketplace.
Comment: One commenter offered the following recommendations to
reduce price variability without implementing this rule: (1) Reject
offers for products that fall outside of an acceptable pricing range
compared to the contract-prices for identical products; (2) assure
offers are authorized resellers; (3) encourage vendors to update their
GSA Advantage![supreg] catalogs and remove products that are no longer
available; (4) increase customer training to reinforce the requirements
of FAR subpart 8.4; (5) collect data internally to test transactional
data concepts; and (6) eliminate the PRC.\172\
---------------------------------------------------------------------------
\172\ Id.
---------------------------------------------------------------------------
Response: GSA's responses to each item are as follows:
(1) GSA concurs. It is pursuing this objective with its Formatted
Product Tool (FPT), which identifies pricing outside a range determined
to be acceptable for identical items; vendors whose prices exceed the
acceptable range are then notified of their comparative pricing.
(2) As noted by the commenter in their full comment, GSA requires
offerors to submit letters of supply/commitment. GSA works to remedy
situations when it is notified that a vendor is not an authorized
reseller.
(3) GSA currently encourages vendors to maintain accurate GSA
Advantage![supreg] catalogs. GSA is also working on implementing
updates to GSA Advantage![supreg] that will make it easier for vendors
to maintain current catalogs.
(4) GSA is updating relevant courseware on the Federal Acquisition
Institute (FAI) and Defense Acquisition University (DAU) portals to
educate both customers and GSA contracting officers on how to use the
data. Similarly, the courseware on how to use the FSS program and other
non-FSS GWACs and multi-agency IDIQs will be updated to educate
customers on the new requirements and how they can use the data
collected to buy smarter. The external courseware will also highlight
the additional value transactional data offers to GSA's FSS and non-FSS
contracting programs and emphasize it must be viewed in the context of
each procurement, taking into account desired terms and conditions,
performance levels, past customer satisfaction, and other relevant
information.
(5) GSA considered relying on data from transactions completed
through GSA Advantage![supreg], but it only accounts for about 1
percent of Schedule sales. Thus, the breadth of data is not adequate to
meet the Government's objectives.
(6) As noted previously, GSA is removing the PRC tracking customer
provision and CSP disclosures for vendors subject to the Transactional
Data Reporting requirements, in part to reduce costs and simplify
procedures for industry partners.
Comment: One commenter stated GSA should provide guidelines for
using transactional data, as the proposed use contradicts the proposal
analysis techniques found in FAR 15.404-1.\173\
---------------------------------------------------------------------------
\173\ See ABA Letter.
---------------------------------------------------------------------------
Response: GSA is developing training for Government buyers and
implementing new procedures for its FSS contracting officers. Training
and guidance deployed in connection with this rule emphasizes the
importance of considering the best overall value (not just unit price)
for each procurement, taking into account desired terms and conditions,
performance levels, past customer satisfaction, and other relevant
information. Additionally, the new GSAM guidance released in tandem
with this rule instructs FSS contracting officers to follow the
techniques found in FAR 15.404-1(b).\174\
---------------------------------------------------------------------------
\174\ Federal Acquisition Regulation section 15.404-1(b) (48 CFR
15.404-1(b)).
---------------------------------------------------------------------------
Comment: One commenter expressed concern that GSA is announcing
elements of the rule implementation on its blog, GSA Interact, and
urged GSA to release such details through the Federal Register.
Response: GSA is committed to transparency and appreciates concerns
regarding communication related to this rule. As such, we conducted a
public meeting regarding the rule on April 17,
[[Page 41126]]
2015 and included additional details in this Federal Register notice.
However, the Interact platform, as well as other Internet forums, help
GSA remain transparent by providing quick, efficient methods to
disseminate to, and receive information from, its stakeholders. GSA
will continue to make rulemaking-related announcements through the
Federal Register. Additionally, announcements regarding reportable data
elements will be posted in the Federal Register. Yet, GSA intends to
continue using other mediums, as appropriate, to help it maintain a
dialog with its stakeholders and promote transparency.
Comment: It is unclear if the proposed data element, ``Non-Federal
Entity, if applicable'' \175\ applies to authorized state and local
governments, authorized prime contractors purchasing under the FAR Part
51 authority, or another entity.\176\
---------------------------------------------------------------------------
\175\ See GSAR Case 2013-G504; Docket 2014-0020; Sequence 1 (80
FR 11619 (Mar. 4, 2015)).
\176\ See ABA Letter.
---------------------------------------------------------------------------
Response: ``Non-Federal Entity, if applicable,'' in both
Transactional Data Reporting clauses (GSAR 552.216-75 and 552.238-74
Alternate I), applies to any non-federal user authorized to purchase
from the respective contract. For the FSS clause, this can include
authorized state and local users under the Cooperative Purchasing
program or contractors purchasing through the FAR Part 51
authority.\177\
---------------------------------------------------------------------------
\177\ Federal Acquisition Regulation subpart 51.1 (48 CFR 51.1).
---------------------------------------------------------------------------
Comment: One commenter expressed concern that GSA's ability to
unilaterally add data elements to the reporting clauses will add
uncertainty for contractors.\178\
---------------------------------------------------------------------------
\178\ Id.
---------------------------------------------------------------------------
Response: The new GSAM guidance released in tandem with this rule
requires FSS contracting officers and GSA program offices seeking to
add new standard data elements to the reporting clauses to coordinate
with the applicable category manager and obtain approval from the
respective head of contracting activity (HCA) and GSA's Senior
Procurement Executive. The clauses themselves also note GSA Senior
Procurement Executive approval is required to add new data elements. If
new data elements are approved, announcements will be made in the
Vendor Support Center Web site,\179\ and additional forums as
necessary.
---------------------------------------------------------------------------
\179\ The Vendor Support Center can be accessed at https://vsc.gsa.gov.
---------------------------------------------------------------------------
Comment: GSA should limit the rule to products and services that
have ``substantially similar pricing structures'' for a ``defined pilot
program.'' \180\
---------------------------------------------------------------------------
\180\ See ABA Letter.
---------------------------------------------------------------------------
Response: GSA considered whether Transactional Data Reporting
should be applied only to certain subsets of contracts. The proposed
requirement was retained for GSA's non-FSS Governmentwide vehicles
because most of those contracts currently have transactional data
reporting requirements that exceed those created through this rule.
However, the new applicable Transactional Data Reporting clause (GSAR
clause 552.216-75) will provide a consistent reporting mechanism for
future non-FSS vehicles, or for current vehicles that adopt the new
clause. For FSS contracts, an analysis was conducted to determine
whether Transactional Data Reporting should be considered for all FSS
contracts, or only those that include products or services that would
allow straightforward comparisons, such as commodities with standard
part numbers. While transactional data is most useful for price
analysis when comparing like items, it does not mean the data is not
useful when perfect comparisons cannot be made. Government buyers and
FSS contracting officers will still use the data for price analysis and
market research, and category managers will use the data for
consumption analysis to form demand management strategies, regardless
of whether the data can be used for perfect comparisons. An example is
the ability to compare labor rates across contract vehicles, which is
beginning to bear fruit in the form of reduced contract duplication.
Consequently, GSA decided not to limit the prescription of
Transactional Data Reporting to certain Schedules or Special Item
Numbers.
Comment: One commenter cited several concerns regarding the rule's
potential application to transportation services providers for the
Federal Government. Specifically, the commenter asked whether the rule
will apply to GSA's freight management program; does the rule apply to
contracts between federal vendors and their suppliers; and does the
rule cover commercial-to-commercial transactions. The commenter also
stated the rule is outside of GSA's jurisdiction; is an unwarranted
expansion of the former alternation of rates doctrine; is a violation
of antitrust principles, and is implementing a new fee (the Contract
Access Fee) that will be an unauthorized burden on federal
vendors.\181\
---------------------------------------------------------------------------
\181\ See NMFTA Letter.
---------------------------------------------------------------------------
Response: This rule applies to certain Federal Supply Schedule
(FSS) contracts, Governmentwide Acquisition Contracts (GWACs), and
Governmentwide Indefinite-Delivery, Indefinite-Quantity (IDIQ)
contracts awarded by GSA. This rule does not require vendors to report
transactional data on orders placed outside of these contracts and does
not require them to report transactional data generated for
transactions between vendors and their suppliers, or commercial-to-
commercial transactions.
GSA has the authority to issue regulations relating to its
contracting programs. GSA's primary statutory authorities for the FSS
program are 41 U.S.C. 152(3), Competitive Procedures, and 40 U.S.C.
501, Services for Executive Agencies. For GWACs, GSA is an executive
agent designated by the Office of Management and Budget pursuant to 40
U.S.C. 11302(e). Furthermore, 40 U.S.C. 121(c) authorizes GSA to
prescribe regulations for its other multi-agency contracts, including
Governmentwide IDIQ contracts. This rule is not an unwarranted
expansion of the former alternation of rates doctrine and is not a
violation of antitrust principles.
Lastly, the rule is not creating a new Contract Access Fee (CAF).
Currently, GSA charges ordering activities a CAF on many of its
Governmentwide Acquisition Contracts (GWACs) and Governmentwide
Indefinite-Delivery, Indefinite-Quantity (IDIQ) contracts, such as
Alliant and OASIS. The CAF serves a similar purpose for those contracts
as the Industrial Funding Fee (IFF) does for the FSS program. These
fees are generally remitted by vendors on behalf of the ordering
activity but are not actually paid by the vendor. Future contracts
including GSAR clause 552.216-75 may apply a CAF, but the CAF will not
be applied primarily because of the clause's inclusion.
Comment: Finally, a former Multiple Award Schedule Advisory Panel
member expressed his support for the rule, noting ``GSA should be
encouraged to implement these changes and move forward with the
improvement of the management of its Government-wide contract vehicles.
. .'' \182\
---------------------------------------------------------------------------
\182\ See Perry Letter.
---------------------------------------------------------------------------
Response: GSA appreciates the support and will continue to improve
its contract solutions to serve its Government customers and the
American taxpayer.
VI. Executive Orders 12866 and 13563
Executive Order (E.O.) 12866 of September 30, 1993, Regulatory
[[Page 41127]]
Planning and Review, directs agencies to assess all costs and benefits
of available regulatory alternatives and, if regulation is necessary,
to select regulatory approaches that maximize net benefits (including
potential economic, environmental, public health and safety effects,
distributive impacts, and equity). Section 6(b) of the E.O. requires
the OMB Office of Information and Regulatory Affairs (OIRA) to review
regulatory actions that have been identified as significant regulatory
actions by the promulgating agency or OIRA.\183\ This final rule has
been determined to be a significant regulatory action and was therefore
subject to OIRA review. However, this rule is not a ``major rule,'' as
defined by 5 U.S.C. 804.
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\183\ E.O. 12866 section 3(f) states, `` `Significant regulatory
action' means any regulatory action that is like to result in a rule
that may:
(1) Have an annual effect on the economy of $100 million or more
or adversely affect in a material way the economy, a sector of the
economy, productivity, competition, jobs, the environment, public
health or safety, or State, local, or tribal governments or
communities;
(2) Create a serious inconsistency or otherwise interfere with
an action taken or planned by another agency;
(3) Materially alter the budgetary impact of entitlements,
grants, user fees, or loan programs or the rights and obligations of
recipients thereof; or
(4) Raise novel legal or policy issues arising out of legal
mandates, the President's priorities, or the principles set forth in
this Executive order.''
---------------------------------------------------------------------------
E.O. 13563 of January 18, 2011, Improving Regulation and Regulatory
Review, supplements and reaffirms the principles of E.O. 12866 of
September 30, 1993. Section 1(c) of E.O. 13563 directs agencies to
``use the best available techniques to quantify anticipated present and
future benefits and costs as accurately as possible.'' Accordingly, GSA
offers the following summary of the costs and benefits associated with
this final rule.
