[Federal Register Volume 84, Number 189 (Monday, September 30, 2019)]
[Notices]
[Pages 51578-51586]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-21253]


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GENERAL SERVICES ADMINISTRATION

[OMB Control No. 3090-0235; Docket No. 2019-0001; Sequence No. 1]


General Services Administration Acquisition Regulation; 
Submission for OMB Review; Federal Supply Schedule Pricing Disclosures 
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 requirement regarding 
Commercial Sales Practices disclosures and the General Services 
Administration Acquisition Regulation (GSAR) clause regarding price 
reductions. The information collected is used to establish and maintain 
Federal Supply Schedule (FSS) pricing and price-related terms and 
conditions. The extension has been renamed ``Federal Supply Schedule 
Pricing Disclosures and Sales Reporting'' because it now includes a 
burden estimate associated with the basic version of the GSAR clause 
regarding industrial funding fee and sales reporting. GSA uses this 
information to collect the Industrial Funding Fee and administer the 
FSS program. This burden was included under a separate approved 
information collection identified by OMB control number 3090-0121.

[[Page 51579]]


DATES: Submit comments on or before: October 30, 2019.

ADDRESSES: Submit comments identified by Information Collection 3090-
0235, Federal Supply Schedule Pricing Disclosures 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 3090-0235, Federal Supply Schedule 
Pricing Disclosures and Sales Reporting.'' Follow the instructions 
provided at the ``Submit a Comment'' screen. Please include your name, 
company name (if any), and ``Information Collection 3090-0235, Federal 
Supply Schedule Pricing Disclosures and Sales Reporting'' on your 
attached document.
     Mail: General Services Administration, Regulatory 
Secretariat Division (MVCB), 1800 F Street NW, Washington, DC 20405. 
ATTN: Ms. Mandell/IC 3090-0235, Federal Supply Schedule Pricing 
Disclosures.
    Instructions: Please submit comments only and cite Information 
Collection 3090-0235, Federal Supply Schedule Pricing Disclosures 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: Mr. Matthew McFarland, Office of 
Acquisition Policy, 301-758-5880 or [email protected].

SUPPLEMENTARY INFORMATION:

A. Purpose

    GSA's Federal Supply Schedules, commonly known as GSA Schedules or 
Multiple Award Schedules (MAS), are Government-wide contracts providing 
federal agencies with a simplified process for acquiring commercial 
supplies and services. The FSS program is the Government's preeminent 
commercial contracting vehicle, accounting for about 10 percent of all 
federal contract dollars with approximately $33 billion of purchases 
made through the program in fiscal year 2018.
    GSA establishes the pricing and terms of each GSA Schedule contract 
with commercial contractors. Federal agencies then follow GSA's 
competitive procedures when placing orders against these contracts and 
thereby satisfy statutory competition requirements to provide ``the 
lowest overall cost alternative to meet the needs of the Federal 
Government.'' \1\ In turn, those agencies must pay an Industrial 
Funding Fee (IFF) that covers GSA's costs of operating the FSS program. 
The fee is currently set at 0.75 percent and is included in the prices 
ordering activities pay contractors when purchasing from an FSS 
contract.\2\ FSS contractors then report GSA Schedule sales data and 
remit the IFF collected from ordering activities to GSA once a quarter.
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    \1\ 41 U.S.C. 152(3)(B) requires FSS ordering procedures to 
``result in the lowest overall cost alternative to meet the needs of 
the Federal Government.''
    \2\ The IFF for Schedule 599, Special Item Number 599-2 is $1.50 
per transaction.
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    There were a total of 16,215 GSA FSS contracts in fiscal year 2018. 
This information collection pertains to the pricing disclosures and 
sales reporting requirements for 14,152 of these contracts. The 
remaining 2,063 contracts participated in the Transactional Data 
Reporting (TDR) pilot and were subject to a separate information 
collection identified by OMB control number 3090-0306.
    GSA believes TDR offers a meaningful burden reduction for FSS 
contractors. GSA estimates the combined burden of this information 
collection is 49 percent more per contract than the TDR burden. If all 
FSS contractors participated in TDR, rather than being subject to the 
sales reporting and pricing disclosure requirements of this information 
collection, they would realize an estimated annual burden reduction of 
$30.8 million.\3\ On the other hand, contractors will absorb costs when 
reverting back to the requirements of this information collection, 
including costs associated with establishing a basis of award customer 
and monitoring system for PRC compliance, if GSA ends the TDR pilot 
without an alternative means of collecting the IFF, monitoring program 
sales and establishing and monitoring contract pricing.
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    \3\ The estimated burden for this information collection, which 
applied to the 14,152 contracts not participating in the TDR pilot, 
is estimated to be $94.2 million. This equates to a per-contract 
burden of $6,662/year. The estimated burden for the TDR information 
collection is $9.2 million/year for the 2,063 contracts 
participating in the FSS pilot; this equates to a per-contract the 
burden of $4,483/year. The estimated $30.8 million/year burden 
reduction is calculated by taking the updated 3090-0235 burden 
estimate ($94.2 million/year) and subtracting the product of the 
number of contracts included in 3090-0235 multiplied by the average 
per-contract burden of TDR (14,152 contracts x $4,483), which equals 
$63.4 million/year ($94.2M--$63.4M = $30.8M). More information about 
the TDR burden can be found under Information Collection 3090-0306 
at http://www.reginfo.gov/public by searching ``ICR'' for ``3090-
0306''.
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    The Paperwork Reduction Act generally requires information 
collections to be renewed every three years.\4\ Both this information 
collection (OMB control number 3090-0235) and the Transactional Data 
Reporting information collection (OMB control number 3090-0306) were 
last approved in 2016, so GSA is now obtaining extensions to both 
information collections. Additionally, GSA is consolidating a separate 
information collection for IFF and sales reporting (OMB control number 
3090-0121) with this information collection because the burdens are 
interdependent.
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    \4\ 44 U.S.C. 3507(g)
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    This request for comments only pertains to the information 
collection requirements associated with the basic version of GSAR 
clause 552.238-80 and CSP and PRC disclosure requirements. GSA has also 
published a separate notice requesting comments on the Transactional 
Data Reporting information collection (OMB control number 3090-0306) 
elsewhere in this issue of the Federal Register.

