General Services Administration Acquisition Regulation (GSAR); Transactional Data Reporting, 41103-41139 [2016-14728]

Agencies

• General Services Administration

[Federal Register Volume 81, Number 121 (Thursday, June 23, 2016)]
[Rules and Regulations]
[Pages 41103-41139]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-14728]



[[Page 41103]]

Vol. 81

Thursday,

No. 121

June 23, 2016

Part IV





General Services Administration





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48 CFR Parts 501, 515, 516, et al.





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

Federal Register / Vol. 81 , No. 121 / Thursday, June 23, 2016 / 
Rules and Regulations

[[Page 41104]]


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GENERAL SERVICES ADMINISTRATION

48 CFR Parts 501, 515, 516, 538, and 552

[GSAR Change 74; GSAR Case 2013-G504; Docket No. 2014-0020; Sequence 
No. 1]
RIN 3090-AJ51


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

AGENCY: Office of Acquisition Policy, General Services Administration.

ACTION: Final rule.

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SUMMARY: The General Services Administration (GSA) is amending the 
General Services Administration Acquisition Regulation (GSAR) to 
include clauses that require vendors to report transactional data from 
orders placed against certain Federal Supply Schedule (FSS) contracts, 
Governmentwide Acquisition Contracts (GWACs), and Governmentwide 
Indefinite-Delivery, Indefinite-Quantity (IDIQ) contracts.
    Transactional data refers to the information generated when the 
Government purchases goods or services from a vendor. It includes 
specific details such as descriptions, part numbers, quantities, and 
prices paid for the items purchased. GSA has experimented with 
collecting transactional data through some of its contracts and found 
it instrumental for improving competition, lowering pricing, and 
increasing transparency. Accordingly, GSA will now test these 
principles on a broader base of its contracting programs. This move 
supports the Government's shift towards category management by allowing 
it to centrally analyze what it buys and how much it pays, and thereby 
identify the most efficient solutions, channels, and sources to meet 
its mission critical needs.
    GSA will introduce a new Transactional Data Reporting clause to its 
FSS contracts in phases, beginning with a pilot for select Schedules 
and Special Item Numbers. Participating vendors will no longer be 
subject to the existing requirements for Commercial Sales Practices 
(CSP) disclosures and Price Reductions clause (PRC) basis of award 
monitoring, resulting in a substantial burden reduction. Stakeholders 
have identified the CSP and PRC requirements as some of the most 
burdensome under the Schedules program. These actions represent the 
most significant change to the Schedules program in the past two 
decades. GSA has also created a Transactional Data Reporting clause for 
all new GWACs and Governmentwide IDIQ contracts and may apply the 
clause to any existing contracts in this class that do not contain 
other transactional data requirements.

DATES: This rule is effective June 23, 2016.

FOR FURTHER INFORMATION CONTACT: Mr. Matthew McFarland, Senior Policy 
Advisor, GSA Acquisition Policy Division, at 202-690-9232 or 
matthew.mcfarland@gsa.gov.

SUPPLEMENTARY INFORMATION: 

Table of Contents

I. Overview
II. Background
    A. Category Management
    B. Necessity and Value of Transactional Data
    C. Imperative for Innovation
    D. Transactional Data Reporting: Proposed Rule and Public 
Meeting
III. Final Rule Overview
    A. Summary of Changes Made at the Final Rule Stage
    B. Alternatives Analysis
IV. Final Rule Implementation
    A. GWACs and Governmentwide IDIQs
    B. FSS Contracts
    C. Systems
    D. Procedures
V. Public Comments Overview and Discussion
VI. Executive Orders 12866 and 13563
VII. Regulatory Flexibility Act
VIII. Paperwork Reduction Act
    A. New Reporting Requirements
    B. Annualized Public Burden Estimates
    C. Annualized Federal Government Burden Estimates
    D. Differences From the Previous Burden Estimates
    E. Information Collection Supporting Statement
Exhibit A: List of Comment Letters Received

I. Overview

    The purpose of the Transactional Data Reporting rule is to 
transform price disclosure and related policies for GSA's Federal 
Supply Schedule (FSS) contracts, Governmentwide Acquisition Contracts 
(GWACs), and Governmentwide Indefinite-Delivery, Indefinite Quantity 
(IDIQ) contracts, in order to improve the value taxpayers receive when 
purchases are made using these vehicles. The rule contains new clauses 
that require vendors to electronically report certain specific details 
on transactions under these GSA contracts, such as the descriptions of 
goods or services acquired, part numbers, quantities, and prices paid. 
GSA will use this added market intelligence to make smarter buying 
decisions and share the information with its agency customers so they 
can also make smarter buying decisions when utilizing GSA's contract 
vehicles.((
    The rule also seeks to eliminate burden associated with current 
pricing disclosure and tracking requirements for thousands of entities, 
particularly small businesses that sell to agencies through the FSS 
program, the Government's largest purchasing channel for commercial 
products and services. In Fiscal Year 2015 alone, GSA's FSS contracts 
accounted for $33 billion in sales, or more than 7 percent of all 
federal contract spending. Accordingly, the rule provides for a 
measured and managed phase-out of disclosures and tracking currently 
required by the Commercial Sales Practices (CSP) format and the Price 
Reductions clause (PRC), and the associated practice of negotiating 
pricing based on a model where the Government strives to secure the 
vendor's most favored pricing and maintain this position for the life 
of the contract. Instead, GSA is adopting a more dynamic market driven 
pricing model, where vendors submit prices paid by Government customers 
through a new Transactional Data Reporting clause \1\ and the 
Government uses this data, along with other pricing information, to 
ensure a vendor's offered price is competitive relative to other 
vendors selling the same or similar items or services.
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    \1\ GSAR clause 552.238-74, Industrial Funding Fee and Sales 
Reporting (Alternate I) (48 CFR 552.238-74 Alternate I).
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    The Transactional Data Reporting clause is being implemented under 
the Schedules program on a pilot basis, to begin not less than 60 days 
after the publication date of the rule. Participation in the pilot will 
initially be voluntary for existing Schedule contract holders, and 
those who participate and comply with the Transactional Data Reporting 
requirements will not provide CSPs or be subject to the PRC basis of 
award tracking customer provision. The pilot will involve eight 
Schedules, including the information technology Schedule 70 and the 
Professional Services Schedule (Schedule 00CORP), and will reach 
approximately 30 percent of GSA's FSS contracts that account for more 
than 40 percent of GSA the FSS sales volume.
    FSS contracts managed by the Department of Veterans Affairs are not 
included in the pilot and therefore will not be impacted by changes 
made by this rule to waive application of the CSP and PRC tracking 
customer provision.
    For GSA's non-FSS Governmentwide vehicles, a Transactional Data 
Reporting

