General Services Administration Acquisition Regulation; Submission for OMB Review; Federal Supply Schedule Pricing Disclosures, 21346-21351 [2016-08160]

Download as PDF 21346 Federal Register / Vol. 81, No. 69 / Monday, April 11, 2016 / Notices longitude or latitude of a registered antenna structure. This change will increase the number of these forms filed, or responses for this collection, by approximately 100 per annum. The second change, found in 17.4(b), requires owners to note on FCC Form 854 that the registration is voluntary if the antenna structure is otherwise not required to be registered under section 17.4. For this, an additional checkbox will be added to Form 854, but this revision will not increase the collection’s average burden per response. These changes will enable the Commission to further modernize its rules while adhering to its statutory responsibility to prevent antenna structures from being hazards to air navigation. Federal Communications Commission. Gloria J. Miles, Federal Register Liaison Officer, Office of the Secretary. [FR Doc. 2016–08217 Filed 4–8–16; 8:45 am] BILLING CODE 6712–01–P FEDERAL RESERVE SYSTEM mstockstill on DSK4VPTVN1PROD with NOTICES Change in Bank Control Notices; Acquisitions of Shares of a Bank or Bank Holding Company The notificants listed below have applied under the Change in Bank Control Act (12 U.S.C. 1817(j)) and § 225.41 of the Board’s Regulation Y (12 CFR 225.41) to acquire shares of a bank or bank holding company. The factors that are considered in acting on the notices are set forth in paragraph 7 of the Act (12 U.S.C. 1817(j)(7)). The notices are available for immediate inspection at the Federal Reserve Bank indicated. The notices also will be available for inspection at the offices of the Board of Governors. Interested persons may express their views in writing to the Reserve Bank indicated for that notice or to the offices of the Board of Governors. Comments must be received not later than April 26, 2016. A. Federal Reserve Bank of Atlanta (Chapelle Davis, Assistant Vice President) 1000 Peachtree Street NE., Atlanta, Georgia 30309. Comments can also be sent electronically to Applications.Comments@atl.frb.org: 1. The RLP 2012 Children’s Trust, Panama City, Florida, and Johnna Lombard, Trustee, Manhasset, New York; to acquire voting shares of PrimeSouth Bancshares, Inc., and thereby indirectly acquire voting shares of PrimeSouth Bank, both in Tallassee, Alabama. VerDate Sep<11>2014 18:37 Apr 08, 2016 Jkt 238001 B. Federal Reserve Bank of St. Louis (David L. Hubbard, Senior Manager) P.O. Box 442, St. Louis, Missouri 63166–2034. Comments can also be sent electronically to Comments.applications@stls.frb.org: 1. Jeffery F. Teague and Sarah Shell Teague, as co-trustees of the Jeffery F. Teague and Sarah Shell Teague Joint Revocable Trust, all of El Dorado, Arkansas; Susan Shell Allison, individually, and as trustee of the Susan Allison Testamentary Trust with power to vote shares owned by her two minor children, all of Benton, Arkansas; Joseph Shell, individually, and as trustee of the Joe Shell Testamentary Trust with power to vote shares owned by the Hanna Shell Irrevocable Trust, and by his minor child, all of Batesville, Arkansas; Jay Shell with power to vote shares held by Carolyn Southerland Shell Testamentary Trust and by High Point Farms, Jayme Shell, Jessica Shell, Mary K. Shell, all of Batesville, Arkansas; and John Allison, and Anna Allison, both of Benton, Arkansas, all as members of the Allison-Shell-Teague family control group; to retain voting shares of Citizens Bancshares of Batesville, and thereby indirectly retain voting shares of The Citizens Bank, both in Batesville, Arkansas. Board of Governors of the Federal Reserve System, April 6, 2016. Michael J. Lewandowski, Associate Secretary of the Board. [FR Doc. 2016–08204 Filed 4–8–16; 8:45 am] BILLING CODE 6210–01–P GENERAL SERVICES ADMINISTRATION [OMB Control No. 3090–0235; Docket No. 2015–0001; Sequence 13] General Services Administration Acquisition Regulation; Submission for OMB Review; Federal Supply Schedule Pricing Disclosures Office of Acquisition Policy, General Services Administration (GSA). ACTION: Notice of request for comments regarding an extension to an existing OMB clearance. AGENCY: 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– SUMMARY: PO 00000 Frm 00038 Fmt 4703 Sfmt 4703 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. A notice was published in the Federal Register at 80 FR 72060 on November 18, 2015. One comment was received. DATES: Submit comments on or before: May 11, 2016. ADDRESSES: Submit comments regarding this burden estimate or any other aspect of this collection of information, including suggestions for reducing this burden to: Office of Information and Regulatory Affairs of OMB, Attention: Desk Officer for GSA, Room 10236, NEOB, Washington, DC 20503. Additionally submit a copy to GSA 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. Hada 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 matthew.mcfarland@gsa.gov. SUPPLEMENTARY INFORMATION: E:\FR\FM\11APN1.SGM 11APN1 Federal Register / Vol. 81, No. 69 / Monday, April 11, 2016 / Notices 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 2015. 