Sales Reporting

    General Services Administration Acquisition Regulation (GSAR) 
clause 552.238-80 Industrial Funding Fee and Sales Reporting is 
included in every GSA Schedule contract. The basic version of the 
clause requires contractors to report their FSS contract sales to GSA 
within 30 days after the end of the quarter. GSA then calculates the 
IFF due based on the total amount of sales reported and the contractor 
must also remit that amount within 30 days after the end of the 
quarter.\5\
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    \5\ Alternate I of the clause applies to FSS contracts 
participating in the TDR pilot and falls under the information 
collection identified by OMB control number 3090-0306.
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FSS Pricing Disclosures

    The basic version of GSAR clause 552.238-80 Industrial Funding Fee 
and Sales Reporting also dictates the pricing procedures GSA will use 
to establish contract pricing. These pricing procedures require GSA to 
determine 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) and then 
maintains that pricing relationship for the life of the contract. In 
order to carry out this practice, GSA collects pricing information 
through CSP disclosures and enforces the pricing relationship through 
the PRC.

[[Page 51580]]

    Commercial Sales Practices (CSP): In accordance with GSAR 
515.408(a)(2), offerors must submit information in the Commercial Sales 
Practices Format provided in the solicitation, following the 
instructions at GSAR Figure 515.4-2, or submit information in their own 
format. In addition to when an offer is submitted, CSP disclosures are 
also required prior to executing bilateral modifications for exercising 
a contract option period, adding items to the contract, or increasing 
pricing under the Economic Price Adjustment clause (GSAR 552.216-70).
    Price Reductions Clause (PRC): GSAR 538.273 (b)(2) prescribes the 
PRC for use in all FSS solicitations and contracts. The clause is 
intended to ensure the Government maintains its price/discount (and/or 
term and condition) advantage in relation to the contractor's customer 
(or category of customer) upon which the FSS contract is based. The 
basis of award customer (or category of customer) is identified at the 
conclusion of negotiations and noted in the contract. Thereafter, the 
PRC requires FSS contractors to inform the contracting officer of price 
reductions within 15 calendar days. Per GSAR 552.238-81(c)(1)a price 
reduction shall apply to purchases under the contract if, after the 
date negotiations conclude, the Contractor--
     Revises the commercial catalog, pricelist, schedule or 
other document upon which contract award was predicated to reduce 
prices;
     Grants more favorable discounts or terms and conditions 
than those contained in the commercial catalog, pricelist, schedule or 
other documents upon which contract award was predicated; or
     Grants special discounts to the customer (or category of 
customers) that formed the basis of award, and the change disturbs the 
price/discount relationship of the Government to the customer (or 
category of customers) that was the basis of award.
    FSS ordering procedures are required by law to ``result in the 
lowest overall cost alternative to meet the needs of the Federal 
Government.'' \6\ CSP disclosures and the PRC provide GSA a mechanism 
for meeting this objective by giving it insight into a contractor's 
pricing practices, which is proprietary information that can only be 
obtained directly from the contractor.
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    \6\ 41 U.S.C. 152(3)(B)
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Information Collection Changes and Updates

    The burden estimates from the previous approval have been adjusted 
to include updates to sales reporting estimates previously included 
under OMB control number 3090-0121; reflect actual participation in the 
TDR pilot; revised labor rates used to calculate cost estimates; and 
increases to the heavier lift burdens for PRC compliance systems, CSP 
pre-award disclosures and CSP option disclosures. The number of 
respondents and applicable actions has also been updated.
    Industrial Funding Fee and Sales Reporting: The basic version of 
the Industrial Funding Fee and Sales Reporting clause has traditionally 
been associated with OMB control number 3090-0121, which was last 
extended in June 2017. GSA determined this information collection 
should be consolidated with the FSS Pricing Disclosures information 
collection (OMB control number 3090-0235) because they apply to the 
same population within the GSA Schedules program.
    The estimation methodology for the sales reporting calculations is 
the same as what was used for the 2017 renewal of OMB control number 
3090-0121 except the sales categories were revised to align with those 
used for the Transactional Data Reporting information collection (OMB 
control number 3090-0306).
    Adjustments for the Transactional Data Reporting Pilot: GSA 
Schedule contracts included in the TDR pilot are no longer subject to 
this information collection; the separate reporting requirements for 
those contracts are covered by OMB control number 3090-0306.
    The TDR pilot had yet to launch when these burden estimates were 
previously calculated in 2016, so GSA based its estimates for the 
number of contracts that would participate on the total number of 
contracts under the Schedules and Special Item Numbers eligible for the 
pilot:
     The ratio of GSA Schedule contracts that would continue 
under this information collection was estimated to be 56.8 percent, 
which was based on the percentage of the program's sales in fiscal year 
2015 for contracts that would not be eligible to participate in the TDR 
pilot.
     The ratio of GSA Schedule contracts slated to be included 
in the TDR pilot was estimated to account for the remaining 43.2 
percent.
    Consequently, the 2016 burden estimates for the CSP and PRC renewal 
and the 2017 IFF and sales reporting renewal relied upon these TDR 
pilot participation projections. However, pilot participation became 
optional in 2017 and the number of contracts that eventually joined the 
pilot was lower than anticipated in 2016. Of the 16,215 contracts that 
were active in FY 2018,
     14,152 contracts, or 87.28 percent of the total, are 
subject to this information collection.
     2,063 contracts, or 12.72 percent of the total, 
participated in the TDR pilot.
    Consequently, the revised participation figures resulted in 
significantly higher burden estimates for this information collection 
and lower burden estimates for the Transactional Data Reporting 
information collection (OMB control number 3090-0306).
    Revised Labor Rates: The previous burden estimates used a fully 
burdened labor rate of $68/hour. This included a $50/hour base rate, 
which was based on professional judgment, and 36 percent for fringe 
benefits, which was rounded down from the 36.25 percent fringe benefit 
factor included in OMB Circular A-76.\7\
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    \7\ 36.25% 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.
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    The revised burden estimates attempt to align with the Department 
of Defense's Regulatory Cost Analysis Tool (RCAT), which was developed 
to prepare economic analyses in compliance with Executive Order 13771 
and uses various Government labor category rates as the basis for cost 
estimates. GSA determined--
     The GS-14, Step 5 labor rate from the RCAT ($77.55/hour) 
was the most appropriate for the tasks performed by contractors to 
comply with CSP and PRC disclosure requirements and perform the initial 
setup for sales reporting systems.
     The GS-12, Step 5 labor rate from the RCAT ($55.19/hour) 
was the most appropriate for the tasks performed by contractors for 
quarterly sales reporting.