Transactional Data Reporting Costs
The total costs associated with this rule are $15 million per year
for participating vendors and $2 million per year for the Federal
Government.\184\ These costs are attributable to GSA's Federal Supply
Schedules and its other non-FSS Governmentwide IDIQ vehicles as
follows:
---------------------------------------------------------------------------
\184\ See Section VIII.B for a discussion of the burden
estimates in accordance with Paperwork Reduction Act requirements.
---------------------------------------------------------------------------
For FSS contracts, the new reporting requirements will be
initially implemented for select Schedules and Special Item Numbers on
a pilot basis. GSA estimates the costs associated with these
requirements to be $12 million per year for vendors participating in
the FSS pilot.\185\ However, the new Transactional Data Reporting
clause, GSAR Alternate I, 552.238-74 Industrial Funding Fee and Sales
Reporting (Federal Supply Schedule), will be paired with changes to
existing FSS pricing disclosure requirements. Specifically, FSS vendors
subject to the Transactional Data Reporting rule will no longer provide
CSP disclosures and will no longer be subject to the PRC tracking
customer provision. GSA estimates the total burden of these existing
FSS pricing disclosure requirements to be $102 million per year, with
FSS pilot vendors accounting for $44 million of that burden. Therefore,
replacing the existing FSS pricing disclosure requirements with
transactional data reporting results in a net burden reduction of
approximately $32 million per year for FSS pilot vendors.\186\
Furthermore, implementing the FSS pilot without the existing CSP and
PRC requirements lowers the Government's burden by about $3 million per
year.\187\
---------------------------------------------------------------------------
\185\ Id.
\186\ $32 million does not include costs for non-FSS contracts.
It is the result of the FSS burden of the initial pilot
implementation ($12.41 million), minus the share of the combined CSP
and PRC burden allocated to the FSS pilot vendors ($44.03 million).
The total CSP and PRC burden from Information Collection 3090-0235,
if it were applied to all GSA FSS vendors, including those
participating in the Transactional Data Reporting pilot, would be
$101.69 million. The share of that burden allocated to the FSS pilot
vendors ($44.03 million) is based on the percentage of the overall
FY15 FSS sales accounted for by the FSS pilot vendors (43.2
percent).
\187\ $3 million is the result of the Government's annual burden
for this rule ($2.34 million) minus the share of the combined CSP
and PRC burden for the Government allocated to the FSS pilot
contracts ($5.58 million).
---------------------------------------------------------------------------
Non-FSS Governmentwide IDIQs, including GWACs, will be
subject to GSAR clause 552.216-75 Transactional Data Reporting. GSA
estimates the costs for vendors holding these contracts to be up to
almost $3 million per year.
The estimated costs for vendors affected by this rule are limited
to the time needed to implement reporting procedures and fulfill
monthly reporting obligations. Implementation costs include the time to
configure systems, train personnel, and institute procedures. Monthly
reporting costs include the time needed for identifying reportable
data, performing quality assurance checks, and transmitting the data.
GSA's burden estimates account for vendors that may want to hire
personnel and update information technology systems to meet the
reporting requirements. Existing FSS vendors participating in the
Transactional Data Reporting pilot will initially be the only ones that
will absorb new reporting burdens in the course of their current
contract performance. However, these vendors will not necessarily need
to hire additional personnel because the rule provides a net burden
reduction with the removal of the CSP and PRC disclosure requirements.
Likewise, the rule does not require vendors to acquire information
technology tools, although some vendors, particularly those with higher
sales volume, may choose to adopt automated systems to meet the
reporting requirement. Nevertheless, the new FSS reporting clause will
be incorporated into existing contracts through bilateral
modifications, so vendors may choose not to participate. Otherwise, the
new Transactional Data Reporting clauses will apply to new contracts
awarded under the pilot Schedules and Special Item Numbers and new
contracts awarded under non-FSS Governmentwide IDIQ programs. As such,
these new vendors will have an opportunity to evaluate the costs
associated with meeting these reporting requirements prior to entering
into the contract.
Transactional Data Reporting Benefits
This rule will save taxpayer dollars because it supports smarter
buying practices and will improve pricing. Transactional Data Reporting
supports the Government's shift towards category management and
provides vendors with a more open marketplace.
GSA has found transactional data to be instrumental for improving
competition, lowering pricing, and increasing transparency through its
Federal Strategic Sourcing Initiative (FSSI) contracts. GSA does not
expect this pilot to replicate or exceed the discounts achieved through
FSSI--often up to 30 percent lower than the comparable Schedule
prices--mostly because of the diversity of offerings in the greater
Schedules program. Yet, GSA does anticipate lower prices in addition to
other key benefits. For instance, it supports the category management
principles of optimizing existing contract vehicles and reducing
contract duplication. The Government can use transactional data to
analyze its consumption patterns, evaluate and compare purchasing
channels, and identify best-in-class solutions. Thereafter, the
Government can leverage its buying power and demand management
strategies to achieve taxpayer savings as it concentrates its purchases
through fewer channels, which will in turn provide lower administrative
costs for vendors.
Today, vendors incur heavy upfront costs when submitting an offer
for an FSS contract, which is frequently the
[[Page 41128]]
entry-point to the greater federal marketplace. They are required to
supply GSA contracting officers with CSP disclosures and set up
mechanisms to track their sales in order to comply with the PRC. These
costs are incurred before a vendor wins any federal dollars through the
FSS contract. In contrast, vendors participating in Transactional Data
Reporting will only incur costs after receiving an order against their
FSS contract, and the costs will only increase when they win more
orders. Thus, GSA is removing barriers to entry into the federal
marketplace, which GSA believes is particularly beneficial to small
businesses that have fewer resources for upfront investments. With
Transactional Data Reporting, GSA will use the data it collects, along
with data from other sources, to determine whether an offer is fair and
reasonable. As a result, fewer vendors will need to rely on outside
support when preparing an offer for a GSA contract vehicle.
Lastly, the transactional data released to the public will provide
valuable market intelligence that can be used by vendors for crafting
more efficient, targeted business development strategies that incur
lower administrative costs. This will be particularly beneficial for
small businesses, which often do not have the resources to invest in
dedicated business development staff or acquire business intelligence
through third-parties.
VII. Regulatory Flexibility Act
GSA expects this final rule to have a significant economic impact
on a substantial number of small entities within the meaning of the
Regulatory Flexibility Act, 5 U.S.C. 601, et seq., because it involves
providing transactional data on FSS and non-FSS orders that may
ultimately affect the end pricing of products offered through GSA.
However, the cost to comply with the additional reporting requirement
will be offset by the benefits provided by the transactional data, such
as greater insight and visibility into customer buying habits and
knowledge of market competition. Additional benefits to FSS vendors
include the addition of the Transactional Data Reporting clause (GSAR
clause 552.238-74 Alternate I) being coupled with the elimination of
Commercial Sales Practices (CSP) disclosures and an alternate version
of the Price Reductions clause (PRC) (GSAR clause 552.238-75) that does
not include the basis of award ``tracking customer'' requirement.
Following receipt of the public comments in response to the
proposed rule, GSA concluded the horizontal pricing ability afforded by
Transactional Data Reporting would not only exceed the PRC tracking
customer provision benefits, it could also alleviate the need for CSP
disclosures when combined with automated commercial data sources, new
data analytic tools, and improved price analysis policy. For the
Schedules pilot, pairing Transactional Data Reporting with a removal of
CSP disclosures and the PRC tracking customer provision will result in
an average annual burden reduction of approximately $32 million for
participating FSS vendors.\188\ Furthermore, implementing the FSS pilot
without the existing CSP and PRC requirements lowers the Government's
burden by about $3 million a year.\189\
---------------------------------------------------------------------------
\188\ $32 million does not include costs for non-FSS contracts.
It is the result of the FSS burden of the initial pilot
implementation ($12.41 million), minus the share of the combined CSP
and PRC burden allocated to the FSS pilot vendors ($44.03 million).
The total CSP and PRC burden from Information Collection 3090-0235,
if it were applied to all GSA FSS vendors, including those
participating in the Transactional Data Reporting pilot, would be
$101.69 million. The share of that burden allocated to the FSS pilot
vendors ($44.03 million) is based on the percentage of the overall
FY15 FSS sales accounted for by the FSS pilot vendors (43.2
percent).
\189\ $3 million is the result of the Government's annual burden
for this rule ($2.34 million) minus the share of the combined CSP
and PRC burden for the Government allocated to the FSS pilot
contracts ($5.58 million).
---------------------------------------------------------------------------
Providing the required transactional data will impose significant
economic impact on all vendors, both small and other than small, doing
business on GSA-managed contracts. Therefore, Final Regulatory
Flexibility Analysis (FRFA) has been prepared consistent with 5 U.S.C.
603, and is summarized as follows:
1. Statement of the need for, and the objectives of, the rule.
The General Services Administration (GSA) is amending the
General Services Administration Acquisition Regulation (GSAR) to
require vendors to report transactional data generated from orders
placed against certain contracts. The primary changes are the
creation of three clauses: 552.216-75 Sales Reporting and Fee
Remittance; 552.238-74 Industrial Funding Fee (IFF) and Sales
Reporting, Alternate I; and 552.238-75 Price Reductions, Alternate
II.
Clauses 552.238-74, Alternate I and 552.216-75 will require
vendors to provide transactional data from orders placed against
GSA's Governmentwide contracts. Clause 552.238-74, Alternate I
applies to orders placed against Federal Supply Schedule (FSS)
contract vehicles. FSS vendors that agree to the new transactional
data reporting requirement will have their contracts modified to
include clause 552.238-75 Price Reductions, Alternate II, which
removes the basis of award tracking requirement found in the basic
Price Reductions clause (PRC). These vendors will also no longer be
required to provide Commercial Sales Practices (CSP) disclosures, as
required by GSAR section 515.408. Removing these two disclosure
requirements in favor of a new transactional data reporting clause
will provide a net burden reduction for FSS vendors.
The other transactional data reporting clause, 552.216-75,
applies to GSA's non-FSS contract vehicles--Governmentwide
Acquisition Contracts (GWACs) and Multi-Agency Contracts (MACs).
Most of these contracts already contain transactional data reporting
requirements and are not subject to the FSS PRC and CSP disclosure
requirements. Once implemented, the new GSAR reporting clauses will
further the objective of using actual transactional data in order to
negotiate better pricing for GSA's Governmentwide contracting
programs and enable GSA to provide federal agencies with market
intelligence and expert guidance in procuring goods and services
from GSA acquisition vehicles. Additionally, collecting
transactional data will allow customers to analyze spending patterns
and develop new acquisition strategies to fully leverage the
Government's spend. Finally, reducing FSS pricing disclosure
requirements will provide vendors a net burden reduction, make FSS
contracts easier to administer, and improve accessibility for new
vendors.
2. Summary of the significant issues raised by the public
comments in response to the initial regulatory flexibility analysis.
GSA received 26 comment letters on the proposed rule, including
comments from industry associations, vendors, individuals,
Government stakeholders, and other interested groups. Commenters
representing industry interests cited the high reporting burden
imposed by the rule, while stating GSA was underestimating the
potential burden. However, these commenters supported the removal of
the PRC basis of award tracking customer requirement.
Other areas with significant industry concern included:
The retention, and potential increase, of CSP
disclosures.
Releasability of the transactional data to the public.
Using transactional data for other than one-to-one
comparisons.
3. Summary of the assessment of such issues, and a statement of
any changes made to the proposed/interim rule as a result of such
comments.
To address concerns with its Transactional Data Reporting burden
estimates, GSA reevaluated its Paperwork Reduction Act burden
estimation methodology and substantially increased its burden
estimates. These higher burden projections were a significant
concern and they reinforced the need to couple Transactional Data
Reporting with other significant forms of burden reductions.