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. mstockstill on DSK4VPTVN1PROD with NOTICES 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 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 collected 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. VerDate Sep<11>2014 18:37 Apr 08, 2016 Jkt 238001 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 reduction for participating FSS contractors. The proposed rule also noted, ‘‘. . . GSA would maintain the PO 00000 Frm 00039 Fmt 4703 Sfmt 4703 21347 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). E:\FR\FM\11APN1.SGM 11APN1 21348 Federal Register / Vol. 81, No. 69 / Monday, April 11, 2016 / Notices • 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. mstockstill on DSK4VPTVN1PROD with NOTICES 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). VerDate Sep<11>2014 18:37 Apr 08, 2016 Jkt 238001 Price Reductions Clause For this information collection clearance, GSA attributes the PRCrelated 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 lighter lift contractors (600 hours divided by 20 years). In FY2014, there were 17,302 contractors, 3,460 (20 percent) with a PO 00000 Frm 00040 Fmt 4703 Sfmt 4703 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 E:\FR\FM\11APN1.SGM 11APN1 Federal Register / Vol. 81, No. 69 / Monday, April 11, 2016 / Notices 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 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: mstockstill on DSK4VPTVN1PROD with NOTICES 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 VerDate Sep<11>2014 18:37 Apr 08, 2016 Jkt 238001 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. Discussion and Analysis Pre-award Disclosures—Lighter Lift Option Modifications—Heavier Lift Total Annual Burden A notice of request for comments regarding the extension of Information Collection 3090–0235, Federal Supply Schedule Pricing Disclosures, was published in the Federal Register at 80 FR 72060 on November 18, 2015. One respondent provided comments on (1) whether FSS pricing disclosures are necessary and have practical utility, and (2) if GSA’s estimates of the collection burden are accurate, and based on valid assumptions and methodology. The following are summaries of those comments and GSA’s responses: Comment: The respondent stated these pricing disclosures no longer have practical utility because pricing under the FSS program is primarily driven by order-level competition. In regards to the Price Reductions clause (PRC), the respondent stated the following: • GSA’s notice of proposed rulemaking for GSAR case 2013–G504, Transactional Data Reporting, which stated ‘‘only about 3 percent of the total price reductions received under the price reductions 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.’’ 1 • The respondent’s member organizations ‘‘overwhelmingly reported that competition in response to known requirements is the most significant driver of reduced pricing for customer agencies.’’ • The PRC limits contractors in their ability to offer discounts to certain commercial clients, which undermines competition in the commercial marketplace. In regards to Commercial Sales Practices (CSP) disclosures, the respondent stated: • ‘‘The current CSP format for disclosures does not provide for consideration of the existing GSA Schedule ordering procedures, creates ambiguity in disclosure requirements, 1 See GSAR Case 2013–G504; Docket 2014–0020; Sequence 1 [80 FR 11619 (Mar. 4, 2015)]. PO 00000 Frm 00041 Fmt 4703 Sfmt 4703 21349 and requires the release of data that exceeds the needs of the government to negotiate fair and reasonable prices.’’ • The CSP was developed at a time when the commercial marketplace was less volatile and contractors generally had standard prices and pricelists. However, this is no longer the case, particularly for the service and hightech industry sectors. As a result, the respondent’s members report ‘‘it is difficult to determine how to respond to and appropriately disclose information requested in the CSP format.’’ Response: The PRC and CSP disclosures are a means for GSA to meet its obligation under 41 U.S.C. 152(3)(B), which requires FSS ordering procedures to ‘‘result in the lowest overall cost alternative to meet the needs of the Federal Government.’’ However, GSA is exploring alternatives to these practices. For example, GSA’s Transactional Data Reporting proposed rule would require FSS contractors to report to GSA transactional data—including descriptions of the items purchased, quantities, and prices paid—on orders placed under their FSS contracts. GSA’s experience with transactional data has shown it can lead to better contractlevel and order-level prices. As part of GSA’s Transactional Data Reporting proposed rule, GSA proposed removing the basis of award requirement of the PRC when FSS contractors agreed to report transactional data to GSA.2 Comment: The respondent stated the ‘‘higher lift’’ versus ‘‘lighter lift’’ assumptions are not appropriate because its member organizations consisting of both small businesses and large businesses, and both types use consultants and attorneys to assist in completing pre-award CSP disclosures, which aligns both types closer to the higher lift burden estimates. Response: GSA used this approach to account for the vast disparity in burden among FSS contractors. The amount of ‘‘lift’’ required by a contractor can be affected by factors such as business size, sales volume, and contract-type. The following illustrations show how the burden can vary by each factor: • A larger business will encounter more obstacles in meeting these requirements, such as coordinating between multiple offices and business lines, than a smaller business with fewer customers. • Schedule contractors with higher sales volume will likely encounter more situations that require pricing disclosures than those with no sales. • A higher number of FSS contract line-items require more expansive CSP 2 Id. E:\FR\FM\11APN1.SGM 11APN1 mstockstill on DSK4VPTVN1PROD with NOTICES 21350 Federal Register / Vol. 81, No. 69 / Monday, April 11, 2016 / Notices disclosures and broader PRC basis of award customer monitoring. Typically, product-oriented contracts have more line-items than a service contract and therefore face a higher burden. Since a single factor alone does not determine a contractor’s lift, as these factors are independent of each other (e.g. business size does not determine sales volume or contract-type), it would be inappropriate to categorize vendors along business or contract attributes. On the other hand, it is appropriate to separate the burden between heavier lift and lighter lift because there are marked differences in the compliance burden. While many contractors do absorb a higher compliance burden, they are not representative of the Schedules program. The following fiscal year 2014 figures illustrate why most vendors would not fall into the heavier lift category: • Other-than-small businesses accounted for 63% of the total sales but only held 20% of the FSS contracts. • The top 20 percent of FSS contractors, in terms of FY2014 sales, accounted for 95.7 percent of the overall FSS sales volume. • 82% of sales were under Schedules that had a majority of sales under service-related SINs, while 18% of sales were made under Schedules that had a majority of sales under product-related SINs. Typically, majority-product contracts have more line items and require a higher burden for FSS pricing disclosure requirements. Some of the majority-service Schedules contain product-related SINs, meaning the service-related sales portion could be under 82%, but service-related sales still undoubtedly account for a majority of the overall FSS sales volume. Comment: The PRC burden does not account for monitoring activities beyond establishing electronic systems to track pricing. The respondent’s members indicated this burden could potentially be 2,000 hours a year for a heavy lift contractor. Response: GSA’s compliance system burden estimate is the highest of the various PRC components because it included monitoring activities. A compliance system encompasses how a contractor maintains compliance with the PRC. Some contractors may invest in an electronic system that requires high upfront investments but automates ongoing monitoring, while others may opt to manually compare their GSA prices to other classes of customers. Accordingly, GSA considered monitoring activities when evaluating the compliance system burden. GSA’s annual compliance system burden estimates consist of annual monitoring VerDate Sep<11>2014 18:37 Apr 08, 2016 Jkt 238001 activities and an allocated portion of the burden for establishing a compliance system. However, GSA is interested in additional comments on whether monitoring activities would take place outside of a compliance system. Comment: The compliance systems burden of 1,100 hours was taken from the respondent’s comments regarding the 2012 information collection extension but incorrectly spread the burden across a 20-year period. Accordingly, the burden should be 20 times larger than GSA’s estimates. Response: GSA allocated the burden over the full 20-year FSS contract lifecycle because contractors will not establish a new compliance system each year. Typically, a contractor will establish a compliance ‘‘system’’— which may entail electronic tools or simply be a procedure to manually review pricing—and then commence monitoring activities. Since the compliance system will not be reestablished each year, it should be allocated over the life of the contract. However, GSA invites comments on whether the compliance system burden should be allocated over the full contract life-cycle or another