Increased Heavier Lift Burdens

    GSA increased some of its heavier lift burden estimates in response 
to public comments received in 2019. Previously, the heavier lift 
calculations for PRC compliance systems and CSP pre-award and options 
disclosures were generally 15-86 percent higher than the lighter lift 
estimates for those functions. However, GSA now believes the disparity 
between a lighter lift and a heavier lift is greater than previously 
estimated and projects the heavier lift burden for those activities is 
5 times greater than the lighter lift estimates. This change

[[Page 51581]]

increases the annual information collection burden estimate by 
approximately $33 million.

B. Annual Reporting Burden

    This information collection applies to GSA FSS contracts that 
include the basic version of GSAR clause 552.238-80 Industrial Funding 
Fee and Sales Reporting. In FY 2018, 13,828 contractors held a total of 
16,215 GSA FSS contracts; 12,151 of these contractors held a total of 
14,152 contracts containing the basic version of clause 552.238-80.\8\ 
These contracts accounted for approximately 77.8 percent of GSA FSS 
sales in fiscal year 2018. The 2,063 GSA FSS contracts subject to 
Alternate I of GSAR clause 552.238-80--those participating in the TDR 
pilot--are covered by a separate information collection identified 
under OMB control number 3090-0306.
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    \8\ Some contractors hold multiple contracts and may have 
contracts participating in the TDR pilot and other contracts that 
are subject to CSP and PRC disclosure requirements.
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Cost Burden Calculation

    Sales Reporting: The two primary activities associated with sales 
reporting are initial setup and quarterly reporting. GSA calculated the 
cost burden for each as follows:
     Initial Setup: The duties required for these activities 
will generally be completely by a senior-level subject matter expert. 
For the purposes of establishing an hourly rate, GSA equates these 
duties to those of a GS-14, Step 5 employee, whose hourly rate in 2019 
for the ``Rest of U.S.'' locality is $56.92 an hour.\9\ When factoring 
a 36.25 percent overhead rate for fringe benefits, the fully burdened 
rate is $77.55 an hour.\10\
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    \9\ General Schedule (GS) labor rates may be viewed on the 
Office of Personnel Management (OPM) under Pay & Leave: Salaries and 
Wages, SALARY TABLE 2019-RUS at https://www.opm.gov/policy-data-oversight/pay-leave/salaries-wages/salary-tables/19Tables/html/RUS_h.aspx
    \10\ 36.25% 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.
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     Quarterly Reporting: The duties required for these 
activities will generally be completed by mid-level personnel. For the 
purposes of establishing an hourly rate, GSA equates these duties to 
those of a GS-12, Step 5 employee, whose hourly rate in 2019 for the 
``Rest of U.S.'' locality is $40.51 an hour. When factoring a 36.25 
percent overhead rate for fringe benefits, the fully burdened rate is 
$55.19 an hour.
    Pricing Disclosures: The duties required for these activities will 
generally be completed by a senior-level subject matter expert. For the 
purposes of establishing an hourly rate, GSA equates these duties to 
those of a GS-14, Step 5 employee, whose hourly rate in 2019 for the 
``Rest of U.S.'' locality is $56.92 an hour. When factoring a 36.25 
percent rate for fringe benefits, the fully burdened rate is $77.55 an 
hour.