[[Page 41105]]

clause \2\ is immediately available. The new clause will be applied to 
solicitations for covered vehicles issued on or after the effective 
date of the rule. Existing contract vehicles containing other 
transactional data requirements have the option of incorporating the 
new clause through bilateral modifications.
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    \2\ GSAR clause 552.216-75, Transactional Data Reporting (48 CFR 
552.216-75).
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    The Transactional Data Reporting final rule follows a proposed rule 
published by GSA in the Federal Register at 80 FR 11619, on March 4, 
2015.\3\ The proposed rule sought to eliminate the PRC tracking 
customer provision but retained the Government's right to request CSP 
disclosures. In response to the proposed rule, many public commenters 
concurred with the need for a change to Schedules pricing policies, as 
well as the need for a model that leverages modern analytics and 21st 
century technology, but a number of commenters asserted that GSA's 
projections of burden reduction were significantly overstated. They 
explained that the continued requirement to maintain the CSP, coupled 
with the Government's right to regularly demand updated information, 
would significantly limit the relief contractors would realize from 
waiver of the PRC's tracking requirements. Other commenters raised 
concern that elimination of these historical pricing tools would thwart 
GSA's ability to gauge how its prices relate to commercial sales, and 
as a result, put the Government at a greater risk of paying less 
competitive prices for commercial goods and services.
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    \3\ See GSAR Case 2013-G504; Docket 2014-0020; Sequence 1 (80 FR 
11619 (Mar. 4, 2015)).
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    After careful review of the public comments, which are discussed in 
greater detail in Section V of this document,\4\ and additional 
deliberation with Government stakeholders, GSA has modified the 
proposed rule to authorize in the final rule the phased elimination of 
both the CSP and the PRC tracking customer provision, as opposed to 
just the PRC's tracking requirements, as the proposed rule would have 
provided. Phase-out of these requirements will be subject to the 
results of a pilot, as was discussed in the preamble to the proposed 
rule. However, the pilot has been broadened to be more reflective of 
the varied goods and services offered and sold through the Schedules 
program, and will allow GSA to more effectively evaluate the likely 
impact of the intended transformation before making any final 
determinations.
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    \4\ See section V. Public Comments Overview and Discussion.
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    Transactional Data Reporting is an attempt to embrace modern 
technology while moving away from outmoded practices. When first 
introduced in the 1980s, the CSP and PRC helped GSA and its customer 
agencies maintain advantageous pricing from original equipment 
manufacturers that held the vast majority of FSS contracts. However, 
changes in what the Government buys and shifts in the federal 
marketplace have eroded the effectiveness of these tools over time. 
Additionally, vendors repeatedly single out these pricing tools as 
among the most complicated and burdensome requirements in federal 
contracting. By contrast, Transactional Data Reporting provides a less 
burdensome alternative. The rule adds a total of $15 million a year in 
costs for two classes of contracts, FSS ($12 million a year) and non-
FSS ($3 million a year). FSS vendors are currently subject to the CSP 
and PRC reporting requirements that are being eliminated, resulting in 
a $44 million a year burden reduction. Factoring in the $12 million a 
year increase for new reporting requirements, this equates to a $32 
million a year net burden reduction for those FSS vendors ($12 million-
$44 million = -$32 million). However, non-FSS vendors are not subject 
to the CSP and PRC requirements and therefore are not receiving any 
burden reduction, but are seeing a $3 million a year reporting burden 
for the new requirements. As a result, the net burden reduction reduces 
to $29 million a year when accounting for all vendors subject to the 
rule ($12 million + $3 million-$44 million = -$29 million).
    In all, the Transactional Data Reporting rule will result in an 
estimated burden reduction of $29 million a year, which consists of a 
projected $15 million a year compliance burden\5\ minus the estimated 
$44 million a year burden for the CSP and PRC requirements being waived 
for vendors participating in the FSS pilot.\6\
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    \5\ See Section VIII.B, Annualized Public Burden Estimates.
    \6\ The CSP and PRC burden estimates are from Information 
Collection 3090-0235, FSS Pricing Disclosures. The annual public 
reporting burden for the CSP and PRC, excluding FSS vendors 
participating in the Transactional Data Reporting pilot, is $57.66 
million. If FSS pilot vendors were still subject to the CSP and PRC 
reporting requirements, the total annual public reporting burden 
would be $101.69 million. The FSS pilot vendors' share of the total 
CSP and PRC reporting burden is based upon their share of the GSA 
FSS fiscal year 2015 sales volume, 43.2 percent. The annual $44.03 
million reporting burden reduction attributed to this rule is 43.2 
percent of the $101.69 million annual reporting burden if it were 
applied to the entire GSA FSS program. More information about 
Information Collection 3090-0235 can be found at https://www.reginfo.gov/public by searching ``ICR'' for ``3090-0235''.
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    Equally important, GSA's experience using horizontal pricing 
techniques, where it compares a vendor's offered price to those offered 
by other vendors, has proved to be a more effective model. This 
includes a growing body of experience with transactional data that 
points to improved acquisition outcomes, from smarter demand 
management, to better pricing and reduced price variation, and 
opportunities to develop more effective buying strategies. Section II.B 
of this document provides several examples of how the Government has 
successfully employed transactional data-fueled horizontal pricing 
techniques.
    To ensure a measured and manageable transition to use of 
transactional data in lieu of the CSP and PRC, the final rule will be 
implemented through a multi-layered phase-in process built around the 
pilot as follows:
     First, the pilot will be evaluated against a series of 
metrics that will include, but not be limited to, changes in price, 
sales volume, and small business participation, as well as macro use of 
transactional data by category managers and teams to create smarter 
buying strategies such as consumption policies. GSA's Senior 
Procurement Executive will regularly evaluate progress against these 
metrics in consultation with the Administrator for Federal Procurement 
Policy and other interested stakeholders to determine whether to 
expand, limit, or discontinue the program. No expansion of the pilot or 
action to make Transactional Data Reporting a permanent fixture on the 
Schedules will occur prior to the careful evaluation of at least one 
year of experience with the pilot.
     Second, Schedules will enter the pilot on a rolling basis. 
At least thirty days prior to applying the pilot to a Schedule or 
Special Item Number, vendors will be given notice on Interact, GSA's 
platform for exchanging information with Schedule vendors.\7\
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    \7\ GSA Interact can be accessed at https://interact.gsa.gov.
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     Third, the new Transactional Data Reporting requirements 
will be mandatory only for new Schedule contracts awarded after the 
Schedule becomes subject to the pilot and at the time to extend the 
term of the Schedule contract. Initially, vendors holding existing 
contracts under pilot Schedules will be encouraged to enter via a 
bilateral contract modification so they can begin to take advantage of 
the

