General Services Administration Acquisition Regulation; Information Collection; Federal Supply Schedule Pricing Disclosures, 72060-72063 [2015-29396]

Agencies

• General Services Administration

[Federal Register Volume 80, Number 222 (Wednesday, November 18, 2015)]
[Notices]
[Pages 72060-72063]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-29396]


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GENERAL SERVICES ADMINISTRATION

[OMB Control No. 3090-0235; Docket No. 2015-0001; Sequence 13]


General Services Administration Acquisition Regulation; 
Information Collection; Federal Supply Schedule Pricing Disclosures

AGENCY: Office of Acquisition Policy, General Services Administration 
(GSA).

ACTION: Notice of request for comments regarding an extension to an 
existing OMB clearance.

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SUMMARY: Under the provisions of the Paperwork Reduction Act, the 
Regulatory Secretariat Division is submitting a request to the Office 
of Management and Budget (OMB) to review and approve an extension of a 
previously approved information collection requirement regarding 
General Services Administration Acquisition Regulation clause 552.238-
75, Price Reductions, otherwise known as the Price Reductions clause. 
The requested extension has been renamed ``Federal Supply Schedule 
Pricing Disclosures'' because it now includes a burden estimate for 
Commercial Sales Practices disclosures. The information collected is 
used to establish and maintain Federal Supply Schedule pricing and 
price related terms and conditions.

DATES: Submit comments on or before: January 19, 2016.

ADDRESSES: Submit comments identified by Information Collection 3090-
0235, Federal Supply Schedule Pricing Disclosures, by any of the 
following methods:
     Regulations.gov: https://www.regulations.gov. Submit 
comments via the Federal eRulemaking portal by searching the OMB 
control number. Select the link ``Submit a Comment'' that corresponds 
with ``Information Collection 3090-0235, Federal Supply Schedule 
Pricing Disclosures.'' Follow the instructions provided at the ``Submit 
a Comment'' screen. Please include your name, company name (if any), 
and ``Information Collection 3090-0235, Federal Supply Schedule Pricing 
Disclosures'' on your attached document.
     Mail: General Services Administration, Regulatory 
Secretariat Division (MVCB), 1800 F Street, NW., Washington, DC 20405. 
ATTN: Ms. Flowers/IC 3090-0235, Federal Supply Schedule Pricing 
Disclosures.
    Instructions: Please submit comments only and cite Information 
Collection 3090-0235, Federal Supply Schedule Pricing Disclosures, in 
all correspondence related to this collection. Comments received 
generally will be posted without change to https://www.regulations.gov, 
including any personal and/or business confidential information 
provided. To confirm receipt of your comment(s), please check 
www.regulations.gov, approximately two to three days after submission 
to verify posting (except allow 30 days for posting of comments 
submitted by mail).

FOR FURTHER INFORMATION CONTACT: Mr. Matthew McFarland, General 
Services Acquisition Policy Division, 202-690-9232 or gsar@gsa.gov.

SUPPLEMENTARY INFORMATION:

A. Purpose

    GSA's Federal Supply Schedule (FSS) program, commonly known as the 
GSA Schedules program or Multiple Award Schedule (MAS) program, 
provides federal agencies with a simplified process for acquiring 
commercial supplies and services. The FSS program is the Government's 
preeminent contracting vehicle, accounting for approximately 10 percent 
of all federal contract dollars, with approximately $33 billion in 
purchases made through the program in fiscal year 2014.
    GSA is requesting an extension of a previously approved information 
collection requirement related to one of the major components of the 
FSS program, General Services Administration Acquisition Regulation 
(GSAR) clause 552.238-75, Price Reductions, otherwise known as the 
Price Reductions clause. However, this requested extension has been 
renamed ``Federal Supply Schedule Pricing Disclosures'' because it now 
includes a burden estimate for Commercial Sales Practices disclosures.

FSS Pricing Practices

    GSA establishes price reasonableness on its FSS contracts by 
comparing a contractor's prices and price-related terms and conditions 
with those offered to their other customers. Through analysis and 
negotiations, GSA establishes a favorable pricing relationship in 
comparison to one of the contractor's customers (or category of 
customers) and then maintains that pricing relationship for the life of 
the contract. In order to carry out this practice, GSA collects pricing 
information through Commercial Sales Practices (CSP) disclosures and 
enforces the pricing relationship through General Services 
Administration Acquisition Regulation (GSAR) clause 552.238-75, Price 
Reductions, commonly known as the Price Reductions clause (PRC).
    Commercial Sales Practices (CSP): In accordance with GSAR 
515.408(a)(2), offerors must submit information in the Commercial Sales 
Practices Format provided in the solicitation, following the 
instructions at GSAR Figure 515.4-2, or submit information in their own 
format. In addition to when an offer is submitted, CSP disclosures are 
also required prior to executing bilateral modifications for exercising 
a contract option period, adding items to the contract, or increasing 
pricing under the Economic Price Adjustment clause (GSAR 552.216-70).
    Price Reductions Clause (PRC): GSAR 538.273(b)(2) prescribes the 
PRC for use in all FSS solicitations and contracts. The clause is 
intended to ensure the Government maintains its price/discount (and/or 
term and condition) advantage in relation to the contractor's customer 
(or category of customer) upon which the FSS contract is based. The 
basis of award customer (or category of customer) is identified at the 
conclusion of negotiations and noted in the contract. Thereafter, the 
PRC requires FSS contractors to inform the contracting officer of price 
reductions within 15 calendar days. Per GSAR 552.238-75(c)(1),