Heavier Lifts and Lighter Lifts

    Due to the diversity among the FSS contractor population, the 
burden associated with many of the CSP and PRC components of this 
information collection cannot be equally attributed to all FSS 
contracts. In these areas, GSA is categorizing contracts into those 
with a ``heavier lift'' or ``lighter lift.''
    FSS contracts are held by a diverse set of companies, which vary in 
terms of business size, offerings, and FSS sales volume. For example, 
in FY 2018:
     30.7 percent, or 4,975 contracts had $0 in reported FSS 
sales.
     6.8 percent, or 1,100 contracts, accounted for about 80 
percent of all FSS sales.
     The top 20 percent of FSS contracts (in terms of FY 2018 
sales) accounted for 94.6 percent of FSS sales.
     Only 19.7 percent of FSS contracts had more than $1 
million in FSS sales.
     68.7 percent of FSS contracts were held by small 
businesses and had less than $1 million in FSS sales.
     Small businesses held 81 percent of the FSS contracts but 
accounted for 37 percent of FSS sales.
    In general, a contractor's sales volume will have the greatest 
effect on the associated burden of these requirements, although the 
number and type of offerings, and business structure, can also be 
significant factors. As previously shown, a relatively small number of 
FSS contracts account for the vast majority of FSS sales and therefore 
likely bear a heavier burden for these requirements. Conversely, the 
majority of FSS contracts, which are typically held by small businesses 
with lower sales volume, absorb less of the burden for these 
requirements.
    To account for the differences among FSS contracts, GSA is 
utilizing the Pareto principle, or ``80/20 rule,'' which states 80 
percent of effects comes from 20 percent of the population. 
Accordingly, GSA is categorizing FSS contracts by those with a heavier 
lift (20 percent) and those with a lighter lift (80 percent). Contracts 
with heavier lifts are those with the characteristics leading to 
increased burden--more sales volume, higher number of contract items, 
more complex offerings, more transactions, more complex transactions, 
and/or intricate business structures.

Sales Reporting

    The basic version of the Industrial Funding Fee and Sales Reporting 
clause requires contractors to report their total sales by Special Item 
Number once a quarter in the 72A Reporting System.\11\ Contractors must 
file these reports within 30 days after the end of each of the 
following quarters:

    \11\ https://72a.gsa.gov.
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 January 1 to March 31
 April 1 to June 30
 July 1 to September 30
 October 1 to December 31

    After contractors report their sales, the 72A Reporting System 
calculates the IFF due for the quarter. The system then prompts users 
to ``Pay Now'' or ``Pay Later.'' Contractors can remit IFF payments via 
credit card, online check, or paper check. Regardless of whether a 
contractor remits the IFF at the time sales are reported or at a later 
date, the IFF due must be remitted within the same 30 day deadline 
following the end of the reporting quarters.
    Categorization of Vendors by Quarterly Sales Revenue: Sales 
reporting imposes a progressive burden--one that increases with a 
contractor's sales volume. Quarterly reporting times will increase with 
a contractor's applicable sales volume, as contractors 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 contracts into categories based on reported annual 
sales volume in order to account for the differences in reporting 
burden. These categories are:

 Category 1: No sales activity
 Category 2: Sales between $0 and $25,000
 Category 3: Sales between $25,000 and $250,000
 Category 4: Sales between $250,000 and $1 million
 Category 5: Sales over $1 million
    The distribution of contracts by sales category is as follows:

[[Page 51582]]



                       Contracts by Sales Category
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                                           FSS contracts   FSS contracts
                                              (count)      (percentage)
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Category 1..............................           4,657             33%
Category 2..............................           1,188              8%
Category 3..............................           3,469             25%
Category 4..............................           2,168             15%
Category 5..............................           2,670             19%
rrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrr
    Total...............................          14,152            100%
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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, contractors 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 
contractor's sales volume.
    The likelihood of a contractor 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. However, as a 
contractor's applicable sales increase, they will be increasingly 
likely to establish an automated system to reduce the quarterly 
reporting burden. Consequently, contractors 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 
contracts operating under manual and automated reporting systems:

                                       Contracts by Reporting System Type
                                             [Manual vs. Automated]
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                                                                 Automated     Manual system--      Automated
                                               Manual system      system        vendor count     system-- vendor
                                               (percentage)    (percentage)                           count
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Category 1..................................             100               0             4,657                 0
Category 2..................................             100               0             1,188                 0
Category 3..................................              90              10             3,122               347
Category 4..................................              50              50             1,084             1,084
 
Category 5..................................              10              90               267             2,403
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    Total Count of Contracts by System Type.................................            10,318             3,834
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    Percentage of Contracts by System Type..................................               73%               27%
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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 contractors 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 estimates the average one-time setup burden is 8 hours for 
contractors with a manual system and 40 hours for those with an 
automated system. GSA also attributes the same system type 
probabilities (manual system 73 percent, automated system 27 percent) 
to the population of new contractors. These estimates apply to the 
1,220 contractors awarded FSS contracts in fiscal year 2018.
    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 sales volume. GSA 
estimates contractors using a manual system have average quarterly 
reporting times ranging from 15 minutes (0.25 hours) per quarter for 
contractors with $0 sales to an average of 8 hours per quarter for 
contractors with quarterly sales over $1 million. On the other hand, 
GSA projects contractors 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:

[[Page 51583]]



          Quarterly Reporting Hours by System Type and Category
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                                                             Automated
                                          Manual 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
------------------------------------------------------------------------

    Annualized Public Burden Estimates for Sales Reporting: The burden 
estimates consist of quarterly reporting times for all 14,152 
participating contracts and a one-time setup burden for the 1,220 new 
contracts:
Quarterly Reporting
    Annual Burden (Hours): 90,945.
    Annual Burden (Cost): $5,019,255.
Initial Setup
    Annual Burden (Hours): 20,336.
    Annual Burden (Cost): $1,577,078.

