The dog days of summer typically see a slow-down in the procurement policy world. Not this year! Since Memorial Day we have seen the issuance of the GSAR Commercial Supplier Agreement (CSA) proposed rule, the Federal Strategic Sourcing Initiative proposed rule, Transactional Data Reporting (TDR) Rule, the Veterans First Contracting Policy Memorandum as a result of the Kingdomware Supreme Court Decision and, just last week, the release of a GSA Inspector General Report on IT Schedule 70 and reseller pricing. These are all worthy topics for the FAR & Beyond blog.
With regard to the TDR rule, two weeks ago the FAR & Beyond blog launched the first in a series on the TDR rule by focusing on whether the rule’s reporting requirement are consistent with customary commercial practice. This week the Coalition submitted comments on GSA’s proposed CSA rule and, accordingly, this week’s blog will further focus on the CSA proposed rule. The TDR commentary series will return/continue next week.
As noted in our CSA comments, the Coalition supports the common goal of streamlining federal procurement. However, the key to streamlining the procurement system is putting “commercial” back into commercial item contracting. Streamlining commercial item contracting will reduce barriers to entry into the federal marketplace for small, medium and large commercial business. Promoting effective commercial item acquisition policy can be a game changer, increasing access to new, innovative technologies and solutions from across the commercial market.
Unfortunately, the unintended consequences of the proposed CSA rule will be to increased complexity, risk and burden for commercial item contractors. The change in the order of precedence in the proposed rule creates a preference for government unique terms and conditions that will increase costs and risk for GSA contractors, especially small business concerns. The result will be higher prices/costs for customer agencies using GSA’s suite of government-wide contract vehicles. Ironically, this over regulation of commercial item acquisition puts at risk efforts by GSA’s Technology Transformation Service to promote access to, and adoption of, new technologies to meet customer agency IT mission support.
Of particular note in the proposed rule is a new, government-unique information collection requirement. The background of the proposed rule provides that “[i]ncorporation by reference is allowed provided the full text of the terms is provided with the offer.” The specific language of the proposed new GSAR clause states that “[t]his commercial supplier agreement may incorporate additional terms by reference, provided that the full text of the terms are provided with the offer.”
As a threshold matter, it is truly a government-unique requirement to provide that a contractor may incorporate by reference so long as it does not incorporate by reference. Is up is now down? More significantly, this language creates a new, burdensome information collection requirement for all GSA contractors. It essentially means that all documents that are normally incorporated by reference as part of a license agreement, service agreement or other terms of sale or purchase must now be submitted to the government. This significant new information collection burden will potentially impact approximately 18,000 Federal Supply Schedule (FSS) contractors. It will negatively impact thousands of commercial companies, especially small businesses, who may yet seek an FSS contract, thereby creating a new barrier to entry to the federal marketplace.
Troublingly, in the background information for the proposed rule, GSA concludes that the “proposed rule does not contain any information collection requirements that require the approval of the Office of Management and Budget under the Paperwork Reduction Act (44 U.S.C. 35).” However, GSA provides no factual or legal analysis supporting this conclusion, despite the new requirement to submit to the government the full text of any terms “incorporated by reference.”
Finally, from a strategic perspective, the combined information collection burdens of the TDR rule and the proposed CSA are unprecedented. There is a significant risk that GSA contracting officers, and the FSS program as a whole, will be overwhelmed by the scope and volume of these new data collection requirements. At the same time, these reporting burdens create operational/administrative incentives for companies to seek less burdensome, more efficient contract vehicles to support their federal business. The Coalition urges GSA to work with its industry partners to put commercial back in commercial item contracting and reduce information collection burdens. We stand ready to work with stakeholders across the procurement community and GSA towards such an effort.