Give the General Services Administration credit for not shying away from the harsh criticism of the Transactional Data Reporting (TDR) program.
Industry associations and government contracting experts have bluntly told their clients not to take part in the program. Or as Larry Allen, president of Allen Federal Business Partners and a long-time GSA expert, wrote in a recent blog post that Federal News Radio put our website, “Run, don’t walk, from GSA’s TDR.”
First, let me give you a little background about the Transactional Data Rule program. It’s a new requirement GSA finalized in June that lets government contractors submit information about transactions through the schedule contracts and those governmentwide acquisition contracts run by the agency, instead of having to follow two clauses that most vendors dread — the Price Reduction Clause (PRC) and the Commercial Services Practices (CSP) provision.
Over the last decade or more, vendors have complained about the requirement to submit to the PRC and send in CSP data. The Commercial Sales Practices regulation requires contractors to disclose to GSA details of any discounts vendors offer to commercial customers for similar products and services. The Price Reduction Clause requires contractors to monitor their pricing over the life of the contract and provide the government with the same price reductions that they give to commercial customers. The PRC has been at the center of most of the government-contracting-based False Claims Act whistleblower cases and settlements over the past decade. Vendors have called on GSA to change the PRC because it doesn’t match up with how agencies buy or how contractors sell these days.
GSA came up with this alternative called TDR and initially, vendors were pleased to see the agency finally taking action. But as GSA finalized the rule and kicked off the pilot last winter, the rallying cry against the program has gotten louder.
Allen’s latest blog post, as well as Coalition for Government Procurement President Roger Waldron’s February column, highlight ongoing and growing concerns.
Allen’s latest blog post highlighted anecdotal evidence that schedule contractors participating in the TDR program are reporting that contracting officers still are asking for commercial service prices (CSP), or CSP-like information, even though they are not expected to keep or provide that information, generally speaking. There are specific reasons why a contracting officer may ask for this type of information even from vendors participating in the TDR pilot, but for this discussion, let’s not get into that minutia of contracting.
In the face of the criticism, GSA’s Kevin Youel Page, the deputy commissioner of the Federal Acquisi
tion Service, hasn’t hidden behind the walls of GSA or shrunk from the debate.
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“We are unaware of any of the specific problems that were raised by Mr. Allen in his specific article,” Youel Page said in an interview with Federal News Radio. “We did have a chance to talk with him when we invited him to our TDR summit on Feb. 7 and he raised this in the abstract that this could happen or might happen. But we haven’t really heard from him or anyone else that this has specifically happened. We did reach out to the Office of the Inspector General to see if we could identify which specific companies are being impacted. We will get to the heart of it.”
Youel Page said the TDR program management office set up an email address where Allen, or vendors or anyone can send in comments, questions or concerns about the TDR program.
“We are interested in hearing from Mr. Allen or anyone else who feels like we are not applying the rule as it was intended so we can chase down any concern and we will work with anyone who raises the concern to get it fully addressed,” he said. “So far when we’ve had some of these concerns raised, we’ve been able to address them very quickly and it helps us because it helps us understand where there may be additional training required or additional clarification required in the policy. We are being very aggressive in receiving the feedback from any concerned party and then taking actions to address that concern.”
Youel Page said FAS also is working closely with the inspector general’s office to ensure there is no confusion over another concern raised by Allen and others regarding pre-award and post-award audits.
“With our friends in the IG, they have been partners from the very beginning of the process of putting this rule in place. They have been playing their role perfectly to be the combination of oversight and business advisor that helps us make better decisions as we have been communicating about the pilot and executing the pilot,” he said. “They are engaged in ongoing reviews of our work. For our part, we’re engaged on a very, very regular basis to talk about how it’s going.”
Additionally, Youel Page said GSA continues its “myth-busting TDR” campaign around the country to educate and train contracting officers and other stakeholders. He said GSA also has developed a “train-the-trainer” program and are working with champions in each of the acquisition centers to ensure they are sharing updates to the TDR Frequently Asked Questions (FAQs) or help answer any questions or challenges.
“The goal is here to apply as consistent an approach as we can to this implementation of this rather dramatic change,” Youel Page said.
Youel Page hits the nail on the head with what’s going on. This is a dramatic change for contractors, GSA and auditors alike.
There are questions about the long-term viability of the TDR program because GSA only has committed to a three-year pilot. There has been no public support for TDR from the Trump administration, meaning changes could come three or six or 12 months from now, and that creates concerns about liabilities for CSP and PRC data.
And those concerns are real. Check out how aggressive the Justice Department has been over the last decade in bringing False Claims Act lawsuits against contractors. Justice reports it recovered a total of almost $4 billion from federal contractors since 2009 under the False Claims Act.
Contractors ranging from VMWare/Carashoft to Deloitte to Oracle to Lockheed Martin to SAIC have paid millions of dollars in fines to settle these lawsuits.
This is not to say these vendors were innocent or guilty, but just to point out that contractors are well aware of the risks they face in not complying with the Price Reduction Clause.
And that is why Allen and others have expressed great concern over TDR. The uncertainty of the program, the lack of assurance from GSA and/or the IG that they will not come looking for this CSP and PRC data in the future, and the potential overall burden of collecting the information have made TDR too risky in many experts’ opinion.
Youel Page said he understands vendor concerns and tried to reassure them.
“As a basic matter, we will not ask for CSPs for the purpose of enforcing CSPs for a company that is prospectively engaged in the TDR,” he said. “That’s the shift. That’s the big change and that’s the big burden that we are reducing by taking away the CSPs and the Price Reduction Clause.”
One thing GSA could do is work with the IG and send out a memo or some kind of statement expressing the agency-wide agreement that vendors will not be held liable to CSP and PRC data during the time they were in the TDR pilot.