    A price reduction shall apply to purchases under this contract 
if, after the date negotiations conclude, the Contractor--
    (i) Revises the commercial catalog, pricelist, schedule or other 
document upon which contract award was predicated to reduce prices;
    (ii) Grants more favorable discounts or terms and conditions 
than those contained in the commercial catalog, pricelist, schedule 
or other documents upon which contract award was predicated; or
    (iii) Grants special discounts to the customer (or category of 
customers) that formed the basis of award, and the change disturbs 
the price/discount relationship of the Government to the customer 
(or category of customers) that was the basis of award.

    41 U.S.C. 152(3)(B) requires FSS ordering procedures to ``result in 
the lowest overall cost alternative to meet the needs of the Federal 
Government.'' CSP disclosures and the PRC ensure GSA meets this 
objective by giving it insight into a contractor's pricing practices, 
which is proprietary information that can only be obtained directly 
from the contractor.

Information Collection Changes and Updates

    GSA has revised this information collection by adding CSP 
disclosure burden estimates, renaming the information collection, and 
updating figures.
    Including the CSP Disclosure Burden: GSA is adding CSP disclosure 
burden estimates to this information collection because of comments 
received for its Transactional Data Reporting proposed rule (GSAR case 
2013-G504), published in the Federal Register at 80 FR 11619, on March 
4, 2015. GSA proposed to amend the GSAR to include a clause that would 
require FSS vendors to report transactional data from orders and prices 
paid by ordering activities. The new clause would be paired with 
changes to the basis of award monitoring, or ``tracking customer,'' 
requirement of the existing Price Reductions clause, resulting in a 
burden

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reduction for participating FSS contractors. The proposed rule also 
noted, ``. . . GSA would maintain the right throughout the life of the 
FSS contract to ask a vendor for updates to the disclosures made on its 
[CSP] format . . . if and as necessary to ensure that prices remain 
fair and reasonable in light of changing market conditions.''
    In comments received regarding the proposed rule, industry 
respondents indicated retaining CSP disclosures would cancel out any 
burden reduction achieved by eliminating the PRC tracking customer 
requirement. Specifically, respondents were concerned that CSP 
disclosures still force them to monitor their commercial prices, which 
ultimately causes the associated burden for both disclosure 
requirements. In response, GSA agrees the burden of the PRC and CSP is 
related and is therefore including CSP disclosure burden estimates in 
this information collection extension request.
    Renaming the Information Collection: GSA is changing the 
information collection name from ``Price Reductions Clause'' to 
``Federal Supply Schedule Pricing Disclosures'' to more accurately 
reflect the scope of the information collected.
    Updated Figures: The following figures were updated for the current 
information collection:
     Increased the number of FSS contracts and vendors from 
19,000 FSS contracts held by 16,000 vendors to 20,094 FSS contracts 
were held by 17,302 vendors.
     Increased the number of price reduction modifications from 
1,560 to 2,148.
     Decreased the number of GSA OIG pre-award audits from an 
average of 70 to 59.
     Increased the estimated annual time burden from 868,920 
hours to 1,324,343 hours.
     Increased the estimated annual cost burden; the new 
estimated annual cost burden is $90,055,353. The 2012 information 
collection did not provide a cost burden estimate, but if the same 
hourly rate ($68) was applied to the 2012 time burden, the 2012 cost 
burden would have been $59,086,560.

B. Annual Reporting Burden

    This information collection applies to all companies that held, or 
submitted offers for, FSS contracts. In fiscal year 2014:
     20,094 contracts were active, including 1,411 contracts 
that were awarded and 2,213 contracts that ended over that time period.
     17,302 companies held FSS contracts (some companies held 
more than one contract).
     3,464 offers were submitted for FSS contracts.

However, the number of responses consists of the number of CSP 
disclosures and price reduction notifications made in FY2014, as well 
as the average number of GSA Office of Inspector General audits 
performed between fiscal years 2012 and 2014.