[[Page 41106]]

reduced burden of not having to comply with the CSP and PRC.
     Fourth, use of the transactional data will be introduced 
to federal buyers in stages, starting with category managers to provide 
them with insight into the assorted options available for satisfying 
common requirements and support smarter buying strategies, such as 
demand management, that promote the most efficient methods for meeting 
the Government's needs. The data will then be shared with FSS 
contracting officers, followed by agency ordering offices. Each of 
these buying groups will receive tailored training on the proper use of 
transactional data. In all cases, training will emphasize that prices 
paid information is just one information point that must be considered 
in conjunction with other factors such as total cost, quantity 
discounts, desired performance levels, unique terms and conditions or 
product attributes, delivery schedule, customer satisfaction, and other 
relevant information. Contracting officers will be encouraged to 
discuss with the offeror perceived variances between offered prices, 
transactional data, and existing contract-level prices, in order to 
evaluate whether other attributes (e.g., superior warranties, quantity 
discounts, etc.) justify awarding higher prices.
    Finally, GSA is amending its pricing instructions in the General 
Services Administration Acquisition Manual (GSAM) to place greater 
emphasis on price analysis when negotiating prices with Schedule 
vendors and, in particular, the need to specifically consider (i) 
offered prices on FSS contracts or Governmentwide contracts for the 
same or similar items or services, (ii) prices paid, as it becomes 
available under this rule, and (iii) commercial data sources providing 
publicly available pricing information. The GSAM guidance will also 
reiterate that the contracting officer is responsible for ensuring 
pricing is fair and reasonable. Accordingly, if a contracting officer 
is unable to make this determination based on data available to them 
through GSA's tools or available commercial pricing information, they 
will retain the right, as the Federal Acquisition Regulation (FAR) has 
always provided, to request additional pricing information, such as 
data other than certified cost and pricing data.
    A fuller discussion of these issues is presented in the following 
sections of this document, including GSA's analysis of alternatives, an 
overview of the rule's implementation, a discussion of public comments, 
and an examination of the reporting burden.
    GSA's primary statutory authorities for the FSS program are 41 
U.S.C. 152(3), Competitive Procedures, and 40 U.S.C. 501, Services for 
Executive Agencies. For GWACs, GSA is an executive agent designated by 
the Office of Management and Budget pursuant to 40 U.S.C. 11302(e). 
Furthermore, 40 U.S.C. 121(c) authorizes GSA to prescribe regulations 
for its other multi-agency contracts, including Governmentwide IDIQ 
contracts. Finally, this rule is included in GSA's report under 
Executive Order 13563, Improving Regulation and Regulatory Review, 
which directs each federal agency to consider ``how best to promote 
retrospective analysis of rules that may be outmoded, ineffective, 
insufficient, or excessively burdensome.'' GSA's retrospective plan and 
updates to the plan can be found at www.gsa.gov/improvingregulations.

II. Background

A. Category Management

    Currently, the Federal Government acquires goods and services worth 
hundreds of billions in dollars through millions of individual 
transactions conducted by thousands of contracting units across 
hundreds of federal agencies and commissions. Most buying offices 
operate independently, conducting procurements without regard to the 
experiences of their counterparts. Functions such as industry outreach, 
market research, requirements development, negotiations, and contract 
award are repetitively performed, without coordination, across the 
acquisition landscape. Ongoing contract duplication leaves vendors 
navigating a diverse array of procedures and requirements, driving up 
administrative costs that ultimately manifest in higher prices.
    In response, the Office of Federal Procurement Policy (OFPP) 
introduced a new vision for federal purchasing to fundamentally shift 
managing individual purchases and prices across thousands of 
procurement units to buying as one through category management.\8\ The 
initiative entails grouping commonly-purchased goods and services into 
centrally coordinated categories. The Category Management Leadership 
Council (CMLC), established by OFPP, has defined the underlying 
principles of category management, which are supported by this rule:
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    \8\ See Office of Management and Budget memorandum, 
``Transforming the Marketplace: Simplifying Federal Procurement to 
Improve Performance, Drive Innovation and Increase Savings'', 
December 4, 2014, available at https://www.whitehouse.gov/sites/default/files/omb/procurement/memo/simplifying-federal-procurement-to-improve-performance-drive-innovation-increase-savings.pdf).

    1. Optimizing existing contract vehicles (including replacement 
or elimination of duplicate or underperforming contracts) and 
driving more optimal use of contract vehicles.
    2. Improving data collection efforts and analysis to drive 
improvements in categories of spend to increase savings and reduce 
duplication.
    3. Leveraging industry/commercial intelligence and key partner 
relationships.
    4. Maximizing customer insights and relationships to bring more 
spend under management and improve offerings and value.
    5. Growing and sharing expertise.\9\
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    \9\ See ``Government-wide Category Management, Guidance 
Document, Version 1.0,'' Office of Management Budget, May 2015, 
available at https://hallways.cap.gsa.gov/information/Gov-wide_CM_Guidance_V1.pdf.

    The CMLC has identified the following ten first-tier, or Level 1, 
categories that account for $270 billion, or approximately two-thirds, 
of total contract spending:
     Information Technology (IT).
     Professional Services.
     Security and Protection.
     Facilities & Construction.
     Industrial Products and Services.
     Office Management.
     Transportation and Logistics Services.
     Travel and Lodging.
     Human Capital.
     Medical.\10\
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    \10\ See ``Taking Category Management Government-Wide'', January 
7, 2015, available at https://www.whitehouse.gov/blog/2015/01/07/taking-category-management-government-wide-0.
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    To ensure Governmentwide harmonization, Level 1 categories will be 
led by a manager responsible for developing category-specific 
strategies. Within each Level 1 category are several Level 2 
categories. For example, the Level 1 IT category includes Level 2 
categories such as IT Software and IT Consulting. In concert with their 
respective category manager, Level 2 category teams will provide expert 
analysis, identify best-in-class sourcing solutions, and facilitate the 
dissemination of best practices, leading to smarter buying across the 
Government.\11\
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    \11\ See ``Government-wide Category Management, Guidance 
Document, Version 1.0,'' Office of Management Budget, May 2015, 
available at https://hallways.cap.gsa.gov/information/Gov-wide_CM_Guidance_V1.pdf.
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    For example, OFPP issued Category Management Policy 15-1: Improving 
the Acquisition and Management of Common Information Technology: 
Laptops and Desktops. In Fiscal Year 2014, agencies awarded more than 
10,000 contracts and orders totaling $1.1

