[Federal Register Volume 82, Number 9 (Friday, January 13, 2017)]
[Notices]
[Pages 4337-4339]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-00687]


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GENERAL SERVICES ADMINISTRATION

[OMB Control No. 3090-0121: Docket No. 2017-0001; Sequence 1]


General Services Administration Acquisition Regulation; 
Information Collection; Industrial Funding Fee and Sales Reporting

AGENCY: Office of Acquisition Policy, General Services Administration 
(GSA).

ACTION: Notice of request for comments regarding an extension to an 
existing OMB clearance.

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SUMMARY: Under the provisions of the Paperwork Reduction Act, the 
Regulatory Secretariat Division is submitting a request to the Office 
of Management and Budget (OMB) to review and approve an extension of a 
previously approved information collection associated with General 
Services Administration Acquisition Regulation clause 552.238-74, 
Industrial Funding Fee and Sales Reporting. GSA uses this information 
to collect the Industrial Funding Fee and administer the Federal Supply 
Schedule (FSS) program.

DATES: Submit comments on or before: March 14, 2017.

ADDRESSES: Submit comments identified by Information Collection 3090-
0121, Industrial Funding Fee and Sales Reporting, by any of the 
following methods:
     Regulations.gov: http://www.regulations.gov. Submit 
comments via the Federal eRulemaking portal by searching the OMB 
control number. Select the link ``Submit a Comment'' that corresponds 
with ``Information Collection 3090-0121, Industrial Funding Fee and 
Sales Reporting.'' Follow the instructions provided at the ``Submit a 
Comment'' screen. Please include your name, company name (if any), and 
``Information Collection 3090-0121, Industrial Funding Fee and Sales 
Reporting'' on your attached document.
     Mail: General Services Administration, Regulatory 
Secretariat Division (MVCB), 1800 F Street NW., Washington, DC 20405. 
ATTN: Ms. Flowers/IC 3090-0121, Industrial Funding Fee and Sales 
Reporting.
    Instructions: Please submit comments only and cite Information 
Collection 3090-0121, Industrial Funding Fee and Sales Reporting, in 
all correspondence related to this collection. All comments received 
will be posted without change to http://www.regulations.gov, including 
any personal and/or business confidential information provided.

FOR FURTHER INFORMATION CONTACT: Matthew McFarland, Senior Policy 
Advisor, GSA Acquisition Policy Division, at 202-690-9232 or 
[email protected].

SUPPLEMENTARY INFORMATION: 

A. Purpose

    GSA's Federal Supply Schedule (FSS) program, commonly known as the 
GSA Schedules program or Multiple Award Schedule (MAS) program provides 
federal agencies with a simplified process for acquiring commercial 
supplies and services. The FSS program is the Government's preeminent 
contracting vehicle, accounting for approximately 10 percent of all 
federal contract dollars with $33 billion of purchases made through the 
program in fiscal year 2016.
    Activities placing orders against a GSA Schedule contract must pay 
an Industrial Funding Fee (IFF) that reimburses GSA's Federal 
Acquisition Service (FAS) for the costs of operating the FSS program. 
FAS recoups its operating costs from ordering activities (i.e., 
customers) 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 FAS programs, in accordance 
with 40 U.S.C. 321. The IFF, currently set at 0.75 percent, is included 
in the order price, so when a vendor is paid for an FSS order, it is 
also collecting the IFF. Collection is similar to a state sales tax, 
where a customer pays the tax due to a merchant, and then the merchant 
remits the taxes collected to the state government.
    GSA requires vendors to report their FSS sales each quarter so it 
can determine the amount of IFF the vendors have collected from 
customers, and therefore must remit to GSA. However, GSA also uses this 
information for other purposes, including budgeting, determining 
whether vendors have met the minimum sales requirement,\1\ evaluating 
the program's performance, and monitoring small business participation.
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    \1\ The FSS Contract Sales Criteria clause requires vendors to 
have at least $25,000 in sales over the first two years of a 
contract and then $25,000/year in sales for each year thereafter. 
Vendors that have not satisfied the minimum sales requirement are 
subject to cancellation in accordance with GSAR clause 552.238-73 
Cancellation.
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    Vendor reporting and remittance requirements are set forth in 
General Services Administration Acquisition Regulation (GSAR) clause 
552.238-74, Industrial Funding Fee and Sales Reporting, or Alternate I 
of that clause. While both clause versions govern how the IFF is 
calculated and remitted, the reporting requirements differ between the 
basic version and Alternate I:
    Clause 552.238-75: Basic Version: This version requires vendors to 
report their FSS contract sales to GSA once a quarter. GSA then 
calculates the IFF due based on the total amount of sales reported, and 
the vendor must remit that amount within 30 days after the end of the 
quarter. The basic version of the clause applies to approximately 72 
percent of GSA Schedule contracts.
    Clause 552.238-75: Alternate I: While the basic version requires 
vendors to report their total FSS sales each quarter, Alternate I 
requires vendors to report the transactional data generated from orders 
each month. GSA then calculates the IFF due based on the transactional 
data reported, and the vendor must remit that amount within 30 days 
after the end of the quarter. Alternate I of the clause applies to FSS 
contracts participating in the Transactional Data Reporting pilot. The 
pilot commenced on June 23, 2016 and will run for at least a year 
before substantial changes are considered. Approximately 28 percent of 
GSA Schedule contracts are eligible to participate in the pilot.
    Since the reporting requirements vary by the two versions of clause 
552.238-74, separate Paperwork Reduction Act information collections 
have been established for each version. The information collection 
associated with OMB control number 3090-0306, which expires on 8/31/
2019, applies to Alternate I. This information collection (OMB control 
number 3090-0121) applies to the basic version of the clause.

