General Services Administration Acquisition Regulation (GSAR); Transactional Data Reporting, 11619-11628 [2015-04349]

Download as PDF Federal Register / Vol. 80, No. 42 / Wednesday, March 4, 2015 / Proposed Rules (d) Up to two of the following 50 kilohertz segments may be stacked to form a channel which may be assigned for use by broadcast remote pickup stations using any emission contained within the resultant channel in accordance with the provisions of § 74.462. Users committed to 100 kilohertz bandwidths and transmitting program material will have primary use of these channels. After [insert effective date of rule], initial authorizations with 100 kilohertz bandwidth will not be issued. * * * * * ■ 3. Amend § 74.462 by revising paragraphs (a) and (b) to read as follows: § 74.462 Authorized Bandwidth and Emissions. (a) Each authorization for a new remote pickup broadcast station or system shall require the use of certificated equipment and such equipment shall be operated in 11619 accordance with emission specifications included in the grant of certification and as prescribed in paragraphs (b), (c), and (d) of this section. Any form of modulation may be used. (b) The maximum authorized bandwidth of emissions corresponding to the types of emissions specified below, and the maximum authorized frequency deviation in the case of frequency or phase modulated emission, shall be as follows: Maximum authorized bandwidth (kilohertz) Frequencies MHz: 25.87 to 26.03 .............................................................................................................................................. 26.07 to 26.47 .............................................................................................................................................. 152.8625 to 153.3575 2 ............................................................................................................................... 160.860 to 161.400 ...................................................................................................................................... 161.625 to 161.775 ...................................................................................................................................... 166.25 and 170.15 3 .................................................................................................................................... 450.00625 to 450.99375 .............................................................................................................................. 455.00625 to 455.99375 .............................................................................................................................. 450.03125 to 450.61875 .............................................................................................................................. 455.03125 to 455.61875 .............................................................................................................................. 450.6375 to 450.8625. 455.6375 to 455.8625 .................................................................................................................................. 450.900, 450.950. 455.900, 455.950 4 ....................................................................................................................................... Maximum frequency deviation (kilohertz) 1 40 20 30/60 60 30 12.5 25 25 50 50 10 5 5/10 10 5 2.5 5 5 50 10 100 35 5 1 Applies where F1A, F1B, F1D, F1E, F2A, F2B, F2D, F2E, F3E, or F9E emissions are used. or modified licenses for use of the frequencies will not be granted to utilize transmitters on board aircraft, or to use a bandwidth in excess of 30 kilohertz and maximum deviation exceeding 5 kilohertz. 3 For stations licensed or applied for before April 16, 2003, the sum of the bandwidth of emission and tolerance on frequencies 166.25 MHz or 170.15 MHz shall not exceed 25 kilohertz, and such operation may continue until January 1, 2005. For new stations licensed or applied for on or after April 16, 2003, the sum of the bandwidth of emission and tolerance on these frequencies shall not exceed 12.5 kilohertz. For all remote pickup broadcast stations, the sum of the bandwidth of emission and tolerance on these frequencies shall not exceed 12.5 kilohertz on or after January 1, 2005. 4 After [insert effective date of rule], new authorizations with 100 kilohertz bandwidth will not be issued. 2 New * * * * * 4. Amend § 74.463 by revising paragraph (c) to read as follows: decode the digital transmission and ascertain the call sign transmitted. * * * * * ■ § 74.463 [FR Doc. 2015–04155 Filed 3–3–15; 8:45 am] Modulation Requirements. BILLING CODE 6712–01–P * * * * * (c) If frequency modulation or digital modulation is employed, the emission shall conform to the requirements specified in § 74.462. * * * * * ■ 5. Amend § 74.482 by adding a new paragraph (f) to read as follows: § 74.482 Station Identification. asabaliauskas on DSK5VPTVN1PROD with PROPOSALS * * * * * (f) Stations that normally employ digital signals for the transmission of data, text, control codes, or digitized voice, may also be identified by digital transmission of the call sign. A licensee that identifies its call sign in this manner must provide the Commission, upon request, information sufficient to VerDate Sep<11>2014 17:17 Mar 03, 2015 Jkt 235001 GENERAL SERVICES ADMINISTRATION 48 CFR Parts 501, 516, 538 and 552 [GSAR Case 2013–G504; Docket 2014–0020; Sequence 1] RIN 3090–AJ51 General Services Administration Acquisition Regulation (GSAR); Transactional Data Reporting Office of Acquisition Policy, General Services Administration. ACTION: Notice of a public meeting and request for comments on proposed rule. AGENCY: The General Services Administration (GSA) announces a public meeting and request for comment SUMMARY: PO 00000 Frm 00022 Fmt 4702 Sfmt 4702 on its proposal to amend the General Services Administration Acquisition Regulation (GSAR) to include clauses that would require vendors to report transactional data from orders and prices paid by ordering activities. This includes orders placed against both Federal Supply Schedule (FSS) contract vehicles and GSA’s non-FSS contract vehicles—Governmentwide Acquisition Contracts (GWACs) and Governmentwide Indefinite-Delivery, Indefinite-Quality (IDIQ) contracts. For FSS vehicles, the clause would be introduced in phases, beginning with a pilot for select products and commoditized services. The new clause will be paired with changes to the basis of award monitoring requirement of the existing price reductions clause, resulting in a burden reduction for participating FSS contractors. This rulemaking does not apply to the Department of Veterans Affairs (VA) FSS contract holders. GSA is interested in conducting a dialogue with industry and interested E:\FR\FM\04MRP1.SGM 04MRP1 asabaliauskas on DSK5VPTVN1PROD with PROPOSALS 11620 Federal Register / Vol. 80, No. 42 / Wednesday, March 4, 2015 / Proposed Rules parties in Government about the proposed change. GSA is seeking feedback on potential impacts to agency customers and contractors alike. Feedback will be used to help inform the revisions to the proposed clauses, provisions, and prescriptions and other guidance to implement the proposed rule. DATES: Interested parties may offer oral and/or written comments at a public meeting to be held on Friday, April 17, 2015, at 9:00 a.m. Eastern Standard Time. Parties are also encouraged to provide all written comments, including those to be delivered at the public meeting, directly to www.regulations.gov. As explained in this notice, other tools will also be used to elicit public input. Interested parties should submit written comments to the Regulatory Secretariat on or before Monday, May 4, 2015 to be considered in the formulation of a final rule. The public meeting will be conducted on Friday, April 17, 2015, at 9:00 a.m. Eastern Standard Time. Information for the public meeting may be found under the heading SUPPLEMENTARY INFORMATION. ADDRESSES: Submit comments identified by GSAR Case 2013–G504, Transactional Data Reporting, by any of the following methods: • Regulations.gov: http:// www.regulations.gov. Submit comments by searching for ‘‘GSAR Case 2013–G504’’. Select the link ‘‘Comment Now’’ and follow the instructions provided at the ‘‘You are commenting on’’ screen. Please include your name, company name (if any), and ‘‘GSAR Case 2013–G504’’, on your attached document. • Fax: 202–501–4067. • Mail: U.S. General Services Administration, Regulatory Secretariat Division (MVCB), 1800 F Street NW., 2nd Floor, ATTN: Hada Flowers, Washington, DC 20405–0001. Instructions: Please submit comments only and cite GSAR Case 2013–G504 in all correspondence related to this case. All comments received will be posted without change to http:// www.regulations.gov, including any personal and/or business confidential information provided. FOR FURTHER INFORMATION CONTACT: Ms. Dana Munson, General Services Acquisition Policy Division, GSA, 202– 357–9652 or Mr. Matthew McFarland, General Services Acquisition Policy Division, GSA, 202–690–9232 or email gsar@gsa.gov, for clarification of content, public meeting information and submission of comment. For VerDate Sep<11>2014 17:17 Mar 03, 2015 Jkt 235001 information pertaining to status or publication schedules, contact the Regulatory Secretariat at 202–501–4755. Please cite GSAR Case 2013–G504. SUPPLEMENTARY INFORMATION: I. Public Meeting GSA is holding a public meeting on Friday, April 17, 2015. The meeting will start at 9:00 a.m. Eastern Standard Time. The meeting end time will depend on the final number of registered oral presentations. Attendees can attend the meeting in person at GSA Central Office or virtually through GSA’s Internet meeting platform, Adobe Connect. In-person Attendance: Interested parties may attend the public meeting to be held in the GSA Auditorium at GSA Headquarters, located at 1800 F St. NW., Washington, DC 20405. The public is asked to pre-register by Wednesday April 1, 2015, due to security and seating limitations. To pre-register, use the following link: https://meet.gsa.gov/ e5rpxxbrh14/event/event_info.html. Registration check-in will begin at 8:00 a.m. Eastern Standard Time Friday, April 17, 2015, and the meeting will start at 9:00 a.m. Eastern Standard Time. Attendees must be prepared to present a form of government issued photo identification. Virtual Attendance: Interested parties may also attend virtually through GSA’s Internet meeting platform, hosted by Adobe Connect. Virtual attendees must register in advance at https:// meet.gsa.gov/e5rpxxbrh14/event/event_ info.html. Meeting Accommodations: The public meeting is physically accessible to people with disabilities. Request for sign language interpretation or other auxiliary aids should be directed to Ms. Munson at dana.munson@gsa.gov or 202–357–9652 by Wednesday, April 1, 2015. The TTY number for further information is: 1–800–877–8339. When the operator answers the call, let them know the agency is the General Services Administration; the point-of-contact is Dana Munson at 202–357–9652 or Matthew McFarland 202–690–9232. Oral Public Comments: Parties wishing to make formal oral presentations at the public meeting should indicate so during the registration process. Presentations must be provided to Ms. Dana Munson by electronic mail at gsar@gsa.gov no later than Wednesday, April 8, 2015. Time allocations for oral presentations will be limited to fifteen minutes. All formal oral public comments should also be followed-up in writing and submitted to www.regulations.gov no later than Monday, May 4, 2015. When submitting PO 00000 Frm 00023 Fmt 4702 Sfmt 4702 your comments, search for ‘‘GSAR Case 2013–G504’’ and reference ‘‘Public Meeting, Public Comments on Transactional Data Reporting.’’ Note: Requests made after the deadline for formal oral presentations will be permitted as time permits and assigned based on the order the requests are received. Written Comments/Statements: In lieu of, or in addition to, participating in the public meeting, interested parties may submit written comments to www.regulations.gov by Monday, May 4, 2015. When submitting your comments, search for ‘‘GSAR Case 2013–G504’’ and reference ‘‘Public Comments on Transactional Data Reporting.’’ Parties wishing to share written statements at the public meeting must submit such statements to Ms. Dana Munson at gsar@ gsa.gov by Wednesday, April 8, 2015. II. Overview The Office of Federal Procurement Policy (OFPP) recently announced a new vision for Federal purchasing, one that fundamentally shifts from managing purchases and price individually across thousands of procurement units to managing entire categories of purchases across Government collaboratively (see Transforming the Marketplace: Simplifying Federal Procurement to Improve Performance, Drive Innovation and Increase Savings, December 4, 2014, available at http:// www.whitehouse.gov/sites/default/files/ omb/procurement/memo/simplifyingfederal-procurement-to-improveperformance-drive-innovation-increasesavings.pdf). Category management involves buying and managing commonly-purchased goods and services through categories like information technology (IT) hardware and IT software. Categories will be managed by experts with in-depth market expertise who understand buying trends, industry cost drivers, new innovations on the horizon and emerging companies. Category managers will also share information with agencies across government to support smarter buying decisions. GSA is creating a Common Acquisition Platform (CAP), an online marketplace to identify best-in-class contracts issued by GSA or other agencies, best practices, and other information agencies need to reduce the proliferation of duplicative contract vehicles and deliver the best value possible to federal customers and the American people. A critical component of the CAP, and smarter buying in general, is the availability of the prices previously paid by other government E:\FR\FM\04MRP1.SGM 04MRP1 asabaliauskas on DSK5VPTVN1PROD with PROPOSALS Federal Register / Vol. 80, No. 42 / Wednesday, March 4, 2015 / Proposed Rules buyers for a similar product or service under similar terms and conditions. Government buyers will be able to use that data, in combination with other relevant information—such as customer satisfaction with the performance of the contractor-furnished solution—to determine fair and reasonable pricing as part of a best value solution. The current lack of transparency on prices paid by government customers has led to significant price variation, sometimes 300 percent or more, for identical purchases by federal agencies from the same commercial vendor as well as the unnecessary duplication of contract vehicles. A recent pilot where contractors were required to furnish prices paid on GSA’s strategically sourced Office Supplies 2 (OS2) vehicle demonstrated the power of such a tool in producing market driven pricing throughout the life of the contract. Accordingly, this proposed rule would create a transactional data reporting clause to improve GSA’s ability to conduct meaningful price analysis and more efficiently and effectively validate fair and reasonable pricing on both its non-FSS and FSS vehicles. It would also allow GSA’s customers to improve their ability to compare prices prior to placing orders under its vehicles. Under the transactional data reporting clause, contractors would report prices paid for products and services delivered during the performance of the contract, including under orders and blanket purchase agreements (BPAs) through a user-friendly, online reporting system. The report would include transactional data elements such as unit measure, quantity of item sold, universal product code, if applicable, prices paid per unit, and total price. The transactional data reporting clause would be applied immediately to GSA’s government-wide non-FSS vehicles, where transactional data is not already collected through other methods. For FSS vehicles, the clause would be introduced in phases, beginning with a pilot for select products and commoditized services. Under the pilot, FSS customers would take advantage of prices paid information and the more rigorous order level competition it generates to establish pricing. To ensure these prices remain competitive with commercial pricing, GSA would evaluate prices paid under the pilot to commercial benchmarks and other available data on commercial pricing, as well as prices previously paid prior to the pilot where such data is available. Vendors would not be subject to the ‘‘tracking customer’’ provisions of the price VerDate Sep<11>2014 17:17 Mar 03, 2015 Jkt 235001 reductions clause that require them to monitor their pricing, and provide the government with the same price reductions that they give to the class of the contractor’s commercial customers upon which the original contract was awarded. However, GSA would maintain the right throughout the life of the FSS contract to ask a vendor for updates to the disclosures on its commercial sales format—which is used to negotiate pricing on FSS vehicles— where commercial benchmarks or other available data on commercial pricing is insufficient to establish price reasonableness. Price and quality metrics would be established, and commercial benchmarks identified, prior to the launch of the pilot so that GSA could perform these analyses and measure the results and impact of the pilot. GSA would also seek vendor feedback to compare experience with the transactional data clause to the tracking requirements of the price reductions clause. GSA would use all relevant information and analysis to determine, in consultation with OMB, whether use of the clause is beneficial. If the results of the pilot confirm that using transactional data is an effective pricing model, its use would be broadened using the authorities provided by this rule. If the results of the pilot reveal that using transactional data is not an effective pricing model, contracts would be modified to revert back to using the tracking customer provisions of the price reductions clause. Additional details regarding the scope of the pilot will be announced through an open dialog on GSA’s Interact platform at interact.gsa.gov. This public input will be considered prior to the launch of the pilot. GSA