[[Page 41107]]

billion for laptops and desktops. In addition to contract duplication, 
price variation is also an issue since the prices paid for laptops of 
the same configuration could range from $450 to $1,300, or almost 300 
percent. A category team led by the National Aeronautics and Space 
Administration (NASA), with subject matter experts from across the 
Government, was established and came up with the following 
requirements:
    1. Standardize laptop and desktop configurations for common 
requirements. Through an extensive data analysis, the category team 
determined five standard configurations could satisfy 80 percent of the 
Government's laptop needs.
    2. Reduce the number of contracts for laptops and desktops by 
consolidating purchasing and using a few number of high-performing--or 
best in class--contracts. With limited exceptions, all agencies are 
prohibited from issuing new solicitations for laptops and desktops, and 
civilian agencies must use NASA Solutions for Enterprise-Wide 
Procurement (SEWP), GSA Schedule 70, or National Institutes of Health 
(NIH) Chief Information Officer-Commodities and Solutions (CIO-CS).
    3. Develop and modify demand management processes to optimize price 
and performance. Agencies are encouraged to adopt smarter buying 
strategies, such as adopting uniform refresh cycles and aggregating 
demand to support leveraged buying events.\12\
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    \12\ See Office of Management and Budget Memorandum M-16-02, 
``Category Management Policy 15-1: Improving the Acquisition and 
Management of Common Information Technology: Laptops and Desktops'', 
October 16, 2015, available at https://www.whitehouse.gov/sites/default/files/omb/memoranda/2016/m-16-02.pdf.
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    In another example, the Professional Services category team within 
GSA consolidated its offerings in two areas, the Professional Services 
Schedule (PSS) and the One Acquisition Solution for Integrated Services 
(OASIS) vehicle. The PSS is the result of combining eight separate 
Schedules under one umbrella, and in the process eliminating more than 
700 duplicative contracts. This promotes efficiency in a number of 
ways. GSA can now focus its resources on improving the user experience 
under its contracts. Vendors, especially small businesses, now need to 
manage fewer contracts to fully access the professional services 
market, lowering their administrative burden. Finally, customers can 
meet their mission needs through a less fragmented purchasing channel. 
Likewise, OASIS provides flexibility for federal buyers seeking to 
streamline their acquisition strategies by eliminating duplicative 
contracts. In Fiscal Year 2015, GSA supported the Army and Air Force in 
moving more than $350 million in combined contract sales under the 
OASIS vehicle. OASIS has also allowed the Air Force to forgo extending 
five of its IDIQ contracts and the Department of Homeland Security has 
chosen OASIS as the successor to its Technical, Acquisition, and 
Business Support Services (TABSS) IDIQ contract.
    The reduction in duplicative and inefficient contracts also removes 
barriers to entry into the federal marketplace, especially for small 
businesses. The Government Accountability Office (GAO) reports the 
costs of being on multiple contract vehicles ranged from $10,000 to 
$1,000,000 due to increased bid and proposal, and administrative 
costs.\13\ Consequently, as category management streamlines procurement 
channels and vendors realize lower administrative costs, small 
businesses in particular will benefit from a leveling of the playing 
field. Small business participation is a key component of all category 
management strategies and care will be taken to ensure small businesses 
maintain access to the federal marketplace as duplicative contracts are 
eliminated.
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    \13\ See GAO report GAO-10-367, ``Contracting Strategies, Data 
and Oversight Problems Hamper Opportunities to Leverage Value of 
Interagency and Enterprisewide Contracts,'' April 2010, available at 
https://www.gao.gov/new.items/d10367.pdf.
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    Nevertheless, as category management continues to permeate the 
acquisition landscape, a critical ingredient for its success must be 
obtained: Transactional data.

B. Necessity and Value of Transactional Data

    A critical component of category management, and smarter buying in 
general, is the availability of transactional data, which shows the 
details of purchases at the line-item level. It includes details such 
as descriptions, quantities, and prices paid for the items purchased. 
More than providing leverage for Government buyers to negotiate lower 
prices, transactional data underlies the business intelligence used to 
inform smarter buying strategies.
    Transactional data provides the Government insight into its 
purchasing patterns, allowing it to identify the most efficient 
solutions, channels, and sources to meet mission critical needs. As 
previously noted, two key category management principles are optimizing 
existing contract vehicles and reducing contract duplication.\14\ With 
transactional data, the Government can analyze its consumption 
patterns, evaluate and compare purchasing channels, and identify best-
in-class solutions. Thereafter, the Government can leverage its buying 
power to achieve taxpayer savings as it concentrates its purchases 
through fewer channels, which will in turn provide lower administrative 
costs for federal contractors.
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    \14\ See ``Government-wide Category Management, Guidance 
Document, Version 1.0,'' Office of Management Budget, May 2015, 
available at https://hallways.cap.gsa.gov/information/Gov-wide_CM_Guidance_V1.pdf.
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    Category managers will also use transactional data to develop 
demand management strategies that offer more optimal solutions for 
satisfying common requirements. For example, GSA's Domestic Delivery 
Services 2 (DDS2) program illustrates how transactional data can 
provide valuable insight into purchasing patterns and offer 
opportunities to develop more effective procurement strategies. In 
Fiscal Year 2009, 90 percent of revenue through the Domestic Delivery 
Services contracts was for more expensive, express air shipments, with 
less costly ground shipments accounting for the remaining 10 percent. 
However, after analyzing the actual buying practices through 
transactional data, the Government was able to change its consumption 
behavior to spend less by foregoing unnecessary express air shipments. 
By Fiscal Year 2015, air shipments shrank to 60 percent of revenue and 
46 percent of total shipments, while ground shipments grew to 40 
percent of revenue and 54 percent of total shipments.
    Transactional data can also be leveraged to reduce price variation 
and lower costs. As exhibited by the 300 percent laptop price variance, 
Government buyers often rely on asymmetric information, which results 
from one party possessing better information than the other. In 
response, GSA began pioneering transactional data reporting on several 
of its contract vehicles. Combined with sourcing strategies and 
enhanced competition, GSA successfully instituted dynamic pricing 
models, where prices are continually adjusted based on transactional 
data, resulting in less variation and lower prices. Examples of this 
success include:
     Office Supplies 2 (OS2) and Office Supplies 3(OS3), with 
direct savings increasing from 10 percent in Fiscal Year 2010 to nearly 
30 percent by Fiscal Year 2015.
     Federal Strategic Sourcing Initiative (FSSI) Wireless: 
This contract delivered

[[Page 41108]]

a 21 percent savings rate in its first year of operation (Fiscal Year 
2014), which then increased to 26 percent by its second year. Other 
agencies that adopted FSSI Wireless achieved savings up to 38 percent 
from their previous contract prices while reducing the number of 
devices managed.
     Commercial Satellite Communications (COMSATCOM): Customers 
save an average of 34 percent compared to GSA Schedule contract prices 
and better understand spend details. The availability of transactional 
data under COMSATCOM is already contributing to a reduction in 
duplicative contracts.
    However, transactional data does not transform the federal 
acquisition system into a lowest-price procurement model. The Federal 
Acquisition Regulation (FAR) has a stated vision ``to deliver on a 
timely basis the best value product or service to the customer, while 
maintaining the public's trust and fulfilling public policy 
objectives.'' \15\ The Government's preference will continue to be 
``best value,'' or as defined in the FAR, ``the expected outcome of an 
acquisition that, in the Government's estimation, provides the greatest 
overall benefit in response to the requirement.'' \16\ Transactional 
data is viewed in the context of each procurement, taking into account 
desired terms and conditions, performance levels, past customer 
satisfaction, and other relevant information. Using and understanding 
the data will help inform requirements definition and reduce excess 
consumption.
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    \15\ Federal Acquisition Regulation section 1.102 (48 CFR 
1.102).
    \16\ Federal Acquisition Regulation section 2.101 (48 CFR 
2.101).
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C. Imperative for Innovation