However, Transactional Data Reporting could negate that
disclosure burden because not only does it exceed the PRC tracking
customer provision benefits, it could also alleviate the need for
CSP disclosures when combined with automated commercial data
sources, new data analytic tools, and
[[Page 41129]]
improved price analysis policy. Consequently, GSA decided to pair
the new reporting requirements with the removal of CSP disclosures
and the PRC tracking customer provision, resulting in an average
annual burden reduction of approximately $32 million for vendors
participating in the FSS pilot.\190\ GSA has also reevaluated its
plans for disclosure of the reported data. Transactional data
collected through the portal will be accessible only by authorized
users and protected in accordance with GSA's information technology
security policies. This data will be used by category managers and
acquisition professionals to implement smarter buying strategies.
---------------------------------------------------------------------------
\190\ $32 million does not include costs for non-FSS contracts.
It is the result of the FSS burden of the initial pilot
implementation ($12.41 million), minus the share of the combined CSP
and PRC burden allocated to the FSS pilot vendors ($44.03 million).
The total CSP and PRC burden from Information Collection 3090-0235,
if it were applied to all GSA FSS vendors, including those
participating in the Transactional Data Reporting pilot, would be
$101.69 million. The share of that burden allocated to the FSS pilot
vendors ($44.03 million) is based on the percentage of the overall
FY15 FSS sales accounted for by the FSS pilot vendors (43.2
percent).
---------------------------------------------------------------------------
GSA intends to share transactional data to the maximum extent
allowable to promote transparency and competition while respecting
that some data could be exempt from disclosure. Accordingly, a data
extract will be created for use by the general public, containing
information otherwise releasable under the Freedom of Information
Act; details about the public data extract will be released through
a forthcoming notice in the Federal Register. This data will provide
valuable market intelligence that can be used by vendors for
crafting more efficient, targeted business development strategies
that incur lower administrative costs. This will be particularly
beneficial for small businesses, which often do not have the
resources to invest in dedicated business development staff or
acquire business intelligence through third-parties.
Finally, GSA gave consideration as to whether Transactional Data
Reporting should be considered for all FSS contracts or only those
that include products or services that would allow straightforward
comparisons, such as commodities with standard part numbers. GSA
agrees transactional data is most useful for price analysis when
comparing like items, but that does not mean the data is not useful
when perfect comparisons cannot be made. Government buyers and FSS
contracting officers will use the data for price analysis and market
research, and category managers will use the data for consumption
analysis to form demand management strategies, regardless of whether
the data can be used for perfect comparisons.
4. The response of the agency to any comments filed by the Chief
Counsel for Advocacy of the Small Business Administration in
response to the rule, and a detailed statement of any change made in
the final rule as a result of the comments.
The Chief Counsel for Advocacy of the Small Business
Administration provided comments in response to the proposed rule;
the following is a summary of those comments and GSA's responses:
Comment: While GSA recognizes that this proposed rule will have
a significant economic impact on a substantial number of small
businesses, the Initial Regulatory Flexibility Analysis (IRFA) does
not provide sufficient data for the public to examine the potential
impact of the rule on small entities.
Response: GSA did not differentiate between small businesses and
other-than-small businesses in its burden estimates because
Transactional Data Reporting imposes a progressive burden-one that
increases with a vendor's sales volume. Namely, monthly reporting
time will increase with a vendor's applicable sales volume, as
vendors with lower to no reportable sales will spend little time on
monthly reporting, while those businesses with more reportable sales
will face a higher reporting burden. Likewise, setup costs will be a
major driver of the new reporting burden, but vendors with little to
no activity on their FSS contracts will likely forgo investments in
new reporting systems because the reporting burden will not be
significantly more than that of the current quarterly sales
reporting requirements.
However, GSA was especially mindful of small business concerns
when forming this rule. For instance, tying the reporting burden to
sales volume is particularly beneficial for small businesses, as
they hold 80 percent of the total contracts but only account for
approximately 39 percent of the sales.\191\ Moreover, the decision
to streamline the existing pricing disclosure requirements was
partially motivated by the positive impact on small businesses.
Unlike the new data reporting requirements, the current CSP and PRC
disclosure requirements are constant, meaning vendors, especially
those with a higher number of FSS contract offerings, must bear the
burden even if they have little to no sales through their FSS
contracts. Thus, small businesses are disproportionately affected
because they account for the bulk of lower volume contracts.
Moreover, small businesses, which generally have fewer resources to
devote to contract management, will no longer be subjected to the
complex CSP and PRC pricing disclosure requirements.
---------------------------------------------------------------------------
\191\ Based on fiscal year 2015 Federal Supply Schedule contract
data.
---------------------------------------------------------------------------
The public data extract will also benefit small businesses. GSA
intends to share transactional data to the maximum extent allowable
to promote transparency and competition while respecting that some
data could be exempt from disclosure. The data will serve as
valuable market intelligence for vendors to use for crafting more
efficient, targeted business development strategies that incur lower
administrative costs. This will be particularly beneficial for small
businesses, which often do not have the resources to invest in
dedicated business development staff or acquire business
intelligence through third-parties. Details about the public data
extract will be released in a forthcoming Federal Register notice.
Comment: Small businesses are concerned that the IRF A for this
transactional data collection and reporting rule does not provide
them with a clear understanding of GSA's legal framework for
requiring this new system.
Response: GSA will be implementing the Transactional Data
Reporting clauses through bilateral modifications on existing
contracts, meaning vendors must agree to the changes before GSA can
insert a new clause in a contract. New contracts awarded under the
pilot Schedules/Special Item Numbers or future Governmentwide
indefinite-delivery indefinite-quantity (IDIQ) vehicles will include
the new Transactional Data Reporting clauses, but vendors will have
an opportunity to view the requirements before agreeing to a
contract. For the Schedules, GSA is instituting this program to meet
its obligations under 41 U.S.C. 152(3)(b), which states that orders
and contracts awarded under the FSS program must result in ``the
lowest overall cost alternative to meet the needs of the Federal
Government.''
Comment: Small businesses expressed some of the similar concerns
as shared by the GSA Office of Inspector General during the public
forum. The IG stated that the proposed rule under estimates the
burden and resources.
Response: As a result of these comments, GSA reevaluated its
estimation methodology and recalculated the burden based on whether
vendors use automated or manual systems to identify and report
transactional data. An automated system is one that relies on
information technology, such as an accounting system or data
management software, to identify and compile reportable data. These
systems can tremendously streamline the reporting process but
require upfront configuration to perform the tasks, such as coding
the data elements to be retrieved. Conversely, a manual system is
one that incorporates little to no automation and instead relies on
personnel to manually identify and compile the reportable data. An
example of a manual system would be an accountant reviewing invoices
to identify the reportable data and then transferring the findings
to a spreadsheet. In contrast to automation, a manual system
requires relatively little setup time but the reporting effort will
generally increase with the vendor's sales volume.
The likelihood of a vendor adopting an automated system
increases with their applicable sales volume. Vendors with little to
no reportable data are unlikely to expend the effort needed to
establish an automated reporting system since it will be relatively
easy to identify and report a limited amount of data. In fiscal year
2015, 32 percent of FSS vendors reported $0 sales, while another 34
percent reported average sales between $1 and $20,000 per month. If
the rule were applied to the entire Schedules program, approximately
two-thirds, or nearly 11,000 vendors, would have a lower reporting
burden. However, as a vendor's applicable average monthly sales
increase, they will be increasingly likely to establish an automated
system to reduce the monthly reporting burden. Consequently, vendors
with higher reportable sales will likely bear a higher setup burden
to create an automated system, or absorb a high monthly reporting
burden if
[[Page 41130]]
they choose to rely on manual reporting methods.
This renewed analysis led GSA to increase its burden estimates.
For FSS contracts in particular--
The projected setup time for an automated system
increased from an average of 6 hours \192\ to an average of 240
hours; and
---------------------------------------------------------------------------
\192\ The proposed rule setup time estimates did not
differentiate between manual and automated reporting systems.
---------------------------------------------------------------------------
The projected monthly reporting time range grew from
0.3 minutes-4 hours to 0.25 hours-48 hours.
However, GSA's estimates are still considerably lower than the
estimates provided through the public comments,\193\ primarily
because--
---------------------------------------------------------------------------
\193\ One commenter provided its own estimates on the reporting
burden.
---------------------------------------------------------------------------
At least two-thirds of the potential Transactional Data
Reporting participants will have a relatively lower burden (e.g.,
vendors with lower or no sales); and
Vendors with higher reporting volume will face lower
setup times with a higher monthly reporting burden, or higher setup
times with a lower monthly reporting burden. In other words, vendors
will not face a higher setup burden and a higher monthly reporting
burden to comply with the rule.
Comment: Small businesses fear that the proposed rule will have
unintended consequence of further reduction of an already reduced
federal small business industrial base. Small businesses in this
regard point to the negative impact of Strategic Sourcing (SS) on
the number of small businesses that are now participating in the
federal procurement system. Some postulate that SS has not harmed
the small business community citing the actual dollars being awarded
to small businesses. However, while the dollars are increasing the
actual participation rate of small businesses is decreasing.
Response: GSA will be mindful of Transactional Data Reporting's
small business impacts. The initiative is being phased in on a pilot
basis. GSA's Senior Procurement Executive will regularly evaluate
progress against metrics, including small business participating, in
consultation with the Administrator for Federal Procurement Policy
and other interested stakeholders to determine whether to expand,
limit, or discontinue the program. No expansion of the pilot or
action to make Transactional Data Reporting a permanent fixture on
the Schedules will occur prior to the careful evaluation of at least
one year of experience with the pilot.
Comment: GSA will sort the monthly reporting of the
transactional data and share it across the federal government but
small businesses are concerned that the proposed rule does not
contemplate privacy issues nor other proprietary business concerns.
Small businesses have concerns about how transactional data will be
protected from competitors.
Response: Transactional data reported in accordance with this
rule will be accessible only by authorized Government users. GSA
intends to share the transactional data with the public to the
maximum extent allowable while respecting that some data could be
exempt from disclosure. Consequently, a data extract will be created
for use by the general public, containing information otherwise
releasable under the Freedom of Information Act (FOIA); \194\
details about the public data extract will be released through a
forthcoming notice in the Federal Register.
---------------------------------------------------------------------------
\194\ 5 U.S.C. 552.
---------------------------------------------------------------------------
Transparency will support a dynamic marketplace by providing
contractors with the business intelligence needed to identify
customers, determine which products should be included on their
contract pricelists, and ascertain whether their prices are
competitive. This will be particularly beneficial for small
businesses, which often do not have the resources to invest in
dedicated business development staff or acquire business
intelligence through third-parties.
However, GSA recognizes some information may be protected from
public release, which led to the decision to create a public data
extract, as opposed to allowing the public the same access as
authorized users. The data extract will provide the public a
filtered view of the data, including information that is releasable
under FOIA while protecting information that is not.
Comment: Small business owners are concerned that this new
vision of transactional data reporting and utilization will reduce
the values added that they bring to an acquisition process. The
proposal's new vision and the transactional proposal would seem to
place price as opposed to best value as its single most important
consideration for contract award. Best value has emerged over the
years as a strong federal government benchmark for evaluating and
awarding contracts and it allows for small businesses to compete on
a more level playing field. While trying to improve the acquisition
process, the government should not abandon this long established and
proven acquisition tool. Price should not be the sole measure of
awarding a contract.
Response: Transactional data will not transform the federal
acquisition system into a lowest-price procurement model. The
Federal Acquisition Regulation (FAR) has a stated vision ``to
deliver on a timely basis the best value product or service to the
customer, while maintaining the public's trust and fulfilling public
policy objectives.'' \195\ The Government's preference will continue
to be ``best value,'' or defined in the FAR, ``the expected outcome
of an acquisition that, in the Government's estimation, provides the
greatest overall benefit in response to the requirement.'' \196\
Transactional data is viewed in the context of each procurement,
taking into account desired terms and conditions, performance
levels, past customer satisfaction, and other relevant information.