amount of time, such as a single year or a 5-year option period. Comment: The CSP burden is underestimated because it does not account for the work that contractors do to prepare a CSP before it is presented to a contracting officer. Response: GSA considered the upfront work needed to prepare CSPs before they are presented to the contracting officer. However, the contracting officer also spends a considerable amount of time evaluating the CSPs. As such, GSA believes the contractor preparation and contracting officer review burdens are comparable. However, GSA encourages commenters to provide estimates regarding the amount of upfront work needed to prepare a pre-award CSP. Comment: Several of the respondent’s members, most of who fall under the heavy lift category, stated the pre-award CSP burden could exceed 400 hours and the modification preparation burden could be as much as 185 hours. Response: GSA based its CSP burden estimates on the results of a survey it conducted among its FSS contracting officers. Those results showed a wide variance in the amount of time needed to complete CSP-related activities. For example, FSS contracting officer CSP estimates were as high as 2,400 hours for pre-award CSPs and 206 hours for requests to add items or SINs to the contract. Consequently, statistical methods were used to account for PO 00000 Frm 00042 Fmt 4703 Sfmt 4703 outliers within the responses and provide a reliable average estimate for each component. Specifically, the final averages were calculated using an interquartile mean, derived from an interquartile range (IQR) multiplied by 1.5. Comment: Contractors that do not maintain standardized pricelists have a more difficult time preparing CSP disclosures and often obtain additional training and/or hire consultants to meet the CSP requirements. Response: As previously noted, GSA recognized there are several factors that affect the burden and therefore separated contractors into those with heavier lifts and lighter lifts. Contractors that have a difficult time preparing CSP disclosures and therefore choose to obtain additional training and/or hire consultants may fall into the heavier lift category. Comment: The heavier lift versus lighter lift methodology may not capture all of the heavier lift contractors because many small businesses that would fall in the lighter lift category due to their sales volume still endure a high compliance burden. Response: As noted above, the heavier lift and lighter lift categories are not determined by a single factor like FSS sales volume; they are reflective of the overall compliance burden. Small businesses with a high compliance burden would fall into the heavier lift category. Conversely, many larger service providers with a high sales volume concentrated in a small number of contracts and fewer contract lineitems may fall in the lighter lift category. Comment: The respondent’s small business members report compliance with these disclosure requirements is particularly challenging because unlike larger contractors, they do not have the resources to invest in compliance. This results in a barrier to entry to the FSS program for small innovative firms. Response: GSA requires these disclosures as one method of meeting its statutory obligations to provide the ‘‘lowest cost alternative,’’ but is exploring options to lower burden. As part of GSA’s Transactional Data Reporting proposed rule, GSA proposed removing the basis of award requirement of the PRC when FSS contractors agreed to report transactional data to GSA.3 Comment: The hourly rate GSA used for its estimates ($68/hour) is understated. For example, some outside consultants hired by contractors to assist with the disclosures may be paid 3 Id. E:\FR\FM\11APN1.SGM 11APN1 Federal Register / Vol. 81, No. 69 / Monday, April 11, 2016 / Notices mstockstill on DSK4VPTVN1PROD with NOTICES as much as $200 an hour. The respondent recommends GSA measure the burden by the number of hours or determine a more accurate hourly rate. Response: The $68/hour rate consists of a $50/hour base rate and $18/hour (36% above the base rate) for fringe benefits. The 36% fringe benefit rate was taken from Office of Management and Budget (OMB) Circular No. A–76, which recommends cost factors to ensure that specific government costs are calculated in a standard and consistent manner to reasonably reflect the cost of performing commercial activities with government personnel. The standard A–76 cost factor for fringe benefits is 36.25%; GSA opted to round to the nearest whole number for the basis of its burden estimates.4 Regarding the base rate, GSA believes these disclosure functions are typically performed by contract administrators with occasional assistance from higherpaid professionals, such as attorneys and consultants. The most comparable labor category to a contract administrator that was analyzed by the Bureau of Labor Statistics (BLS) is a buyer and purchasing agent, whose responsibilities include