Heavier Lifts and Lighter Lifts

    FSS contracts are held by a diverse set of companies, which vary in 
terms of business size, offerings, and FSS sales volume. For example, 
in fiscal year 2014:
     32.8 percent, or 5,673 companies, reported $0 in FSS 
contracts.
     5.6 percent, or 975 companies, accounted for 80 percent of 
all FSS sales.
     The top 20 percent of FSS contractors (in terms of FY2014 
sales) accounted for 95.7 percent of FSS sales.
     Only 2.6 percent of FSS contractors reported more than $1 
million in FSS sales.
    In general, a contractor's FSS sales volume will have the greatest 
effect on the associated burden of these requirements, although the 
number and type of offerings, and business structure, can also be 
significant factors. As shown by the above figures, a relatively small 
number of FSS contractors account for the vast majority of FSS sales 
and accordingly, likely bear a heavier burden for these requirements. 
Conversely, the majority of FSS vendors, which are typically small 
businesses with lower sales volume, absorb a lighter burden for these 
requirements.
    To account for the differences among FSS contractors, GSA is 
utilizing the Pareto principle, or ``80/20 rule,'' which states 80 
percent of effects comes from 20 percent of the population. 
Accordingly, GSA is separating FSS contractors among those that have a 
``heavier lift'' (20 percent) from those that have a ``lighter lift'' 
(80 percent). Contractors with heavier lifts are those with the 
characteristics that lead to increased burden--more sales volume, 
higher number of contract items, more complex offerings, more 
transactions, more complex transactions, and/or intricate business 
structures. This methodology is used for several components of the 
burden analysis.

Cost Burden Calculation

    The estimated cost burden for respondents was calculated by 
multiplying the burden hours by an estimated cost of $68/hour ($50/hour 
with a 36 percent overhead rate).

Price Reductions Clause

    For this information collection clearance, GSA attributes the PRC-
related burden to training, compliance systems, and audits, as well as 
a burden associated with notifying GSA of price reductions within 15 
calendar days after their occurrence.
    Training: FSS contractors provide training to their employees to 
ensure compliance with FSS pricing disclosure requirements. In FY2014, 
there were 17,302 contractors, 3,460 (20 percent) with a heavier lift 
and 13,842 (80 percent) with a lighter lift. Contractors within the 
heavier lift category may need to develop formal training programs and 
conduct training for numerous divisions and offices, while contractors 
in the lighter lift category may have no need for training design and 
administration due to having as few as one person responsible for PRC 
compliance.
Training--Heavier Lift
Total Annual Responses: 3,460
Average Hours per Response: 40
Total Time Burden (Hours): 138,400
Total Cost Burden: $9,411,200
Training--Lighter Lift
Total Annual Responses: 13,842
Average Hours per Response: 20
Total Time Burden (Hours): 276,840
Total Cost Burden: $18,825,120

    Compliance Systems: FSS contractors must develop systems to control 
discount relationships with other customers/categories of customer to 
ensure the basis of award pricing relationship is not disturbed. In 
response to the 2012 information collection request, the Coalition for 
Government Procurement provided the results from a survey it conducted 
among its members regarding the PRC burden. The Coalition survey 
results attributed 1,100 burden hours to developing compliance systems. 
However, GSA believes this figure is only attributable to heavier lift 
contractors and should be allocated over the 20-year life of an FSS 
contract because a significant part of a burden is the effort to 
establish a compliance system that will be used over the life of the 
contract. GSA is attributing a total of 600 burden hours to compliance 
systems for contractors with a lighter lift and is also allocating that 
burden over a 20-year period. The results are an annual 55-hour burden 
for heavier lift contractors (1,100 hours divided by 20 years) and an 
annual 30-hour burden for

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lighter lift contractors (600 hours divided by 20 years).
    In FY2014, there were 17,302 contractors, 3,460 (20 percent) with a 
heavier lift and 13,842 (80 percent) with a lighter lift:
Compliance Systems--Heavier Lift
Total Annual Responses: 3,460
Average Hours per Response: 55
Total Time Burden (Hours): 190,322
Total Cost Burden: $12,940,400
Compliance Systems--Lighter Lift
Total Annual Responses: 13,842
Average Hours per Response: 30
Total Time Burden (Hours): 415,248
Total Cost Burden: $28,237,680

    Audits: The GSA Office of Inspector General (OIG) performed an 
average of 59 pre-award audits of FSS contracts between FY2012 and 
FY2014, according to the OIG's Semiannual Congressional Reports over 
that time period. Respondents to a 2012 Coalition for Government 
Procurement survey estimated that approximately 440-470 hours were 
spent preparing for audits involving the PRC; the 455 hour figure is 
the median point in the range:
GSA OIG Audits
Total Annual Responses: 59
Average Hours per Response: 455
Total Time Burden (Hours): 26,845
Total Cost Burden: $1,825,460