    In Fiscal Year 2015, Government agencies ordered nearly $40 billion 
in goods and services through GSA's Federal Supply Schedules, 
Governmentwide Acquisition Contracts (GWACs), and Governmentwide 
Indefinite-Delivery, Indefinite-Quantity (IDIQ) contracts. GSA's 
Federal Supply Schedule program, commonly known as GSA Schedules or 
Multiple Award Schedules (MAS), accounted for approximately $33 billion 
of those sales, making it the Government's most used commercial-item 
purchasing channel. Consistent with the broader effort to transform the 
federal marketplace, GSA is innovating its suite of Governmentwide 
contract vehicles.
    While GSA has a number of policies in place to help its buyers and 
agency users to secure best value for the taxpayer, and other 
regulatory actions in process to improve the Schedules program, two 
limitations in current pricing practices make achievement of this goal 
unnecessarily challenging: (1) Insufficient attention to ``horizontal 
pricingI''--the ability to compare one vendor's pricing to that of 
other vendors--and (2) lack of visibility into prices paid by other 
customers.
    Insufficient Attention to Horizontal Pricing: GSA currently relies 
on a ``vertical'' pricing model to establish price reasonableness on 
its FSS contracts, which entails 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.
    Until recently, when vendors first submitted an FSS offer, minimal 
consideration was given to the relative competitiveness of the vendor's 
prices to other vendors (i.e., horizontal pricing). Instead, the FSS 
program primarily collects aggregate sales information through 
Commercial Sales Practices (CSP) disclosures, which include a broad 
disclosure of discounts vendors offer to commercial customers for 
similar products and services.\17\ GSA's negotiation objective is to 
achieve a company's best price--i.e., the price given to its most 
favored customer--who buys in quantities and under conditions similar 
to those of the Government.\18\ Contractors are then required, under 
the Price Reductions clause (PRC), to monitor their pricing over the 
life of the contract and provide the Government with the same price 
reductions that they give to the class of the contractor's commercial 
customers upon which the original contract award was predicated.\19\ In 
addition to the ``tracking customer'' requirement, the PRC allows 
vendors to voluntarily reduce prices to the Government and for the 
Government to request a price reduction at any time during the contract 
period, such as where market analysis indicates that lower prices are 
being offered or paid for the same items under similar conditions.
---------------------------------------------------------------------------

    \17\ General Services Administration Acquisition Regulation 
section 515.408(a)(2) (48 CFR 515.408(a)(2)).
    \18\ General Services Administration Acquisition Regulation 
section 538.270 (48 CFR 538.270).
    \19\ General Services Administration Acquisition Regulation 
clause 552.238-75 (48 CFR 552.238-75).
---------------------------------------------------------------------------

    Pricing disclosures, such as the CSP and its predecessors, along 
with the PRC, have served as the bedrock of the Schedules program 
pricing approach for at least as far back as the 1980s. With limited 
other means of data collection available, they served as a way to 
ensure fair and reasonable pricing through the life of a contract with 
the goal of achieving most favored customer pricing. For many years, 
CSP disclosures and the PRC tracking customer feature were critical 
mechanisms for achieving advantageous pricing from original equipment 
manufacturers (OEMs) that held the vast majority of FSS contracts. 
However, these tools predate the Federal Acquisition Streamlining Act 
of 1994 (FASA) \20\ and the subsequent procedures in FAR part 12, which 
aim to ``establish policies more closely resembling those of the 
commercial marketplace.'' \21\ For instance, FASA required the 
Government to only ask for information other than cost and pricing data 
as needed.
---------------------------------------------------------------------------

    \20\ Public Law 103-355.
    \21\ Federal Acquisition Regulation section 12.000 (48 CFR 
12.000).
---------------------------------------------------------------------------

    Moreover, a number of factors have eroded the effectiveness of 
these tools over time, including: (i) The significant growth of 
contracts held by resellers with little or no commercial sales against 
which to negotiate most favored customer pricing; (ii) the prevalence 
of sales for commercial-off-the-shelf products or other commercial 
items for which the Government is not a market driver; and (iii) the 
fact that these practices tie pricing for reductions to sales of single 
items and play little role in blanket purchase agreements and other 
higher-volume leveraged buying by agencies to achieve greater savings 
and reduce administrative costs.
    When it comes to contract administration, the Government, and other 
customers in the category to which the Government is most typically 
aligned under the PRC, tends to receive voluntary price reductions from 
the vendor as a result of general market forces. In other words, prices 
are reduced under the voluntary provisions of the PRC as a result of 
competitive market forces, not under the mandatory tracking customer 
provisions.
    Vendors have also singled out these pricing tools as among the most 
complicated and burdensome requirements in federal contracting, 
including during a 2014 national online dialogue sponsored by the Chief 
Acquisition Officers Council to identify ways of improving how the 
Government does business with its contractors. A number of contractors 
contended that the one-size-fits all application of these tools to all 
Schedules runs counter to

[[Page 41109]]