negotiating contracts. BLS’s most recently published hourly rate for this type of professional was $28.14/hour;5 incorporating the 36% fringe benefit factor, the total rate is $38.27/hour. However, GSA chose to use the higher $68/hour rate to account for the occasional involvement of higher-paid professionals. Comment: The respondent calculates the annual PRC burden to be $850 million when applying GSA’s hourly rate ($68/hour) to their estimate of 12.5 million hours a year. As a result, the value of price reductions should exceed $850 million in order for the PRC’s benefits to outweigh its costs. Response: GSA requires these disclosures as one method of meeting its statutory obligations to provide the ‘‘lowest cost alternative,’’ but GSA is exploring alternative methods. As part of GSA’s Transactional Data Reporting proposed rule,6 GSA proposed removing the basis of award requirement of the PRC when FSS contractors agreed to report transactional data to GSA. Comment: The respondent provided comments in opposition to GSAR case 4 See Circular A–76 Figure C1, available at https://www.whitehouse.gov/omb/circulars_a076_ a76_incl_tech_correction/. 5 See the Bureau of Labor Statistics Occupational Outlook Handbook for Buyers and Purchasing Agents, available at https://www.bls.gov/ooh/ business-and-financial/buyers-and-purchasingagents.htm#tab-1. 6 See GSAR Case 2013–G504; Docket 2014–0020; Sequence 1 [80 FR 11619 (Mar. 4, 2015)]. VerDate Sep<11>2014 18:37 Apr 08, 2016 Jkt 238001 2013–G504, Transactional Data Reporting. Response: GSA is not providing responses to comments on Transactional Data Reporting because they are not directly related to this information collection request. D. 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, FSS Pricing Disclosures, in all correspondence. Jeffrey A. Koses, Director, Office of Acquisition Policy, Office of Government-wide Policy. [FR Doc. 2016–08160 Filed 4–8–16; 8:45 am] BILLING CODE 6820–61–P DEPARTMENT OF HEALTH AND HUMAN SERVICES Centers for Disease Control and Prevention [30Day–16–0017] Agency Forms Undergoing Paperwork Reduction Act Review The Centers for Disease Control and Prevention (CDC) has submitted the following information collection request to the Office of Management and Budget (OMB) for review and approval in accordance with the Paperwork Reduction Act of 1995. The notice for the proposed information collection is published to obtain comments from the public and affected agencies. Written comments and suggestions from the public and affected agencies concerning the proposed collection of information are encouraged. Your comments should address any of the following: (a) Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility; (b) Evaluate the accuracy of the agencies estimate of the PO 00000 Frm 00043 Fmt 4703 Sfmt 4703 21351 burden of the proposed collection of information, including the validity of the methodology and assumptions used; (c) Enhance the quality, utility, and clarity of the information to be collected; (d) Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology, e.g., permitting electronic submission of responses; and (e) Assess information collection costs. To request additional information on the proposed project or to obtain a copy of the information collection plan and instruments, call (404) 639–7570 or send an email to omb@cdc.gov. Direct written comments and/or suggestions regarding the items contained in this notice to the Attention: CDC Desk Officer, Office of Management and Budget, Washington, DC 20503 or by fax to (202) 395–5806. Written comments should be received within 30 days of this notice. Proposed Project Application for Training (OMB No. 0920–0017), Expiration 05/31/2016)— Revision—Division of Scientific Education and Professional Development, Center for Surveillance, Epidemiology and Laboratory Services, Centers for Disease Control and Prevention (CDC). Background and Brief Description CDC offers public health training to professionals worldwide. Employees of hospitals, universities, medical centers, laboratories, state and federal agencies, and state and local health departments apply for training to learn up-to-date public health and health care practices. CDC is accredited by multiple accreditation organizations to award continuing education for public health and healthcare professions. CDC requires health professionals seeking continuing education (learners) to use the Training and Continuing Education Online (TCEO) system to establish a participant account by completing the TCEO New Participant Registration form. CDC/CSELS relies on this form to collect the information needed to coordinate learner registration for training activities including classroom study, conferences, and elearning. The TCEO Proposal is a form course developers will use the TCEO system to apply for their training activities to receive continuing education accreditation through CDC. Introduction of this mechanism will allow course E:\FR\FM\11APN1.SGM 11APN1