    Price Reduction Notifications: 2,148 price reduction modifications 
were completed in FY14, with each modification requiring a notification 
from the contractor. In a survey conducted among GSA FSS contracting 
officers, respondents estimated it took an average of 4.25 hours to 
complete a price reduction modification. GSA believes FSS contractors 
bear a similar burden for this task and is therefore using the same 
burden estimate.
Price Reduction Notifications
Total Annual Responses: 2,148
Average Hours per Response: 4.25
Total Time Burden (Hours): 9,129
Total Cost Burden: $620,772

Commercial Sales Practices Disclosures

    The CSP burden results from disclosures required of any contractor 
submitting an offer for an FSS contract or modifying an FSS contract to 
increase prices, add items and Special Item Numbers, or exercise 
options. GSA attributed a negotiations burden to the PRC in the 
previous information collection, but is now including that burden 
within the CSP disclosure estimates.
    The burden estimates for CSP disclosures are based upon the 
estimates provided by respondents to the GSA FSS contracting officer 
survey. While the 77 survey respondents provided estimates regarding 
the amount of time it takes FSS contracting officers to complete CSP-
related tasks, GSA believes FSS contractors bear a similar burden for 
these tasks and is therefore using the same burden estimates.
    Pre-award Disclosures: In FY2014, contractors submitted 3,464 
offers for FSS contracts, with 693 (20 percent) offerors having a 
heavier lift (20 percent) and 2,771 (80 percent) with a lighter lift:
Pre-award Disclosures--Heavier Lift
Total Annual Responses: 693
Average Hours per Response: 41.48
Total Time Burden (Hours): 28,746
Total Cost Burden: $1,954,704
Pre-award Disclosures--Lighter Lift
Total Annual Responses: 2,771
Average Hours per Response: 32.41
Total Time Burden (Hours): 89,808
Total Cost Burden: $6,106,951

    Price Increase Modifications: In FY2014, 2,509 price increase 
modifications were processed, including 502 (20 percent) with a heavier 
lift and 2,007 (80 percent) with a lighter lift:
Price Increases--Heavier Lift
Total Annual Responses: 502
Average Hours per Response: 10.45
Total Time Burden (Hours): 5,246
Total Cost Burden: $356,721
Price Increases--Lighter Lift
Total Annual Responses: 2,007
Average Hours per Response: 9.71
Total Time Burden (Hours): 18,404
Total Cost Burden: $1,251,485

    Adding Items and Special Item Numbers (SINs): In FY2014, 6,861 
modifications to add contract items or SINs were processed, including 
1,372 (20 percent) with a heavier lift and 5,489 (80 percent) with a 
lighter lift:
Addition Modifications--Heavier Lift
Total Annual Responses: 1,372
Average Hours per Response: 11.13
Total Time Burden (Hours): 15,270
Total Cost Burden: $1,038,384
Addition Modifications--Lighter Lift
Total Annual Responses: 5,489
Average Hours per Response: 10.65
Total Time Burden (Hours): 58,458
Total Cost Burden: $3,975,134

    Exercising Options: In FY2014, 2,237 modifications to exercise 
options were processed, including 447 (20 percent) with a heavier lift 
and 1,790 (80 percent) with a lighter lift:
Option Modifications--Heavier Lift
Total Annual Responses: 447
Average Hours per Response: 26.14
Total Time Burden (Hours): 11,685
Total Cost Burden: $794,551
Option Modifications--Lighter Lift
Total Annual Responses: 1,790
Average Hours per Response: 22.32
Total Time Burden (Hours): 39,953
Total Cost Burden: $2,716,790

Total Annual Burden

    The total estimated burden imposed by Federal Supply Schedule 
pricing disclosures is as follows:
Estimated Annual Time Burden (Hours)
Price Reductions Clause: 1,056,774
CSP Disclosures: 267,569
Total Annual Time Burden: 1,324,343
Estimated Annual Cost Burden
Price Reductions Clause: $71,860,632
CSP Disclosures: $18,194,721
Total Annual Cost Burden: $90,055,353

C. Public Comments

    Public comments are particularly invited on: Whether this 
collection of information is necessary and whether it 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.
    Obtaining Copies Of Proposals: Requesters may obtain a copy of the 
information collection documents from the General Services 
Administration, Regulatory Secretariat Division (MVCB), 1800 F Street 
NW., Washington, DC 20405, telephone 202-501-4755. Please cite OMB 
Control No. 3090-0235, Price Reductions Clause, in all correspondence.

    Dated: November 12, 2015.
Jeffrey A. Koses,
Director, Office of Acquisition Policy, Office of Government-wide 
Policy.
[FR Doc. 2015-29396 Filed 11-17-15; 8:45 am]
 BILLING CODE 6820-61-P