recognizes that use of prices paid information must be done within the context of seeking to obtain the best value for the taxpayer. GSA believes the clause will be especially impactful when combined with the insight and expertise of category managers to provide agency buyers across government with market intelligence, expertise, and deep-dive analysis to improve supply chain management, pricing variances, innovation, redundancies, and unnecessary duplication of effort. Tools and training deployed in connection with the implementation of this rule would emphasize the importance of considering total cost (not just unit price) in the context of each procurement, taking into account desired terms and conditions, performance levels, past customer PO 00000 Frm 00024 Fmt 4702 Sfmt 4702 11621 satisfaction, and other relevant information. III. Background In Fiscal Year 2014, government agencies ordered nearly $39 billion in goods and services through GSA’s FSS contracts GWACs, and Governmentwide IDIQs. While GSA has a number of policies in place to help its buyers and agency users to secure best value for the taxpayer, two limitations in current pricing practices make achievement of this goal unnecessarily challenging: (1) Lack of visibility into prices paid by other customers; and (2) insufficient attention on ‘‘horizontal pricing’’ under the FSS program—i.e., the ability to compare one vendor’s pricing to that of other vendors. Lack of Transparency in Prices Previously Paid The Federal Acquisition Regulation (FAR) has long emphasized the need for contracting officers to conduct price analysis as part of their responsibility to establish that offered prices are fair and reasonable. Price analysis requires contracting officers to obtain and analyze data on the prices at which the same or similar items have been sold. At GSA, like most agencies, collection of this information has rested largely on the shoulders of each contracting officer. Until recently, little effort was made to share prices previously paid by agencies throughout the government. Over the years, this lack of transparency contributed to large price disparities, where one agency may pay a significant amount more for the exact same product or commoditized service as another agency under the same or substantially similar terms and conditions, sometimes even from the same vendor. GSA has already seen examples where price variability has decreased through the collection of transactional data such as with its Office Supplies 2 (OS2) government-wide strategic sourcing vehicle, and others, saving taxpayers approximately $370 million. GSA proposes to address this weakness through the use of a transactional data reporting clause. Under the clause contractors would be required to report historical information encompassing the products and services delivered during the performance of the contract, including under orders and BPAs. Contractors would be required to electronically report contract sales monthly through a user-friendly online reporting system. The report would include transactional data elements such as unit measures, quantity of item sold, universal product code, if E:\FR\FM\04MRP1.SGM 04MRP1 asabaliauskas on DSK5VPTVN1PROD with PROPOSALS 11622 Federal Register / Vol. 80, No. 42 / Wednesday, March 4, 2015 / Proposed Rules applicable, price paid per unit, and total price. GSA believes there are multiple benefits to use of the transactional data reporting clause, including better pricing, administrative savings, increased opportunities for small business participation, and standardization of practice. • Better pricing: The availability of prices paid information will lead to better prices for the taxpayer by improving the agency’s ability to conduct price analysis. It will also improve the quality of both contract and order level competition because vendors will know that their customers have greater market intelligence on what other agencies have paid in similar situations. For example, GSA initiated a dynamic pricing model, where prices are adjusted based on transactional data, on its Office Supplies 2 vehicle between November 2012 and January 2013. Prior to the implementation of dynamic pricing, the average OS2 savings were 13.5 percent. However, since fully implementing dynamic pricing in June 2013, savings rates have averaged approximately 18 percent, or roughly 4.5 percent higher than pre-dynamic pricing. • Administrative savings: GSA expects the added value of transactional data to GSA contract vehicles to ultimately reduce duplicative contract vehicles as both FSS and non-FSS contracts will demonstrably offer best value, reducing transactional costs to both agencies and contractors. GSA estimates that more than 600,000 open market actions overlap with existing GSA contract vehicles. With better pricing on GSA contracts, agencies will have less incentive to establish separate contracts. Additionally, GSA believes replacing the price reduction clause’s tracking customer requirement with transactional data reporting could reduce the annual burden on contractors by more than 85 percent, or approximately $51 million in administrative costs to contractors, when compared to the burden hours associated with the tracking customer requirement under the price reductions clause in its current configuration. • Reduction of barriers to small business participation: The reduction in duplicative and inefficient procurement transactions removes barriers to entry into the Federal marketplace, particularly for small businesses. The GAO reports the costs of being on multiple contract vehicles ranged from $10,000 to $1,000,000 due to increased bid and proposal, and administrative costs (see GAO report # GAO–10–367, Contracting Strategies, Data and VerDate Sep<11>2014 17:17 Mar 03, 2015 Jkt 235001 Oversight Problems Hamper Opportunities to Leverage Value of Interagency and Enterprisewide Contracts). • Standardization: Significant GSA non-FSS contracts include a requirement for transactional data. Though the specifics vary, GSA’s Alliant, Alliant Small Business, 8(a) Streamlined Technology Acquisition Resources for Services (STARS) II, and Veterans Technology Services (VETS) GWACs, Connections II, Custom SATCOM Solutions (CS2), Custom SATCOM Solutions—Small Business (CS2–SB), Office Supply Third Generation (OS3), and One Acquisition Solution for Integrated Services (OASIS) Govermentwide IDIQs, all have built-in vendor requirements for submission of transactional data. Currently, these requirements are communicated in solicitations without the benefit of a dedicated GSAR clause. The creation of a uniform clause to be used across GSA’s non-FSS programs would facilitate consistency and transparency by allowing the public to comment on the proposed new clause. Use of Vertical Pricing and Movement Toward Both Vertical and Horizontal Pricing in the FSS Program The FSS program is currently built around a vertical pricing model where pricing offered to the government from a potential vendor is compared to the pricing that the same vendor offers to its commercial customers. When vendors first submit an FSS offer, minimal consideration is given to the relative competitiveness of the vendor’s prices to other vendors (i.e., horizontal pricing). Instead, the FSS program primarily collects aggregate sales information, including a broad disclosure of discounts vendors offer to commercial customers for similar products and services (see the ‘‘Commercial Sales’’ disclosure guidance at GSAR 515.408). The Government’s negotiation objective is to achieve a company’s best price—i.e., the price given to its most favored customer (see GSAR 538.270(a)) who buys in quantities and under conditions similar to those of the government. Contractors are then required, under the ‘‘price reductions’’ clause (PRC), to monitor their pricing over the life of the contract and provide the government with the same price reductions that they give to the class of the contractor’s commercial customers upon which the original contract award was predicated (see GSAR 552.238–75). In addition to the ‘‘tracking customer’’ requirement, the price reductions clause allows vendors to voluntarily reduce prices to the PO 00000 Frm 00025 Fmt 4702 Sfmt 4702 Government and for the Government to request a price reduction at any time during the contract period such as where market analysis indicates that lower prices are being offered or paid for the same items under similar conditions. The required disclosure of commercial sales practices and the PRC were first introduced into the FSS program in the 1980s as a way to ensure fair and reasonable pricing through the life of a contract with the goal of achieving most favored customer pricing. For many years, the tracking customer feature of the PRC was a critical mechanism for enabling GSA and its customers to maintain good pricing from original equipment manufacturers who held the vast majority of FSS contracts. However, changes in the Federal market have lessened the impact of the tracking customer mechanism over time. Of particular note, an increasing percentage of FSS contractors are resellers with little or no commercial sales. The GSA Inspector General (IG) recently reported that resellers represent more than onethird of FSS vendors (See Major Issues from Multiple Award Schedules Audits, Audit Memorandum Numbers A120050–3, available at http:// www.gsaig.gov under Office of Inspector General (OIG) Reports and Audit Reports). Moreover, due to the various exceptions included in the PRC the tracking customer feature ties pricing for reductions to sales of single items and plays little role in blanket purchase agreement and order purchases reflecting volume sales. Further, many products sold under the FSS program are commercial-off-the-shelf (COTS) products or other commercial items for which the government is not a market driver. The government, and other customers in the category to which the government is most typically aligned under the price reductions clause, tend to receive voluntary price reductions from the vendor as a result of general market forces (e.g., intense competition and small profit margins within the IT hardware arena that cause vendors to lower their prices for all customers voluntarily to maintain market share). In other words, prices are reduced under the voluntary provisions of the price reduction clause as a result of market rate pricing changes, not under the mandatory tracking customer provisions. GSA recently analyzed modifications issued between October 1, 2013 and August 4, 2014 under nine of its FSS contracts, including Schedule 70 (Information Technology), Schedule 874 (Mission Oriented Business Integrated E:\FR\FM\04MRP1.SGM 04MRP1 asabaliauskas on DSK5VPTVN1PROD with PROPOSALS Federal Register / Vol. 80, No. 42 / Wednesday, March 4, 2015 / Proposed Rules Solutions (MOBIS)), Schedule 66 (Scientific Equipment and Services), Schedule 84 (Total Solutions for Law Enforcement, Security, Facilities Management, Fire, Rescue, Clothing, Marine Craft and Emergency/Disaster Response), Schedule 899 (Environmental Services), Schedule 738 II (Language Services), 874 V (Logistics Worldwide), Schedule 871 (Professional Engineering Services), and Schedule 00CORP (The Consolidated Schedule). GSA found that only about 3 percent of the total price reductions received under the price reduction clause were tied to the ‘‘tracking customer’’ feature. The vast majority (approximately 78 percent) came as a result of commercial pricelist adjustments and market rate changes, with the balance for other reasons. This finding supports attempting a different means of making better pricing available. Simultaneous with these trends, significant improvements in technology now make it possible to collect transactional data and display it in a way that government customers can see the prices paid by other FSS customers along with other data to determine whether prices offered to them represent the best value to the taxpayer. As explained above, the required disclosure and sharing of prices paid information through the use of a transactional data reporting clause and portal under the OS2 pilot led to savings rates averaging approximately 18 percent, or about 4.5 percent higher than pre-dynamic pricing. GSA believes the collection and use of transactional data may be a more efficient and effective way for driving price reductions on FSS buys than through use of the tracking customer mechanism. In addition to avoiding the challenges associated with the tracking customer mechanism described above, the transactional data reporting clause would allow for greater reliance on horizontal pricing in the FSS program so that GSA and its customers can easily evaluate the relative competitiveness of prices between FSS vendors. Moreover, the transactional data reporting clause, if used as an alternative to tracking customer mechanism, could significantly reduce contractor burden. The Chief Acquisition Officers Council recently conducted an Open Dialogue through an online platform on improving how to do business with the Federal Government. Contractors pointed to the price reductions clause as one of the most complicated and burdensome requirements in Federal contracting, and GSA’s own estimates suggest FSS contractors spend over 860,000 hours a year (at a cost of VerDate Sep<11>2014 17:17 Mar 03, 2015 Jkt 235001 approximately $58.5 million) on compliance with this clause. Several conversations in this dialogue identified the need to reform FSS pricing policies, particularly requesting the removal of GSAR clause 552.238–75, Price Reductions requirements. Over the years, GSA has made adjustments to address burdens and improve the use of these tools. In particular, on March 4, 1996 (GSAR Change 70), GSA modified the sales disclosure form to require only summary information and recognize that the terms and conditions of commercial sales vary and there may be legitimate reasons why the best price is not achieved. Despite these significant adjustments to the FSS pricing model, contractors continue to struggle to comply with the sales practice disclosure requirements and the price reduction clause. In two separate reports, the GSA IG found that over twothirds of vendors reviewed in fiscal year (FY) 2011 and 84 percent in FY 2012 provided commercial sales practice disclosures that are not current, accurate, and/or complete and nearly half of the vendors in FY 2012 had inadequate sales monitoring systems and billing systems to ensure proper administration of the price reduction and billing provisions. See Major Issues from Multiple Award Schedules Audits, Audit Memorandum Numbers A120050–3 and A120050–4, available at http://www.gsaig.gov under OIG Reports and Audit Reports. As stated above, GSA believes that the transactional data reporting clause could reduce the annual burden on contractors by more than 85 percent, or approximately $51 million in administrative costs to contractors, when compared to the burden hours associated with monitoring pricing under the price reductions clause in its current configuration. GSA further believes that use of the transactional data reporting clause as an alternative to the price reduction clause addresses recommendations made by independent reviewers of the FSS program over the past several years. In particular, the Multiple Award Schedule (MAS) Blue Ribbon Advisory Panel, which included representatives from the largest buying agencies, the Department of the Defense, Department of Homeland Security, Department of the Interior, Department of the Treasury, and U.S. Department of Education and industry, recommended in 2010 that ‘‘the GSA Administrator remove the Price Reduction Clause from the MAS program supply contracts for products in phases as the GSA Administrator implements recommendations for competition and PO 00000 Frm 00026 Fmt 4702 Sfmt 4702 11623 price transparency at the Schedule contract level and the order level.’’ The same year, the Government Accountability Office (GAO) issued a report recommending that GSA collect ‘‘prices paid’’ data on FSS orders and make this information available to FSS contract negotiators and customer agencies. See Data and Oversight Problems Hamper Opportunities to Leverage Value of Interagency and Enterprisewide Contracts, GAO–10–367 (April 2010), available at http:// www.gao.gov/products/GAO-10-367. Transitioning to Transactional Data Reporting GSA recognizes that use of prices paid information must be done within the context of seeking to obtain the best value for the taxpayer and envisions that this information would be used as one information point in conjunction with other considerations, such as total cost, desired performance levels, delivery schedule, unique terms and conditions, time considerations, and customer satisfaction. Training to support the implementation of this rule would emphasize that prices paid information must be considered within the context of each individual procurement. More importantly, related efforts, such as the development of category hallways—an online marketplace tool—and the appointment of category managers with in-depth market expertise, will help agencies gain market intelligence to make smarter and well-informed buying decisions. GSA further recognizes that its government-wide non-FSS and FSS contract vehicles require separate implementation strategies taking into account differences in the pricing models currently used by these vehicles. Government-wide Non-FSS contract vehicles. To implement the transactional data reporting requirement, this proposed rule would add a new GSAR clause for non-FSS contract vehicles, 552.216–75 Sales Reporting and Fee Remittance, which would require the submission of transactional data from vendors on orders and prices paid by ordering activities. Government-wide non-FSS contract vehicles account for approximately $3.9 billion in federal contract spending each year. As explained above, a significant number of GSA’s non-FSS contract vehicles, including all GWAC vehicles, already include a requirement for transactional data. This proposed rule would standardize this practice for non-FSS contract vehicles and allow GSA to collect data on fixed-price, time-andmaterial, labor-hour, and cost- E:\FR\FM\04MRP1.SGM 04MRP1 asabaliauskas on DSK5VPTVN1PROD with PROPOSALS 11624 Federal Register / Vol. 80, No. 42 / Wednesday, March 4, 2015 / Proposed Rules reimbursement contracts, consistent with requirements currently in GWAC vehicles. FSS contract vehicles. GSA proposes a phased-in implementation of the transactional data reporting clause to the FSS program, beginning with a pilot chosen from FSS product offerings and commoditized services where obtaining such data has the greatest potential impact to reduce price variability and help agencies secure better value for the taxpayer through category management. Application of the transactional data reporting clause, including the proposed pilot, would be limited to FSS contracts managed by GSA’s Federal Acquisition Service. This rule would not apply to FSS contracts managed by the Department of Veterans Affairs pursuant to a delegation provided by GSA. Details regarding the pilot will be provided by separate notice, including through social media tools already in place such as GSA Interact (https:// interact.gsa.gov), as well as updates to GSA’s Web site where current information is displayed and access and links to other sites are provided. Respondents will be invited to provide feedback through these mechanisms as well as at the public meeting announced in this notice. Respondents are also invited to provide written feedback in response to this notice regarding the preliminary pilot design features described below: • Scope. The pilot would focus on commercial-off-the-shelf and related commercial products and commoditized services that experience high volume of repetitive purchasing under identical or substantially similar terms and conditions. • Participation: Vendor participation in the pilot would be mandatory. Covered vendors would not be subject to the tracking customer requirements of the price reduction clause. However, vendors would still be subject to the commercial sales disclosure requirements, including the requirement to disclose commercial sales practices when requesting a contract modification for additional items or additional Special Item Numbers. In addition, GSA would maintain the right throughout the life of the FSS contract to ask a vendor for updates to the disclosures made on its commercial sales format (which is used to negotiate pricing on FSS vehicles) if and as necessary to ensure that prices remain fair and reasonable in light of changing market conditions. The government could request price reductions and vendors could voluntarily provide price reductions. GSA would modify select existing VerDate Sep<11>2014 17:17 Mar 03, 2015 Jkt 235001 contracts and conduct solicitation refreshes under the FSS program to implement the new transactional data reporting requirements. • Evaluation: Similar to best practices used in strategic sourcing efforts, GSA would establish clearly defined metrics prior to the launch of the pilot, such as savings rates, customer satisfaction, small business utilization, and benchmark results against available commercial data sources within categories of spend to evaluate the impact of the transactional data reporting clause. Pilot results would be evaluated before applying the transactional data reporting clause to additional FSS contracts and making usage mandatory more broadly. Pilot results would also be used to evaluate the comparative efficiency and effectiveness of the tracking customer requirement. If GSA determines using transactional data is not an effective pricing model within the FSS program, contracts would be modified to revert back to using the provisions described in the basic GSAR clause 552.238–75, Price Reductions. Software, Tools, and Training GSA intends to update its systems in order to collect and analyze transactional data. Data submission will be enabled through multiple electronic interfaces (e.g., secure data entry, electronic file submission, or an application programming interface (API)). The goal is to make the reporting process as streamlined, secure and efficient as possible for contractors, requiring them to submit only the transactional data GSA cannot access via other means (e.g., GSA contract management systems or Federal reporting systems such as the System for Award Management (SAM) or the Federal Procurement Data System (FPDS)). GSA also plans to implement an API for buyers to benefit from using transactional data. Through the API, GSA will make this information accessible online for all Government buyers. This data will help buyers better understand the universe of GSA purchases; helping them to drive down prices, reduce price variability, and make smarter purchases. Prior to implementation of transactional data reporting requirements, GSA’s Vendor Support Center (https://vsc.gsa.gov) will provide instructions and offer training to vendors on how to report transactional data for FSS and non-FSS orders. Additionally, GSA will update its relevant courseware on the Federal Acquisition Institute (FAI) and Defense PO 00000 Frm 00027 Fmt 4702 Sfmt 4702 Acquisition University (DAU) portals to educate both customers and GSA contracting officers on how to use the data. The Federal Acquisition Service (FAS) has an internal training course aimed at GSA contracting officers awarding and administering FSS contracts—this course will be updated to educate contracting officers on how to conduct analysis on transactional data, as well as how to use these analyses to achieve better pricing on the contracts. Similarly, the external-facing courseware on how to use the FSS program and other non-FSS GWACs and MACs will be updated to educate customers on the new requirements and how they can use the data collected (to be shared by GSA) to buy smarter. The external courseware will also highlight the additional value the collected data offers to GSA’s FSS and non-FSS contracting programs. IV. Executive Orders 12866 and 13356 Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). E.O. 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This is not a significant regulatory action and, therefore, was not subject to review under section 6(b) of E.O. 12866, Regulatory Planning and Review, dated September 30, 1993. This rule is not a major rule under 5 U.S.C. 804. V. Regulatory Flexibility Act GSA expects this proposed rule to have a significant economic impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act, 5 U.S.C. 601, et seq., because the proposed rule involves providing transactional data on FSS and non-FSS orders and transactional data that may ultimately affect the end pricing of products offered through GSA. However, the cost to comply with the additional reporting requirement may be offset by the benefits provided by the transactional data, such as greater insight and visibility into customer buying habits and knowledge of market competition. An additional benefit to FSS contractors is that the addition of the transactional data reporting clause would be coupled with an alternate version of GSAR clause 552.238–75 E:\FR\FM\04MRP1.SGM 04MRP1 Federal Register / Vol. 80, No. 42 / Wednesday, March 4, 2015 / Proposed Rules asabaliauskas on DSK5VPTVN1PROD with PROPOSALS Price Reductions that does not require customer tracking where the vendor monitors and provides price reductions to the Government when the customer or category of customer upon which the contract was predicated receives a discount. GSAR clause 552.238–75, Price Reductions has long been the mechanism through which GSA ensures prices on contract remained fair and reasonable. However, with transactional data, contracting officers will have a new, potentially more effective and less burdensome mechanism through which to ensure contract pricing is competitive and fair and reasonable, although vertical pricing analysis techniques can still be used. Providing the required transactional data will impose significant economic impact on all contractors, both small and other than small, doing business on GSA-managed contracts. Therefore, an Initial Regulatory Flexibility Analysis (IRFA) has been prepared consistent with 5 U.S.C. 603, and is summarized as follows: The General Services Administration (GSA) is proposing to amend General Services Administration Acquisition Regulation (GSAR) to add an alternate to clause 552.238–74 Industrial Funding Fee (IFF) and Sales Reporting, and new clause 552.216–75 Sales Reporting and Fee Remittance to require transactional data reporting in FSS and non-FSS contract vehicles. The clause will require GSA contractors to provide transactional data, which is equivalent to information found on an itemized invoice, to GSA. This will further the objective to improve category management and negotiate better pricing on all GSA acquisition vehicles. Collecting transactional data on orders and prices paid will allow customers to analyze spending patterns and develop new acquisition strategies to fully leverage the Government’s spend. GSA is undertaking a major modernization initiative aimed at enabling customers to drive better value and achieve taxpayer savings by setting the stage for pricing reform. A major characteristic of modernization is collecting and using transactional data for units under most GSA acquisition vehicles to serve as a basis for price analysis and category management. This rule will apply to all contractors who hold non-FSS contract vehicles as well as to all FSS contract holders, contingent on beneficial results being demonstrated through a pilot conducted on a subset of FSS contracts for products and commoditized services. As of Fiscal Year 2013, there are 15,738 vendors holding 18,598 FSS and nonFSS contract vehicles. Of the 15,738 vendors, 12,590 are small entities to which the rule will apply. Only those contracts with sales would have data to report. Department of Veteran Affairs FSS holders are not affected. During the development of the rule, GSA considered using one of its many internal applications that support pre-award and VerDate Sep<11>2014 17:17 Mar 03, 2015 Jkt 235001 post-award actions for GSA contracts to pull the transactional data necessary for more robust price analysis. These internal applications facilitate data exchanges between GSA and its vendors to provide business intelligence, create procurement sources, facilitate acquisitions, execute deliveries, and provide customer care. GSA uses this information to update systems architecture, to develop new applications for contract administration, and to enhance business intelligence for suppliers and ordering activities. Unfortunately, most of these systems do not collect transactional data at a level that would be of benefit for spend analysis and/or do not possess the most accurate and timely information regarding purchasing activity. Approximately 13 percent of GSA-controlled sales, which includes purchases made by GSA’s Assisted Acquisition Services activity on behalf of customer agencies, can capture transactional data; for the remaining majority of purchases (87 percent), the customer and supplier are the only sources of detailed transaction-level data. Another option for transactional data sourcing would be to enhance or combine existing GSA systems to collect the data. GSA would incur significant IT development costs for the effort. Were GSA to invest the time and resources into an enterprise-wide system that could handle procurement functions and spend analysis, then customers and suppliers would need to commit to use electronic commercial tools such as eBuy and Advantage!®. Without the 100 percent commitment of individual customers, the data will be incomplete—possibly to a large extent—and may significantly skew any subsequent analysis on cost savings and/or purchasing decisions. GSA’s SmartPay program (the program that manages the governmentwide purchase card) is another source where transactional data could be collected, and has been on a limited basis following commercial standards for the past several years on sub-sets of several FSS contracts. However, with less than 1 percent of procurements being made through the purchase card, this method would not provide a complete set of data to achieve the full benefits of capturing transactional data. Finally, FPDS could be upgraded to collect transactional data. However, this would require Federal Acquisition Regulation revisions, tens of millions of dollars in system changes, and years to implement. Additionally, ordering activities do not normally collect transactional data, so agency financial procedures and systems would have to be overhauled in order to accommodate transactional data collection. The Regulatory Secretariat has submitted a copy of the Initial Regulatory Flexibility Analysis (IRFA) to the Chief Counsel for Advocacy of the Small Business Administration. A copy of the IRFA may be obtained from the Regulatory Secretariat. GSA invites comments from small business concerns and other interested parties on the expected impact of this rule on small entities. PO 00000 Frm 00028 Fmt 4702 Sfmt 4702 11625 GSA will also consider comments from small entities concerning the existing regulations in subparts affected by this rule in accordance with 5 U.S.C. 610. Interested parties must submit such comments separately and should cite 5 U.S.C. 601, et seq. (GSAR Case 2013– G504), in correspondence. VI. Paperwork Reduction Act The Paperwork Reduction Act (44 U.S.C. Chapter 35) applies. The proposed rule contains information collection requirements. Accordingly, the Regulatory Secretariat will be submitting a request for approval of a new information collection requirement concerning this rule to the Office of Management and Budget under 44 U.S.C. 3501, et seq. GSA estimates the proposed rule will result in a net burden reduction of approximately 757,000 hours per year based on the difference in current reporting requirement (i.e. GSAR clause 552.238–75) and the proposed reporting requirements (i.e. clause 552.238–74 Industrial Funding Fee and Sales Reporting (Federal Supply Schedule) Alternate I and clause 552.216–75 Sales Reporting and Fee Remittance). The analysis of this calculation as well as the assumptions made to support this analysis is presented below. A. New Reporting Requirements GSA estimates the public reporting burden for contractors to set-up transactional data reporting systems to average a one-time initial set-up burden of 6 hours. The estimated time includes the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. GSA also took into consideration training, compliance systems, negotiations, and audit preparation the new clause may require, when estimating the one-time initial set-up of 6 hours. Thereafter, the monthly burden estimate to report data is approximately .52 of an hour or 31 minutes. This number takes into consideration the distribution of contract values (i.e. sales) and assumes monthly reporting burden rises with vendor sales based on the distribution of sales and obligations within FSS contracts and non-FSS contracts. There is a wide variation in contract sales, therefore monthly reporting burden ranges between 2 minutes (for contractors with $0 in sales) and 4 hours (for contractors with greater than $50 million in sales). GSA estimates that only the top 0.6 percent of FSS contractors and top 4 percent of non-FSS contractors will be affected the E:\FR\FM\04MRP1.SGM 04MRP1 asabaliauskas on DSK5VPTVN1PROD with PROPOSALS 11626 Federal Register / Vol. 80, No. 42 / Wednesday, March 4, 2015 / Proposed Rules most. The average GSA contractor will see little or no effect of the new reporting requirement. A weighted average was used, based on distribution of sales, to calculate a reporting burden. To arrive at the weighted average, vendors were broken up into six categories, based on contract values. The characteristics of these categories of contracts in FY 2013 are as follows: Category 1: Contract value is less than $0. The estimated burden for this category per contractor is 0.03 hours (2 minutes) a month, or 0.36 hours (21.8 minutes) annually. This makes up 37 percent of FSS contractors and 8 percent of non-FSS vendors. The total annual burden for this category is estimated as 2,620 hours. Category 2: Contract value is $1– $500,000. The estimated burden for this category per contractor is 0.5 hours (30 minutes) a month, or 6 hours annually. This category makes up 41 percent of FSS contractors and 24 percent of nonFSS vendors. The total annual burden for this category is estimated as 44,884 hours. Category 3: Contract value is $500,000–$5,000,000. The estimated burden for this category per contractor is 1 hour per month, or 12 hours annually. This category makes up 17 percent of FSS contractors and 43 percent of non-FSS vendors. The total annual burden for this category is estimated as 38,956 hours. Category 4: Contract value is $5,000,000–$20,000,000. The estimated burden for this category per contractor is 2 hours per month, or 24 hours annually. This category makes up 4 percent of FSS contractors and 17 percent of non-FSS vendors. The total annual burden for this category is estimated as 17,293 hours. Category 5: Contract value is $20,000,000–$50,000,000. The estimated burden for this category per contractor is 3 hours per month, or 36 hours annually. This category makes up 1 percent of FSS contractors and 5 percent of non-FSS vendors. The total annual burden for this category is estimated as 6,785 hours. Category 6: Contract value is greater than $50,000,000. The estimated burden for this category per contractor is 4 hours per month, or 48 hours annually. This category makes up 1 percent of FSS contractors and 4 percent of non-FSS vendors. The total annual burden for this category is estimated as 5,094 hours. Taking the above into consideration, a weighted average was used to calculate an annual burden of 6.3 hours or 0.52 VerDate Sep<11>2014 17:17 Mar 03, 2015 Jkt 235001 hours per month since reporting will be required monthly. The cost of reporting was quantified by multiplying the level of effort in hours by an assumed fully loaded hourly rate for contractors ($50 × 136 percent = $68). The annual reporting burden is estimated as follows: 552.216–75 Sales Reporting and Fee Remittance (Transactional Data Reporting Requirement) and 552.238–74 Industrial Funding Fee and Sales Reporting (FEDERAL SUPPLY SCHEDULE) Alternate I The total public annual burden hours for setup and reporting are 223,906.32 based on the following: Non-FSS Contracts (One-time initial setup) Respondents: 477. Responses Per Respondent: × 1. Total Responses: 477. Hours Per Response: × 6. Total Burden Hours: 2,862. Non-FSS Contracts (Reporting) Respondents: 477. Responses Per Respondent: × 12. Total Responses: 5,724. Hours Per Response: × 0.52. Total Burden Hours: 2,976.48. The annual estimated total burden hours for non-FSS contracts are 5,838.48 for year one and 2,976.48 for every year thereafter. FSS Contracts (One-time initial setup) Respondents: 17,816. Responses Per Respondent: × 1. Total Responses: 17,816. Hours Per Response: × 6. Total Burden Hours: 106,896. FSS Contracts (Reporting) Respondents: 17,816. Responses Per Respondent: × 12. Total Responses: 213,792. Hours Per Response: × 0.52. Total Burden Hours: 111,171.84. The annual estimated total burden hours for FSS contracts are 218,067.84 for year one and 111,171.84 for every year thereafter. The total annual estimated cost to the public for the Transactional Data Reporting GSAR clauses (552.216–75 and 552.238–74 Alternate I) and is estimated to be $15,225,629.76 based on the following: Non-FSS (One-time initial setup) Respondents: 477. Responses per respondent: × 1. Total annual responses: 477. Preparation hours per response: × 6. Total response burden hours: 2,862. Average hourly wages ($50.00+36 percent overhead): × 68. PO 00000 Frm 00029 Fmt 4702 Sfmt 4702 Estimated cost to the public: $194,616. Non-FSS (Reporting) Respondents: 477. Responses per respondent: × 12. Total annual responses: 5,724. Preparation hours per response: × .52. Total response burden hours: 2,976.48 Average hourly wages ($50.00+36 percent overhead): × 68. Estimated cost to the public: $202,400.64. Estimated cost to the public for NonMAS contracts is: $397,016.64 for year one and $202,400.64 for every year thereafter. FSS Contracts (One-time initial set up) Respondents: 17,816. Responses per respondent: × 1. Total annual responses: 17,816. Preparation hours per response: × 6. Total response burden hours: 106,896.00 Average hourly wages ($50.00+36 percent overhead): × 68.00. Estimated cost to the public: $7,268,928. FSS (Reporting) Respondents: 17,816. Responses per respondent: × 12. Total annual responses: 213,792. Preparation hours per response: × .52. Total response burden hours: 111,171.84. Average hourly wages ($50.00+36 percent overhead): 68.00. Estimated cost to the public: $7,559,685.12. The total estimated cost to the public for FSS contracts is $14,828,613.12 for year one and $7,559,687.12 for every year thereafter. There are 18,293 contracts containing the transactional data reporting requirement. Data submitted by respondents is submitted and stored electronically. Retrieval of cumulative data requires approximately 1 hour each month (1*12) for a total of 12 hours annually; and costs the Government $9,015,522.12 annually. Requests per year 18,293. Reviewing Time (1*12) × 12. Total Review Time/year 219,516. Average Cost/hr × 41.07. Total Government Cost $9,015,522.12. The cost of $41.07 per hour is based on GS–12, step 5 salary (Salary Table 2014–DCB Washington-Baltimore, DC– MD–VA–WV–PA, Effective January 2014). Difference in Reporting Requirements Acceptance of GSAR Alternate I, 552.238–74 Industrial Funding Fee and E:\FR\FM\04MRP1.SGM 04MRP1 Federal Register / Vol. 80, No. 42 / Wednesday, March 4, 2015 / Proposed Rules asabaliauskas on DSK5VPTVN1PROD with PROPOSALS Sales Reporting (Federal Supply Schedule), also triggers the inclusion of Alternate II, 552.238–75 Price Reductions. Unlike the basic Price Reductions GSAR clause, Alternate II of 552.238–75 does not require the vendor to monitor and provide price reductions to the Government when the customer or category of customer upon which the contract was predicated receives a discount. In other words, there will be no reporting burden for GSAR Alternate II, 552.238–75 Price Reductions. The current total estimated reporting burden hours for GSAR clause 552.238– 75 Price Reductions is 868,150 with annual burden cost of approximately $58.5 million (see OMB control number 3090–0235). The total annual estimated reporting burden hours for the new Transactional Data Reporting clause is 111,171.84 with annual burden cost of $7,559,685.12. Therefore, the net annual burden reduction is 756,978.16 hours with annual burden savings of approximately $51 million. B. Request for Comments Regarding Paperwork Burden Submit comments, including suggestions for reducing this burden, not later than Monday, May 4, 2015 to: General Services Administration, Regulatory Secretariat Division (MVCB), ATTN: Hada Flowers, 1800 F Street NW., 2nd Floor, Washington, DC 20405–0001. Public comments are particularly invited on: Whether this collection of information is necessary for the proper performance of functions of the GSAR, and will have practical utility; whether our estimate of the public burden of this collection of information is accurate, and based on valid assumptions and methodology; ways to enhance the quality, utility, and clarity of the information to be collected; and ways in which we can minimize the burden of the collection of information on those who are to respond, through the use of appropriate technological collection techniques or other forms of information technology. Requesters may obtain a copy of the supporting statement from the General Services Administration, Regulatory Secretariat (MVCB), ATTN: Hada Flowers, 1800 F Street NW., 2nd Floor, Washington, DC 20407. Please cite OMB Control Number 3090–0306, Transactional Data Reporting: GSAR Part Affected: 552.238–74, Industrial Funding Fee and Sales in all correspondence. List of Subjects in 48 CFR Parts 501, 516, 538 and 552 Government procurement. VerDate Sep<11>2014 17:17 Mar 03, 2015 Jkt 235001 Dated: February 25, 2015. Jeffrey A. Koses, Senior Procurement Executive, Office of Acquisition Policy, Office of Governmentwide Policy, General Services Administration. Therefore, GSA proposes to amend 48 CFR parts 501, 516, 538, and 552 as set forth below: ■ 1. The authority citation for 48 CFR parts 501, 516, 538, and 552 continues to read as follows: Authority: 40 U.S.C 121(c). 11627 Data Reporting Requirements. This alternate clause is used when vendors agree to include clause 552.238–74 Alternate I; (iii) Federal Supply Schedule 84; and (iv) Federal Supply Schedules for recovery purchasing (see 538.7102). * * * * * PART 552—SOLICITATION PROVISIONS AND CONTRACT CLAUSES 5. Amend section 552.212–71 by revising the introductory text to read as follows: ■ PART 501—GENERAL SERVICES ADMINISTRATION ACQUISITION REGULATION SYSTEM 501.106 [Amended] 2. Amend section 501.106 in the table, by adding in numerical sequence, GSAR Reference ‘‘552.216–75’’ and its corresponding OMB Control Number ‘‘3090–XXXX’’. ■ PART 516—TYPES OF CONTRACTS 3. Amend section 516.506 by adding paragraph (d) to read as follows: ■ 516.506 Solicitation provisions and contract clauses. * * * * * (d) The contracting officer may insert clause 552.216–75 in solicitations and GSA-awarded IDIQ contracts. This clause should be included in all GSAawarded Governmentwide acquisition contracts and multi-agency contracts. PART 538—FEDERAL SUPPLY SCHEDULE CONTRACTING 4. Amend section 538.273 by revising paragraphs (b)(1) and (2) to read as follows: ■ 538.273 Contract clauses. * * * * * (b) * * * (1) 552.238–74, Industrial Funding Fee and Sales Reporting. Use Alternate I for Federal Supply Schedules with Transactional Data Reporting Requirements. Clause 552.238–75 Alternate II should also be used when vendors agree to include clause 552.238–74 Alternate I in the contract. (2) 552.238–75, Price Reductions (May 2004). (i) Except in cases where Alternate II is used, use Alternate I in solicitations and contracts for: (A) Federal Supply Schedule 70; (B) The Consolidated Schedule containing information technology Special Item Numbers; (C) Federal Supply Schedule 84; and (D) Federal Supply Schedules for recovery purchasing (see 538.7102). (ii) Use Alternate II for Federal Supply Schedules with Transactional PO 00000 Frm 00030 Fmt 4702 Sfmt 4702 552.212–71 Contract Terms and Conditions Applicable to GSA Acquisition of Commercial Items. As prescribed in 512.301(a)(1), insert the following clause: * * * * * ■ 6. Add section 552.216–75 to read as follows: 552.216–75 Transactional Data Reporting. As prescribed in 516.506(d), insert the following provision: Transactional Data Reporting (Date) (a) Definitions: (1) Contract sale is the price paid by the ordering activity for the product or service on the task or delivery order placed against this contract. Contract sales include contract items sold to authorized users unless the purchase was conducted pursuant to a separate contracting authority, such a separately awarded FAR part 12, FAR part 13, FAR part 14, or FAR part 15 procurement; or a non-FAR contract. (2) Transactional data is historical information encompassing the products and services delivered during the performance of a contract. (b) Reporting of Contract Sales. The Contractor shall report all contract sales under this contract as follows: (1) The Contractor shall electronically report contract sales monthly, including ‘‘zero’’ sales, by utilizing the automated reporting system at an Internet Web site designated by the General Services Administration (GSA) or by uploading the data according to GSA instructions. Each report shall be submitted within 15 calendar days of the applicable monthly reporting period. The Web site address, as well as registration instructions and reporting procedures, will be provided at the time of award. (2) The Contractor shall provide, at no cost to the Government, the following transactional data elements, as applicable— (i) Contract or BPA Number; (ii) Order Number/Procurement Instrument Identifier (PIID); (iii) Non Federal Entity, if applicable; (iv) Description of Deliverable; (v) Manufacturer Name; (vi) Manufacturer Part Number; (vii) Unit Measure (each, hour, case, lot); (viii) Quantity of Item Sold; E:\FR\FM\04MRP1.SGM 04MRP1 asabaliauskas on DSK5VPTVN1PROD with PROPOSALS 11628 Federal Register / Vol. 80, No. 42 / Wednesday, March 4, 2015 / Proposed Rules (ix) Universal Product Code (UPC), if applicable; (x) Price Paid per Unit; and (xi) Total Price. (3) GSA will post reporting instructions at https://vsc.gsa.gov/. GSA reserves the unilateral right to change reporting instructions, including data submission requirements, following 60 days advance notification to the Contractor. (4) The Contractor shall report contract sales in U.S. dollars. (5) The reported contract sales value shall include the Contractor Access Fee (CAF). (6) The Contractor shall maintain a consistent accounting method of contract sales reporting, based on the Contractor’s established commercial accounting practice. (7) The acceptable points at which contract sales may be reported include— (i) Issuance of an invoice; or (ii) Receipt of payment. (8) The Contractor shall continue to furnish reports, including ‘‘zero’’ sales, through physical completion of the last outstanding task or delivery order of the contract. (9) Orders that contain classified information are exempt from this reporting requirement (See FAR 4.606(c)). (c) Contractor Access Fee (CAF). (1) The CAF represents a percentage of the total quarterly sales reported. This percentage is set at the discretion of GSA. GSA has the unilateral right to change the percentage at any time, but not more than once per year. GSA provides reasonable notice prior to the effective date of the change. The CAF reimburses GSA for operating costs. Offerors must include the CAF in their prices. The fee is included in the awarded price(s) and reflected in the total amount charged to ordering activities. (2) Within 60 days of award, a GSA representative will provide the Contractor with specific written procedural instructions on remitting the CAF. GSA reserves the unilateral right to change such instructions following notification to the Contractor. (3) The Contractor shall remit the CAF at the rate set by GSA within 15 calendar days after the end of the calendar month. Final payment shall be remitted within 30 days after physical completion of the last outstanding task order or delivery order of the contract. (4) The Contractor shall remit the CAF to GSA in U.S. dollars. (5) Failure to remit the full amount of the CAF within 15 calendar days after the end of the applicable reporting period constitutes a contract debt to the United States Government under the terms of FAR Subpart 32.6. The Government may exercise all rights under the Debt Collection Improvement Act of 1996, including withholding or setting off payments and interest on the debt (see FAR clause 52.232–17, Interest). Should the Contractor fail to submit the required sales reports, falsify them, or fail to timely pay the CAF, this is sufficient cause for the Government to terminate the contract for cause. (End of Clause) ■ 7. Amend section 552.238–74 by revising the date of the clause; and adding Alternate I to read as follows: VerDate Sep<11>2014 17:17 Mar 03, 2015 Jkt 235001 552.238–74 Industrial Funding Fee and Sales Reporting. * * * * * Industrial Funding Fee and Sales Reporting (Date) * * * * * Alternate I (Date): As prescribed in 538.273(b)(1), substitute the following paragraphs (a), (b), and (c) for paragraphs (a), (b), and (c) of the basic clause: (a) Definitions. (1) Contract sale is the price paid by the ordering activity for the product or service on the task or delivery order placed against this contract. Contract sales include contract items sold to authorized users unless the purchase was conducted pursuant to a separate contracting authority, such as a Governmentwide Acquisition Contract (GWAC); a separately awarded FAR part 12, FAR part 13, FAR part 14, or FAR part 15 procurement; or a non-FAR contract. Sales made to state and local governments under Cooperative Purchasing authority shall be counted as reportable sales. (2) Transactional data is historical information encompassing the products and services delivered during the performance of a contract. (b) Reporting of Contract Sales. The Contractor shall report all contract sales under this contract as follows: (1) The Contractor shall electronically report contract sales monthly, including ‘‘zero’’ sales, by utilizing the automated reporting system at an Internet Web site designated by the General Services Administration (GSA) or by uploading the data according to GSA instructions. Each report shall be submitted within 15 calendar days of the applicable monthly reporting period. The Web site address, as well as registration instructions and reporting procedures, will be provided at the time of award. (2) The Contractor shall provide, at no cost to the Government, the following transactional data elements, as applicable— (i) Contract or BPA Number; (ii) Order Number/Procurement Instrument Identifier (PIID); (iii) Non Federal Entity, if applicable; (iv) Description of Deliverable; (v) Manufacturer Name; (vi) Manufacturer Part Number; (vii) Unit Measure (each, hour, case, lot); (viii) Quantity of Item Sold; (ix) Universal Product Code (UPC), if applicable; (x) Price Paid per Unit; and (xi) Total Price. (3) GSA will post reporting instructions at vsc.gsa.gov. GSA reserves the unilateral right to change reporting instructions, including data submission requirements, following 60 days advance notification to the Contractor. (4) The Contractor shall report contract sales in U.S. dollars. (5) The reported contract sales value shall include the Industrial Funding Fee (IFF). (6) The Contractor shall maintain a consistent accounting method of contract sales reporting, based on the Contractor’s established commercial accounting practice. PO 00000 Frm 00031 Fmt 4702 Sfmt 9990 (7) The acceptable points at which contract sales may be reported include— (i) Issuance of an invoice; or (ii) Receipt of payment. (8) The Contractor shall continue to furnish reports, including ‘‘zero’’ sales, through physical completion of the last outstanding task or delivery order of the contract. (9) Orders that contain classified information are exempt from this reporting requirement (See FAR 4.606(c)). (c) Industrial Funding Fee. The Contractor shall remit the IFF at the rate set by GSA’s FAS. (1) The Contractor shall remit the IFF to FAS in U.S. dollars within 30 calendar days after the end of the reporting quarter; final payment shall be remitted within 30 days after physical completion of the last outstanding task order or delivery order of the contract. (2) The IFF remittance Web site address, as well as registration procedures and remittance instructions, will be provided at the time of award or acceptance of this clause. FAS reserves the unilateral right to change such instructions from time to time, following notification to the Contractor. (3) The IFF represents a percentage of the total quarterly sales reported. This percentage is set at the discretion of GSA’s FAS. GSA’s FAS has the unilateral right to change the percentage at any time, but not more than once per year. FAS will provide reasonable notice prior to the effective date of the change. The IFF reimburses FAS for the costs of operating the Federal Supply Schedules Program. FAS recoups its operating costs from ordering activities as set forth in 40 U.S.C. 321: Acquisition Services Fund. Net operating revenues generated by the IFF are also applied to fund initiatives benefitting other authorized FAS programs, in accordance with 40 U.S.C. 321. Offerors must include the IFF in their prices. The fee is included in the awarded price(s) and reflected in the total amount charged to ordering activities. FAS will post notice of the current IFF at https://72a.gsa.gov/ or successor Web site as appropriate. 8. Amend section 552.238–75 by revising the date of the clause; and adding Alternate II to read as follows: ■ 552.238–75 * * Price Reductions. * * * Price Reductions (Date) * * * * * Alternate II (Date). As prescribed in 538.273(b)(2)(ii), substitute the following paragraph (a) for paragraphs (a), (b), (c), (d), (f) and (g) of the basic clause, and paragraph (e) of the basic clause will become paragraph (b) in Alternate II. The Government may request from the contractor a price reduction at any time during the contract period. [FR Doc. 2015–04349 Filed 3–3–15; 8:45 am] BILLING CODE 6820–61–P E:\FR\FM\04MRP1.SGM 04MRP1