Price Reductions Clause

    GSA attributes the PRC-related burden to training, compliance 
systems, and notifying GSA of price reductions within 15 calendar days 
after their occurrence.
    Training: FSS contractors provide training to their employees to 
ensure compliance with FSS pricing disclosure requirements. GSA is 
basing these burden estimates on the number of contractors, not the 
number of contracts, because contractors with multiple contracts 
subject to this requirement will likely not have to provide separate 
training for each contract.
    In FY 2018, there were 12,151 contractors subject to PRC 
notification requirements, 2,830 (20 percent) with a heavier lift and 
9,721 (80 percent) with a lighter lift. Vendors within the heavier lift 
category may need to develop formal training programs and conduct 
training for numerous divisions and offices, while contractors in the 
lighter lift category may have no need for training design and 
administration due to having as few as one person responsible for PRC 
compliance.
Training--Heavier Lift
    Total Annual Responses: 2,430.
    Average Hours per Response: 40.
    Total Time Burden (Hours): 97,200.
    Total Cost Burden: $7,537,860.
Training--Lighter Lift
    Total Annual Responses: 9,721.
    Average Hours per Response: 20.
    Total Time Burden (Hours): 194,420.
    Total Cost Burden: $15,077,271.
    Compliance Systems: FSS contractors must develop systems to control 
discount relationships with other customers/categories of customer to 
ensure the basis of award pricing relationship is not disturbed. In 
public comments submitted on this information collection renewal in 
2016, a respondent stated PRC monitoring burden should be 1,290 hours 
to establish a compliance system in the first year and 1,100 hours each 
year thereafter for monitoring activities. However, GSA believes the 
amount of investment into a compliance system is inversely related to 
the amount of time needed to carry out ongoing monitoring activities. 
Specifically, contractors making high upfront investments, such as 
programming a quotation tool to control discounts, will have a lower 
ongoing monitoring reporting burden. On the other hand, contractors not 
making upfront investments to establish a compliance system will have a 
higher ongoing reporting burden.
    GSA previously adopted an average burden of 1,290 hours but 
allocated it across the 20-year life of a contract for heavier lift 
contractors using automated systems to carry out monitoring activities, 
resulting in an annual burden of 65 hours. GSA estimated heavier lift 
contractors that spend less time implementing an automated system would 
incur a similar burden for monitoring activities, meaning GSA estimated 
the same 65 hour/year burden for those contractors. For lighter lift 
contractors, GSA attributed an average burden of 700 hours for the 20-
year life of the contract, which equates to 35 hours a year.
    However, GSA decided in 2019 to increase its heavier lift burden 
estimates after considering public comments. GSA now believes the 
disparity between a lighter lift and a heavier lift is greater than 
previously estimated and projects the heavier lift burden for those 
activities to be 5 times greater than the lighter lift estimates.
Compliance Systems--Heavier Lift
    Total Annual Responses: 2,430.
    Average Hours per Response: 175.
    Total Time Burden (Hours): 425,250.
    Total Cost Burden: $32,978,138.
Compliance Systems--Lighter Lift
    Total Annual Responses: 9,721.
    Average Hours per Response: 35.
    Total Time Burden (Hours): 340,235.
    Total Cost Burden: $26,385,224.
    Price Reduction Notifications: 1,035 price reduction modifications 
were completed in FY 2018, with each modification requiring a 
notification from the contractor. In a survey conducted among GSA FSS 
contracting officers, respondents estimated it took an average of 4.25 
hours to complete a price reduction modification. GSA believes FSS 
contractors bear a similar burden for this task and is therefore using 
the same burden estimate.
Price Reduction Notifications
    Total Annual Responses: 1,035.
    Average Hours per Response: 4.25.
    Total Time Burden (Hours): 4,399.
    Total Cost Burden: $341,123.

Commercial Sales Practices Disclosures

    The CSP burden results from disclosures required of any contractor 
submitting an offer for an FSS contract or modifying an FSS contract to 
increase prices, add items and Special Item Numbers, or exercise 
options.
    The burden estimates for CSP disclosures are based upon the 
estimates provided by respondents to the GSA FSS contracting officer 
survey. The 77 survey respondents provided estimates regarding the 
amount of time it takes FSS contracting officers to complete CSP-
related tasks and GSA believes these responses can be used as a 
benchmark for contractor burden estimates.
    In calculating these burden estimates, GSA acknowledges a 
contractor's tasks are more complex than simply comparing offered 
prices to discounts given to other categories of customers. In addition 
to collecting and analyzing data, GSA expects offerors to provide data 
that is current, accurate and complete. GSA recognizes this due 
diligence places an additional burden on offerors. Also, similar to the 
PRC, factors such as sales volume, the number of contract items, 
complexity of offerings, and business structures has a significant 
effect on the burden but can

[[Page 51584]]