Information Collection Changes and Updates

     The population of vendors subject to this information 
collection is smaller than the previous version, as FSS contracts 
eligible to participate in the Transactional Data Reporting pilot

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(approximately 28 percent of all GSA Schedule contracts) are now 
included under OMB control number 3090-0306.
     Previous justifications for this information collection 
limited the burden to the amount of time needed for vendors to input 
sales data in the 72A Reporting System and remit IFF payments. However, 
GSA now recognizes recordkeeping, quality assurance, reporting, and 
remittance should be included in the burden estimates. Since 
recordkeeping and quality assurance are the largest burden drivers for 
both vendors and the Government, the burden estimates for both the 
public and Government have increased.

B. Annual Reporting Burden

    Population Overview: The basic version of clause 552.238-74 is 
included in 14,306 contracts held by 12,254 vendors. This includes 
1,128 new contracts awarded to 819 vendors.\2\
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    \2\ These are approximations based on FY2015 data. The number of 
vendors equals the number of unique Data Universal Numbering System 
(DUNS) numbers, which are assigned to business entities.
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    Cost Estimates: The estimated cost burden for respondents was 
calculated by multiplying the burden hours by an estimated cost of $68/
hour ($50/hour with a 36% overhead rate).\3\
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    \3\ The 36% overhead rate was used in reference 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%; GSA opted to round to the 
nearest whole number for the basis of its burden estimates.
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    Categorization of Vendors by Quarterly Sales Revenue: Sales 
reporting imposes a progressive burden -- one that increases with a 
vendor's sales volume. Quarterly reporting times will increase with a 
vendor's applicable sales volume, as vendors with lower to no 
reportable sales will spend little time on quarterly reporting, while 
those with more reportable sales with face a higher reporting burden.
    GSA separated vendors into categories based on average quarterly 
sales volume \4\ in order to account for the differences in reporting 
burden. These categories are:
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    \4\ Average quarterly sales volume was computed by taking a 
vendor's total annual sales volume and dividing it by 4. All sales 
data is from FY2015.
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     Category 1: No sales activity (average quarterly sales of 
$0)
 Category 2: Average quarterly sales between $0 and $60,000
 Category 3: Average quarterly sales between $60,000 and 
$600,000
 Category 4: Average quarterly sales between $600,000 and $3 
million
 Category 5: Average quarterly sales over $3 million

    The distribution of vendors by sales category is as follows:

                                        FSS and Vendors by Sales Category
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                                                                                               FSS vendors
                                                                  FSS vendors (count)          (percentage)
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Category 1....................................................                    4,217                       34
Category 2....................................................                    4,020                       33
Category 3....................................................                    2,768                       23
Category 4....................................................                      970                        8
Category 5....................................................                      279                        2
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    Total.....................................................                   12,254                   100.00
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    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 quarter's reportable sales. 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 
sales types 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, 34 
percent of FSS vendors subject to this collection reported $0 sales, 
while another 33 percent reported average quarterly sales between $1 
and $60,000 per quarter. However, as a vendor's applicable average 
quarterly sales increase, they will be increasingly likely to establish 
an automated system to reduce the quarterly reporting burden. 
Consequently, vendors with higher reportable sales will likely bear a 
higher setup burden to create an automated system, or absorb a high 
quarterly reporting burden if they choose to rely on manual reporting 
methods.
    The following chart depicts the likelihood of the population of 
vendors adopting manual and automated reporting systems:

                                                            Vendors by Reporting System Type
                                                                 (Manual vs. Automated)
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                                                       Manual system  (vendor      Automated system      Manual system  (vendor      Automated system
                                                            percentage)          (vendor percentage)             count)               (vendor count)
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Category 1..........................................                      100                        0                    4,217                        0
Category 2..........................................                      100                        0                    4,020                        0

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Category 3..........................................                       90                       10                    2,491                      277
Category 4..........................................                       50                       50                      485                      485
Category 5..........................................                       10                       90                       28                      251
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                                   Total Vendor Count by System Type                                                     11,241                    1,013
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                                   Vendor Percentage by System Type                                                          92                        8
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    Initial Setup: Vendors with active FSS contracts already have 
procedures in place to meet these longstanding reporting requirements. 
However, new FSS vendors 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 as 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 40 hours for those with an automated 
system. GSA also attributes the same system type probabilities (manual 
system 92%, automated system 8%) to the population of new vendors. 
These estimates apply to the 819 vendors awarded FSS contracts in 
fiscal year 2015.
    Quarterly Reporting: Vendors are required to report sales within 30 
calendar days after the end of each quarter. The average reporting 
times vary by system type (manual or automated) and by sales 
categories. GSA estimates vendors using a manual system will have 
average quarterly reporting times ranging from 15 minutes (0.25 hours) 
per quarter for vendors with $0 sales, to an average of 8 hours per 
quarter for vendors with quarterly sales over $3 million. On the other 
hand, GSA projects vendors with automated systems will have reporting 
times of 2 hours per quarter, irrespective of quarterly sales volume, 
as a result of efficiencies achieved through automated processes. The 
following table shows GSA's projected quarterly reporting times per 
sales category and system type.

          Quarterly Reporting Hours by System Type and Category
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                                              Manual         Automated
                                              systems         systems
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Category 1..............................            0.25            2.00
Category 2..............................            1.00            2.00
Category 3..............................            2.00            2.00
Category 4..............................            4.00            2.00
Category 5..............................            8.00            2.00
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Annualized Public Burden Estimates

    The burden estimates consist of quarterly reporting times for all 
12,254 participating vendors and a one-time setup burden for the 819 
new vendors:
Quarterly Reporting
    Annual Burden (Hours): 56,983.
    Annual Burden (Cost): $3,874,817.
Initial Setup
    Annual Burden (Hours): 8,718.
    Annual Burden (Cost): $592,846.
Total Information Collection Burden
    Number of Respondents: 12,254.
    Response per Respondent: 4.
    Total Annual Responses: 49, 016.
    Hours Per Response: 1.3404.
    Total Burden (Hours): 65,701.
    Annual Burden (Cost): $4,467,663.

C. Public Comments

    Public comments are particularly invited on: Whether this 
collection of information is necessary and whether it will have 
practical utility; whether our estimate of the public burden of this 
collection of information is accurate, and based on valid assumptions 
and methodology; ways to enhance the quality, utility, and clarity of 
the information to be collected.
    Obtaining Copies of Proposals: Requesters may obtain a copy of the 
information collection documents from the General Services 
Administration, Regulatory Secretariat Division (MVCB), 1800 F Street 
NW., Washington, DC 20405, telephone 202-501-4755. Please cite OMB 
Control No. 3090-0235, Price Reductions Clause, in all correspondence.

Jeffrey A. Koses,
Director, Office of Acquisition Policy, Office of Government-wide 
Policy.
[FR Doc. 2017-00687 Filed 1-12-17; 8:45 am]
 BILLING CODE 6820-61-P