Agencies

[Federal Register Volume 80, Number 42 (Wednesday, March 4, 2015)]
[Proposed Rules]
[Pages 11619-11628]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2015-04349]


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GENERAL SERVICES ADMINISTRATION

48 CFR Parts 501, 516, 538 and 552

[GSAR Case 2013-G504; Docket 2014-0020; Sequence 1]
RIN 3090-AJ51


General Services Administration Acquisition Regulation (GSAR); 
Transactional Data Reporting

AGENCY: Office of Acquisition Policy, General Services Administration.

ACTION: Notice of a public meeting and request for comments on proposed 
rule.

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SUMMARY: The General Services Administration (GSA) announces a public 
meeting and request for comment on its proposal to amend the General 
Services Administration Acquisition Regulation (GSAR) to include 
clauses that would require vendors to report transactional data from 
orders and prices paid by ordering activities. This includes orders 
placed against both Federal Supply Schedule (FSS) contract vehicles and 
GSA's non-FSS contract vehicles--Governmentwide Acquisition Contracts 
(GWACs) and Governmentwide Indefinite-Delivery, Indefinite-Quality 
(IDIQ) contracts. For FSS vehicles, the clause would be introduced in 
phases, beginning with a pilot for select products and commoditized 
services. The new clause will be paired with changes to the basis of 
award monitoring requirement of the existing price reductions clause, 
resulting in a burden reduction for participating FSS contractors. This 
rulemaking does not apply to the Department of Veterans Affairs (VA) 
FSS contract holders.
    GSA is interested in conducting a dialogue with industry and 
interested

[[Page 11620]]

parties in Government about the proposed change. GSA is seeking 
feedback on potential impacts to agency customers and contractors 
alike. Feedback will be used to help inform the revisions to the 
proposed clauses, provisions, and prescriptions and other guidance to 
implement the proposed rule.

DATES: Interested parties may offer oral and/or written comments at a 
public meeting to be held on Friday, April 17, 2015, at 9:00 a.m. 
Eastern Standard Time. Parties are also encouraged to provide all 
written comments, including those to be delivered at the public 
meeting, directly to www.regulations.gov. As explained in this notice, 
other tools will also be used to elicit public input.
    Interested parties should submit written comments to the Regulatory 
Secretariat on or before Monday, May 4, 2015 to be considered in the 
formulation of a final rule.
    The public meeting will be conducted on Friday, April 17, 2015, at 
9:00 a.m. Eastern Standard Time. Information for the public meeting may 
be found under the heading SUPPLEMENTARY INFORMATION.

ADDRESSES: Submit comments identified by GSAR Case 2013-G504, 
Transactional Data Reporting, by any of the following methods:
     Regulations.gov: http://www.regulations.gov.
    Submit comments by searching for ``GSAR Case 2013-G504''. Select 
the link ``Comment Now'' and follow the instructions provided at the 
``You are commenting on'' screen. Please include your name, company 
name (if any), and ``GSAR Case 2013-G504'', on your attached document.
     Fax: 202-501-4067.
     Mail: U.S. General Services Administration, Regulatory 
Secretariat Division (MVCB), 1800 F Street NW., 2nd Floor, ATTN: Hada 
Flowers, Washington, DC 20405-0001.
    Instructions: Please submit comments only and cite GSAR Case 2013-
G504 in all correspondence related to this case. All comments received 
will be posted without change to http://www.regulations.gov, including 
any personal and/or business confidential information provided.

FOR FURTHER INFORMATION CONTACT: Ms. Dana Munson, General Services 
Acquisition Policy Division, GSA, 202-357-9652 or Mr. Matthew 
McFarland, General Services Acquisition Policy Division, GSA, 202-690-
9232 or email gsar@gsa.gov, for clarification of content, public 
meeting information and submission of comment. For information 
pertaining to status or publication schedules, contact the Regulatory 
Secretariat at 202-501-4755. Please cite GSAR Case 2013-G504.

SUPPLEMENTARY INFORMATION:

I. Public Meeting

    GSA is holding a public meeting on Friday, April 17, 2015. The 
meeting will start at 9:00 a.m. Eastern Standard Time. The meeting end 
time will depend on the final number of registered oral presentations. 
Attendees can attend the meeting in person at GSA Central Office or 
virtually through GSA's Internet meeting platform, Adobe Connect.
    In-person Attendance: Interested parties may attend the public 
meeting to be held in the GSA Auditorium at GSA Headquarters, located 
at 1800 F St. NW., Washington, DC 20405. The public is asked to pre-
register by Wednesday April 1, 2015, due to security and seating 
limitations. To pre-register, use the following link: https://meet.gsa.gov/e5rpxxbrh14/event/event_info.html. Registration check-in 
will begin at 8:00 a.m. Eastern Standard Time Friday, April 17, 2015, 
and the meeting will start at 9:00 a.m. Eastern Standard Time. 
Attendees must be prepared to present a form of government issued photo 
identification.
    Virtual Attendance: Interested parties may also attend virtually 
through GSA's Internet meeting platform, hosted by Adobe Connect. 
Virtual attendees must register in advance at https://meet.gsa.gov/e5rpxxbrh14/event/event_info.html.
    Meeting Accommodations: The public meeting is physically accessible 
to people with disabilities. Request for sign language interpretation 
or other auxiliary aids should be directed to Ms. Munson at 
dana.munson@gsa.gov or 202-357-9652 by Wednesday, April 1, 2015.
    The TTY number for further information is: 1-800-877-8339. When the 
operator answers the call, let them know the agency is the General 
Services Administration; the point-of-contact is Dana Munson at 202-
357-9652 or Matthew McFarland 202-690-9232.
    Oral Public Comments: Parties wishing to make formal oral 
presentations at the public meeting should indicate so during the 
registration process. Presentations must be provided to Ms. Dana Munson 
by electronic mail at gsar@gsa.gov no later than Wednesday, April 8, 
2015. Time allocations for oral presentations will be limited to 
fifteen minutes. All formal oral public comments should also be 
followed-up in writing and submitted to www.regulations.gov no later 
than Monday, May 4, 2015. When submitting your comments, search for 
``GSAR Case 2013-G504'' and reference ``Public Meeting, Public Comments 
on Transactional Data Reporting.'' Note: Requests made after the 
deadline for formal oral presentations will be permitted as time 
permits and assigned based on the order the requests are received.
    Written Comments/Statements: In lieu of, or in addition to, 
participating in the public meeting, interested parties may submit 
written comments to www.regulations.gov by Monday, May 4, 2015. When 
submitting your comments, search for ``GSAR Case 2013-G504'' and 
reference ``Public Comments on Transactional Data Reporting.'' Parties 
wishing to share written statements at the public meeting must submit 
such statements to Ms. Dana Munson at gsar@gsa.gov by Wednesday, April 
8, 2015.

II. Overview

    The Office of Federal Procurement Policy (OFPP) recently announced 
a new vision for Federal purchasing, one that fundamentally shifts from 
managing purchases and price individually across thousands of 
procurement units to managing entire categories of purchases across 
Government collaboratively (see Transforming the Marketplace: 
Simplifying Federal Procurement to Improve Performance, Drive 
Innovation and Increase Savings, December 4, 2014, available at http://www.whitehouse.gov/sites/default/files/omb/procurement/memo/simplifying-federal-procurement-to-improve-performance-drive-innovation-increase-savings.pdf). Category management involves buying 
and managing commonly-purchased goods and services through categories 
like information technology (IT) hardware and IT software. Categories 
will be managed by experts with in-depth market expertise who 
understand buying trends, industry cost drivers, new innovations on the 
horizon and emerging companies. Category managers will also share 
information with agencies across government to support smarter buying 
decisions.
    GSA is creating a Common Acquisition Platform (CAP), an online 
marketplace to identify best-in-class contracts issued by GSA or other 
agencies, best practices, and other information agencies need to reduce 
the proliferation of duplicative contract vehicles and deliver the best 
value possible to federal customers and the American people. A critical 
component of the CAP, and smarter buying in general, is the 
availability of the prices previously paid by other government

[[Page 11621]]

buyers for a similar product or service under similar terms and 
conditions. Government buyers will be able to use that data, in 
combination with other relevant information--such as customer 
satisfaction with the performance of the contractor-furnished 
solution--to determine fair and reasonable pricing as part of a best 
value solution.
    The current lack of transparency on prices paid by government 
customers has led to significant price variation, sometimes 300 percent 
or more, for identical purchases by federal agencies from the same 
commercial vendor as well as the unnecessary duplication of contract 
vehicles. A recent pilot where contractors were required to furnish 
prices paid on GSA's strategically sourced Office Supplies 2 (OS2) 
vehicle demonstrated the power of such a tool in producing market 
driven pricing throughout the life of the contract.
    Accordingly, this proposed rule would create a transactional data 
reporting clause to improve GSA's ability to conduct meaningful price 
analysis and more efficiently and effectively validate fair and 
reasonable pricing on both its non-FSS and FSS vehicles. It would also 
allow GSA's customers to improve their ability to compare prices prior 
to placing orders under its vehicles. Under the transactional data 
reporting clause, contractors would report prices paid for products and 
services delivered during the performance of the contract, including 
under orders and blanket purchase agreements (BPAs) through a user-
friendly, online reporting system. The report would include 
transactional data elements such as unit measure, quantity of item 
sold, universal product code, if applicable, prices paid per unit, and 
total price.
    The transactional data reporting clause would be applied 
immediately to GSA's government-wide non-FSS vehicles, where 
transactional data is not already collected through other methods. For 
FSS vehicles, the clause would be introduced in phases, beginning with 
a pilot for select products and commoditized services. Under the pilot, 
FSS customers would take advantage of prices paid information and the 
more rigorous order level competition it generates to establish 
pricing. To ensure these prices remain competitive with commercial 
pricing, GSA would evaluate prices paid under the pilot to commercial 
benchmarks and other available data on commercial pricing, as well as 
prices previously paid prior to the pilot where such data is available. 
Vendors would not be subject to the ``tracking customer'' provisions of 
the price reductions clause that require them to monitor their pricing, 
and provide the government with the same price reductions that they 
give to the class of the contractor's commercial customers upon which 
the original contract was awarded. However, GSA would maintain the 
right throughout the life of the FSS contract to ask a vendor for 
updates to the disclosures on its commercial sales format--which is 
used to negotiate pricing on FSS vehicles--where commercial benchmarks 
or other available data on commercial pricing is insufficient to 
establish price reasonableness. Price and quality metrics would be 
established, and commercial benchmarks identified, prior to the launch 
of the pilot so that GSA could perform these analyses and measure the 
results and impact of the pilot. GSA would also seek vendor feedback to 
compare experience with the transactional data clause to the tracking 
requirements of the price reductions clause. GSA would use all relevant 
information and analysis to determine, in consultation with OMB, 
whether use of the clause is beneficial. If the results of the pilot 
confirm that using transactional data is an effective pricing model, 
its use would be broadened using the authorities provided by this rule. 
If the results of the pilot reveal that using transactional data is not 
an effective pricing model, contracts would be modified to revert back 
to using the tracking customer provisions of the price reductions 
clause. Additional details regarding the scope of the pilot will be 
announced through an open dialog on GSA's Interact platform at 
interact.gsa.gov. This public input will be considered prior to the 
launch of the pilot.
    GSA recognizes that use of prices paid information must be done 
within the context of seeking to obtain the best value for the 
taxpayer. GSA believes the clause will be especially impactful when 
combined with the insight and expertise of category managers to provide 
agency buyers across government with market intelligence, expertise, 
and deep-dive analysis to improve supply chain management, pricing 
variances, innovation, redundancies, and unnecessary duplication of 
effort. Tools and training deployed in connection with the 
implementation of this rule would emphasize the importance of 
considering total cost (not just unit price) in the context of each 
procurement, taking into account desired terms and conditions, 
performance levels, past customer satisfaction, and other relevant 
information.

III. Background

    In Fiscal Year 2014, government agencies ordered nearly $39 billion 
in goods and services through GSA's FSS contracts GWACs, and 
Governmentwide IDIQs. While GSA has a number of policies in place to 
help its buyers and agency users to secure best value for the taxpayer, 
two limitations in current pricing practices make achievement of this 
goal unnecessarily challenging: (1) Lack of visibility into prices paid 
by other customers; and (2) insufficient attention on ``horizontal 
pricing'' under the FSS program--i.e., the ability to compare one 
vendor's pricing to that of other vendors.