the spirit of the FASA and its implementing policies in FAR part 12, 
such as by requesting detailed pricing information only after 
determining that more readily available data is not sufficient to 
establish fair and reasonable pricing. Some noted that the 
proliferation of Schedule resellers has occurred, in part, out of an 
effort by OEMs to shield them from what they see as an overly complex 
and burdensome process that has created a punitive relationship between 
the Government and its suppliers.
    GSA recognized the deficiencies of its vertical pricing model and 
has begun implementing horizontal pricing initiatives for its FSS 
contracts. For example, over the past year GSA has launched the 
Competitive Pricing Initiative (CPI) and the Contract Awarded Labor 
Category Tool (CALC):
     CPI aims to identify and address price variability across 
the Schedules program. The initiative is built around a Formatted 
Product Tool (FPT) that identifies pricing outside a range determined 
to be acceptable for identical items; vendors whose prices exceed the 
acceptable range are then notified of their comparative pricing. 
Currently, this initiative applies only to products, while services 
will be addressed at a later date. Moving forward, FSS contracting 
officers will utilize available horizontal pricing data from the FPT 
for certain categories of supplies when conducting price analysis, in 
addition to other price analysis techniques already employed in 
compliance with the FAR and GSAR. The FSS contracting officer's final 
determination will also take into account non-price elements, such as 
materially different terms, quantities, and market and economic 
factors. CPI will also allow FSS contracting officers to identify where 
a vendor's offered pricing is outside the range determined to be 
acceptable for identified products and services. After a vendor has 
been notified, they will be given the opportunity to use this market 
intelligence to make their offered pricing more competitive. Equally 
important, vendors will have the chance to advise if they have a unique 
value proposition, such as speedier deliveries, guarantees, or quantity 
that warrants a higher price.
     CALC is a market research tool that searches a database of 
awarded FSS contract prices for 48,000 labor categories from more than 
5,000 FSS contracts under the Professional Services Schedule. Rather 
than sifting through contract files or searching GSA Advantage![supreg] 
for comparable pricing, Government contracting professionals can now 
use CALC to return a multitude of comparable contract prices within a 
matter of seconds. Additionally, these search results can be filtered 
by relevant criteria such as years of experience and education level. 
Over time, greater enhancements are anticipated, such as adding 
geographic filters.
    GSA has made tremendous progress on the horizontal price analysis 
front over the past year, but tools such as CPI and CALC only support 
segments of the FSS program and only analyze contract-level prices. 
Although GSA establishes fair and reasonable prices on its 
Governmentwide contracts, the program is designed with the intent of 
ordering activities negotiating further discounts at the time of the 
instant requirement. While in many respects this is a significant 
strength of the program, at times, the absence of good pricing 
information contributes to negative perceptions of the program, and as 
result, contract duplication. Consequently, transactional data is 
needed to perform a horizontal analysis of the actual prices paid for 
goods and services acquired through GSA contract vehicles.
    Lack of transparency in prices previously paid: The FAR has long 
emphasized the need for contracting officers to conduct price analysis 
as part of their responsibility to determine offered prices are fair 
and reasonable. Price analysis requires contracting officers to obtain 
and analyze data on the prices at which the same or similar items have 
been sold, but until recently, little effort was made to share prices 
previously paid by agencies throughout the Government. As a result, 
contracting officers generally lack critical information when making 
these important determinations.
    Though the specifics vary, several of GSA's non-FSS contracts now 
require vendors to report transactional data, including Alliant, 
Alliant Small Business, Connections II, Custom SATCOM Solutions (CS2), 
Custom SATCOM Solutions--Small Business (CS2-SB), Office Supply Third 
Generation (OS3), and One Acquisition Solution for Integrated Services 
(OASIS). However, these requirements are applied through their 
respective solicitations without the benefit of a dedicated, standard 
GSAR clause, resulting in inconsistency.
    Continuous innovation is imperative for the FSS program. In 2010, 
the Multiple Award Schedule (MAS) Blue Ribbon Advisory Panel, which 
included representatives from the Government's largest buying 
agencies--the Department of the Defense, Department of Homeland 
Security, Department of the Interior, Department of the Treasury, and 
Department of Education--and industry, recommended that ``the GSA 
Administrator remove the Price Reduction Clause from the MAS program 
supply contracts for products in phases as the GSA Administrator 
implements recommendations for competition and price transparency at 
the Schedule contract level and the order level.'' That same year, the 
Government Accountability Office (GAO) issued a report recommending GSA 
collect ``prices paid'' data on FSS orders and make this information 
available to FSS contract negotiators and customer agencies.\22\ Over 
the next few years, GSA explored alternatives for collecting 
transactional data through the FSS program before ultimately deciding 
to pursue incorporating a transactional data reporting requirement in 
its FSS contracts.
---------------------------------------------------------------------------

    \22\ See U.S. Government Accountability Office report GAO-10-
367, ``Data and Oversight Problems Hamper Opportunities to Leverage 
Value of Interagency and Enterprisewide Contracts,'' April 2010, 
available at https://www.gao.gov/products/GAO-10-367.
---------------------------------------------------------------------------

D. Transactional Data Reporting: Proposed Rule and Public Meeting

    On March 4, 2015, GSA issued a proposed rule to require 
transactional data reporting on its FSS contracts and non-FSS contract 
vehicles--Governmentwide Acquisition Contracts (GWACs) and 
Governmentwide Indefinite-Delivery, Indefinite-Quantity (IDIQ) 
contracts. The rule proposed for non-FSS contracts would have been 
immediately implemented but rolled out on a pilot basis for the FSS 
program under select Schedules. For FSS contracts, the requirement 
would be paired with an alternate Price Reductions clause that did not 
include the tracking customer feature, although GSA would have had the 
right to request CSP disclosures at any time.\23\
---------------------------------------------------------------------------

    \23\ See GSAR Case 2013-G504 (80 FR 11619 (Mar. 4, 2015)).
---------------------------------------------------------------------------

    On April 17, 2015, a public meeting was held at GSA headquarters in 
Washington, DC, to discuss the proposed rule. Nearly 200 companies, 
organizations, Government agencies, and interest groups were 
represented. In general, industry representatives opposed the 
transactional data reporting requirement but supported the proposed PRC 
changes. Government procurement representatives supported the rule, 
while oversight entities expressed concern with the potential reporting 
burden and PRC changes.\24\
---------------------------------------------------------------------------

    \24\ See the public meeting transcript at https://www.regulations.gov/#!documentDetail;D=GSA-GSAR-2014-0020-0024.

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

[[Page 41110]]

    Following an extension to the public comment period,\25\ GSA 
received 26 comment letters on the proposed rule, including comments 
from industry associations, contractors, individuals, Government 
stakeholders, and other interested groups.
---------------------------------------------------------------------------

    \25\ See GSAR Case 2013-G504 (80 FR 25994 (May 6, 2015)).
---------------------------------------------------------------------------

III. Final Rule Overview

    GSA is adopting new requirements for transactional data reporting 
on its FSS, GWAC, and Governmentwide IDIQ vehicles:
     For FSS contracts, a new transactional data reporting 
clause, GSAR Alternate I, 552.238-74 Industrial Funding Fee and Sales 
Reporting (Federal Supply Schedule), will be paired with changes to FSS 
pricing disclosure requirements. Specifically, FSS vendors subject to 
the Transactional Data Reporting rule will no longer provide CSP 
disclosures and will no longer be subject to the PRC tracking customer 
provision. These changes will be initially implemented for select 
Schedules and Special Item Numbers on a pilot basis.
     For GWACs and Governmentwide IDIQs, a new clause, GSAR 
552.216-75 Transactional Data Reporting, will apply to all new GWACs 
and Governmentwide IDIQs and may be applied to any existing contracts 
in this class that do not contain other transactional data clauses.