Using and understanding the data will help inform requirements
definition and reduce excess consumption.
---------------------------------------------------------------------------
\195\ Federal Acquisition Regulation section 1.102 (48 CFR
1.102).
\196\ Federal Acquisition Regulation section 2.101 (48 CFR
2.101).
---------------------------------------------------------------------------
Comment: The proposed rule would seem to require contractors to
pay a Contractor Access Fee (CAF) fee and an industrial funding fee.
The proposed rule is unclear as to how these fees interact with each
other.
Response: The Contract Access Fee (CAF) and Industrial Funding
Fee (IFF) will not be charged in tandem. The IFF is applied to GSA's
Federal Supply Schedule contracts while the CAF is only applied to
GSA's other Governmentwide vehicles, such as Governmentwide
Acquisition Contracts (GWACs), indefinite-delivery indefinite-
quantity (IDIQ), and other multi-agency contracts.
Comment: Because of the economic impact of this proposed
regulation on a substantial number of small entities, GSA should
extend the comment period for an additional sixty days and conduct
field hearings in other parts of the United States.
Response: GSA extended the proposed rule comment period from May
4, 2015 to May 15, 2015. Additionally, the public meeting it held on
April 17, 2015 in Washington, DC was accessible through an Internet
simulcast to interested parties outside of the Washington, DC area.
In total, the meeting was attended by 120 in-person participants and
153 remote attendees.
Comment: GSA should conduct a more detailed impact assessment of
this proposed rule on small businesses. During the April 17, 2015
public forum, Advocacy asked GSA if an analysis had been performed
on the impact of this rule on small businesses and GSA's response
was to cite the number of small businesses that are on schedule and
the dollar amount being awarded to these businesses. However this
statement does not delve into the more structural issue of small
business commodity pricing. Since most small businesses that are on
a GSA schedule are value added resellers and since many of the
original equipment makers are also on GSA schedules it is unclear
because of the lack of data how GSA will balance the potential
conflict of these two types of business entities.
Response: Pricing will not be GSA's sole consideration when
awarding items on its Governmentwide contract vehicles, and the
Government will continue to have a preference for best value
solutions. However, when price is evaluated, it will be done so
within a range, as GSA recognizes other factors should be taken into
consideration, such as socio-economic concerns. For example, GSA is
beginning to employ automated analysis techniques for its contract-
level prices to reduce variability. GSA recently launched its
Formatted Product Tool (FPT) that identifies pricing outside a range
determined to be acceptable for identical items; vendors whose
prices exceed the acceptable range are then notified of their
comparative pricing. Currently, this initiative applies only to
products, while services will be addressed at a later date. However,
whether it be the FPT or other tools, it is important to note GSA
intends to view pricing in a range, so renegotiations will not be
triggered merely because a vendor does not meet the lowest-reported
price.
5. Description and an estimate of the number of small entities
to which the rule will apply.
The reporting clauses created by this rule will initially apply
to a subset of the GSA's
[[Page 41131]]
Federal Supply Schedule program on a pilot basis and will be
available for use for all of GSA's non-FSS Governmentwide IDIQ
contracts. This population consists of 6,017 contracts, of which
4,852 (81 percent) are held by small business concerns. The vast
majority of these small business contracts (4,358) are under GSA's
FSS program.
This rule may eventually apply to all contractors who hold GSA
Federal Supply Schedule contracts and other GSA Governmentwide
contract vehicles. This population consists of 20,323 contracts,
16,308 (80 percent) of which are held by small businesses. The vast
majority of these small businesses contracts (15,837) are under
GSA's FSS program.
6. A description of the projected reporting, recordkeeping, and
other compliance requirements of the rule, including an estimate of
the classes of small entities that will be subject to the
requirement and the type of professional skills necessary for
preparation of the report or record.
Vendors subject to the rule will be required to report
transactional data and remit fees paid by ordering activities to
GSA. The data reporting responsibilities are new for FSS vendors,
but most of GSA's Governmentwide non-FSS contracts already contain
transactional data reporting requirements.
The reporting aspect of the rule requires vendors to identify,
compile, and report transactional data--historical information
encompassing the products and services delivered during the
performance of a task or delivery order placed against this
contract. Furnishing electronic reports is an existing requirement
for all affected vendors but FSS vendors will be required to furnish
more detailed information than currently required under their FSS
contracts. The clauses require vendors to report data once a month--
within 30 days after the last day of the end of the month.
Vendors will be responsible for remitting applicable fees paid
by ordering activities to GSA. FSS vendors must remit fees four
times a year (30 days after the end of the last day of each quarter)
and non-FSS vendors may have to remit fees up to, but no more than,
once a month. These fee remittance requirements are generally the
same as what is currently required under these contracts.
The reporting clauses created by this rule will initially apply
to a subset of the GSA's Federal Supply Schedule program on a pilot
basis and will be available for use for all of GSA's non-FSS
Governmentwide IDIQ contracts; this population consists of 6,017
contracts, of which 4,852 (81 percent) are held by small business
concerns. This rule may eventually apply to all contractors who hold
GSA Federal Supply Schedule contracts and other GSA Governmentwide
contract vehicles; this population consists of 20,323 contracts,
16,308 (80 percent) of which are held by small businesses. These
small business contract holders include SBA certified 8(a) firms;
SBA certified small disadvantaged businesses; HUBZone firms; service
disabled veteran-owned small businesses; veteran-owned small
businesses; economically disadvantaged women-owned small businesses;
and women-owned small businesses.
The professional skills needed to comply with these requirements
are generally the same as those needed to comply with existing FSS
and non-FSS reporting requirements and invoicing functions.
Generally, reporting personnel must have an understanding of the
reporting system and the transactional data they are reporting.
7. An account of the steps taken to minimize the significant
economic impact of the rule on small entities consistent with the
stated objectives of applicable statutes, including:
A statement of the factual, policy, and legal reasons
for selecting the alternative adopted in the final rule; and
Why each one of the other considered significant
alternatives, that affect the impact on small entities, was
rejected.
GSA determined it is necessary to obtain and analyze
transactional data for purchases made through its contract vehicles
in order to support the Government's category management vision and
improve acquisition outcomes in general. For the Schedules, GSA is
instituting this program to meet its obligations under 41 U.S.C.
152(3)(b), which states that orders and contracts awarded under the
FSS program must result in ``the lowest overall cost alternative to
meet the needs of the Federal Government.''
Following the April 17, 2015 public meeting and subsequent
receipt of the public comments, GSA was compelled to further
evaluate the spectrum of alternatives for Transactional Data
Reporting, ranging from withdrawing the rule in favor of different
approaches for obtaining the data to applying the new reporting
clauses without corresponding changes to existing disclosure
requirements. Ultimately, the decision to proceed hinged on
considerations including, but not limited to, alternatives for
collecting transactional data; the burden associated with reporting
transactional data; opportunities to reduce burden through changes
to existing disclosure requirements, and the associated impacts of
those changes; effects on small businesses; and the benefits of
collecting transactional data for non-standard products and
services.
GSA's Initial Regulatory Flexibility Analysis included an
evaluation of alternatives for obtaining transactional data--
internal applications; GSA ordering platforms such as eBuy and GSA
Advantage![supreg]; the SmartPay credit card purchase program; and
upgrades to the Federal Procurement Data System. GSA previously
concluded these options would not provide the breadth of data needed
to support the Government's objectives or would be unable to do so
in the foreseeable future. Since the publication of the proposed
rule, GSA reevaluated those alternatives and reached similar
conclusions. Additionally, the Government's electronic invoicing
initiative \197\ was assessed as a potential alternative. However,
following meetings regarding electronic invoicing implementation
with representatives from the Department of Defense, Department of
Energy, Department of Transportation, Department of Treasury, and
Department of Veterans Affairs, it was determined these electronic
invoicing platforms will not provide a Government-wide transactional
data reporting solution in the near term. Consequently, GSA
continued to evaluate solutions that relied on vendor-provided
transactional data.
---------------------------------------------------------------------------
\197\ See Office of Management and Budget memorandum M-15-19,
``Improving Government Efficiency and Saving Taxpayer Dollars
Through Electronic Invoicing'', July 17, 2015, available at https://www.whitehouse.gov/sites/default/files/omb/memoranda/2015/m-15-19.pdf.
---------------------------------------------------------------------------
The most common concern, in terms of the number of respondents,
regarded the associated burden of reporting transactional data. In
general, commenters felt the burden was underestimated and/or the
requirement was too burdensome. To address the concerns with its
Transactional Data Reporting burden estimates, GSA reevaluated its
methodology and substantially increased its burden estimates. These
higher burden projections were a significant concern and they
reinforced the need to couple Transactional Data Reporting with
other significant forms of burden reductions.
A notable concern expressed by industry stakeholders was the
retention, and potential increase, of CSP disclosures. GSA noted in
the proposed rule it ``. . . would maintain the right throughout the
life of the FSS contract to ask a vendor for updates to the
disclosures made on its commercial sales format (which is used to
negotiate pricing on FSS vehicles) if and as necessary to ensure
that prices remain fair and reasonable in light of changing market
conditions.'' \198\ In response, industry stakeholders indicated
retaining CSP disclosures would undercut any burden reduction
achieved by eliminating the PRC tracking customer requirement.
Specifically, respondents were concerned CSP disclosures will still
force them to monitor their commercial prices, which ultimately
causes the associated burden for both disclosure requirements.
---------------------------------------------------------------------------
\198\ See GSAR Case 2013-G504; Docket 2014-0020; Sequence 1 (80
FR 25994 (May 6, 2015)).
---------------------------------------------------------------------------
In 2015, GSA also began preparing its request to renew the PRC
information collection request (ICR) in accordance with the
Paperwork Reduction Act of 1995.\199\ While GSA would have proceeded
with a renewal request regardless of this case, the timing did allow
for the consideration of the Transactional Data Reporting comments.
GSA agreed with the general comment that burdens of the PRC and CSP
are related; as a result, it included CSP disclosure burden
estimates in the ICR and renamed it ``Federal Supply Schedule
Pricing Disclosures'' to more accurately reflect the scope of the
information collected.
---------------------------------------------------------------------------
\199\ Public Law 104-13, 109 Stat. 163.
---------------------------------------------------------------------------
Following two Federal Register notices requesting comments on
the FSS Pricing Disclosures ICR,\200\ GSA increased its annual
burden estimates for GSA FSS vendors, including those who would
participate in the Transactional Data Reporting pilot, from $59
[[Page 41132]]
million \201\ to $102 million.\202\ Yet, Transactional Data
Reporting alleviates the need for these FSS pricing disclosures when
combined with automated commercial data sources, new data analytic
tools, and improved price analysis policy. As a result, GSA decided
to pair Transactional Data Reporting with the removal of CSP
disclosures and the PRC tracking customer provision, resulting in an
average annual burden reduction of approximately $32 million for
participating FSS vendors.\203\ Furthermore, implementing the FSS
pilot without the existing CSP and PRC requirements lowers the
Government's burden by about $3 million a year.\204\
---------------------------------------------------------------------------
\200\ See 80 FR 72060 (Nov. 18, 2015) and 81 FR 21346 (Apr. 11,
2016).
\201\ The 2012 information collection did not provide a cost
burden estimate, but if the same hourly rate ($68) was applied to
the 2012 time burden, the 2012 cost burden would have been
$59,086,560.
\202\ The annual public reporting burden for the CSP and PRC,
excluding FSS vendors participating in the Transactional Data
Reporting pilot, is $57.66 million. If FSS pilot vendors were still
subject to the CSP and PRC reporting requirements, the total annual
public reporting burden would be $101.69 million. The FSS pilot
vendors' share of the total CSP and PRC reporting burden is based
upon their share of the GSA FSS fiscal year 2015 sales volume, 43.2
percent. The annual $44.03 million reporting burden reduction
attributed to this rule is 43.2 percent of the $101.69 million
annual reporting burden if it were applied to the entire GSA FSS
program. More information about Information Collection 3090-0235 can
be found at http://www.reginfo.gov/public by searching ``ICR'' for
``3090-0235''.