Lack of Transparency in Prices Previously Paid

    The Federal Acquisition Regulation (FAR) has long emphasized the 
need for contracting officers to conduct price analysis as part of 
their responsibility to establish that offered prices are fair and 
reasonable. Price analysis requires contracting officers to obtain and 
analyze data on the prices at which the same or similar items have been 
sold. At GSA, like most agencies, collection of this information has 
rested largely on the shoulders of each contracting officer. Until 
recently, little effort was made to share prices previously paid by 
agencies throughout the government. Over the years, this lack of 
transparency contributed to large price disparities, where one agency 
may pay a significant amount more for the exact same product or 
commoditized service as another agency under the same or substantially 
similar terms and conditions, sometimes even from the same vendor. GSA 
has already seen examples where price variability has decreased through 
the collection of transactional data such as with its Office Supplies 2 
(OS2) government-wide strategic sourcing vehicle, and others, saving 
taxpayers approximately $370 million.
    GSA proposes to address this weakness through the use of a 
transactional data reporting clause. Under the clause contractors would 
be required to report historical information encompassing the products 
and services delivered during the performance of the contract, 
including under orders and BPAs. Contractors would be required to 
electronically report contract sales monthly through a user-friendly 
online reporting system. The report would include transactional data 
elements such as unit measures, quantity of item sold, universal 
product code, if

[[Page 11622]]

applicable, price paid per unit, and total price.
    GSA believes there are multiple benefits to use of the 
transactional data reporting clause, including better pricing, 
administrative savings, increased opportunities for small business 
participation, and standardization of practice.
     Better pricing: The availability of prices paid 
information will lead to better prices for the taxpayer by improving 
the agency's ability to conduct price analysis. It will also improve 
the quality of both contract and order level competition because 
vendors will know that their customers have greater market intelligence 
on what other agencies have paid in similar situations. For example, 
GSA initiated a dynamic pricing model, where prices are adjusted based 
on transactional data, on its Office Supplies 2 vehicle between 
November 2012 and January 2013. Prior to the implementation of dynamic 
pricing, the average OS2 savings were 13.5 percent. However, since 
fully implementing dynamic pricing in June 2013, savings rates have 
averaged approximately 18 percent, or roughly 4.5 percent higher than 
pre-dynamic pricing.
     Administrative savings: GSA expects the added value of 
transactional data to GSA contract vehicles to ultimately reduce 
duplicative contract vehicles as both FSS and non-FSS contracts will 
demonstrably offer best value, reducing transactional costs to both 
agencies and contractors. GSA estimates that more than 600,000 open 
market actions overlap with existing GSA contract vehicles. With better 
pricing on GSA contracts, agencies will have less incentive to 
establish separate contracts. Additionally, GSA believes replacing the 
price reduction clause's tracking customer requirement with 
transactional data reporting could reduce the annual burden on 
contractors by more than 85 percent, or approximately $51 million in 
administrative costs to contractors, when compared to the burden hours 
associated with the tracking customer requirement under the price 
reductions clause in its current configuration.
     Reduction of barriers to small business participation: The 
reduction in duplicative and inefficient procurement transactions 
removes barriers to entry into the Federal marketplace, particularly 
for small businesses. The GAO reports the costs of being on multiple 
contract vehicles ranged from $10,000 to $1,000,000 due to increased 
bid and proposal, and administrative costs (see GAO report # GAO-10-
367, Contracting Strategies, Data and Oversight Problems Hamper 
Opportunities to Leverage Value of Interagency and Enterprisewide 
Contracts).
     Standardization: Significant GSA non-FSS contracts include 
a requirement for transactional data. Though the specifics vary, GSA's 
Alliant, Alliant Small Business, 8(a) Streamlined Technology 
Acquisition Resources for Services (STARS) II, and Veterans Technology 
Services (VETS) GWACs, Connections II, Custom SATCOM Solutions (CS2), 
Custom SATCOM Solutions--Small Business (CS2-SB), Office Supply Third 
Generation (OS3), and One Acquisition Solution for Integrated Services 
(OASIS) Govermentwide IDIQs, all have built-in vendor requirements for 
submission of transactional data. Currently, these requirements are 
communicated in solicitations without the benefit of a dedicated GSAR 
clause. The creation of a uniform clause to be used across GSA's non-
FSS programs would facilitate consistency and transparency by allowing 
the public to comment on the proposed new clause.

Use of Vertical Pricing and Movement Toward Both Vertical and 
Horizontal Pricing in the FSS Program

    The FSS program is currently built around a vertical pricing model 
where pricing offered to the government from a potential vendor is 
compared to the pricing that the same vendor offers to its commercial 
customers. When vendors first submit an FSS offer, minimal 
consideration is given to the relative competitiveness of the vendor's 
prices to other vendors (i.e., horizontal pricing). Instead, the FSS 
program primarily collects aggregate sales information, including a 
broad disclosure of discounts vendors offer to commercial customers for 
similar products and services (see the ``Commercial Sales'' disclosure 
guidance at GSAR 515.408). The Government's negotiation objective is to 
achieve a company's best price--i.e., the price given to its most 
favored customer (see GSAR 538.270(a)) who buys in quantities and under 
conditions similar to those of the government. Contractors are then 
required, under the ``price reductions'' clause (PRC), to monitor their 
pricing over the life of the contract and provide the government with 
the same price reductions that they give to the class of the 
contractor's commercial customers upon which the original contract 
award was predicated (see GSAR 552.238-75). In addition to the 
``tracking customer'' requirement, the price reductions clause allows 
vendors to voluntarily reduce prices to the Government and for the 
Government to request a price reduction at any time during the contract 
period such as where market analysis indicates that lower prices are 
being offered or paid for the same items under similar conditions.
    The required disclosure of commercial sales practices and the PRC 
were first introduced into the FSS program in the 1980s as a way to 
ensure fair and reasonable pricing through the life of a contract with 
the goal of achieving most favored customer pricing. For many years, 
the tracking customer feature of the PRC was a critical mechanism for 
enabling GSA and its customers to maintain good pricing from original 
equipment manufacturers who held the vast majority of FSS contracts. 
However, changes in the Federal market have lessened the impact of the 
tracking customer mechanism over time. Of particular note, an 
increasing percentage of FSS contractors are resellers with little or 
no commercial sales. The GSA Inspector General (IG) recently reported 
that resellers represent more than one-third of FSS vendors (See Major 
Issues from Multiple Award Schedules Audits, Audit Memorandum Numbers 
A120050-3, available at http://www.gsaig.gov under Office of Inspector 
General (OIG) Reports and Audit Reports).
    Moreover, due to the various exceptions included in the PRC the 
tracking customer feature ties pricing for reductions to sales of 
single items and plays little role in blanket purchase agreement and 
order purchases reflecting volume sales. Further, many products sold 
under the FSS program are commercial-off-the-shelf (COTS) products or 
other commercial items for which the government is not a market driver. 
The government, and other customers in the category to which the 
government is most typically aligned under the price reductions clause, 
tend to receive voluntary price reductions from the vendor as a result 
of general market forces (e.g., intense competition and small profit 
margins within the IT hardware arena that cause vendors to lower their 
prices for all customers voluntarily to maintain market share). In 
other words, prices are reduced under the voluntary provisions of the 
price reduction clause as a result of market rate pricing changes, not 
under the mandatory tracking customer provisions. GSA recently analyzed 
modifications issued between October 1, 2013 and August 4, 2014 under 
nine of its FSS contracts, including Schedule 70 (Information 
Technology), Schedule 874 (Mission Oriented Business Integrated

[[Page 11623]]

Solutions (MOBIS)), Schedule 66 (Scientific Equipment and Services), 
Schedule 84 (Total Solutions for Law Enforcement, Security, Facilities 
Management, Fire, Rescue, Clothing, Marine Craft and Emergency/Disaster 
Response), Schedule 899 (Environmental Services), Schedule 738 II 
(Language Services), 874 V (Logistics Worldwide), Schedule 871 
(Professional Engineering Services), and Schedule 00CORP (The 
Consolidated Schedule). GSA found that only about 3 percent of the 
total price reductions received under the price reduction clause were 
tied to the ``tracking customer'' feature. The vast majority 
(approximately 78 percent) came as a result of commercial pricelist 
adjustments and market rate changes, with the balance for other 
reasons. This finding supports attempting a different means of making 
better pricing available.
    Simultaneous with these trends, significant improvements in 
technology now make it possible to collect transactional data and 
display it in a way that government customers can see the prices paid 
by other FSS customers along with other data to determine whether 
prices offered to them represent the best value to the taxpayer. As 
explained above, the required disclosure and sharing of prices paid 
information through the use of a transactional data reporting clause 
and portal under the OS2 pilot led to savings rates averaging 
approximately 18 percent, or about 4.5 percent higher than pre-dynamic 
pricing.
    GSA believes the collection and use of transactional data may be a 
more efficient and effective way for driving price reductions on FSS 
buys than through use of the tracking customer mechanism. In addition 
to avoiding the challenges associated with the tracking customer 
mechanism described above, the transactional data reporting clause 
would allow for greater reliance on horizontal pricing in the FSS 
program so that GSA and its customers can easily evaluate the relative 
competitiveness of prices between FSS vendors. Moreover, the 
transactional data reporting clause, if used as an alternative to 
tracking customer mechanism, could significantly reduce contractor 
burden. The Chief Acquisition Officers Council recently conducted an 
Open Dialogue through an online platform on improving how to do 
business with the Federal Government. Contractors pointed to the price 
reductions clause as one of the most complicated and burdensome 
requirements in Federal contracting, and GSA's own estimates suggest 
FSS contractors spend over 860,000 hours a year (at a cost of 
approximately $58.5 million) on compliance with this clause. Several 
conversations in this dialogue identified the need to reform FSS 
pricing policies, particularly requesting the removal of GSAR clause 
552.238-75, Price Reductions requirements. Over the years, GSA has made 
adjustments to address burdens and improve the use of these tools. In 
particular, on March 4, 1996 (GSAR Change 70), GSA modified the sales 
disclosure form to require only summary information and recognize that 
the terms and conditions of commercial sales vary and there may be 
legitimate reasons why the best price is not achieved. Despite these 
significant adjustments to the FSS pricing model, contractors continue 
to struggle to comply with the sales practice disclosure requirements 
and the price reduction clause. In two separate reports, the GSA IG 
found that over two-thirds of vendors reviewed in fiscal year (FY) 2011 
and 84 percent in FY 2012 provided commercial sales practice 
disclosures that are not current, accurate, and/or complete and nearly 
half of the vendors in FY 2012 had inadequate sales monitoring systems 
and billing systems to ensure proper administration of the price 
reduction and billing provisions. See Major Issues from Multiple Award 
Schedules Audits, Audit Memorandum Numbers A120050-3 and A120050-4, 
available at http://www.gsaig.gov under OIG Reports and Audit Reports.
    As stated above, GSA believes that the transactional data reporting 
clause could reduce the annual burden on contractors by more than 85 
percent, or approximately $51 million in administrative costs to 
contractors, when compared to the burden hours associated with 
monitoring pricing under the price reductions clause in its current 
configuration. GSA further believes that use of the transactional data 
reporting clause as an alternative to the price reduction clause 
addresses recommendations made by independent reviewers of the FSS 
program over the past several years. In particular, the Multiple Award 
Schedule (MAS) Blue Ribbon Advisory Panel, which included 
representatives from the largest buying agencies, the Department of the 
Defense, Department of Homeland Security, Department of the Interior, 
Department of the Treasury, and U.S. Department of Education and 
industry, recommended in 2010 that ``the GSA Administrator remove the 
Price Reduction Clause from the MAS program supply contracts for 
products in phases as the GSA Administrator implements recommendations 
for competition and price transparency at the Schedule contract level 
and the order level.'' The same year, the Government Accountability 
Office (GAO) issued a report recommending that GSA collect ``prices 
paid'' data on FSS orders and make this information available to FSS 
contract negotiators and customer agencies. See Data and Oversight 
Problems Hamper Opportunities to Leverage Value of Interagency and 
Enterprisewide Contracts, GAO-10-367 (April 2010), available at http://www.gao.gov/products/GAO-10-367.

Transitioning to Transactional Data Reporting

    GSA recognizes that use of prices paid information must be done 
within the context of seeking to obtain the best value for the taxpayer 
and envisions that this information would be used as one information 
point in conjunction with other considerations, such as total cost, 
desired performance levels, delivery schedule, unique terms and 
conditions, time considerations, and customer satisfaction. Training to 
support the implementation of this rule would emphasize that prices 
paid information must be considered within the context of each 
individual procurement. More importantly, related efforts, such as the 
development of category hallways--an online marketplace tool--and the 
appointment of category managers with in-depth market expertise, will 
help agencies gain market intelligence to make smarter and well-
informed buying decisions.
    GSA further recognizes that its government-wide non-FSS and FSS 
contract vehicles require separate implementation strategies taking 
into account differences in the pricing models currently used by these 
vehicles.
    Government-wide Non-FSS contract vehicles. To implement the 
transactional data reporting requirement, this proposed rule would add 
a new GSAR clause for non-FSS contract vehicles, 552.216-75 Sales 
Reporting and Fee Remittance, which would require the submission of 
transactional data from vendors on orders and prices paid by ordering 
activities. Government-wide non-FSS contract vehicles account for 
approximately $3.9 billion in federal contract spending each year. As 
explained above, a significant number of GSA's non-FSS contract 
vehicles, including all GWAC vehicles, already include a requirement 
for transactional data. This proposed rule would standardize this 
practice for non-FSS contract vehicles and allow GSA to collect data on 
fixed-price, time-and-material, labor-hour, and cost-

[[Page 11624]]

reimbursement contracts, consistent with requirements currently in GWAC 
vehicles.
    FSS contract vehicles. GSA proposes a phased-in implementation of 
the transactional data reporting clause to the FSS program, beginning 
with a pilot chosen from FSS product offerings and commoditized 
services where obtaining such data has the greatest potential impact to 
reduce price variability and help agencies secure better value for the 
taxpayer through category management. Application of the transactional 
data reporting clause, including the proposed pilot, would be limited 
to FSS contracts managed by GSA's Federal Acquisition Service. This 
rule would not apply to FSS contracts managed by the Department of 
Veterans Affairs pursuant to a delegation provided by GSA.
    Details regarding the pilot will be provided by separate notice, 
including through social media tools already in place such as GSA 
Interact (https://interact.gsa.gov), as well as updates to GSA's Web 
site where current information is displayed and access and links to 
other sites are provided. Respondents will be invited to provide 
feedback through these mechanisms as well as at the public meeting 
announced in this notice. Respondents are also invited to provide 
written feedback in response to this notice regarding the preliminary 
pilot design features described below:
     Scope. The pilot would focus on commercial-off-the-shelf 
and related commercial products and commoditized services that 
experience high volume of repetitive purchasing under identical or 
substantially similar terms and conditions.
     Participation: Vendor participation in the pilot would be 
mandatory. Covered vendors would not be subject to the tracking 
customer requirements of the price reduction clause.
    However, vendors would still be subject to the commercial sales 
disclosure requirements, including the requirement to disclose 
commercial sales practices when requesting a contract modification for 
additional items or additional Special Item Numbers. In addition, GSA 
would maintain the right throughout the life of the FSS contract to ask 
a vendor for updates to the disclosures made on its commercial sales 
format (which is used to negotiate pricing on FSS vehicles) if and as 
necessary to ensure that prices remain fair and reasonable in light of 
changing market conditions. The government could request price 
reductions and vendors could voluntarily provide price reductions. GSA 
would modify select existing contracts and conduct solicitation 
refreshes under the FSS program to implement the new transactional data 
reporting requirements.
     Evaluation: Similar to best practices used in strategic 
sourcing efforts, GSA would establish clearly defined metrics prior to 
the launch of the pilot, such as savings rates, customer satisfaction, 
small business utilization, and benchmark results against available 
commercial data sources within categories of spend to evaluate the 
impact of the transactional data reporting clause. Pilot results would 
be evaluated before applying the transactional data reporting clause to 
additional FSS contracts and making usage mandatory more broadly. Pilot 
results would also be used to evaluate the comparative efficiency and 
effectiveness of the tracking customer requirement. If GSA determines 
using transactional data is not an effective pricing model within the 
FSS program, contracts would be modified to revert back to using the 
provisions described in the basic GSAR clause 552.238-75, Price 
Reductions.

