Yesterday the General Services Administration (GSA) published the final rule implementing Transactional Data Reporting (TDR) for GSA’s Federal Supply Schedule (FSS) program, Governmentwide Acquisition Contracts (GWACs) and other Governmentwide Indefinite-Delivery, Indefinite Quantity (IDIQ) contracts.
The Coalition is reviewing and analyzing the rule, including the new clauses, the detailed background information, and the agency’s responses to the public comments received in response to last year’s proposed TDR rule. The Coalition will be briefing the procurement community on the TDR rule and is seeking feedback from member firms on its impact and the reporting burden, especially concerns regarding monthly reporting for professional services.
The final rule includes a number of changes from the proposed rule. In large part, the changes demonstrate that GSA is listening to the public and is trying to address industry concerns. As members review the TDR rule, here are some initial thoughts/observations.
Chief among the changes is the elimination of the Commercial Sales Practices (CSP) format. As you know, the proposed rule only eliminated the Price Reduction Clause (PRC) tracking requirement while maintaining the CSP. GSA further stated that it could demand an update to the CSP at any time during the contract thereby creating an ongoing compliance reporting burden and corresponding civil False Claims Act liability risk for FSS contractors. As a result, maintaining the CSP as explained in the proposed rule essentially undercut any potential burden reduction accruing from the proposed elimination of the PRC. Moreover, the Coalition, based on feedback from members, indicated that maintaining/updating the CSP information would increase compliance burdens for FSS contractors. GSA’s elimination of the CSP is a positive step reflecting GSA efforts to balance the government’s desire for information against the cost of collecting, maintaining and reporting data.
The final rule also provides for a pilot test, with a phased implementation. For non-schedule contracts a Transactional Data Reporting clause is immediately available. GSA has identified 8 Schedule contracts for the initial pilot. GSA describes the TDR pilot as voluntary for applicable FSS contractors—current contractors can choose to continue to operate under the current CSP/PRC framework or agree to modify their contracts to eliminate CSP/PRC and accept TDR. This is a change from the mandatory TDR structure of the proposed rule. This change is consistent with the Federal Acquisition Streamlining Act’s implementing regulations which require modifications of commercial item contracts, like FSS contracts, to be bilateral.
With regard to areas of potential areas of concern and/or continued dialogue, the Coalition notes that the rule still provides for monthly TDR submissions by contractors to GSA while the Industrial Funding Fee (IFF) reporting is done on a quarterly basis. This disconnect increased contract reporting complexity, costs, and risk for contractors. The rule does allow FSS contractors the flexibility to report IFF on a monthly basis consistent with TDR; it also should allow the option for quarterly TDR consistent with the current IFF reporting.
The TDR rule also references a forthcoming notice in the Federal Register regarding a public data extract for information that otherwise would be releasable under the Freedom of Information Act (FOIA) and available to the public. This effort prompts us to ask how, under the law, GSA will consult with FSS contractors regarding whether the contractor specific data is protected from disclosure as commercial, propriety information. It would appear that “reverse FOIA” consultations will be required with each contractor reporting transactional data.
The background information included in the public notice also discusses various, potential uses of the data. Although there is a very positive discussion of best value, other language in the background potentially reaffirms concerns regarding the drive to constantly lower prices on the FSS notwithstanding other price drivers. Specifically, GSA states that transactional data will be taken into consideration when awarding FSS contracts and evaluating requests to adjust pricing and add new items to the contracts. Presumably, transactional data also will be used in the negotiation process for the exercise of options to extend contracts.
Any price comparison between the FSS contract level price and an order price must acknowledge the overriding fundamental difference in terms: at the FSS contract level there is a $2500 guaranteed minimum along with the opportunity to compete for future orders while an FSS order reflects a firm commitment to purchase. Will the data be used to continuously drive down contract pricing? If so, GSA essentially will be resurrecting an operating rule that a price reduction to one customer agency results in price reduction for all at the contract level. It is a rule that was abandoned by GSA, customer agencies and FSS contractors over 20 years ago.
GSA notes that there will be training and guidance for FSS contracting officers on uses of transactional data in pricing analysis. The devil will be in the implementation details regarding training for FSS contracting officers on uses for transactional data. As such, in the interests of transparency and full stakeholder engagement, GSA should share that training publicly and provide an opportunity for stakeholder feedback.
Communication and collaboration on this effort are critical and can only serve to improve the training for all.
The Coalition stands ready to engage in a wide ranging dialogue regarding implementation of the rule.