One more step away from the acquisition regulation that most vendors hate

The General Services Administration wants to expand the Transactional Data Reporting (TDR) program to more of its contract vehicles.

A new memo from Jeff Koses, GSA’s senior procurement executive, will let more vendors submit pricing data at the task order level through the multi-agency and governmentwide acquisition contracts (GWACs). The deviation to GSA’s Federal Acquisition Regulation applies only to cost-reimbursement contracts and task orders.

“The Office of Management and Budget (OMB) and GSA have found transactional data to be conducive to improving competition, lowering pricing, and increasing transparency,” Koses wrote in the memo. “With more robust data, GSA achieves better pricing outcomes in partnership with its customers. Transactional data also helps GSA achieve best-in-class data standards, and fulfill OMB reporting requirements.”

An industry source, who requested anonymity, said the deviation came at the request of the Polaris program office. Polaris is the small business GWAC that GSA plans to award later this year.

GSA says the class deviation, which takes effect immediately, does not apply to other governmentwide programs including GSA SmartPay contracts or GSA E-Gov Travel Service contracts.

The source added it’s unclear whether GSA will modify the Polaris contracts after they are awarded as well as other GWACs and MACs, such as OASIS, Alliant 2 and 8(a) STARS III.

TDR’s long journey to acceptance

GSA applied TDR to the schedules program in 2016 aiming to get rid of the Price Reduction Clause (PRC), which vendors dislike because of its burdensome requirements and risks of False Claims Act violations. The price reduction clause is included in every GSA schedules contract. Every vendor must abide by the rule that requires the government to get the vendors’ best price no matter what. So that means if the vendor sells one widget for $1 to agency X, and then sells the same widget to a commercial company for 75 cents, they have to tell agency X and reduce their costs.

Despite some concerns by vendors and aggressive pushback by GSA’s inspector general, the agency said it planned to expand TDR reporting to all special item numbers last fall. It’s unclear if GSA finalized that change.

Last July, the IG issued a scathing review of TDR, recommending GSA cancel the program altogether.

“When performing price analyses on TDR pilot contracts, FAS contracting personnel do not have access to TDR data that can be used for pricing decisions and as a result, they mainly compared proposed pricing to other MAS and government contracts,” the IG stated. “However, this approach does not provide customer agencies with assurance that FAS achieved pricing that reflects the offerors’ best pricing and will result in the lowest overall cost alternative to meet the government’s needs.”

Despite the IG’s blistering report, GSA planned to expand TDR, believing it provides more value and reality on prices paid across government.

33 data elements for reporting

Larry Allen, the president of Allen Federal Business Partners and a TDR convert, said the deviation continues a trend away from negotiating contract level pricing based on commercial or other prices.

“It makes it easier for companies to obtain a GSA GWAC or MAC contract without having to provide substantial information on their commercial pricing practices or those they give on other government contracts,” Allen said. “Instead, it heightens the reliance on prices given by companies in the same market segments generally.  This should make it easier for more companies, especially new market entries, to obtain a contract. It is a move toward horizontal pricing analysis, as opposed to the traditional vertical analysis.”

The deviation lists 33 data elements vendors will have to provide to GSA under TDR. These include quantity of item sold, total price, service employees labor category, services employee indirect hourly costs and services employee type of work performed.

Leo Alvarez, a principal with the advisory CPA firm Baker Tilly, said the deviation more than doubles the number of fields usually required under TDR.

“It also clarifies that the transactional data should be reported when the invoice is paid, instead of the prior option of doing it at invoice or collection – which requires some work from an accounting perspective.  This also means how an organization reports on these other vehicles could be different than how they report sales through the GSA Schedules program,” he said. “Industry has been waiting quite some time for the expansion of TDR pilot program.  It is hard to ignore these changes and what it could mean for the GSA Schedules long term.  Contractors have to ask themselves – is GSA going to require these kinds of additional data elements once their systems are mature enough to ingest and analyze this information?  It appears this will mostly impact other major MA-IDIQ vehicles like Polaris and OASIS+.  But what is holding GSA back from requiring this long term for GSA Schedule contractors? ”

Allen said the overall expansion of TDR is a good way to further attract new companies into the federal market.

The industry expert said it’s unclear how much, if at all, did GSA talk to industry about this expansion.

“The deviation says industry has to supply the data at no cost to the government, but there always a cost to send data so it’s unclear how that will play out,” the source said. “While it’s the next logical step with regard to data for services, services prices are more difficult to determine because it’s requirements specific. If it’s firm fixed price contract, the government doesn’t get a breakdown of hourly rates and labor categories. Cost reimbursement contracts get a lot of that information anyways because contractors have to report direct and indirect costs, and what is allocable and what is allowable.”

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