Agencies

General Services Administration

[Federal Register Volume 81, Number 69 (Monday, April 11, 2016)]
[Notices]
[Pages 21346-21351]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-08160]

=======================================================================
-----------------------------------------------------------------------

GENERAL SERVICES ADMINISTRATION

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

General Services Administration Acquisition Regulation;
Submission for OMB Review; 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.

-----------------------------------------------------------------------

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. A notice was published in the
Federal Register at 80 FR 72060 on November 18, 2015. One comment was
received.

DATES: Submit comments on or before: May 11, 2016.

ADDRESSES: Submit comments regarding this burden estimate or any other
aspect of this collection of information, including suggestions for
reducing this burden to: Office of Information and Regulatory Affairs
of OMB, Attention: Desk Officer for GSA, Room 10236, NEOB, Washington,
DC 20503. Additionally submit a copy to GSA 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. Hada 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
matthew.mcfarland@gsa.gov.

SUPPLEMENTARY INFORMATION:

[[Page 21347]]

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 2015.
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 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 collected 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 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).

[[Page 21348]]

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 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

[[Page 21349]]

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. Discussion and Analysis

A notice of request for comments regarding the extension of
Information Collection 3090-0235, Federal Supply Schedule Pricing
Disclosures, was published in the Federal Register at 80 FR 72060 on
November 18, 2015. One respondent provided comments on (1) whether FSS
pricing disclosures are necessary and have practical utility, and (2)
if GSA's estimates of the collection burden are accurate, and based on
valid assumptions and methodology. The following are summaries of those
comments and GSA's responses:
Comment: The respondent stated these pricing disclosures no longer
have practical utility because pricing under the FSS program is
primarily driven by order-level competition. In regards to the Price
Reductions clause (PRC), the respondent stated the following:
GSA's notice of proposed rulemaking for GSAR case 2013-
G504, Transactional Data Reporting, which stated ``only about 3 percent
of the total price reductions received under the price reductions
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.'' \1\
---------------------------------------------------------------------------

\1\ See GSAR Case 2013-G504; Docket 2014-0020; Sequence 1 [80 FR
11619 (Mar. 4, 2015)].
---------------------------------------------------------------------------

The respondent's member organizations ``overwhelmingly
reported that competition in response to known requirements is the most
significant driver of reduced pricing for customer agencies.''
The PRC limits contractors in their ability to offer
discounts to certain commercial clients, which undermines competition
in the commercial marketplace.
In regards to Commercial Sales Practices (CSP) disclosures, the
respondent stated:
``The current CSP format for disclosures does not provide
for consideration of the existing GSA Schedule ordering procedures,
creates ambiguity in disclosure requirements, and requires the release
of data that exceeds the needs of the government to negotiate fair and
reasonable prices.''
The CSP was developed at a time when the commercial
marketplace was less volatile and contractors generally had standard
prices and pricelists. However, this is no longer the case,
particularly for the service and high-tech industry sectors. As a
result, the respondent's members report ``it is difficult to determine
how to respond to and appropriately disclose information requested in
the CSP format.''
Response: The PRC and CSP disclosures are a means for GSA to meet
its obligation under 41 U.S.C. 152(3)(B), which requires FSS ordering
procedures to ``result in the lowest overall cost alternative to meet
the needs of the Federal Government.'' However, GSA is exploring
alternatives to these practices. For example, GSA's Transactional Data
Reporting proposed rule would require FSS contractors to report to GSA
transactional data--including descriptions of the items purchased,
quantities, and prices paid--on orders placed under their FSS
contracts. GSA's experience with transactional data has shown it can
lead to better contract-level and order-level prices. As part of GSA's
Transactional Data Reporting proposed rule, GSA proposed removing the
basis of award requirement of the PRC when FSS contractors agreed to
report transactional data to GSA.\2\
---------------------------------------------------------------------------

\2\ Id.
---------------------------------------------------------------------------

Comment: The respondent stated the ``higher lift'' versus ``lighter
lift'' assumptions are not appropriate because its member organizations
consisting of both small businesses and large businesses, and both
types use consultants and attorneys to assist in completing pre-award
CSP disclosures, which aligns both types closer to the higher lift
burden estimates.
Response: GSA used this approach to account for the vast disparity
in burden among FSS contractors. The amount of ``lift'' required by a
contractor can be affected by factors such as business size, sales
volume, and contract-type. The following illustrations show how the
burden can vary by each factor:
A larger business will encounter more obstacles in meeting
these requirements, such as coordinating between multiple offices and
business lines, than a smaller business with fewer customers.
Schedule contractors with higher sales volume will likely
encounter more situations that require pricing disclosures than those
with no sales.
A higher number of FSS contract line-items require more
expansive CSP