vary widely from contractor to contractor. Consequently, GSA is using 
the heavier lift and lighter lift methodology for the CSP burden 
estimates.
    Pre-award Disclosures: In fiscal year 2018, contractors submitted 
2,503 offers for FSS contracts with CSP disclosure requirements. GSA 
recognizes the complexity of this task varies with the type and number 
of offerings, business structure, and expected revenue, so for this 
burden estimate, these offers are separated between offerors with 
heavier lifts (20 percent or 501 offers) and those with lighter lifts 
(80 percent or 2,002 offers).
    GSA previously based its burden estimates for this function 
directly on the results from the FAS survey of its FSS contracting 
officers in 2016. However, after receiving public comments in 2016 
stating the pre-award disclosure burden for contractors exceeds that 
for contracting officers, GSA doubled its contractor estimates, 
resulting in increases for heavier lift contractors from 41.48 hours/
year to 82.96 hours/year and for lighter lift contractors from 32.41 
hours/year to 64.82 hours/year.
    In 2019, GSA once again chose to increase its heavier lift burden 
estimates after considering public comments. GSA now believes the 
disparity between a lighter lift and a heavier lift is greater than 
previously estimated and projects the heavier lift burden for those 
activities to be 5 times greater than the lighter lift estimates.
Pre-award Disclosures--Heavier Lift
    Total Annual Responses: 501.
    Average Hours per Response: 324.10.
    Total Time Burden (Hours): 162,374.
    Total Cost Burden: $12,592,111.
Pre-award Disclosures--Lighter Lift
    Total Annual Responses: 2,002.
    Average Hours per Response: 64.82.
    Total Time Burden (Hours): 129,770.
    Total Cost Burden: $10,063,636.
    Price Increase Modifications: In FY 2018, 1,457 price increase 
modifications were processed, including 492 (20 percent) with a heavier 
lift and 1,967 (80 percent) with a lighter lift. The time burden for 
these modifications varies mainly with the type and number of 
offerings. GSA is basing its burden estimates for this function 
directly on the results from the FAS survey of its FSS contracting 
officers.
Price Increases--Heavier Lift
    Total Annual Responses: 492.
    Average Hours per Response: 10.45.
    Total Time Burden (Hours): 5,141.
    Total Cost Burden: $398,716.
Price Increases--Lighter Lift
    Total Annual Responses: 1,967.
    Average Hours per Response: 9.71.
    Total Time Burden (Hours): 18,037.
    Total Cost Burden: $1,398,800.
    Adding Items and Special Item Numbers (SINs): In FY 2018, 4,209 
addition modifications were processed, including 1,275 (20 percent) 
with a heavier lift and 5,099 (80 percent) with a lighter lift. The 
time burden for these modifications varies with the type and number of 
offerings. GSA is basing its burden estimates for this function 
directly on the results from the FAS survey of its FSS contracting 
officers.
Addition Modifications--Heavier Lift
    Total Annual Responses: 1,275.
    Average Hours per Response: 11.13.
    Total Time Burden (Hours): 14,191.
    Total Cost Burden: $1,100,493.
Addition Modifications--Lighter Lift
    Total Annual Responses: 5,099.
    Average Hours per Response: 10.65.
    Total Time Burden (Hours): 54,304.
    Total Cost Burden: $4,275,363.
    Exercising Options: In FY 2018, 2,468 option modifications were 
processed, including 494 (20 percent) with a heavier lift and 1,974 (80 
percent) with a lighter lift. The time burden for these modifications 
varies with the type and number of offerings, business structure, and 
expected revenue.
    GSA previously based its burden estimates for this function 
directly on the results from the FAS survey of its FSS contracting 
officers because while the associated tasks with processing an option 
CSP are similar to that of a pre-award CSP, the option CSP requires 
less time because of familiarity and precedents created during the 
preceding contract period.
    However, GSA decided in 2019 to increase its heavier lift burden 
estimates after considering public comments. GSA now believes the 
disparity between a lighter lift and a heavier lift is greater than 
previously estimated and projects the heavier lift burden for those 
activities to be 5 times greater than the lighter lift estimates.
Option Modifications--Heavier Lift
    Total Annual Responses: 494.
    Average Hours per Response: 111.60.
    Total Time Burden (Hours): 55,130.
    Total Cost Burden: $1,000,605.
Option Modifications--Lighter Lift
    Total Annual Responses: 1,974.
    Average Hours per Response: 22.32.
    Total Time Burden (Hours): 44,060.
    Total Cost Burden: $3,416,828.

GSA Office of Inspector General Audits

    The GSA Office of Inspector General (OIG) regularly audits GSA 
Schedule contracts for compliance with PRC and CSP requirements. The 
GSA OIG performed 48 contract audits in FY 2018.\12\ Survey responses 
included with public comments submitted for the 2012 renewal of this 
information collection noted contractors estimated spending 
approximately 440-470 hours preparing for audits involving the PRC. 
This burden still applied in 2018, so GSA is taking the median point of 
that range (455) and multiplying it by 48 audits, to reach the sum of 
21,840 hours expended preparing for audits.
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    \12\ The GSA OIG's audit findings are outlined in their 
Semiannual Reports to the Congress. The report covering October 1, 
2017 to March 31, 2018 stated the OIG performed 21 contract audits 
and the report covering April 1, 2018 to September 30, 2018 stated 
the GSA OIG performed 27 contract audits.
---------------------------------------------------------------------------

GSA OIG Audits
    Total Annual Responses: 48.
    Average Hours per Response: 455.
    Total Time Burden (Hours): 21,840.
    Total Cost Burden: $1,226,316.

Total Annual Burden

    The total estimated burden imposed by Federal Supply Schedule 
pricing disclosures is as follows:
Estimated Annual Time Burden (Hours)
    Sales Reporting: 111,281.
    Price Reductions Clause: 1,061,504.
    CSP Disclosures: 483,008.
    GSA OIG Audits: 21,840.
    Total Annual Time Burden: 1,247,865.
Estimated Annual Cost Burden
    Sales Reporting: $6,596,333.
    Price Reductions Clause: $82,319,616.
    CSP Disclosures: $37,457,248.
    GSA OIG Audits: $1,693,692.
    Total Annual Cost Burden: $128,066,888.

C. Public Comments

    An initial notice of request for comments regarding the extension 
of this information collection was published in the Federal Register at 
84 FR 24517 on May 28, 2019. GSA sought comments regarding (1) whether 
FSS pricing disclosures are necessary and have practical utility, and 
(2) if GSA's estimates of the collection burden are accurate, and based 
on valid assumptions and methodology. GSA received comment letters 
covering a variety of topics from two respondents, the GSA Office of 
Inspector General (GSA OIG) and the Coalition for Government 
Procurement (The Coalition).