A. Summary of Changes Made at the Final Rule Stage

    The following is a summary of changes made in response to public 
comments regarding the proposed rule:
    CSP Disclosures: FSS vendors will no longer provide CSP disclosures 
for contracts subject to the new Transactional Data Reporting clause, 
552.238-74 Alternate I. This is in addition to pairing the new 
reporting clause with the new Price Reductions clause (552.238-75) 
Alternate II, which does not include the basis of award tracking 
customer requirement. The GSAR sections requiring CSP disclosures and 
clauses 552.238-75 and 552.238-75 Alternate I (the PRC versions that 
include the tracking customer provision) have been updated to exclude 
contracts subject to the new FSS reporting clause, 552.238-74 Alternate 
I.
    GSA has also concluded the horizontal pricing ability afforded by 
Transactional Data Reporting would not only exceed the PRC tracking 
customer provision benefits, it could also alleviate the need for CSP 
disclosures when combined with automated commercial data sources, new 
data analytic tools, and improved price analysis policy. For the 
Schedules pilot, pairing Transactional Data Reporting with a removal of 
CSP disclosures and the PRC tracking customer provision will result in 
an average annual burden reduction of approximately $32 million for 
participating FSS vendors.\26\ Furthermore, implementing the FSS pilot 
without the existing CSP and PRC requirements lowers the Government's 
burden by about $3 million a year.\27\
---------------------------------------------------------------------------

    \26\ $32 million does not include costs for non-FSS contracts. 
It is the result of the FSS burden of the initial pilot 
implementation ($12.41 million), minus the share of the combined CSP 
and PRC burden allocated to the FSS pilot vendors ($44.03 million). 
The total CSP and PRC burden from Information Collection 3090-0235, 
if it were applied to all GSA FSS vendors, including those 
participating in the Transactional Data Reporting pilot, would be 
$101.69 million. The share of that burden allocated to the FSS pilot 
vendors ($44.03 million) is based on the percentage of the overall 
FY15 FSS sales accounted for by the FSS pilot vendors (43.2 
percent).
    \27\ $3 million is the result of the Government's annual burden 
for this rule ($2.34 million) minus the share of the combined CSP 
and PRC burden for the Government allocated to the FSS pilot 
contracts ($5.58 million).
---------------------------------------------------------------------------

    Data Reporting and Fee Remittance Timelines: Both Transactional 
Data Reporting clauses (552.216-75 and 552.238-74 Alternate I) now 
require vendors to report transactional data within 30 calendar days 
after the last day of the calendar month. Additionally, the non-FSS 
clause (552.216-75) now states a GSA representative will provide the 
contractor with specific written procedural instructions on remitting 
the Contract Access Fee (CAF) within 60 days of award or inclusion of 
this clause in the contract, including the deadline by which the 
contractor must remit the CAF, although the deadline specified in the 
written procedural instructions will be no less than 30 days after the 
last day of the month. Previously, GSA proposed for contractors subject 
to both clauses to report transactional data within 15 calendar days 
after the end of the calendar month. Non-FSS contractors were to remit 
any CAF due within 15 calendar days after the end of the calendar 
month. FSS contractors were to remit any Industrial Funding Fee (IFF) 
due within 30 calendar days after the end of each quarter.
    GSA increased the monthly reporting window from 15 to 30 calendar 
days in response to comments stating the proposed 15-day window did not 
allow enough time to compile, analyze, and report transactional data. 
GSA opted to not require monthly IFF remittance because doing so would 
disproportionately harm small businesses, many of whom remit fees based 
on accrued billings before they actually receive payments from their 
Government customers. The non-FSS clause (552.216-75) does not specify 
CAF remittance frequency--those instructions will be provided within 60 
days after award or inclusion of the clause in the contract--but 
ensures contractors have at least 30 days after the last day of the 
month to remit the CAF.
    Clause Language: GSA made several revisions to the clause language 
for 552.216-75 and 552.238-74 Alternate I, including a data element 
``fill-in'' for additional elements that requires approval from GSA's 
Senior Procurement Executive.
    Paperwork Reduction Act: GSA increased its Transactional Data 
Reporting burden estimates. For the proposed rule, GSA's public burden 
estimates included an average initial setup time of 6 hours and average 
ongoing monthly reporting times ranging from 2 minutes to 4 hours, 
depending on a vendor's sales volume.\28\ In contrast, the final rule 
burden estimates include initial average setup times of 8 hours for 
vendors using manual systems and 240 hours for vendors using automated 
systems, and average ongoing monthly reporting times ranging from 15 
minutes to 48 hours, depending on a contractor's sales volume and 
reporting system type.
---------------------------------------------------------------------------

    \28\ See GSAR Case 2013-G504; Docket 2014-0020; Sequence 1 [80 
FR 11619 (Mar. 4, 2015)].
---------------------------------------------------------------------------

B. Alternatives Analysis

    GSA determined it is necessary to obtain and analyze transactional 
data for purchases made through its contract vehicles in order to 
support the Government's category management vision and improve 
acquisition outcomes in general. However, following the April 17, 2015 
public meeting and subsequent receipt of the public comments, GSA was 
compelled to further evaluate the spectrum of alternatives for 
Transactional Data Reporting, ranging from withdrawing the rule in 
favor of different approaches for obtaining the data to applying the 
new reporting clauses without corresponding changes to existing 
disclosure requirements. Ultimately, the decision to proceed hinged on 
considerations including, but not limited to, alternatives for 
collecting transactional data; the burden associated with reporting 
transactional data; opportunities to reduce burden through changes to 
existing disclosure requirements, and the associated

[[Page 41111]]

impacts of those changes; effects on small businesses; and the benefits 
of collecting transactional data for non-standard products and 
services.
    The Initial Regulatory Flexibility Analysis published with the 
proposed rule included an evaluation of alternatives for obtaining 
transactional data--internal applications; GSA ordering platforms such 
as eBuy and GSA Advantage![supreg]; the SmartPay credit card purchase 
program; and upgrades to the Federal Procurement Data System. GSA 
previously concluded these options would not provide the breadth of 
data needed to support the Government's objectives or would be unable 
to do so in the foreseeable future. Since the publication of the 
proposed rule, GSA reevaluated those alternatives and reached similar 
conclusions. Additionally, the Government's electronic invoicing 
initiative \29\ was assessed as a potential alternative. However, 
following meetings regarding electronic invoicing implementation with 
representatives from the Department of Defense, Department of Energy, 
Department of Transportation, Department of Treasury, and Department of 
Veterans Affairs, it was determined these electronic invoicing 
platforms will not provide a Governmentwide transactional data 
reporting solution in the near term. Consequently, GSA continued to 
evaluate solutions that relied on contractor-provided transactional 
data.
---------------------------------------------------------------------------

    \29\ See Office of Management and Budget memorandum M-15-19, 
``Improving Government Efficiency and Saving Taxpayer Dollars 
Through Electronic Invoicing'', July 17, 2015, available at https://www.whitehouse.gov/sites/default/files/omb/memoranda/2015/m-15-19.pdf.
---------------------------------------------------------------------------

    The most common concern, in terms of the number of respondents to 
the proposed rule, regarded the associated burden of reporting 
transactional data. In general, commenters felt the burden was 
underestimated and/or the requirement was too burdensome. To address 
the concerns with its Transactional Data Reporting burden estimates, 
GSA reevaluated its methodology and significantly increased its burden 
estimates.\30\ These higher burden projections were a significant 
concern and reinforced the need to couple Transactional Data Reporting 
with other significant forms of burden reduction.
---------------------------------------------------------------------------