Software, Tools, and Training

    GSA intends to update its systems in order to collect and analyze 
transactional data. Data submission will be enabled through multiple 
electronic interfaces (e.g., secure data entry, electronic file 
submission, or an application programming interface (API)). The goal is 
to make the reporting process as streamlined, secure and efficient as 
possible for contractors, requiring them to submit only the 
transactional data GSA cannot access via other means (e.g., GSA 
contract management systems or Federal reporting systems such as the 
System for Award Management (SAM) or the Federal Procurement Data 
System (FPDS)).
    GSA also plans to implement an API for buyers to benefit from using 
transactional data. Through the API, GSA will make this information 
accessible online for all Government buyers. This data will help buyers 
better understand the universe of GSA purchases; helping them to drive 
down prices, reduce price variability, and make smarter purchases.
    Prior to implementation of transactional data reporting 
requirements, GSA's Vendor Support Center (https://vsc.gsa.gov) will 
provide instructions and offer training to vendors on how to report 
transactional data for FSS and non-FSS orders.
    Additionally, GSA will update its relevant courseware on the 
Federal Acquisition Institute (FAI) and Defense Acquisition University 
(DAU) portals to educate both customers and GSA contracting officers on 
how to use the data. The Federal Acquisition Service (FAS) has an 
internal training course aimed at GSA contracting officers awarding and 
administering FSS contracts--this course will be updated to educate 
contracting officers on how to conduct analysis on transactional data, 
as well as how to use these analyses to achieve better pricing on the 
contracts. Similarly, the external-facing courseware on how to use the 
FSS program and other non-FSS GWACs and MACs will be updated to educate 
customers on the new requirements and how they can use the data 
collected (to be shared by GSA) to buy smarter. The external courseware 
will also highlight the additional value the collected data offers to 
GSA's FSS and non-FSS contracting programs.

IV. Executive Orders 12866 and 13356

    Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess 
all costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts, and equity). E.O. 
13563 emphasizes the importance of quantifying both costs and benefits, 
of reducing costs, of harmonizing rules, and of promoting flexibility. 
This is not a significant regulatory action and, therefore, was not 
subject to review under section 6(b) of E.O. 12866, Regulatory Planning 
and Review, dated September 30, 1993. This rule is not a major rule 
under 5 U.S.C. 804.

V. Regulatory Flexibility Act

    GSA expects this proposed rule to have a significant economic 
impact on a substantial number of small entities within the meaning of 
the Regulatory Flexibility Act, 5 U.S.C. 601, et seq., because the 
proposed rule involves providing transactional data on FSS and non-FSS 
orders and transactional data that may ultimately affect the end 
pricing of products offered through GSA. However, the cost to comply 
with the additional reporting requirement may be offset by the benefits 
provided by the transactional data, such as greater insight and 
visibility into customer buying habits and knowledge of market 
competition.
    An additional benefit to FSS contractors is that the addition of 
the transactional data reporting clause would be coupled with an 
alternate version of GSAR clause 552.238-75

[[Page 11625]]

Price Reductions that does not require customer tracking where the 
vendor monitors and provides price reductions to the Government when 
the customer or category of customer upon which the contract was 
predicated receives a discount. GSAR clause 552.238-75, Price 
Reductions has long been the mechanism through which GSA ensures prices 
on contract remained fair and reasonable. However, with transactional 
data, contracting officers will have a new, potentially more effective 
and less burdensome mechanism through which to ensure contract pricing 
is competitive and fair and reasonable, although vertical pricing 
analysis techniques can still be used.
    Providing the required transactional data will impose significant 
economic impact on all contractors, both small and other than small, 
doing business on GSA-managed contracts. Therefore, an Initial 
Regulatory Flexibility Analysis (IRFA) has been prepared consistent 
with 5 U.S.C. 603, and is summarized as follows:

    The General Services Administration (GSA) is proposing to amend 
General Services Administration Acquisition Regulation (GSAR) to add 
an alternate to clause 552.238-74 Industrial Funding Fee (IFF) and 
Sales Reporting, and new clause 552.216-75 Sales Reporting and Fee 
Remittance to require transactional data reporting in FSS and non-
FSS contract vehicles. The clause will require GSA contractors to 
provide transactional data, which is equivalent to information found 
on an itemized invoice, to GSA. This will further the objective to 
improve category management and negotiate better pricing on all GSA 
acquisition vehicles. Collecting transactional data on orders and 
prices paid will allow customers to analyze spending patterns and 
develop new acquisition strategies to fully leverage the 
Government's spend.
    GSA is undertaking a major modernization initiative aimed at 
enabling customers to drive better value and achieve taxpayer 
savings by setting the stage for pricing reform. A major 
characteristic of modernization is collecting and using 
transactional data for units under most GSA acquisition vehicles to 
serve as a basis for price analysis and category management.
    This rule will apply to all contractors who hold non-FSS 
contract vehicles as well as to all FSS contract holders, contingent 
on beneficial results being demonstrated through a pilot conducted 
on a subset of FSS contracts for products and commoditized services. 
As of Fiscal Year 2013, there are 15,738 vendors holding 18,598 FSS 
and non-FSS contract vehicles. Of the 15,738 vendors, 12,590 are 
small entities to which the rule will apply. Only those contracts 
with sales would have data to report. Department of Veteran Affairs 
FSS holders are not affected.
    During the development of the rule, GSA considered using one of 
its many internal applications that support pre-award and post-award 
actions for GSA contracts to pull the transactional data necessary 
for more robust price analysis. These internal applications 
facilitate data exchanges between GSA and its vendors to provide 
business intelligence, create procurement sources, facilitate 
acquisitions, execute deliveries, and provide customer care. GSA 
uses this information to update systems architecture, to develop new 
applications for contract administration, and to enhance business 
intelligence for suppliers and ordering activities. Unfortunately, 
most of these systems do not collect transactional data at a level 
that would be of benefit for spend analysis and/or do not possess 
the most accurate and timely information regarding purchasing 
activity. Approximately 13 percent of GSA-controlled sales, which 
includes purchases made by GSA's Assisted Acquisition Services 
activity on behalf of customer agencies, can capture transactional 
data; for the remaining majority of purchases (87 percent), the 
customer and supplier are the only sources of detailed transaction-
level data.
    Another option for transactional data sourcing would be to 
enhance or combine existing GSA systems to collect the data. GSA 
would incur significant IT development costs for the effort. Were 
GSA to invest the time and resources into an enterprise-wide system 
that could handle procurement functions and spend analysis, then 
customers and suppliers would need to commit to use electronic 
commercial tools such as eBuy and Advantage![supreg]. Without the 
100 percent commitment of individual customers, the data will be 
incomplete--possibly to a large extent--and may significantly skew 
any subsequent analysis on cost savings and/or purchasing decisions.
    GSA's SmartPay program (the program that manages the 
governmentwide purchase card) is another source where transactional 
data could be collected, and has been on a limited basis following 
commercial standards for the past several years on sub-sets of 
several FSS contracts. However, with less than 1 percent of 
procurements being made through the purchase card, this method would 
not provide a complete set of data to achieve the full benefits of 
capturing transactional data.
    Finally, FPDS could be upgraded to collect transactional data. 
However, this would require Federal Acquisition Regulation 
revisions, tens of millions of dollars in system changes, and years 
to implement. Additionally, ordering activities do not normally 
collect transactional data, so agency financial procedures and 
systems would have to be overhauled in order to accommodate 
transactional data collection.

    The Regulatory Secretariat has submitted a copy of the Initial 
Regulatory Flexibility Analysis (IRFA) to the Chief Counsel for 
Advocacy of the Small Business Administration. A copy of the IRFA may 
be obtained from the Regulatory Secretariat. GSA invites comments from 
small business concerns and other interested parties on the expected 
impact of this rule on small entities.
    GSA will also consider comments from small entities concerning the 
existing regulations in subparts affected by this rule in accordance 
with 5 U.S.C. 610. Interested parties must submit such comments 
separately and should cite 5 U.S.C. 601, et seq. (GSAR Case 2013-G504), 
in correspondence.

VI. Paperwork Reduction Act

    The Paperwork Reduction Act (44 U.S.C. Chapter 35) applies. The 
proposed rule contains information collection requirements. 
Accordingly, the Regulatory Secretariat will be submitting a request 
for approval of a new information collection requirement concerning 
this rule to the Office of Management and Budget under 44 U.S.C. 3501, 
et seq.
    GSA estimates the proposed rule will result in a net burden 
reduction of approximately 757,000 hours per year based on the 
difference in current reporting requirement (i.e. GSAR clause 552.238-
75) and the proposed reporting requirements (i.e. clause 552.238-74 
Industrial Funding Fee and Sales Reporting (Federal Supply Schedule) 
Alternate I and clause 552.216-75 Sales Reporting and Fee Remittance). 
The analysis of this calculation as well as the assumptions made to 
support this analysis is presented below.

A. New Reporting Requirements

    GSA estimates the public reporting burden for contractors to set-up 
transactional data reporting systems to average a one-time initial set-
up burden of 6 hours. The estimated time includes the time for 
reviewing instructions, searching existing data sources, gathering and 
maintaining the data needed, and completing and reviewing the 
collection of information. GSA also took into consideration training, 
compliance systems, negotiations, and audit preparation the new clause 
may require, when estimating the one-time initial set-up of 6 hours.
    Thereafter, the monthly burden estimate to report data is 
approximately .52 of an hour or 31 minutes. This number takes into 
consideration the distribution of contract values (i.e. sales) and 
assumes monthly reporting burden rises with vendor sales based on the 
distribution of sales and obligations within FSS contracts and non-FSS 
contracts. There is a wide variation in contract sales, therefore 
monthly reporting burden ranges between 2 minutes (for contractors with 
$0 in sales) and 4 hours (for contractors with greater than $50 million 
in sales). GSA estimates that only the top 0.6 percent of FSS 
contractors and top 4 percent of non-FSS contractors will be affected 
the

[[Page 11626]]

most. The average GSA contractor will see little or no effect of the 
new reporting requirement.
    A weighted average was used, based on distribution of sales, to 
calculate a reporting burden. To arrive at the weighted average, 
vendors were broken up into six categories, based on contract values. 
The characteristics of these categories of contracts in FY 2013 are as 
follows:
    Category 1: Contract value is less than $0. The estimated burden 
for this category per contractor is 0.03 hours (2 minutes) a month, or 
0.36 hours (21.8 minutes) annually. This makes up 37 percent of FSS 
contractors and 8 percent of non-FSS vendors. The total annual burden 
for this category is estimated as 2,620 hours.
    Category 2: Contract value is $1-$500,000. The estimated burden for 
this category per contractor is 0.5 hours (30 minutes) a month, or 6 
hours annually. This category makes up 41 percent of FSS contractors 
and 24 percent of non-FSS vendors. The total annual burden for this 
category is estimated as 44,884 hours.
    Category 3: Contract value is $500,000-$5,000,000. The estimated 
burden for this category per contractor is 1 hour per month, or 12 
hours annually. This category makes up 17 percent of FSS contractors 
and 43 percent of non-FSS vendors. The total annual burden for this 
category is estimated as 38,956 hours.
    Category 4: Contract value is $5,000,000-$20,000,000. The estimated 
burden for this category per contractor is 2 hours per month, or 24 
hours annually. This category makes up 4 percent of FSS contractors and 
17 percent of non-FSS vendors. The total annual burden for this 
category is estimated as 17,293 hours.
    Category 5: Contract value is $20,000,000-$50,000,000. The 
estimated burden for this category per contractor is 3 hours per month, 
or 36 hours annually. This category makes up 1 percent of FSS 
contractors and 5 percent of non-FSS vendors. The total annual burden 
for this category is estimated as 6,785 hours.
    Category 6: Contract value is greater than $50,000,000. The 
estimated burden for this category per contractor is 4 hours per month, 
or 48 hours annually. This category makes up 1 percent of FSS 
contractors and 4 percent of non-FSS vendors. The total annual burden 
for this category is estimated as 5,094 hours.
    Taking the above into consideration, a weighted average was used to 
calculate an annual burden of 6.3 hours or 0.52 hours per month since 
reporting will be required monthly.
    The cost of reporting was quantified by multiplying the level of 
effort in hours by an assumed fully loaded hourly rate for contractors 
($50 x 136 percent = $68). The annual reporting burden is estimated as 
follows:


552.216-75  Sales Reporting and Fee Remittance (Transactional Data 
Reporting Requirement) and 552.238-74 Industrial Funding Fee and Sales 
Reporting (FEDERAL SUPPLY SCHEDULE) Alternate I

    The total public annual burden hours for setup and reporting are 
223,906.32 based on the following:

    Non-FSS Contracts
    (One-time initial setup)
    Respondents: 477.
    Responses Per Respondent: x 1.
    Total Responses: 477.
    Hours Per Response: x 6.
    Total Burden Hours: 2,862.

    Non-FSS Contracts
    (Reporting)
    Respondents: 477.
    Responses Per Respondent: x 12.
    Total Responses: 5,724.
    Hours Per Response: x 0.52.
    Total Burden Hours: 2,976.48.

    The annual estimated total burden hours for non-FSS contracts are 
5,838.48 for year one and 2,976.48 for every year thereafter.

    FSS Contracts
    (One-time initial setup)
    Respondents: 17,816.
    Responses Per Respondent: x 1.
    Total Responses: 17,816.
    Hours Per Response: x 6.
    Total Burden Hours: 106,896.

    FSS Contracts
    (Reporting)
    Respondents: 17,816.
    Responses Per Respondent: x 12.
    Total Responses: 213,792.
    Hours Per Response: x 0.52.
    Total Burden Hours: 111,171.84.

    The annual estimated total burden hours for FSS contracts are 
218,067.84 for year one and 111,171.84 for every year thereafter.
    The total annual estimated cost to the public for the Transactional 
Data Reporting GSAR clauses (552.216-75 and 552.238-74 Alternate I) and 
is estimated to be $15,225,629.76 based on the following:

    Non-FSS
    (One-time initial setup)
    Respondents: 477.
    Responses per respondent: x 1.
    Total annual responses: 477.
    Preparation hours per response: x 6.
    Total response burden hours: 2,862.
    Average hourly wages ($50.00+36 percent overhead): x 68.
    Estimated cost to the public: $194,616.

    Non-FSS
    (Reporting)
    Respondents: 477.
    Responses per respondent: x 12.
    Total annual responses: 5,724.
    Preparation hours per response: x .52.
    Total response burden hours: 2,976.48
    Average hourly wages ($50.00+36 percent overhead): x 68.
    Estimated cost to the public: $202,400.64.

    Estimated cost to the public for Non-MAS contracts is: $397,016.64 
for year one and $202,400.64 for every year thereafter.

    FSS Contracts
    (One-time initial set up)
    Respondents: 17,816.
    Responses per respondent: x 1.
    Total annual responses: 17,816.
    Preparation hours per response: x 6.
    Total response burden hours: 106,896.00
    Average hourly wages ($50.00+36 percent overhead): x 68.00.
    Estimated cost to the public: $7,268,928.

    FSS
    (Reporting)
    Respondents: 17,816.
    Responses per respondent: x 12.
    Total annual responses: 213,792.
    Preparation hours per response: x .52.
    Total response burden hours: 111,171.84.
    Average hourly wages ($50.00+36 percent overhead): 68.00.
    Estimated cost to the public: $7,559,685.12.