[[Page 51585]]

    The GSA OIG's letter, dated July 26, 2019, provided comments for 
this information collection and the Transactional Data Reporting 
information collection (OMB control number 3090-0306). The Coalition's 
letter, dated July 29, 2019, is limited to this information collection, 
although they provided a separate letter with comments on the 
Transactional Data Reporting information collection. GSA is providing 
responses to the Transactional Data Reporting comments in the documents 
associated with the extension of OMB control number 3090-0306.
    Both respondent's comments, as they relate to this information 
collection, concentrated on CSP and PRC disclosures. The following are 
summaries of those comments, grouped by subject matter, and GSA's 
responses:

Reporting Burden

    Comments: Both respondents provided comments about GSA's burden 
calculations. The GSA OIG stated the burden is overstated, noting 16 of 
the 36 FSS contractors they audited in FY 2018 had insufficient 
commercial sales to disclose and therefore did not have to monitor PRC 
compliance. The GSA OIG explained these contractors had sales over $1 
million and therefore would fall into the ``heavy lift'' category of 
GSA's burden methodology, despite having no compliance burden.
    Conversely, the Coalition stated the burden estimates are too low 
and estimate the annual FSS pricing disclosures burden to be $1.1 
billion. They stated:
     GSA's estimate of CSP-related activities being twice as 
burdensome for a contractor as the Government is true for a single 
contractor employee, but seven to ten contractor employees often 
participate in CSP preparation. Therefore, the CSP burden estimates 
should be increased by a factor of seven.
     The estimated contractor labor rate of $77.55/hour for PRC 
compliance activities does not account for the rates of professionals 
such as lawyers, accountants, and consultants, and contractors also 
frequently rely on outside resources for these activities. As such, the 
actual rates fall between $105/hour and $471/hour for an average of 
$288/hour.
     GSA's PRC compliance system burden estimate, which is 
adopted from an earlier Coalition study but allocated across 20 years, 
is an annual cost and should not be divided across 20 years.
    Additionally, the GSA OIG stated the estimated 455-hour audit 
preparation burden should not be included in the burden estimates 
because those activities are included in the CSP and PRC disclosure 
activities for which GSA has already provided a burden estimate.
    Finally, the Coalition noted three calculation discrepancies:
     The compliance systems (lighter lift) burden was noted as 
35 hours but later included a burden of 30 hours per contractor.
     The stated labor rate was $77.25/hour but $77.55/hour was 
used in calculations.
     There is an arithmetical error in the pre-award 
disclosures (heavier lift) calculation.
    GSA Response: The diverging opinions around the FSS pricing 
disclosure burden underscore GSA's decision to use a ``heavier lift'' 
and ``lighter lift'' methodology for many of the components of this 
information collection. While numerous contractors incur a significant 
burden for these activities, many others incur little to no burden, and 
these examples residing at either end of the burden spectrum should not 
be treated as indicative of all affected contractors.
    GSA notes a contractor's sales volume is not the sole determiner of 
whether they are classified as heavier lift in the burden estimation 
methodology. As noted in the Federal Register notice, contracts with 
heavier lifts are those with the characteristics leading to increased 
burden--more sales volume, higher number of contract items, more 
complex offerings, more transactions, more complex transactions, and/or 
intricate business structures. In other words, no single factor, such 
as sales volume, results in a contractor having a heavier lift. 
Instead, GSA's intention was to show that 20 percent of contractors 
have a relatively heavier lift than the other 80 percent of 
contractors. As such, the 16 contractors highlighted by the GSA OIG 
would belong in the lighter lift category and provide an example of why 
a lighter lift contractor would have a relatively low burden.
    Regarding the Coalition's burden estimates, GSA increased some of 
its heavier lift burden estimates in response to their comments. 
Previously, the heavier lift calculations for PRC compliance systems 
and CSP pre-award and options disclosures were generally 15-86 percent 
higher than the lighter lift estimates for those functions. However, 
GSA believes the disparity between a lighter lift and a heavier lift is 
greater than previously estimated and now estimates the heavier lift 
burden for those activities is 5 times greater than the lighter lift 
estimates. This change increases the annual information collection 
burden estimate by approximately $33 million.
    Yet, GSA is not aligning the remaining burden estimates with the 
Coalition's because GSA does not believe those estimates are 
representative of most contractors. As illustrated in the first Federal 
Register notice, FSS contracts are held by a diverse set of companies, 
which vary in terms of business size, offerings, and FSS sales volume. 
For example, in FY 2018:
     30.7 percent, or 4,975 contracts had $0 in reported FSS 
sales.
     6.8 percent, or 1,100 contracts, accounted for about 80 
percent of all FSS sales.
     The top 20 percent of FSS contracts (in terms of FY 2018 
sales) accounted for 94.6 percent of FSS sales.
     Only 19.7 percent of FSS contracts had more than $1 
million in FSS sales.
     68.7 percent of FSS contracts were held by small 
businesses and had less than $1 million in FSS sales.
     Small businesses held 81 percent of the FSS contracts but 
accounted for 37 percent of FSS sales.
    GSA also believes the labor rates provided by the Coalition are 
significantly higher than those typically paid by contractors to 
fulfill these functions. GSA believes these functions are typically 
performed by contract administrators with occasional assistance from 
higher-paid professionals, such as attorneys and consultants. The most 
comparable labor category to a contract administrator that was analyzed 
by the Bureau of Labor Statistics (BLS) is a compliance officer (13-
1041). BLS's most recently published hourly rate for this type of 
professional was $34.86/hour; \13\ when factoring a 36.25 percent 
overhead rate for fringe benefits, the fully burdened rate is $47.50 an 
hour.\14\ However, GSA chose to use the higher $77.55/hour rate to 
account for the occasional involvement of higher-paid professionals.
---------------------------------------------------------------------------