\203\ $32 million does not include costs for non-FSS contracts.
It is the result of the FSS burden of the initial pilot
implementation ($12.41 million), minus the share of the combined CSP
and PRC burden allocated to the FSS pilot vendors ($44.03 million).
The total CSP and PRC burden from Information Collection 3090-0235,
if it were applied to all GSA FSS vendors, including those
participating in the Transactional Data Reporting pilot, would be
$101.69 million. The share of that burden allocated to the FSS pilot
vendors ($44.03 million) is based on the percentage of the overall
FY15 FSS sales accounted for by the FSS pilot vendors (43.2
percent).
\204\ $3 million is the result of the Government's annual burden
for this rule ($2.34 million) minus the share of the combined CSP
and PRC burden for the Government allocated to the FSS pilot
contracts ($5.58 million).
---------------------------------------------------------------------------
Streamlining the existing pricing disclosure requirements is
particularly beneficial for small businesses. The current CSP and
PRC disclosure requirements are constant, meaning vendors,
especially those with a higher number of FSS contract offerings,
must bear the burden even if they have little to no sales through
their FSS contracts. Thus, small businesses are disproportionately
impacted because they account for the bulk of lower volume
contracts. Moreover, small businesses, which generally have fewer
resources to devote to contract management, will no longer be
subjected to the complex CSP and PRC pricing disclosure
requirements.
The Regulatory Secretariat has submitted a copy of the Final
Regulatory Flexibility Analysis (FRFA) to the Chief Counsel for
Advocacy of the Small Business Administration. A copy of the FRFA may
be obtained from the Regulatory Secretariat.
VIII. Paperwork Reduction Act
The Paperwork Reduction Act (44 U.S.C. Chapter 35) applies to this
final rule because it contains information collection requirements.
Accordingly, the Regulatory Secretariat submitted a request for
approval of a new information collection requirement concerning this
rule to the Office of Management and Budget under 44 U.S.C. 3501, et
seq.
GSA has increased its burden estimates for the final rule. For the
proposed rule, GSA chose to estimate the burden for the entire
population of contracts that may ultimately be affected by this rule.
However, as this rule will only initially apply to select Schedules and
SINs under the FSS program on a pilot basis, GSA is now estimating the
burden impact for vendors participating in the FSS pilot and those
holding other GSA Governmentwide contracts that may include the
Transactional Data Reporting clause (552.216-75). Although the burden
estimates have increased, the final rule will still provide a net
burden reduction based on the difference between the CSP and PRC
disclosure requirements and the new reporting requirements (i.e.,
clauses 552.238-74 Alternate I and 552.216-75). An analysis of these
burden estimates, as well as the underlying assumptions, is presented
below.
A. New Reporting Requirements
The new reporting clauses require vendors to report transactional
data elements such as item descriptions and prices paid to a GSA Web
site. This data must be reported monthly within 30 calendar days after
the of each calendar month, meaning vendors will furnish 12 reports
over the course of a year for each contract containing one of these
clauses.
Categorization of Vendors by Monthly Sales Revenue: Transactional
Data Reporting imposes a progressive burden--one that increases with a
vendor's sales volume. Monthly reporting times will increase with a
vendor's applicable sales volume, as vendors with lower to no
reportable sales will spend little time on monthly reporting, while
those with more reportable sales with face a higher reporting burden.
The reporting clauses created by this rule will initially apply to
a subset of the FSS program on a pilot basis and will be available for
use for all of GSA's non-FSS Governmentwide IDIQ contracts. The pilot
population may include up to 4,978 FSS vendors and 537 non-FSS vendors,
for a total of 5,515 vendors. However, this number may be lower
depending on the number of FSS vendors that accept the bilateral
modification to include GSAR clause 552.238-74 Alternate I, or whether
existing non-FSS Governmentwide contracting programs opt not to use
GSAR clause 552.216-75.
GSA separated vendors into categories based on average monthly
sales volume \205\ in order to account for the differences in reporting
burden. These categories are:
---------------------------------------------------------------------------
\205\ Average monthly sales volume was computed by taking a
vendor's total annual sales volume and dividing it by 12. All FSS
and non-FSS sales figures are based on FY2015 sales data.
---------------------------------------------------------------------------
Category 1: No sales activity (average monthly sales of
$0).
Category 2: Average monthly sales between $0 and $20,000.
Category 3: Average monthly sales between $20,000 and
$200,000.
Category 4: Average monthly sales between $200,000 and $1
million.
Category 5: Average monthly sales over $1 million.
The distribution by sales category of vendors initially impacted by
this rule (i.e., the pilot) is as follows:
FSS and Non-FSS Vendors by Sales Category
----------------------------------------------------------------------------------------------------------------
Non-FSS Non-FSS Total vendor
FSS vendors FSS vendors vendors vendors count by
(count) (percentage) (count) (percentage) category
----------------------------------------------------------------------------------------------------------------
Category 1...................... 1,343 26.98 31 5.77 1,374
Category 2...................... 1,800 36.19 42 7.82 1,842
Category 3...................... 1,219 24.49 196 36.50 1,415
Category 4...................... 426 8.56 173 32.22 599
Category 5...................... 190 3.82 95 17.69 285
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[[Page 41133]]
Total....................... 4,978 100.00 537 100.00 5,515
----------------------------------------------------------------------------------------------------------------
Automated vs. Manual Reporting Systems: Vendors subject to these
clauses must create systems or processes to produce and report accurate
data. Generally, vendors will use automated or manual systems to
identify the transactional data to be reported each month. An automated
system is one that relies on information technology, such as an
accounting system or data management software, to identify and compile
reportable data. These systems can tremendously streamline the
reporting process but require upfront configuration to perform the
tasks, such as coding the data elements to be retrieved. Conversely, a
manual system is one that incorporates little to no automation and
instead relies on personnel to manually identify and compile the
reportable data. An example of a manual system would be an accountant
reviewing invoices to identify the reportable data and then
transferring the findings to a spreadsheet. In contrast to automation,
a manual system requires relatively little setup time but the reporting
effort will generally increase with the vendor's sales volume.
The likelihood of a vendor adopting an automated system increases
with their applicable sales volume. Vendors with little to no
reportable data are unlikely to expend the effort needed to establish
an automated reporting system since it will be relatively easy to
identify and report a limited amount of data. In fiscal year 2015, 32
percent of FSS vendors reported $0 sales, while another 34 percent
reported average sales between $1 and $20,000 per month. If the rule
were applied to the entire Schedules program, approximately two-thirds,
or nearly 11,000 vendors, would have a lower reporting burden. However,
as a vendor's applicable average monthly sales increase, they will be
increasingly likely to establish an automated system to reduce the
monthly reporting burden. Consequently, vendors with higher reportable
sales will likely bear a higher setup burden to create an automated
system, or absorb a high monthly reporting burden if they choose to
rely on manual reporting methods.
The following chart depicts the likelihood of the pilot population
of vendors initially impacted by this rule adopting manual and
automated reporting systems:
Vendors by Reporting System Type
[Manual vs. automated]
----------------------------------------------------------------------------------------------------------------
Automated Manual system-- Automated
Manual system system vendor count system--
(percentage) (percentage) vendor count
----------------------------------------------------------------------------------------------------------------
Category 1...................................... 100 0 1,374 0
Category 2...................................... 100 0 1,842 0
Category 3...................................... 90 10 1,274 142
Category 4...................................... 50 50 299 300
Category 5...................................... 10 90 29 257
-------------------------------
Total Count of Vendors by System Type....... .............. .............. 4,818 698
Percentage of Vendors by System Type........ .............. .............. 87.35 12.65
----------------------------------------------------------------------------------------------------------------
Initial Setup: Vendors complying with this rule will absorb a one-
time setup burden to establish reporting systems. The estimated setup
time varies between automated and manual reporting systems. Vendors
implementing a manual system must acclimate themselves with the new
reporting requirements and train their staff accordingly, while those
with automated systems must perform these tasks in addition to
configuring information technology resources. GSA is attributing the
setup burden by vendor, not by contracts, because a vendor holding
multiple contracts subject to this rule will likely use a single
reporting system. GSA estimates the average one-time setup burden is 8
hours for vendors with a manual system and 240 hours for those with an
automated system.
Monthly Reporting: After initial setup, vendors subject to these
reporting clauses are required to report transactional data within 30
calendar days after the end of each calendar month. The average
reporting times vary by system type (manual or automated) and by sales
category. GSA estimates vendors using a manual system will have average
monthly reporting times ranging from 15 minutes (0.25 hours) per month
for vendors with $0 sales, to an average of 48 hours per month for
vendors with monthly sales over $1 million. On the other hand, GSA
projects vendors with automated systems will have reporting times of 2
hours per month, irrespective of monthly sales volume, as a result of
efficiencies achieved through automated processes.
The following table shows GSA's projected monthly reporting times
per sales category and system type:
Monthly Reporting Hours by System Type and Category
------------------------------------------------------------------------
Manual Automated
systems systems
------------------------------------------------------------------------
Category 1...................................... 0.25 2.00
Category 2...................................... 2.00 2.00
Category 3...................................... 4.00 2.00
Category 4...................................... 16.00 2.00
Category 5...................................... 48.00 2.00
------------------------------------------------------------------------
B. Annualized Public Burden Estimates
The time and cost estimates for vendors initially impacted by the
rule (i.e., the pilot) include one-time setup and monthly reporting
burdens to comply with both reporting clauses.
[[Page 41134]]
Cost estimates were calculated by multiplying the estimated burden
hours by an hourly rate of $68 ($50/hour with a 36 percent overhead
rate \206\). However, other aspects of the calculation methodology vary
between FSS and non-FSS vendors:
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\206\ The 36 percent overhead rate was used in reference to
Office of Management and Budget (OMB) Circular No. A-76. Circular A-
76 requires agencies to use standard cost factors to estimate
certain costs of Government performance. These cost factors ensure
that specific government costs are calculated in a standard and
consistent manner to reasonably reflect the cost of performing
commercial activities with government personnel. The standard cost
factor for fringe benefits is 36.25 percent; GSA opted to round to
the nearest whole number for the basis of its burden estimates.
---------------------------------------------------------------------------
FSS estimates are made on a 20-year contract life cycle
because the maximum length of an FSS contract is 20 years. The
estimates include a one-time setup burden for all 4,978 FSS pilot
vendors in Year 1. For each year thereafter, the estimates include the
one-time setup burden for new FSS vendors under the pilot Schedules and
SINs \207\ and the monthly reporting burden for all impacted FSS
vendors. The total Year 1 hours and costs were added to the aggregate
hours and costs from Years 2 through 20 to arrive at the total life
cycle figures, and then those figures were divided by 20 to arrive at
the average annual figures:
---------------------------------------------------------------------------
\207\ 1,434 vendors were awarded a total of 1,493 FSS contracts
in FY2015. The 1,434 figure was used to project the number of new
vendors each year from Years 2 through 20.
---------------------------------------------------------------------------
FSS Burden.
Year 1 Time Burden: 321,064 hours.
Year 1 Cost: $21,832,365.60.
Years 2 through 20 Average Annual Time Burden: 175,239 hours.
Years 2 through 20 Average Annual Cost Burden: $11,916,272.42.
Total Average Annual Time Burden: 182,531 hours.
Total Average Annual Cost Burden: $12,412,077.08.
Non-FSS estimates are made on a 10-year contract life
cycle because the maximum length of a non-FSS contract is 10 years. The
estimates include a one-time setup burden for all 537 non-FSS vendors
in Year 1. For each year thereafter, the estimates only include the
monthly reporting burden because contracts are typically not added to a
non-FSS program following the initial awards. The total Year 1 hours
and costs were added to the aggregate hours and costs from Years 2
through 10 to arrive at the total life cycle figures, and then those
figures were divided by 10 to arrive at the average annual figures.