[[Page 21350]]

disclosures and broader PRC basis of award customer monitoring.
Typically, product-oriented contracts have more line-items than a
service contract and therefore face a higher burden.
Since a single factor alone does not determine a contractor's lift,
as these factors are independent of each other (e.g. business size does
not determine sales volume or contract-type), it would be inappropriate
to categorize vendors along business or contract attributes. On the
other hand, it is appropriate to separate the burden between heavier
lift and lighter lift because there are marked differences in the
compliance burden. While many contractors do absorb a higher compliance
burden, they are not representative of the Schedules program. The
following fiscal year 2014 figures illustrate why most vendors would
not fall into the heavier lift category:
Other-than-small businesses accounted for 63% of the total
sales but only held 20% of the FSS contracts.
The top 20 percent of FSS contractors, in terms of FY2014
sales, accounted for 95.7 percent of the overall FSS sales volume.
82% of sales were under Schedules that had a majority of
sales under service-related SINs, while 18% of sales were made under
Schedules that had a majority of sales under product-related SINs.
Typically, majority-product contracts have more line items and require
a higher burden for FSS pricing disclosure requirements. Some of the
majority-service Schedules contain product-related SINs, meaning the
service-related sales portion could be under 82%, but service-related
sales still undoubtedly account for a majority of the overall FSS sales
volume.
Comment: The PRC burden does not account for monitoring activities
beyond establishing electronic systems to track pricing. The
respondent's members indicated this burden could potentially be 2,000
hours a year for a heavy lift contractor.
Response: GSA's compliance system burden estimate is the highest of
the various PRC components because it included monitoring activities. A
compliance system encompasses how a contractor maintains compliance
with the PRC. Some contractors may invest in an electronic system that
requires high upfront investments but automates ongoing monitoring,
while others may opt to manually compare their GSA prices to other
classes of customers. Accordingly, GSA considered monitoring activities
when evaluating the compliance system burden. GSA's annual compliance
system burden estimates consist of annual monitoring activities and an
allocated portion of the burden for establishing a compliance system.
However, GSA is interested in additional comments on whether monitoring
activities would take place outside of a compliance system.
Comment: The compliance systems burden of 1,100 hours was taken
from the respondent's comments regarding the 2012 information
collection extension but incorrectly spread the burden across a 20-year
period. Accordingly, the burden should be 20 times larger than GSA's
estimates.
Response: GSA allocated the burden over the full 20-year FSS
contract life-cycle because contractors will not establish a new
compliance system each year. Typically, a contractor will establish a
compliance ``system''--which may entail electronic tools or simply be a
procedure to manually review pricing--and then commence monitoring
activities. Since the compliance system will not be reestablished each
year, it should be allocated over the life of the contract. However,
GSA invites comments on whether the compliance system burden should be
allocated over the full contract life-cycle or another amount of time,
such as a single year or a 5-year option period.
Comment: The CSP burden is underestimated because it does not
account for the work that contractors do to prepare a CSP before it is
presented to a contracting officer.
Response: GSA considered the upfront work needed to prepare CSPs
before they are presented to the contracting officer. However, the
contracting officer also spends a considerable amount of time
evaluating the CSPs. As such, GSA believes the contractor preparation
and contracting officer review burdens are comparable. However, GSA
encourages commenters to provide estimates regarding the amount of
upfront work needed to prepare a pre-award CSP.
Comment: Several of the respondent's members, most of who fall
under the heavy lift category, stated the pre-award CSP burden could
exceed 400 hours and the modification preparation burden could be as
much as 185 hours.
Response: GSA based its CSP burden estimates on the results of a
survey it conducted among its FSS contracting officers. Those results
showed a wide variance in the amount of time needed to complete CSP-
related activities. For example, FSS contracting officer CSP estimates
were as high as 2,400 hours for pre-award CSPs and 206 hours for
requests to add items or SINs to the contract. Consequently,
statistical methods were used to account for outliers within the
responses and provide a reliable average estimate for each component.
Specifically, the final averages were calculated using an interquartile
mean, derived from an interquartile range (IQR) multiplied by 1.5.
Comment: Contractors that do not maintain standardized pricelists
have a more difficult time preparing CSP disclosures and often obtain
additional training and/or hire consultants to meet the CSP
requirements.
Response: As previously noted, GSA recognized there are several
factors that affect the burden and therefore separated contractors into
those with heavier lifts and lighter lifts. Contractors that have a
difficult time preparing CSP disclosures and therefore choose to obtain
additional training and/or hire consultants may fall into the heavier
lift category.
Comment: The heavier lift versus lighter lift methodology may not
capture all of the heavier lift contractors because many small
businesses that would fall in the lighter lift category due to their
sales volume still endure a high compliance burden.
Response: As noted above, the heavier lift and lighter lift
categories are not determined by a single factor like FSS sales volume;
they are reflective of the overall compliance burden. Small businesses
with a high compliance burden would fall into the heavier lift
category. Conversely, many larger service providers with a high sales
volume concentrated in a small number of contracts and fewer contract
line-items may fall in the lighter lift category.
Comment: The respondent's small business members report compliance
with these disclosure requirements is particularly challenging because
unlike larger contractors, they do not have the resources to invest in
compliance. This results in a barrier to entry to the FSS program for
small innovative firms.
Response: GSA requires these disclosures as one method of meeting
its statutory obligations to provide the ``lowest cost alternative,''
but is exploring options to lower burden. As part of GSA's
Transactional Data Reporting proposed rule, GSA proposed removing the
basis of award requirement of the PRC when FSS contractors agreed to
report transactional data to GSA.\3\
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\3\ Id.
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Comment: The hourly rate GSA used for its estimates ($68/hour) is
understated. For example, some outside consultants hired by contractors
to assist with the disclosures may be paid