    \13\ See the Bureau of Labor Statistics Occupational Employment 
and Wages for Compliance Officers, available at https://www.bls.gov/oes/current/oes131041.htm.
    \14\ 36.25% 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.
---------------------------------------------------------------------------

    With respect to the Coalition's assertion that their compliance 
estimate should be attributed to a single year, GSA will continue to 
allocate the burden over a 20-year period because contractors will not 
establish a new compliance system each year. GSA

[[Page 51586]]

maintains many of the contractors with complex PRC monitoring 
requirements use automated compliance systems to relieve the ongoing 
compliance burden. These automated systems, which typically use price 
discount controls to assure PRC compliance, require high upfront effort 
but significantly decrease the ongoing burden for PRC compliance. On 
the other hand, contractors that forego automated systems in favor of 
manual, ad hoc monitoring activities will have higher ongoing 
monitoring burdens. GSA believes the high investment costs and low 
ongoing monitoring burden for contractors using automated systems is 
comparable over a 20-year period to the minimal investment effort and 
higher ongoing compliance burden for contractors using manual 
processes.
    Regarding the GSA OIG audit burden, GSA will continue to capture 
this burden separately from other CSP and PRC-related burdens because 
that burden would not exist if those contractors were not subject to 
CSP and PRC disclosure requirements. As such, it should be accounted 
for when considering the burden absorbed by contractors complying with 
the CSP and PRC.
    Finally, GSA corrected the errors identified by the Coalition; the 
compliance systems (lighter lift) burden is 35 hours, the correct labor 
rate is $77.55, and the arithmetical error in the pre-award disclosures 
(heavier lift) calculation was corrected. Additionally, the underlying 
calculations for the burden estimates included decimals that were not 
displayed in the Federal Register notice; as a result, some of the 
figures in the underlying calculations now use whole numbers to avoid 
rounding errors.

Utility of CSP and PRC Disclosures

    Comments: Both respondents commented on the utility of CSP and PRC 
disclosures. The GSA OIG stated the benefits of these disclosures far 
exceed the estimated burdens but the Coalition posited these 
disclosures have no practical utility and are no longer necessary.
    The GSA OIG stated the burdens of the CSP requirements and GSA OIG 
audits are considerably less than the estimated burdens, noting that 
since October 1, 2017 they had identified over $550 million in 
potential cost savings for upcoming contract periods based on 
commercial pricing information. Additionally, they stated they had 
identified over $15 million in unreported price reductions over the 
same time period despite auditing just 70 contracts.
    Conversely, the Coalition recommends GSA eliminate the PRC and 
reform the CSP. They stated the PRC is a ``restraint of trade'' and it 
``increases prices and operational costs while hindering innovation and 
competition in the commercial market.'' Moreover, they argue the PRC 
inhibits contractors' ability to compete in the private sector because 
it limits their ability to offer discounts to commercial customers 
without affecting their FSS pricing relationship. Regarding the CSP, 
the Coalition states it contains several undefined terms, raising GSA 
OIG audit and False Claims Act action risks if those terms are 
misunderstood. All told, the Coalition notes many contractors choose 
not to hold GSA Schedule contracts because of the CSP and PRC.
    GSA Response: In respect to the GSA OIG's comment, GSA is solicited 
comments as part of its request to the Office of Information and 
Regulatory Affairs (OIRA). These comments supporting the value of CSP 
and PRC disclosures will be included in materials GSA is providing OIRA 
to justify the continuation of CSP and PRC disclosures.
    Regarding the Coalition's comments, GSA understands contractors 
have regularly singled out these pricing tools as among the most 
complicated and burdensome requirements in federal contracting. As 
such, GSA will continue to investigate methods for reducing the 
information collection burden on its industry partners and increasing 
its reliance on internal Government systems for transactional data. 
Ultimately, GSA's reliance on contractor-reported data is a necessary 
bridge for ensuring the Government's continual access to the 
information it needs to make the best possible buying decisions for the 
taxpayer while it works towards developing internal capabilities.

Incomplete Analysis

    Comments: Lastly, both respondents stated GSA's analysis was 
incomplete. The GSA OIG said GSA's burden estimates ``do not include 
the significant benefit those requirements bring to federal agencies 
and taxpayers alike.'' The Coalition argued GSA's analysis ``did not 
include an analysis of either the benefits of or the alternatives to 
these requirements . . .''
    GSA Response: The Federal Register notice is only one facet of the 
process for requesting an extension of an existing information 
collection. Agencies requesting such extensions must also prepare a 
``supporting statement'' that provides information including why the 
agency thinks the information collection is necessary, how the 
information is used, and consequences for the Government if the 
information is not collected or is collected less frequently.
    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, Federal 
Supply Schedule Pricing Disclosures and Sales Reporting, in all 
correspondence. The supporting statement will also be posted on the 
Office of Information and Regulatory Affairs' website (https://www.reginfo.gov) if the information collection is approved.
    Finally, additional 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, Federal Supply Schedule Pricing Disclosures and 
Sales Reporting, in all correspondence.

Jeffrey A. Koses,
Senior Procurement Executive, Office of Acquisition Policy, Office of 
Government-wide Policy.
[FR Doc. 2019-21253 Filed 9-27-19; 8:45 am]
BILLING CODE 6820-61-P