Non-FSS Burden.
Year 1 Time Burden: 84,994 hours.
Year 1 Cost Burden: $5,779,578.40.
Years 2 through 10 Average Annual Time Burden: 36,247 hours.
Years 2 through 10 Average Annual Cost Burden: $2,464,768.80.
Total Average Annual Time Burden: 41,121 hours.
Total Average Annual Cost Burden: $2,796,249.76.
Based on this methodology, the average annual time burden for
vendors initially complying with this rule is 205,900 hours:
Average Annual Time Burden.
FSS Pilot Vendors (Clause 552.238-74 Alternate I): 182,531 hours.
Non-FSS Vendors (Clause 552.216-75): 41,121 hours.
Total Average Annual Time Burden: 223,652 hours.
The average annual cost burden for vendors initially complying with
this rule is $15,208,326.84:
Average Annual Cost Burden.
FSS Pilot Vendors (Clause 552.238-74 Alternate I): $12,412,077.08.
Non-FSS Vendors (Clause 552.216-75): $2,796,249.76.
Total Average Annual Time Burden: $15,208,326.84.
C. Annualized Federal Government Burden Estimates
The Government also incurs costs through this rule when collecting
data and performing quality assurance functions. Cost estimates use an
hourly rate of $41.48, which is derived from a GS-12, Step 5 salary in
the Washington, DC locality area.\208\ The burden includes costs
specific to FSS contracts, non-FSS contracts, and information
technology systems:
---------------------------------------------------------------------------
\208\ Office of Personnel Management Salary Table 2015-DCB
Washington-Baltimore-Northern Virginia, DC-MD-VA-WV-PA, effective
January 2015.
---------------------------------------------------------------------------
FSS Contracts: Industrial Operations Analysts (IOAs)
conduct compliance reviews that include analyzing the completeness and
accuracy of reported data. IOAs are also responsible for reviewing
reported data and data corrections, as necessary. IOAs reported
spending 62,769 hours on compliance reviews in fiscal year 2014. GSA
personnel spent approximately 1 hour reviewing 2,851 sales adjustments
over that same time period, a task that has since been transferred to
IOAs. Therefore, the total time estimate for FSS contracts is 65,620
hours per year, for an estimated annual cost of $2,721,927.97.
Non-FSS Contracts: GSA personnel estimated it currently
takes them an average of 2.5 hours per contract per month to process
transactional data. Multiplied by the number of applicable non-FSS
contracts in fiscal year 2015 (537), this equates to 16,110 hours, or
an estimated annual cost of $668,242.80.
Information Technology Systems: The system needed to
collect and process transactional data will cost GSA an average of
$491,500.00, spread across a 20-year contract life cycle.
Combining the costs for FSS contracts, non-FSS contracts, and
information technology systems, the total annualized cost to the
Government for the reporting clauses would be $3,881,670.77 if the rule
were implemented across the FSS program.\209\ However, since the rule
is being implemented for the FSS program on a pilot basis for select
Schedules and SINs, the initial implementation costs only include a
share of the full FSS implementation burden. As the pilot contracts
represented 43.2 percent of the total fiscal year 2015 FSS sales, GSA
is allocating the same share for the FSS burden relating to IOAs, which
amounts to $1,175,872.88. As a result, the initial Government burden is
$2,335,615.68.
---------------------------------------------------------------------------
\209\ Excluding costs for FSS contracts administered by the
Department of Veterans Affairs.
---------------------------------------------------------------------------
D. Differences From the Previous Burden Estimates
Nineteen commenters provided comments related to the compliance
burden.\210\ Several questioned GSA's burden projections, stating the
compliance estimates were understated and the projected burden
reduction was overstated. Multiple commenters stated the Government is
shifting the burden of gathering transactional data onto vendors, with
some suggesting the burden will lead to higher prices or that vendors
should be reimbursed for costs incurred.
---------------------------------------------------------------------------
\210\ See e.g., ABA Letter, Abt Associates Letter, Allen Letter,
ARA Letter, CGP Letter, CODSIA Letter, EA Letter, Experian Letter,
GSA OIG Letter, immixGroup Letter, IOPFDA Letter, Insite.rr.com
Letter, Johnson & Johnson Letter, NDIA Letter, POGO Letter, RTI
Letter, SBA Letter, Shepra Letter, SIA Letter.
---------------------------------------------------------------------------
The proposed rule contained burden estimates in accordance with the
Paperwork Reduction Act, including a one-time average initial setup
burden of 6 hours and an average monthly reporting burden of
approximately .52 of an hour, or 31 minutes. The ongoing reporting
burden for FSS vendors, following a first-year burden for
implementation, was estimated to $7.6 million a year. However, the
proposed rule coupled the new reporting requirements with the removal
of the PRC tracking customer provision, which was projected to provide
an estimated burden reduction of approximately $51 million a year if
the rule were applied
[[Page 41135]]
to the entire GSA Schedules program,\211\ based upon PRC burden
estimates from the 2012 approval of the information collection tracked
under OMB Control Number 3090-0235.
---------------------------------------------------------------------------
\211\ The $51 million burden reduction was the ongoing FSS
reporting burden ($7.6 million) minus the PRC burden of $58.5
million from the 2012 PRC information collection (OMB Control Number
3090-0235). The $7.6 million FSS reporting burden did not include
the burden for one-time implementation. The $51 million burden
reduction applied to the entire GSA Schedules program and was not
adjusted to only account for vendors participating in the FSS pilot.
---------------------------------------------------------------------------
Coincidentally, GSA began preparing its request to renew
Information Collection 3090-0235 in the summer of 2015, as it was due
to be renewed three years after its 2012 approval. While GSA would have
proceeded with a renewal request regardless, the timing did allow for
consideration of the Transactional Data Reporting comments. In
particular, GSA agreed with the general industry comment that the
burdens of the PRC and CSP are related, and GSA therefore decided to
include CSP disclosure burden estimates in its information collection
request. Following two Federal Register notices requesting comments on
the FSS Pricing Disclosures ICR,\212\ GSA increased its annual burden
estimates for GSA FSS vendors, including those who would participate in
the Transactional Data Reporting pilot, from $59 million \213\ to $102
million.\214\
---------------------------------------------------------------------------
\212\ See 80 FR 72060 (Nov. 18, 2015) and 81 FR 21346 (Apr. 11,
2016).
\213\ The 2012 information collection did not provide a cost
burden estimate, but if the same hourly rate ($68) was applied to
the 2012 time burden, the 2012 cost burden would have been
$59,086,560.
\214\ The annual public reporting burden for the CSP and PRC,
excluding FSS vendors participating in the Transactional Data
Reporting pilot, is $57.66 million. If FSS pilot vendors were still
subject to the CSP and PRC reporting requirements, the total annual
public reporting burden would be $101.69 million. The FSS pilot
vendors' share of the total CSP and PRC reporting burden is based
upon their share of the GSA FSS fiscal year 2015 sales volume, 43.2
percent. The annual $44.03 million reporting burden reduction
attributed to this rule is 43.2 percent of the $101.69 million
annual reporting burden if it were applied to the entire GSA FSS
program. More information about Information Collection 3090-0235 can
be found at http://www.reginfo.gov/public by searching ``ICR'' for
``3090-0235''.
---------------------------------------------------------------------------
To address the concerns with the Transactional Data Reporting
proposed rule burden estimates, GSA reevaluated its methodology and
substantially increased its burden estimates. For the proposed rule,
GSA's public burden estimates included an average initial setup time of
6 hours and average ongoing monthly reporting times ranging from 2
minutes to 4 hours, depending on a vendor's sales volume.\215\ In
contrast, the final rule burden estimates include initial average setup
times of 8 hours for vendors using manual systems and 240 hours for
vendors using automated systems, and average ongoing monthly reporting
times ranging from 15 minutes to 48 hours, depending on a vendor's
sales volume and reporting system type.
---------------------------------------------------------------------------
\215\ See GSAR Case 2013-G504; Docket 2014-0020; Sequence 1 (80
FR 11619 (Mar. 4, 2015)).
---------------------------------------------------------------------------
These higher burden projections, coupled with the increased
Transactional Data Reporting burden estimates calculated in response to
the public comments, were a significant concern and reinforced the need
to pair Transactional Data Reporting with other significant forms of
burden reductions. Consequently, the FSS Transactional Data Reporting
clause (552.238-74 Alternate I) is now coupled with the removal of the
CSP and PRC burdens shown in Information Collection 3090-0235,
resulting in an overall annual public burden reduction of approximately
$32 million for the initial implementation of the rule.\216\
Furthermore, implementing the FSS pilot without the existing CSP and
PRC requirements lowers the Government's burden by about $3 million a
year.\217\
---------------------------------------------------------------------------
\216\ $32 million does not include costs for non-FSS contracts.
It is the result of the FSS burden of the initial pilot
implementation ($12.41 million), minus the share of the combined CSP
and PRC burden allocated to the FSS pilot vendors ($44.03 million).
The total CSP and PRC burden from Information Collection 3090-0235,
if it were applied to all GSA FSS vendors, including those
participating in the Transactional Data Reporting pilot, would be
$101.69 million. The share of that burden allocated to the FSS pilot
vendors ($44.03 million) is based on the percentage of the overall
FY15 FSS sales accounted for by the FSS pilot vendors (43.2
percent).
\217\ $3 million is the result of the Government's annual burden
for this rule ($2.34 million) minus the share of the combined CSP
and PRC burden for the Government allocated to the FSS pilot
contracts ($5.58 million).
---------------------------------------------------------------------------
E. Information Collection Supporting Statement
Requesters may obtain a copy of the supporting statement from the
General Services Administration, Regulatory Secretariat Division
(MVCB), ATTN: Ms. Flowers, 1800 F Street NW., 2nd Floor, Washington, DC
20407. Please cite OMB Control Number 3090-0306, Transactional Data
Reporting, in all correspondence.
Exhibit A: List of Comment Letters Received
Note: The following Exhibit A will not appear in the Code of
Federal Regulations.
ABA: Letter from Stuart B. Nibley, Chair, American Bar
Association, Section of Public Contract Law, May 11, 2015.
Abt Associates: Letter from Marcia King, Associate Director,
Contracts, Abt Associates, May 1, 2015.
Allen: Letter from Larry Allen, President, Allen Federal
Business Partners, May 4, 2015.
ARA: Letter from John McClelland, Vice President, Government
Affairs & Chief Economist, American Rental Association, May 4, 2015.
Atkins: Letter from Carol Hardaker, Atkins North America, Inc.,
March 11, 2015.
CODSIA: Letter from Bettie McCarthy, Administrative Officer,
Council of Defense and Space Industry Associations, on behalf of: R.
Bruce Josten, Executive Vice President, Government Affairs, Chamber
of Commerce of the U.S.; A.R. ``Trey'' Hodgkins, III, Senior Vice
President for the Public Sector, Information Technology Alliance for
the Public Sector; Will Goodman, Vice President for Policy, National
Defense Industrial Association; Alan Chvotkin, Executive Vice
President & Counsel, Professional Services Counsel; May 4, 2015.
CGP: Letter from Roger Waldron, President, The Coalition for
Government Procurement, May 4, 2015.
deMers: Letter from Brad deMers, March 4, 2015.
EA: Letter from Frank J. Aquino, Vice President and General
Counsel, EA Engineering, Science, and Technology, Inc., PBC, May 4,
2015.
Experian: Letter from Heather Richey, Experian, May 11, 2015.
Falcone: Letter from Ronald Falcone, May 4, 2015.
GSA OIG: Letter from Theodore R. Stehney, Assistant Inspector
General for Auditing, GSA Office of Inspector General, Office of
Audits, May 4, 2015.
immixGroup: Letter from Jeffrey Ellinport, Senior Director &
Deputy General Counsel, immixGroup, May 1, 2015.