[[Page 21351]]

as much as $200 an hour. The respondent recommends GSA measure the
burden by the number of hours or determine a more accurate hourly rate.
Response: The $68/hour rate consists of a $50/hour base rate and
$18/hour (36% above the base rate) for fringe benefits. The 36% fringe
benefit rate was taken from Office of Management and Budget (OMB)
Circular No. A-76, which recommends cost factors to ensure that
specific government costs are calculated in a standard and consistent
manner to reasonably reflect the cost of performing commercial
activities with government personnel. The standard A-76 cost factor for
fringe benefits is 36.25%; GSA opted to round to the nearest whole
number for the basis of its burden estimates.\4\
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\4\ See Circular A-76 Figure C1, available at https://www.whitehouse.gov/omb/circulars_a076_a76_incl_tech_correction/.
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Regarding the base rate, GSA believes these disclosure functions
are typically performed by contract administrators with occasional
assistance from higher-paid professionals, such as attorneys and
consultants. The most comparable labor category to a contract
administrator that was analyzed by the Bureau of Labor Statistics (BLS)
is a buyer and purchasing agent, whose responsibilities include
negotiating contracts. BLS's most recently published hourly rate for
this type of professional was $28.14/hour;\5\ incorporating the 36%
fringe benefit factor, the total rate is $38.27/hour. However, GSA
chose to use the higher $68/hour rate to account for the occasional
involvement of higher-paid professionals.
---------------------------------------------------------------------------

\5\ See the Bureau of Labor Statistics Occupational Outlook
Handbook for Buyers and Purchasing Agents, available at https://www.bls.gov/ooh/business-and-financial/buyers-and-purchasing-agents.htm#tab-1.
---------------------------------------------------------------------------

Comment: The respondent calculates the annual PRC burden to be $850
million when applying GSA's hourly rate ($68/hour) to their estimate of
12.5 million hours a year. As a result, the value of price reductions
should exceed $850 million in order for the PRC's benefits to outweigh
its costs.
Response: GSA requires these disclosures as one method of meeting
its statutory obligations to provide the ``lowest cost alternative,''
but GSA is exploring alternative methods. As part of GSA's
Transactional Data Reporting proposed rule,\6\ GSA proposed removing
the basis of award requirement of the PRC when FSS contractors agreed
to report transactional data to GSA.
---------------------------------------------------------------------------

\6\ See GSAR Case 2013-G504; Docket 2014-0020; Sequence 1 [80 FR
11619 (Mar. 4, 2015)].
---------------------------------------------------------------------------

Comment: The respondent provided comments in opposition to GSAR
case 2013-G504, Transactional Data Reporting.
Response: GSA is not providing responses to comments on
Transactional Data Reporting because they are not directly related to
this information collection request.

D. 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, FSS Pricing Disclosures, in all correspondence.

Jeffrey A. Koses,
Director, Office of Acquisition Policy, Office of Government-wide
Policy.
[FR Doc. 2016-08160 Filed 4-8-16; 8:45 am]
BILLING CODE 6820-61-P

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