The total estimated cost to the public for FSS contracts is 
$14,828,613.12 for year one and $7,559,687.12 for every year 
thereafter.
    There are 18,293 contracts containing the transactional data 
reporting requirement. Data submitted by respondents is submitted and 
stored electronically. Retrieval of cumulative data requires 
approximately 1 hour each month (1*12) for a total of 12 hours 
annually; and costs the Government $9,015,522.12 annually.

    Requests per year 18,293.
    Reviewing Time (1*12) x 12.
    Total Review Time/year 219,516.
    Average Cost/hr x 41.07.
    Total Government Cost $9,015,522.12.

    The cost of $41.07 per hour is based on GS-12, step 5 salary 
(Salary Table 2014-DCB Washington-Baltimore, DC-MD-VA-WV-PA, Effective 
January 2014).
Difference in Reporting Requirements
    Acceptance of GSAR Alternate I, 552.238-74 Industrial Funding Fee 
and

[[Page 11627]]

Sales Reporting (Federal Supply Schedule), also triggers the inclusion 
of Alternate II, 552.238-75 Price Reductions. Unlike the basic Price 
Reductions GSAR clause, Alternate II of 552.238-75 does not require the 
vendor to monitor and provide price reductions to the Government when 
the customer or category of customer upon which the contract was 
predicated receives a discount. In other words, there will be no 
reporting burden for GSAR Alternate II, 552.238-75 Price Reductions.
    The current total estimated reporting burden hours for GSAR clause 
552.238-75 Price Reductions is 868,150 with annual burden cost of 
approximately $58.5 million (see OMB control number 3090-0235). The 
total annual estimated reporting burden hours for the new Transactional 
Data Reporting clause is 111,171.84 with annual burden cost of 
$7,559,685.12. Therefore, the net annual burden reduction is 756,978.16 
hours with annual burden savings of approximately $51 million.

B. Request for Comments Regarding Paperwork Burden

    Submit comments, including suggestions for reducing this burden, 
not later than Monday, May 4, 2015 to: General Services Administration, 
Regulatory Secretariat Division (MVCB), ATTN: Hada Flowers, 1800 F 
Street NW., 2nd Floor, Washington, DC 20405-0001.
    Public comments are particularly invited on: Whether this 
collection of information is necessary for the proper performance of 
functions of the GSAR, and will have practical utility; whether our 
estimate of the public burden of this collection of information is 
accurate, and based on valid assumptions and methodology; ways to 
enhance the quality, utility, and clarity of the information to be 
collected; and ways in which we can minimize the burden of the 
collection of information on those who are to respond, through the use 
of appropriate technological collection techniques or other forms of 
information technology.
    Requesters may obtain a copy of the supporting statement from the 
General Services Administration, Regulatory Secretariat (MVCB), ATTN: 
Hada Flowers, 1800 F Street NW., 2nd Floor, Washington, DC 20407. 
Please cite OMB Control Number 3090-0306, Transactional Data Reporting: 
GSAR Part Affected: 552.238-74, Industrial Funding Fee and Sales in all 
correspondence.

List of Subjects in 48 CFR Parts 501, 516, 538 and 552

    Government procurement.

    Dated: February 25, 2015.
Jeffrey A. Koses,
Senior Procurement Executive, Office of Acquisition Policy, Office of 
Government-wide Policy, General Services Administration.

    Therefore, GSA proposes to amend 48 CFR parts 501, 516, 538, and 
552 as set forth below:

0
1. The authority citation for 48 CFR parts 501, 516, 538, and 552 
continues to read as follows:

    Authority:  40 U.S.C 121(c).

PART 501--GENERAL SERVICES ADMINISTRATION ACQUISITION REGULATION 
SYSTEM


501.106  [Amended]

0
2. Amend section 501.106 in the table, by adding in numerical sequence, 
GSAR Reference ``552.216-75'' and its corresponding OMB Control Number 
``3090-XXXX''.

PART 516--TYPES OF CONTRACTS

0
3. Amend section 516.506 by adding paragraph (d) to read as follows:


516.506  Solicitation provisions and contract clauses.

* * * * *
    (d) The contracting officer may insert clause 552.216-75 in 
solicitations and GSA-awarded IDIQ contracts. This clause should be 
included in all GSA-awarded Governmentwide acquisition contracts and 
multi-agency contracts.

PART 538--FEDERAL SUPPLY SCHEDULE CONTRACTING

0
4. Amend section 538.273 by revising paragraphs (b)(1) and (2) to read 
as follows:


538.273  Contract clauses.

* * * * *
    (b) * * *
    (1) 552.238-74, Industrial Funding Fee and Sales Reporting. Use 
Alternate I for Federal Supply Schedules with Transactional Data 
Reporting Requirements. Clause 552.238-75 Alternate II should also be 
used when vendors agree to include clause 552.238-74 Alternate I in the 
contract.
    (2) 552.238-75, Price Reductions (May 2004).
    (i) Except in cases where Alternate II is used, use Alternate I in 
solicitations and contracts for:
    (A) Federal Supply Schedule 70;
    (B) The Consolidated Schedule containing information technology 
Special Item Numbers;
    (C) Federal Supply Schedule 84; and
    (D) Federal Supply Schedules for recovery purchasing (see 
538.7102).
    (ii) Use Alternate II for Federal Supply Schedules with 
Transactional Data Reporting Requirements. This alternate clause is 
used when vendors agree to include clause 552.238-74 Alternate I;
    (iii) Federal Supply Schedule 84; and
    (iv) Federal Supply Schedules for recovery purchasing (see 
538.7102).
* * * * *

PART 552--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

0
5. Amend section 552.212-71 by revising the introductory text to read 
as follows:


552.212-71  Contract Terms and Conditions Applicable to GSA Acquisition 
of Commercial Items.

    As prescribed in 512.301(a)(1), insert the following clause:
* * * * *
0
6. Add section 552.216-75 to read as follows:


552.216-75  Transactional Data Reporting.

    As prescribed in 516.506(d), insert the following provision:

Transactional Data Reporting (Date)

    (a) Definitions:
    (1) Contract sale is the price paid by the ordering activity for 
the product or service on the task or delivery order placed against 
this contract. Contract sales include contract items sold to 
authorized users unless the purchase was conducted pursuant to a 
separate contracting authority, such a separately awarded FAR part 
12, FAR part 13, FAR part 14, or FAR part 15 procurement; or a non-
FAR contract.
    (2) Transactional data is historical information encompassing 
the products and services delivered during the performance of a 
contract.
    (b) Reporting of Contract Sales. The Contractor shall report all 
contract sales under this contract as follows:
    (1) The Contractor shall electronically report contract sales 
monthly, including ``zero'' sales, by utilizing the automated 
reporting system at an Internet Web site designated by the General 
Services Administration (GSA) or by uploading the data according to 
GSA instructions. Each report shall be submitted within 15 calendar 
days of the applicable monthly reporting period. The Web site 
address, as well as registration instructions and reporting 
procedures, will be provided at the time of award.
    (2) The Contractor shall provide, at no cost to the Government, 
the following transactional data elements, as applicable--
    (i) Contract or BPA Number;
    (ii) Order Number/Procurement Instrument Identifier (PIID);
    (iii) Non Federal Entity, if applicable;
    (iv) Description of Deliverable;
    (v) Manufacturer Name;
    (vi) Manufacturer Part Number;
    (vii) Unit Measure (each, hour, case, lot);
    (viii) Quantity of Item Sold;

[[Page 11628]]

    (ix) Universal Product Code (UPC), if applicable;
    (x) Price Paid per Unit; and
    (xi) Total Price.
    (3) GSA will post reporting instructions at https://vsc.gsa.gov/. GSA reserves the unilateral right to change reporting 
instructions, including data submission requirements, following 60 
days advance notification to the Contractor.
    (4) The Contractor shall report contract sales in U.S. dollars.
    (5) The reported contract sales value shall include the 
Contractor Access Fee (CAF).
    (6) The Contractor shall maintain a consistent accounting method 
of contract sales reporting, based on the Contractor's established 
commercial accounting practice.
    (7) The acceptable points at which contract sales may be 
reported include--
    (i) Issuance of an invoice; or
    (ii) Receipt of payment.
    (8) The Contractor shall continue to furnish reports, including 
``zero'' sales, through physical completion of the last outstanding 
task or delivery order of the contract.
    (9) Orders that contain classified information are exempt from 
this reporting requirement (See FAR 4.606(c)).
    (c) Contractor Access Fee (CAF). (1) The CAF represents a 
percentage of the total quarterly sales reported. This percentage is 
set at the discretion of GSA. GSA has the unilateral right to change 
the percentage at any time, but not more than once per year. GSA 
provides reasonable notice prior to the effective date of the 
change. The CAF reimburses GSA for operating costs. Offerors must 
include the CAF in their prices. The fee is included in the awarded 
price(s) and reflected in the total amount charged to ordering 
activities.
    (2) Within 60 days of award, a GSA representative will provide 
the Contractor with specific written procedural instructions on 
remitting the CAF. GSA reserves the unilateral right to change such 
instructions following notification to the Contractor.
    (3) The Contractor shall remit the CAF at the rate set by GSA 
within 15 calendar days after the end of the calendar month. Final 
payment shall be remitted within 30 days after physical completion 
of the last outstanding task order or delivery order of the 
contract.
    (4) The Contractor shall remit the CAF to GSA in U.S. dollars.
    (5) Failure to remit the full amount of the CAF within 15 
calendar days after the end of the applicable reporting period 
constitutes a contract debt to the United States Government under 
the terms of FAR Subpart 32.6. The Government may exercise all 
rights under the Debt Collection Improvement Act of 1996, including 
withholding or setting off payments and interest on the debt (see 
FAR clause 52.232-17, Interest). Should the Contractor fail to 
submit the required sales reports, falsify them, or fail to timely 
pay the CAF, this is sufficient cause for the Government to 
terminate the contract for cause.


(End of Clause)
0
7. Amend section 552.238-74 by revising the date of the clause; and 
adding Alternate I to read as follows:


552.238-74  Industrial Funding Fee and Sales Reporting.

* * * * *

Industrial Funding Fee and Sales Reporting (Date)

* * * * *
    Alternate I (Date): As prescribed in 538.273(b)(1), substitute 
the following paragraphs (a), (b), and (c) for paragraphs (a), (b), 
and (c) of the basic clause:
    (a) Definitions.
    (1) Contract sale is the price paid by the ordering activity for 
the product or service on the task or delivery order placed against 
this contract. Contract sales include contract items sold to 
authorized users unless the purchase was conducted pursuant to a 
separate contracting authority, such as a Governmentwide Acquisition 
Contract (GWAC); a separately awarded FAR part 12, FAR part 13, FAR 
part 14, or FAR part 15 procurement; or a non-FAR contract. Sales 
made to state and local governments under Cooperative Purchasing 
authority shall be counted as reportable sales.
    (2) Transactional data is historical information encompassing 
the products and services delivered during the performance of a 
contract.
    (b) Reporting of Contract Sales. The Contractor shall report all 
contract sales under this contract as follows:
    (1) The Contractor shall electronically report contract sales 
monthly, including ``zero'' sales, by utilizing the automated 
reporting system at an Internet Web site designated by the General 
Services Administration (GSA) or by uploading the data according to 
GSA instructions. Each report shall be submitted within 15 calendar 
days of the applicable monthly reporting period. The Web site 
address, as well as registration instructions and reporting 
procedures, will be provided at the time of award.
    (2) The Contractor shall provide, at no cost to the Government, 
the following transactional data elements, as applicable--
    (i) Contract or BPA Number;
    (ii) Order Number/Procurement Instrument Identifier (PIID);
    (iii) Non Federal Entity, if applicable;
    (iv) Description of Deliverable;
    (v) Manufacturer Name;
    (vi) Manufacturer Part Number;
    (vii) Unit Measure (each, hour, case, lot);
    (viii) Quantity of Item Sold;
    (ix) Universal Product Code (UPC), if applicable;
    (x) Price Paid per Unit; and
    (xi) Total Price.
    (3) GSA will post reporting instructions at vsc.gsa.gov. GSA 
reserves the unilateral right to change reporting instructions, 
including data submission requirements, following 60 days advance 
notification to the Contractor.
    (4) The Contractor shall report contract sales in U.S. dollars.
    (5) The reported contract sales value shall include the 
Industrial Funding Fee (IFF).
    (6) The Contractor shall maintain a consistent accounting method 
of contract sales reporting, based on the Contractor's established 
commercial accounting practice.
    (7) The acceptable points at which contract sales may be 
reported include--
    (i) Issuance of an invoice; or
    (ii) Receipt of payment.
    (8) The Contractor shall continue to furnish reports, including 
``zero'' sales, through physical completion of the last outstanding 
task or delivery order of the contract.
    (9) Orders that contain classified information are exempt from 
this reporting requirement (See FAR 4.606(c)).
    (c) Industrial Funding Fee. The Contractor shall remit the IFF 
at the rate set by GSA's FAS.
    (1) The Contractor shall remit the IFF to FAS in U.S. dollars 
within 30 calendar days after the end of the reporting quarter; 
final payment shall be remitted within 30 days after physical 
completion of the last outstanding task order or delivery order of 
the contract.
    (2) The IFF remittance Web site address, as well as registration 
procedures and remittance instructions, will be provided at the time 
of award or acceptance of this clause. FAS reserves the unilateral 
right to change such instructions from time to time, following 
notification to the Contractor.
    (3) The IFF represents a percentage of the total quarterly sales 
reported. This percentage is set at the discretion of GSA's FAS. 
GSA's FAS has the unilateral right to change the percentage at any 
time, but not more than once per year. FAS will provide reasonable 
notice prior to the effective date of the change. The IFF reimburses 
FAS for the costs of operating the Federal Supply Schedules Program. 
FAS recoups its operating costs from ordering activities as set 
forth in 40 U.S.C. 321: Acquisition Services Fund. Net operating 
revenues generated by the IFF are also applied to fund initiatives 
benefitting other authorized FAS programs, in accordance with 40 
U.S.C. 321. Offerors must include the IFF in their prices. The fee 
is included in the awarded price(s) and reflected in the total 
amount charged to ordering activities. FAS will post notice of the 
current IFF at https://72a.gsa.gov/ or successor Web site as 
appropriate.

0
8. Amend section 552.238-75 by revising the date of the clause; and 
adding Alternate II to read as follows:


552.238-75  Price Reductions.

* * * * *

Price Reductions (Date)

* * * * *
    Alternate II (Date). As prescribed in 538.273(b)(2)(ii), 
substitute the following paragraph (a) for paragraphs (a), (b), (c), 
(d), (f) and (g) of the basic clause, and paragraph (e) of the basic 
clause will become paragraph (b) in Alternate II.
    The Government may request from the contractor a price reduction 
at any time during the contract period.

[FR Doc. 2015-04349 Filed 3-3-15; 8:45 am]
BILLING CODE 6820-61-P