Insite.rr.com: Letter from Randall Sweeney, Insite.rr.com, April
22, 2015.
IOPFDA: Letter from Paul Miller, Independent Office Products and
Furniture Dealers Association, March 30, 2015.
Johnson & Johnson: Letter from Colleen Menges, Director,
Government Contracts, Johnson & Johnson Health Care Systems Inc.,
May 4, 2015.
Lynch: Letter from Rod Lynch, March 4, 2015.
Macdonald: Letter from J. Ruairi Macdonald, L.L.M. Government
Procurement Law Candidate, George Washington University Law School,
May 4, 2015.
NDIA: Letter from Will Goodman, Vice President for Policy,
National Defense Industrial Association, April 28, 2015.
NMFTA: Letter from Paul D. Cullen, Jr. and John R. Bagileo,
National Motor Freight Traffic Association, Inc., May 11, 2015.
Perry: Letter from Glenn Perry, Multiple Award Schedule Advisory
Panel Member and former senior procurement official, April 17, 2015.
POGO: Letter from Scott H. Amey, General Counsel, Project on
Government Oversight, May 4, 2015.
RTI: Letter from Don Enichen, Research Triangle Institute, May
11, 2015.
SBA: Letter from Claudia R. Rogers, Acting Chief Counsel for
Advocacy, and Major L. Clark III, Assistant Chief Counsel for
Advocacy, U.S. Small Business Administration, Office of Advocacy,
May 4, 2015.
Shepra: Letter from Stephen Roadfeldt, Shepra, Inc., April 9,
2015.
[[Page 41136]]
SIA: Letter from Don Erickson, CEO, Security Industry
Association, May 4, 2015.
List of Subjects in 48 CFR Parts 501, 515, 516, 538, and 552
Government procurement.
Dated: June 16, 2016.
Jeffrey A. Koses,
Senior Procurement Executive, Office of Acquisition Policy, Office of
Government-wide Policy.
For the reasons described in the preamble, GSA amends 48 CFR parts
501, 515, 516, 538, and 552 as follows:
PART 501--GENERAL SERVICES ADMINISTRATION ACQUISITION REGULATION
SYSTEM
0
1. The authority citation for 48 CFR part 501 continues to read as
follows:
Authority: 40 U.S.C. 121(c).
501.106 [Amended]
0
2. Amend section 501.106 in the table, by--
0
a. Adding in numerical sequence, GSAR Reference ``515.408'' and its
corresponding OMB Control Number ``3090-0235'';
0
b. Adding in numerical sequence, GSAR Reference ``552.216-75'' and its
corresponding OMB Control Number ``3090-0306'';
0
c. Removing GSAR Reference ``552.238-74'' and its corresponding OMB
Control Numbers ``3090-0121'' and ``3090-0250''; and
0
d. Adding in numerical sequence, GSAR Reference ``552.238-74'' and its
corresponding OMB Control Numbers ``3090-0121'' and ``3090-0306''.
PART 515--CONTRACT BY NEGOTIATION
0
3. The authority citation for 48 CFR part 515 is revised to read as
follows:
Authority: 40 U.S.C. 121(c).
0
4. Amend section 515.408 by--
0
a. Revising the introductory text of paragraph (a), and paragraph
(a)(2);
0
b. Revising the introductory text of paragraphs (b) and (c);
0
c. Revising paragraph (d); and
0
d. Revising the introductory text of paragraph (e) and paragraph
(e)(1).
The revisions read as follows:
515.408 Solicitation provisions and contract clauses.
* * * * *
(a) Use Alternate IV of the FAR provision at 52.215-20,
Requirements for Cost or Pricing Data or Information Other Than Cost or
Pricing Data, for MAS solicitations to provide the format for
submission of information other than cost or pricing data for MAS
solicitations. To provide uniformity in requests under the MAS program,
insert the following in paragraph (b) of the provision:
* * * * *
(2) Commercial sales practices. When the solicitation contains the
basic clause 552.238-74 Industrial Funding Fee and Sales Reporting, the
Offeror must submit information in the format provided in this
solicitation in accordance with the instructions at Figure 515.4-2 of
the GSA Acquisition Regulation (48 CFR 515.4-2), or submit information
in the Offeror's own format.
* * * * *
(b) When the contract contains the basic clause 552.238-74
Industrial Funding Fee and Sales Reporting, insert the following format
for commercial sales practices in the exhibits or attachments section
of the solicitation and resulting contract (see FAR 12.303).
* * * * *
(c) When the contract contains the basic clause 552.238-74
Industrial Funding Fee and Sales Reporting, include the instructions
for completing the commercial sales practices format in Figure 515.4-2
in solicitations issued under the MAS program.
* * * * *
(d) When the contract contains the basic clause 552.238-74
Industrial Funding Fee and Sales Reporting, insert the clause at
552.215-72, Price Adjustment--Failure to Provide Accurate Information,
in solicitations and contracts under the MAS program.
* * * * *
(e) Use Alternate IV of FAR 52.215-21, Requirements for Cost or
Pricing Data or Information Other Than Cost or Pricing Data--
Modifications, to provide for submission of information other than cost
or pricing data for MAS contracts. To provide for uniformity in
requests under the MAS program, insert the following in paragraph (b)
of the clause:
(1) Information required by the clause at 552.238-81, Modifications
(Multiple Award Schedule).
* * * * *
PART 516--TYPES OF CONTRACTS
0
5. The authority citation for 48 CFR part 516 continues to read as
follows:
Authority: 40 U.S.C. 121(c).
0
6. Amend section 516.506 by adding paragraph (d) to read as follows:
516.506 Solicitation provisions and contract clauses.
* * * * *
(d) The Contracting Officer may insert clause 552.216-75 in
solicitations and GSA-awarded IDIQ contracts, not including Federal
Supply Schedule (FSS) contracts. This clause should be included in all
GSA-awarded Governmentwide acquisition contracts and multi-agency
contracts. See 538.273 for clauses applicable to FSS contracts.
PART 538--FEDERAL SUPPLY SCHEDULE CONTRACTING
0
7. The authority citation for 48 CFR part 538 continues to read as
follows:
Authority: 40 U.S.C. 121(c).
0
8. Revise section 538.270 to read as follows:
538.270 Evaluation of multiple award schedule (MAS) offers.
0
9. Add section 538.270-1 to read as follows:
538.270-1 Evaluation of offers without access to transactional data.
(a) Applicability. Utilize this evaluation methodology for
negotiating MAS offers when the commercial sales practices format is
included in the solicitation (see 515.408).
(b) When offerors have commercial catalogs, negotiate concessions
from established catalogs, including price and non-price terms and
conditions.
(c) The Government will seek to obtain the offeror's best price
(the best price given to the most favored customer). However, the
Government recognizes that the terms and conditions of commercial sales
vary and there may be legitimate reasons why the best price is not
achieved.
(d) Establish negotiation objectives based on a review of relevant
data and determine price reasonableness.
(e) When establishing negotiation objectives and determining price
reasonableness, compare the terms and conditions of the MAS
solicitation with the terms and conditions of agreements with the
offeror's commercial customers. When determining the Government's price
negotiation objectives, consider the following factors:
(1) Aggregate volume of anticipated purchases.
(2) The purchase of a minimum quantity or a pattern of historic
purchases.
(3) Prices taking into consideration any combination of discounts
and concessions offered to commercial customers.
(4) Length of the contract period.
(5) Warranties, training, and/or maintenance included in the
purchase price or provided at additional cost to the product prices.
(6) Ordering and delivery practices.
[[Page 41137]]
(7) Any other relevant information, including differences between
the MAS solicitation and commercial terms and conditions that may
warrant differentials between the offer and the discounts offered to
the most favored commercial customer(s). For example, an offeror may
incur more expense selling to the Government than to the customer who
receives the offeror's best price, or the customer (e.g., dealer,
distributor, original equipment manufacturer, other reseller) who
receives the best price may perform certain value-added functions for
the offeror that the Government does not perform. In such cases, some
reduction in the discount given to the Government may be appropriate.
If the best price is not offered to the Government, you should ask the
offeror to identify and explain the reason for any differences. Do not
require offerors to provide detailed cost breakdowns.
(f) You may award a contract containing pricing which is less
favorable than the best price the offeror extends to any commercial
customer for similar purchases if you make a determination that both of
the following conditions exist:
(1) The prices offered to the Government are fair and reasonable,
even though comparable discounts were not negotiated.
(2) Award is otherwise in the best interest of the Government.
(g) State clearly in the award document the price/discount
relationship between the Government and the identified commercial
customer (or category of customers) upon which the award is based.
0
10. Amend section 538.271 by revising paragraph (a) and removing
paragraph (c).
The revision reads as follows:
538.271 MAS contract awards.
(a) MAS awards will be for commercial items as defined in FAR
2.101.
* * * * *
0
11. Revise section 538.272 to read as follows:
538.272 MAS price reductions.
(a) Applicability. This section applies when the contract contains
the basic clause 552.238-74 Industrial Funding Fee and Sales Reporting.
(b) The basic clause and Alternate I of 552.238-75, Price
Reductions, requires the contractor to maintain during the contract
period the negotiated price/discount relationship (and/or term and
condition relationship) between the eligible ordering activities and
the offeror's customer or category of customers on which the contract
award was predicated (see 538.271(c)). If a change occurs in the
contractor's commercial pricing or discount arrangement applicable to
the identified commercial customer (or category of customers) that
results in a less advantageous relationship between the eligible
ordering activities and this customer or category of customers, the
change constitutes a ``price reduction.''
(c) Ensure that the contractor understands the requirements of
section 552.238-75 and agrees to report all price reductions to the
Contracting Officer as provided for in the clause.
0
12. Amend section 538.273 by revising paragraph (b) to read as follows:
538.273 Contract clauses.
* * * * *
(b) Multiple and single award schedules. Insert the following in
solicitations and contracts:
(1) 552.238-74, Industrial Funding Fee and Sales Reporting. Use
Alternate I for Federal Supply Schedules with Transactional Data
Reporting requirements. Clause 552.238-75 Alternate II should also be
used when vendors agree to include clause 552.238-74 Alternate I in the
contract.
(2) 552.238-75, Price Reductions. (i) Except in cases where
Alternate II is used, use Alternate I in solicitations and contracts
for--
(A) Federal Supply Schedule 70;
(B) The Consolidated Schedule containing information technology
Special Item Numbers;
(C) Federal Supply Schedule 84; and
(D) Federal Supply Schedules for recovery purchasing (see
538.7102).
(ii) Use Alternate II for Federal Supply Schedules with
Transactional Data Reporting requirements. This alternate clause is
used when vendors agree to include clause 552.238-74 Alternate I in the
contract.
(3) 552.238-81, Modifications (Federal Supply Schedule). (i) Use
Alternate I for Federal Supply Schedules that only accept electronic
modifications.
(ii) Use Alternate II for Federal Supply Schedules with
Transactional Data Reporting requirements. This alternate clause is
used when vendors agree to include clause 552.238-74 Alternate I in the
contract.
PART 552--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
0
13. The authority citation for 48 CFR part 552 continues to read as
follows:
Authority: 40 U.S.C. 121(c).
0
14. Amend section 552.212-71 by revising the date of the clause and
removing from paragraph (b) ``__552.243-72 Modifications (Multiple
Award Schedule)'' and adding, in numerical sequence, ``__552.238-81
Modifications (Multiple Award Schedule)''. The revision reads as
follows:
552.212-71 Contract Terms and Conditions Applicable to GSA Acquisition
of Commercial Items.
* * * * *
Contract Terms and Conditions Applicable to GSA Acquisition of
Commercial Items JUN 2016)
* * * * *
0
15. Add section 552.216-75 to read as follows:
552.216-75 Transactional Data Reporting.
