This week, GSA hosted a roundtable discussion on the Transactional Data Reporting (TDR) rule and what it means for GSA’s agency customers and contractors. After listening to the TDR roundtable dialogue, the question that arises is whether GSA is actively listening to the questions and concerns of its customers and its contractors. Here are some examples:
First, during the discussion, GSA characterized the federal government as a “Fortune One” company in terms of its procurement spending. This characterization was to support TDR, category management, strategic sourcing, and the centralized management of federal markets, but it was not the consensus view of the panel. Indeed, one of the panelists, a GSA customer, appeared to have a different perspective citing differences in mission, organizational structures, and behaviors across government and within agencies. Interestingly, industry’s view of the market aligns with this perspective. The government is simply too big and too varied for a one-size-fits-all approach. Each day, Coalition members provide best value support to meet each agency’s unique mission requirements.
Moreover, this “Fortune One” philosophy rests on the view that the federal government can drive/shape the commercial market to its advantage. This perspective runs counter to Congressional and Department of Defense (DoD) recognition that government procurement does not drive the commercial marketplace. Congress and DoD are streamlining acquisition processes, focusing on commercial item contracting and reducing oversight risk, in a strategic effort to acquire commercial innovation and solutions to support the warfighter. Incidentally, the Coalition applauds the Congressional efforts to streamline DoD acquisition.
Second, there are clearly different views regarding the utility of collecting transactional data on services. Two panelists (one representative from industry and one from a GSA customer) expressed their concern that the utility of TDR is limited in the context of services acquisition, in part because the unique nature of service requirements/approaches inhibits direct comparisons. One panelist further commented that the key to improving service performance outcomes was by improving training, requirements development, and performance-based contracting. Notwithstanding these extant and well-communicated concerns, GSA continues to apply TDR to the Professional Services Schedules.
Third, GSA heard concerns during the panel discussion regarding TDR’s impact on pricing. Here, the conversation focused on the use of TDR to drive down contract pricing to uneconomical, unsupportable levels. Even customer agencies have expressed concern that the drive to low prices may drive innovative contractors out of the market. Unfortunately, GSA’s response did little to alleviate industry concerns. Indeed, listening to the conversation, it appeared, at times, that GSA and industry were talking past each other on this issue.
A member of the audience shared their experience negotiating a GSA schedule service contract where pricing data was used to compare rates. The result was that, for a certain labor category on the contract, the rate was driven so low as to make it unsupportable/uneconomical. As a result, the contractor indicated that it did not plan on bidding/using the low-priced category for any schedule task orders. (Presumably, the contractor agreed to include the low rate on the contract to facilitate negotiation and award.) GSA’s response was, in essence, that TDR would help it identify/determine that the low-priced labor category was not being used, and that GSA could then determine how to best address the situation. Of course, that response gives rise to a number of existential questions for the contractor, such as how long the process would take, and what would it look like. The answers to those questions are unclear, but one thing is certain, while the wheels of central planning grind through their process of analysis, the contractor likely will move on to other contracting vehicles that present sound business opportunities.
Finally, there was a discussion of performance measures towards the conclusion of the roundtable. As the Coalition has pointed out in its filings, GSA’s performance measures currently do not include any assessment of the total cost of TDR, specifically, its direct and indirect costs, for government and industry. As evidenced by our comments and throughout the rule making process for TDR, there are significant disagreements regarding the cost impact of TDR on GSA contractors. It is impossible to assess the value of TDR without understanding its direct and indirect cost for industry and government, and any attempt to do so is simply an exercise in futility.