Vendors call GSA’s estimates for data reporting rule ‘irrational’

C ontractor associations are raising red flags over the General Services Administration’s proposed rule for vendors to report 11 transactional data elements. And they are using data and expertise to make their case.

First a little background, GSA released the transactional data reporting requirement under a proposed rule on March 4. The agency is trying to address several long-standing complaints of vendors and apply new data collection requirements as part of its category management effort. But the data collection proposal quickly got industry’s ire up.

By May 8, both the Coalition for Government Procurement and the Professional Services Council submitted strongly-worded protests against the rule — specifically focusing on the burden on industry to meet the current requirements.

CGP surveyed its membership, of which 98 percent hold GSA schedule contracts and 42 percent have governmentwide acquisition contracts, and found companies estimated it would take 30 times longer to meet the proposed requirements than GSA initially estimated.

GSA says on average it would take companies 6 hours to initially change its systems to collect the 11 data elements, and then on average 31 minutes a month to do the reporting.

CGP says its small business member estimated it would take 232 hours to set up the initial requirement and 38 hours a month to do the reporting. Large business said it the rule would be even more burdensome, taking almost 1,200 hours of set up and 68 hours a month.

“Further, GSA contractors estimated that the total cost of implementing the transactional data would be $814,700,534 — 30 times the government’s estimate of approximately $24 million,” CGP said in its written comments to GSA. “The government already has much of the data that its requests from contractors, however that data is not aggregated in a way that makes the data useful. Before GSA increases the reporting burden on industry or expends money and personnel resources to build a system to collect, analyze and communicate billions of data points, GSA should conduct an internal pilot test using its own assisted acquisition organizations. Such a test could validate the data elements to be collected and assess the actual cost vs. benefit of doing so.”

While PSC didn’t survey its members, the association also says GSA’s estimates of 6 hours for set up and 31 minutes a month for reporting are “grossly underestimated.”

“The estimates do not account for costly modifications to information systems that will be required to accurately and completely capture the data elements required by the rule (previously noted as costing in the millions of dollars), nor do they sufficiently account for the time required to perform quality control on draft submissions and investigation into potential data anomalies that frequently arise with transactional data reporting,” PSC wrote in comments to GSA. “Industry is especially concerned that inaccuracies in data reports will be yet another platform for turning innocent mistakes into allegations of fraud under the civil False Claims Act. In light of the risks and liabilities that could result from erroneous submissions, companies will invest heavily in time and manpower to ensure accurate reporting, making GSA’s assumption that contractors will spend only 6 hours to establish and only 31 minutes per month to maintain these reports irrational.”

PSC also pointed out in its comments that GSA’s inspector general also believes the agency’s estimates are understated.

“Also, GSA’s estimates do not account for the proposed rule’s anticipation of more frequent Commercial Sales Practices (CSP) submissions. As evidenced by recent GSA OIG findings and litigation, the government takes a very strict — in our review unreasonably strict — interpretation of what constitutes a current, accurate, and complete CSP disclosure,” PSC wrote. “Government auditors often apply the clause in oversight activities with a heavy hand and point to transactional data and/or informal practices utilized in a single part of an organization or program as a basis for claiming contractor liability. The government’s strict interpretation of the CSP, in turn, is driving contractors to spend substantial resources on the CSP submission process. Depending on the size and complexity of the business, a contractor’s cost of preparing a single CSP could cost in the hundreds of thousands of dollars.”

So with industry raising serious concerns, the question is whether GSA has the will to act. Not because they don’t believe industry is correct or at least potentially right, but whether there’s a higher power pushing this new requirement.

Some sources say the push for more and more data is coming not just from the Office of Federal Procurement Policy, but potentially from the West Wing.

It’s unclear why the White House is getting so involved in the minutia of procurement, but it’s clear industry, even if they are 50 percent overstating their estimates, will not go away without a fight.

This post is part of Jason Miller’s Inside the Reporter’s Notebook feature. Read more from this edition of Jason’s Notebook.

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