As prescribed in 516.506(d), insert the following provision:
Transactional Data Reporting (JUN 2016)
(a) Definition. Transactional data encompasses the historical
details of the products or services delivered by the Contractor during
the performance of task or delivery orders issued against this
contract.
(b) Reporting of Transactional Data. The Contractor must report all
transactional data under this contract as follows:
(1) The Contractor must electronically report transactional data by
utilizing the automated reporting system at an Internet Web site
designated by the General Services Administration (GSA) or by uploading
the data according to GSA instructions. GSA will post registration
instructions and reporting procedures on the Vendor Support Center Web
site, https://vsc.gsa.gov. The reporting system Web site address, as
well as registration instructions and reporting procedures, will be
provided at the time of award or inclusion of this clause in the
contract.
(2) The Contractor must provide, at no additional cost to the
Government, the following transactional data elements, as applicable:
(i) Contract or Blanket Purchase Agreement (BPA) Number.
(ii) Delivery/Task Order Number/Procurement Instrument Identifier
(PIID).
(iii) Non Federal Entity.
(iv) Description of Deliverable.
(v) Manufacturer Name.
(vi) Manufacturer Part Number.
(vii) Unit Measure (each, hour, case, lot).
(viii) Quantity of Item Sold.
[[Page 41138]]
(ix) Universal Product Code.
(x) Price Paid per Unit.
(xi) Total Price.
Note to paragraph (b)(2): The Contracting Officer may add data
elements to the standard elements listed in paragraph (b)(2) of this
section with the approvals listed in GSAM 507.105(c)(3).
(3) The Contractor must report transactional data within 30
calendar days from the last calendar day of the month. If there was no
contract activity during the month, the Contractor must submit a
confirmation of no reportable transactional data within 30 calendar
days of the last calendar day of the month.
(4) The Contractor must report the price paid per unit, total
price, or any other data elements with an associated monetary value
listed in (b)(2) of this section, in U.S. dollars.
(5) The Contractor must maintain a consistent accounting method of
transactional data reporting, based on the Contractor's established
commercial accounting practice.
(6) Reporting Points. (i) The acceptable points at which
transactional data may be reported include--
(A) Issuance of an invoice; or
(B) Receipt of payment.
(ii) The Contractor must determine whether to report transactional
data on the basis of invoices issued or payments received.
(7) The Contractor must continue to furnish reports, including
confirmation of no transactional data, through physical completion of
the last outstanding task or delivery order issued against the
contract.
(8) Unless otherwise expressly stated by the ordering activity,
orders that contain classified information or other information that
would compromise national security are exempt from this reporting
requirement.
(9) This clause does not exempt the Contractor from fulfilling
existing reporting requirements contained elsewhere in the contract.
(10) GSA reserves the unilateral right to change reporting
instructions following 60 calendar days' advance notification to the
Contractor.
(c) Contract Access Fee (CAF). (1) GSA's operating costs are
reimbursed through a CAF charged on orders placed against this
contract. The CAF is paid by the ordering activity but remitted to GSA
by the Contractor. GSA has the unilateral right to change the fee
structure at any time, but not more than once per year; GSA will
provide reasonable notice prior to the effective date of any change.
(2) Within 60 calendar days of award or inclusion of this clause in
the contract, a GSA representative will provide the Contractor with
specific written procedural instructions on remitting the CAF,
including the deadline by which the Contractor must remit the CAF. The
deadline specified in the written procedural instructions will be no
less than 30 calendar days after the last calendar day of the month.
GSA reserves the unilateral right to change remittance instructions
following 60 calendar days' advance notification to the Contractor.
(3) The Contractor must remit the CAF to GSA in U.S. dollars.
(4) The Contractor's failure to remit the full amount of the CAF
within the specified deadline constitutes a contract debt to the United
States Government under the terms of FAR Subpart 32.6. The Government
may exercise all rights under the Debt Collection Improvement Act of
1996, including withholding or offsetting payments and interest on the
debt (see FAR clause 52.232-17, Interest). If the Contractor fails to
submit the required sales reports, falsifies them, or fails to timely
pay the CAF, these reasons constitute sufficient cause for the
Government to terminate the contract for cause.
(End of Provision)
0
16. Amend section 552.238-74 by adding Alternate I to read as follows:
552.238-74 Industrial Funding Fee and Sales Reporting.
* * * * *
Alternate I ([Insert abbreviated month and year of publication in
the Federal Register.]): As prescribed in 538.273(b)(1), substitute the
following paragraphs (a), (b), (c), and (d) for paragraphs (a), (b),
(c), and (d) of the basic clause:
(a) Definition. Transactional data encompasses the historical
details of the products or services delivered by the Contractor during
the performance of task or delivery orders issued against this
contract.
(b) Reporting of Transactional Data. The Contractor must report all
transactional data under this contract as follows:
(1) The Contractor must electronically report transactional data
by utilizing the automated reporting system at an Internet Web site
designated by the General Services Administration (GSA) or by
uploading the data according to GSA instructions. GSA will post
registration instructions and reporting procedures on the Vendor
Support Center Web site, https://vsc.gsa.gov. The reporting system
Web site address, as well as registration instructions and reporting
procedures, will be provided at the time of award or inclusion of
this clause in the contract.
(2) The Contractor must provide, at no additional cost to the
Government, the following transactional data elements, as applicable:
(i) Contract or Blanket Purchase Agreement (BPA) Number.
(ii) Delivery/Task Order Number/Procurement Instrument Identifier
(PIID).
(iii) Non Federal Entity.
(iv) Description of Deliverable.
(v) Manufacturer Name.
(vi) Manufacturer Part Number.
(vii) Unit Measure (each, hour, case, lot).
(viii) Quantity of Item Sold.
(ix) Universal Product Code.
(x) Price Paid per Unit.
(xi) Total Price.
Note to paragraph (b)(2): The Contracting Officer may add data
elements to the standard elements listed in paragraph (b)(2) of this
section with the approvals listed in GSAM 507.105(c)(3).
(3) The contractor must report transactional data within 30
calendar days from the last calendar day of the month. If there was no
contract activity during the month, the Contractor must submit a
confirmation of no reportable transactional data within 30 calendar
days of the last calendar day of the month.
(4) The Contractor must report the price paid per unit, total
price, or any other data elements with an associated monetary value
listed in (b)(2) of this section, in U.S. dollars.
(5) The reported price paid per unit and total price must include
the Industrial Funding Fee (IFF).
(6) The Contractor must maintain a consistent accounting method of
transactional data reporting, based on the Contractor's established
commercial accounting practice.
(7) Reporting Points. (i) The acceptable points at which
transactional data may be reported include--
(A) Issuance of an invoice; or
(B) Receipt of payment.
(ii) The Contractor must determine whether to report transactional
data on the basis of invoices issued or payments received.
(8) The Contractor must continue to furnish reports, including
confirmation of no transactional data, through physical completion of
the last outstanding task or delivery order of the contract.
(9) Unless otherwise expressly stated by the ordering activity,
orders that contain classified information or other or information that
would compromise national security are exempt from this reporting
requirement.
(10) This clause does not exempt the Contractor from fulfilling
existing
[[Page 41139]]
reporting requirements contained elsewhere in the contract.
(11) GSA reserves the unilateral right to change reporting
instructions following 60 calendar days' advance notification to the
Contractor.
(c) Industrial Funding Fee (IFF). (1) This contract includes an IFF
charged on orders placed against this contract. The IFF is paid by the
authorized ordering activity but remitted to GSA by the Contractor. The
IFF reimburses GSA for the costs of operating the Federal Supply
Schedule program, as set forth in 40 U.S.C. 321: Acquisition Services
Fund. Net operating revenues generated by the IFF are also applied to
fund initiatives benefitting other authorized GSA programs, in
accordance with 40 U.S.C. 321.
(2) GSA has the unilateral right to change the fee amount at any
time, but not more than once per year; GSA will provide reasonable
notice prior to the effective date of any change. GSA will post notice
of the current IFF on the Vendor Support Center Web site at https://vsc.gsa.gov.
(3) Offerors must include the IFF in their prices. The fee is
included in the awarded price(s) and reflected in the total amount
charged to ordering activities. The fee will not be included in the
price of non-contract items purchased pursuant to a separate
contracting authority, such as a Governmentwide Acquisition Contract
(GWAC); a separately awarded Federal Acquisition Regulation (FAR) Part
12, FAR Part 13, FAR Part 14, or FAR Part 15 procurement; or a non-FAR
contract.
(4) The Contractor must remit the IFF to GSA in U.S. dollars within
30 calendar days after the last calendar day of the reporting quarter;
final payment must be remitted within 30 calendar days after physical
completion of the last outstanding task order or delivery order issued
against the contract.
(5) GSA reserves the unilateral right to change remittance
instructions following 60 calendar days' advance notification to the
Contractor.
(d) The Contractor's failure to remit the full amount of the IFF
within 30 calendar days after the end of the applicable reporting
period constitutes a contract debt to the United States Government
under the terms of FAR Subpart 32.6. The Government may exercise all
rights under the Debt Collection Improvement Act of 1996, including
withholding or offsetting payments and interest on the debt (see FAR
clause 52.232-17, Interest). If the Contractor fails to submit the
required transactional data reports, falsifies them, or fails to timely
pay the IFF, these reasons constitute sufficient cause for the
Government to terminate the contract for cause.
0
17. Amend section 552.238-75 by adding Alternate II to read as follows:
552.238-75 Price Reductions.
* * * * *
Alternate II ([Insert abbreviated month and year of publication in
the Federal Register.]). As prescribed in 538.273(b)(2)(ii), substitute
the following paragraphs (a) and (b) for paragraphs (a), (b), (c), (d),
(e), (f) and (g) of the basic clause:
(a) The Government may request from the Contractor, and the
Contractor may provide to the Government, a temporary or permanent
price reduction at any time during the contract period.
(b) The Contractor may offer the Contracting Officer a voluntary
price reduction at any time during the contract period.
0
18. Amend section 552.238-81 by--
0
a. In Alternate I, revising the date of the alternate and the
introductory text; and
0
b. Adding Alternate II.
The revisions and addition read as follows:
552.238-81 Modification (Federal Supply Schedule).
* * * * *
Alternate I ([Insert abbreviated month and year of publication in
the Federal Register.]). As prescribed in 538.273(b)(3)(i), add the
following paragraph (f) to the basic clause:
* * * * *
Alternate II ([Insert abbreviated month and year of publication in
the Federal Register.]). As prescribed in 538.273(b)(3)(ii), substitute
the following paragraph (b) for paragraph (b) of the basic clause:
(b) Types of Modifications.
(1) Additional items/additional SINs. When requesting additions,
the Contractor must submit the following information:
(i) Information about the new item(s) or the item(s) under the
new SIN(s) must be submitted in accordance with the instructions in
the solicitation.
(ii) Delivery time(s) for the new item(s) or the item(s) under
the new SIN(s) must be submitted in accordance with the request for
proposal.
(iii) Production point(s) for the new item(s) or the item(s)
under the new SIN(s) must be submitted if required by FAR 52.215-6,
Place of Performance.
(iv) Hazardous Material information (if applicable) must be
submitted as required by FAR 52.223-3 (Alternate I), Hazardous
Material Identification and Material Safety Data.
(v) Any information requested by FAR 52.212-3(f), Offeror
Representations and Certifications-Commercial Items, that may be
necessary to assure compliance with FAR 52.225-1, Buy American Act-
Balance of Payments Programs-Supplies.
(2) Deletions. The Contractor must provide an explanation for
the deletion. The Government reserves the right to reject any
subsequent offer of the same item or a substantially equal item at a
higher price during the same contract period, if the Contracting
Officer determines that the higher price is unreasonable compared to
the price of the deleted item.
[FR Doc. 2016-14728 Filed 6-22-16; 8:45 am]
BILLING CODE 6820-61-P