Industry association raises 60 questions to GSA about new data rule

A major industry association is raising red flags about the new Transactional Data Reporting program that the General Services Administration is rolling out this fall.

The Coalition for Government Procurement wrote a letter to GSA senior procurement executive Jeff Koses asking 60 questions and strongly encouraging the agency to delay the data reporting pilot until January 2017.

“As you know, the transition from compliance with GSA’s current pricing policies to TDR is a major undertaking for both government and industry. We understand from information provided through GSA Interact and the transactional data webinar that the Transactional Data Reporting (TDR) pilots will be launched soon through a multiple-award schedule modification and refreshes to certain Schedule solicitations. There remains, however, a great deal of uncertainty surrounding current implementation plans. This uncertainty directly impacts company business planning, operations, and costs as we approach fiscal year 2017,” said the coalition’s letter. “[W]e believe that GSA’s implementation schedule should consider the time required by contractors to make procedural and systems changes to comply with the new reporting requirements.”

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The coalition says the questions come from its members and four areas: the use of the data, pricing, pilot administration and operations, and the pilot’s evaluation. The majority of the questions are around GSA’s plans for running the data reporting pilot.

This isn’t the first time the coalition raised concerns about GSA’s efforts. In May 2015, it sent a letter to GSA calling the agency’s estimates for how long it would take for vendors to meet the requirements under the proposed rule “irrational.” GSA since increased how long it thinks vendors will need to meet the new requirements. The coalition also highlighted the rule’s potential impact on competition.

The letter comes as GSA announced on Aug. 9 more details about the transactional data pilot.

“GSA agrees with the Coalition for Government Procurement that, like all big changes, the transition to the Transactional Data Reporting (TDR) rule’s reporting requirements will not be without its challenges,” Koses said in an email to Federal News Radio. “However, implementation of the rule will result in significant benefits for both our federal and industry partners.”

GSA says it will begin modifying schedule contracts for those vendors who voluntarily participate in the pilot starting in August with Schedule 72 for furnishings and floor coverings and 58I for professional audio and video products and services.

From September to January, GSA plans to expand the number of schedules that come under the pilot, including the IT schedule in November, eventually ending up with six schedules in total for the pilot.

“Upon acceptance of the bilateral mass modification and the compliance requirements becoming effective for the contract, the requirement for providing commercial sales practices (CSP) to accompany modification requests will be eliminated,” GSA wrote on its interact website. “In addition, vendors will no longer be required to track price reductions granted to their basis of award (BOA) customer or category of customers beginning on the first day of the standard business quarter following acceptance of the mass mod. Other clauses and provisions are also being updated to implement TDR. This will result in significant burden reduction for our industry partners as outlined in the TDR Federal Register notice.”

GSA issued the final rule for reporting transactional data on June 23 detailing how the program will work. The final rule was more than a year in the making. GSA issued a proposed rule in March 2015 and received 26 comments and heard from more than 200 companies, organizations and government agencies.

GSA estimates the new rule would reduce vendor burden by $29 million for those participating in the pilot.

Under the final rule, GSA says it will collect:

• Contract or Blanket Purchase Agreement (BPA) Number
• Delivery/Task Order Number/Procurement Instrument Identifier (PIID)
• Non-Federal Entity
• Description of Deliverable
• Manufacturer Name
• Manufacturer Part Number
• Unit of Measure (each, hour, case, lot)
• Quantity of Item Sold
• Universal Product Code
• Price Paid Per Unit
• Total Price
• Special Item Number (SIN)

“The removal of duplicative and inefficient PRC and CSP disclosure requirements also reduces barriers for entering into the federal marketplace, particularly for small businesses,” Koses said. “In addition, the valuable data and market intelligence collected from TDR reporting will make the Schedules program more attractive to federal buyers who crave this data when making procurement decisions, increasing business opportunities for the industry community.”

But despite all of GSA’s efforts, the coalition says there still are too many unanswered questions, starting with the commercial sales practices (CSP) and its related price reduction clause (PRC).

“[D]uring the first TDR webinar, GSA explained that [the Federal Acquisition Service] has yet to receive a determination from the Office of the Inspector General whether PRC and CSP compliance data could be requested during an audit of the pilot period,” the coalition wrote. “ Indeed, discussions about this issue are still ongoing. Until this issue is resolved, prudent contractors will assume that they should continue to comply with current MAS pricing policies throughout the pilot period, raising significant concerns about whether the pilot is viable.”

The coalition expanded its concerns about the CSP and PRC requirements in questions and statements to GSA:

• Some members feel that they will have to continue to monitor the CSP and the PRC basis of award tracking because of uncertainty related to audit requirements and as to whether the pilot will be continued. Consequently, the proposed rule does not reduce compliance burdens; it increases them.

• Similarly, because the rule allows contracting officers to request other types of financial data, there could be an added administrative burden for data maintenance and retrieval on an ad hoc basis.

• As one member stated, “Ultimately, cost associated with the burden of complying with the heavy monthly reporting requirement, along with the potential risk for ‘non-compliance,’ could exceed the benefit of the proposed PRC and CSP waivers where requirement ‘elements’ of both could still exist.”

The coalition also is asking for an update on where the agency’s IG stands in regard to the pilot and whether GSA would delay the pilot until auditors sign-off.

“If a contractor opts IN to the TDR clauses, can the contracting officer still reach back and ask or require CSPs from suppliers (manufacturers or distributors), even if the CSP is no longer required by the contractor?” one coalition member asked. “Or, are CSPs completely off the table for any companies supplying the contractor?”

Vendors also are concerned about what would happen after the year-long pilot if the transactional data reporting pilot is not extended and the PRC and CSP clauses go back into effect.

“Does that put the vendor in jeopardy if the PRC and CSP disclosures are reinstituted for the prior 12 months of commercial sales? Will accommodation, such as a grace period during which such information not be required, be instituted?” the coalition asked.

Another big area of concern by the coalition’s members is around evaluating the pilot and what metrics will GSA use.

“Have evaluation metrics for the pilot been developed and finalized? Do they include direct and indirect costs, including, but not limited to, administrative costs and the costs of delay, to the government and vendors? On what analysis was the development of these metrics based?” the coalition asked. “In the interests of transparency and accountability, when will GSA publicly share the evaluation metrics for the pilot before its launch? If the metrics are not being shared publicly, please address the rationale for not doing so? What factors will GSA use to determine if the pilot is successful and will be expanded?”

The coalition asked for answers in writing from GSA as well as a series of “in-person” industry days to help further clarify the final rule and pilot program.

“GSA is pleased that our industry partners are fully engaged in the implementation process and are carefully thinking about how they will be impacted,” Koses said. “GSA has maintained a very collaborative relationship with our contractors, and we will continue to engage with industry and answer their implementation questions through multiple webinar trainings, our Interact platform and in-person meetings. Our goal is to work with industry partners throughout the implementation process to ensure execution of a successful TDR pilot. We thank industry for their continued support in helping us transform Schedules so it remains the vehicle of choice for our stakeholder communities.”

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