Government contractors will be required to report their transactional data monthly under a new General Services Administration rule issued Wednesday that will reduce other unnecessary administrative burdens, saving the companies an estimated $29 million in total.
With the publication of GSA’s final Transaction Data Reporting rule — a process that has been more than a year in the making — the agency will do away with the requirement for contractors to file Commercial Sales Practices disclosures and abide by the Price Reductions Clause. The rule will be posted to the Federal Register June 23.
These two decades-old mandates were meant to ensure good pricing from contractors on GSA’s governmentwide Federal Supply Schedules Program, said Jeff Koses, a senior procurement executive with GSA, but have since grown outdated and “very burdensome and expensive to manage and stay on top of.”
“The cost of those continues to go up constantly as the IT systems get more involved, as more technology gets involved in this,” Koses told FedScoop. “If you’re a small business, and you want to deal with the government, well these are some very big barriers to overcome.”
The new rule would instead require vendors who do business with GSA to report their transactional billing data on a monthly basis. Prior to this, contractors filed it quarterly, along with the more burdensome data requirements.
The new wealth of transactional data will be “hugely transformational” for everyone involved because of the reduced burdens, the enhanced industry competition and improved opportunities for small businesses, Koses said. But also because this gives “us some real meaningful insights, some understanding on, the data we can use to develop demand-management strategies and to go to market smarter and to be more informed, more prepared consumers.”
GSA has piloted this idea on a smaller scale several times in the past and seen great results, officials say.
For example, the agency found through transactional data that small-package delivery was extremely wasteful. In many cases when agencies wanted to send something to another location in the Washington, D.C, metropolitan area, companies like FedEx and UPS were actually shipping them by air to an intermediary location, like Memphis, Tennessee, before bring them package right back the next day to the Beltway for delivery.
“Once we had the data, we were able to start putting place demand management strategies,” Koses said, and now more than 40 percent of government shipments are delivered by ground, which is much less expensive, not to mention more environmentally friendly.
The transactional data should also reduce contractor price variability, Kevin Youel Page, deputy commissioner of GSA’s Federal Acquisition Service, told FedScoop. But that’s just a small part of the bigger picture he said.
“When you can see all of this, and you can see where the buying patterns are, we can really empower individual contracting officers and purchase card holders in government to get the best value for the American people,” he said, adding that GSA has made the reporting interface more user-friendly as well.
When GSA first proposed the rulemaking in March 2015, many contractor associations expressed concerns with the burden that this new transactional data reporting requirement would have on businesses — and accused GSA of underestimating it.
The Coalition for Government Procurement filed lengthy a comment based on a survey of its member companies alleging that “the transactional data rule actually increases the total administrative burden on contractors rather than reducing it.” Many others, including GSA’s Office of the Inspector General, held similar reservations to the initial changes.
GSA listened to those concerns, Koses says, and that’s why the final rule looks very different from the March 2015 proposal, particularly with the full elimination of both the Commercial Sales Practices disclosures and the Price Reductions Clause. The agency initially cited a $59 million impact on contractors in its initial proposed rule.
“We had some really terrific comments from industry throughout this process. They were very engaged” during and after an initial public meeting at GSA, Koses said.
In total, the agency considered and resolved 26 comments.
“This is a good example of the importance of the comments process and of the seriousness with which we take and consider the comments,” Koses said.
GSA will start with a pilot of the new rule, beginning with only select schedules and special item numbers, like Schedule 75 for office products and a some SINs on Schedule 70.
The agency will “take meaningful feedback as we launch through the process and engage in all the needed outreach with our vendor community, or agency partner community and our own internal workforce” throughout the pilot, Youel Page said, first putting the data in the hands of the category managers who account for those schedules.
Indeed, this new rule will play a big part in the administration’s push toward category management — an acquisition philosophy that seeks to improve efficiency and ensure unity of effort by grouping similar commoditized goods and services into categories.
“This is an important step forward for the Administration’s successful category management initiative,” U.S. Chief Acquisition Officer Anne Rung said in a release. “For the first time, the federal government will be able to access critical procurement information, like prices paid by government customers for a wide variety of commonly acquired products, to potentially drive hundreds of millions of dollars in savings.”
“I expect many firms to appreciate being able to work in a more commercial way than they ever have before with the government under this program,” Youel Page added. “They will see us acting much more like any one of their other large Fortune 500-type buying organizations.”
Contact the reporter on this story via email at Billy.Mitchell@FedScoop.com or follow him on Twitter @BillyMitchell89. Subscribe to the Daily Scoop to get all the federal IT news you need in your inbox every morning at fdscp.com/sign-me-on.