    \30\ See Section VIII.B for a discussion of the burden estimates 
in accordance with Paperwork Reduction Act requirements.
---------------------------------------------------------------------------

    A notable concern expressed by industry stakeholders was the 
retention, and potential increase, of CSP disclosures. GSA noted in the 
proposed rule it ``. . . would maintain the right throughout the life 
of the FSS contract to ask a vendor for updates to the disclosures made 
on its commercial sales format (which is used to negotiate pricing on 
FSS vehicles) if and as necessary to ensure that prices remain fair and 
reasonable in light of changing market conditions.'' \31\ In response, 
industry stakeholders indicated retaining CSP disclosures would 
undercut any burden reduction achieved by eliminating the PRC tracking 
customer requirement. Specifically, respondents were concerned CSP 
disclosures will still force them to monitor their commercial prices, 
which ultimately causes the associated burden for both disclosure 
requirements.
---------------------------------------------------------------------------

    \31\ See GSAR Case 2013-G504 (80 FR 25994 (May 6, 2015)).
---------------------------------------------------------------------------

    In the summer of 2015, GSA also began preparing its request to 
renew the PRC information collection, which is identified under OMB 
Control Number 3090-0235. The Paperwork Reduction Act requires federal 
agencies to seek public comment on proposed collections of information 
from the public and then submit an information collection request (ICR) 
to the OMB Office of Information and Regulatory Affairs (OIRA). After 
receiving clearance to proceed, federal agencies must seek public 
comment and OIRA approval for renewal of these information collections, 
typically every three years. Since the PRC information collection was 
last approved in 2012, GSA needed to begin preparing its request to 
renew the information collection shortly after publishing the 
Transactional Data Reporting proposed rule. While GSA would have 
proceeded with a renewal request regardless, the timing did allow for 
the consideration of the Transactional Data Reporting comments. In 
particular, GSA agreed with the general industry comment that burdens 
of the PRC and CSP are related and therefore decided to include CSP 
disclosure burden estimates with the PRC ICR. GSA also opted to change 
the name of Information Collection 3090-0235 from ``Price Reductions 
Clause'' to ``Federal Supply Schedule Pricing Disclosures'' to more 
accurately reflect the scope of the information collected.
    Following two Federal Register notices requesting comments on the 
FSS Pricing Disclosures ICR,\32\ GSA increased its annual burden 
estimates for GSA FSS vendors, including those who would participate in 
the Transactional Data Reporting pilot, from $59 million \33\ to $102 
million.\34\ Yet, Transactional Data Reporting alleviates the need for 
these FSS pricing disclosures when combined with automated commercial 
data sources, new data analytic tools, and improved price analysis 
policy. As a result, GSA decided to pair Transactional Data Reporting 
with the removal of CSP disclosures and the PRC tracking customer 
provision, resulting in an average annual burden reduction of $32 
million for participating FSS vendors.\35\ Furthermore, implementing 
the FSS pilot without the existing CSP and PRC requirements lowers the 
Government's burden by about $3 million a year.\36\
---------------------------------------------------------------------------

    \32\ See 80 FR 72060 (Nov. 18, 2015) and 81 FR 21346 (Apr. 11, 
2016).
    \33\ 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.
    \34\ The annual public reporting burden for the CSP and PRC, 
excluding FSS vendors participating in the Transactional Data 
Reporting pilot, is $57.66 million. If FSS pilot vendors were still 
subject to the CSP and PRC reporting requirements, the total annual 
public reporting burden would be $101.69 million. The FSS pilot 
vendors' share of the total CSP and PRC reporting burden is based 
upon their share of the GSA FSS fiscal year 2015 sales volume, 43.2 
percent. The annual $44.03 million reporting burden reduction 
attributed to this rule is 43.2 percent of the $101.69 million 
annual reporting burden if it were applied to the entire GSA FSS 
program. More information about Information Collection 3090-0235 can 
be found at https://www.reginfo.gov/public by searching ``ICR'' for 
``3090-0235''.
    \35\ $32 million does not include costs for non-FSS contracts. 
It is the result of the FSS burden of the initial pilot 
implementation ($12.41 million), minus the share of the combined CSP 
and PRC burden allocated to the FSS pilot vendors ($44.03 million). 
The total CSP and PRC burden from Information Collection 3090-0235, 
if it were applied to all GSA FSS vendors, including those 
participating in the Transactional Data Reporting pilot, would be 
$101.69 million. The share of that burden allocated to the FSS pilot 
vendors ($44.03 million) is based on the percentage of the overall 
FY15 FSS sales accounted for by the FSS pilot vendors (43.2 
percent).
    \36\ $3 million is the result of the Government's annual burden 
for this rule ($2.34 million) minus the share of the combined CSP 
and PRC burden for the Government allocated to the FSS pilot 
contracts ($5.58 million).
---------------------------------------------------------------------------

    Streamlining the existing pricing disclosure requirements is 
particularly beneficial for small businesses. The current CSP and PRC 
disclosure requirements are constant, meaning vendors, especially those 
with a higher number of FSS contract offerings, must bear the burden 
even if they have little to no sales through their FSS contracts. Thus, 
small businesses are disproportionately impacted because they account 
for the bulk of lower volume contracts. Moreover, small businesses, 
which generally have fewer resources to devote to contract management, 
will no longer be subjected to the complex CSP and PRC pricing 
disclosure requirements.

[[Page 41112]]

    Unlike the existing CSP and PRC disclosure requirements, 
Transactional Data Reporting imposes a progressive burden--one that 
increases with a vendor's sales volume. Namely, monthly reporting time 
will increase with a vendor's applicable sales volume, as vendors with 
lower to no reportable sales will spend little time on monthly 
reporting, while those businesses with more reportable sales with will 
face a higher reporting burden. Likewise, setup costs will be a major 
driver of the new reporting burden, but vendors with little to no 
activity on their FSS contracts will likely forgo investments in new 
reporting systems because the reporting burden will not be 
significantly more than that of the current quarterly sales reporting 
requirements. Thus, tying the burden to sales volume is particularly 
beneficial for small businesses, as they hold 80 percent of the total 
contracts but account for only about 39 percent of the sales.\37\
---------------------------------------------------------------------------

    \37\ Based on fiscal year 2015 Federal Supply Schedule contract 
data.
---------------------------------------------------------------------------

    Finally, consideration was given to whether Transactional Data 
Reporting should be applied to all of GSA's Governmentwide contract 
vehicles. Most of GSA's non-FSS Governmentwide vehicles currently have 
transactional data reporting requirements that exceed those created 
through this rule, but the new applicable Transactional Data Reporting 
clause (GSAR clause 552.216-75) will provide a consistent reporting 
mechanism for future non-FSS vehicles, or for current vehicles that 
adopt the new clause. For FSS contracts, an analysis was conducted to 
determine whether Transactional Data Reporting should be considered for 
all FSS contracts, or only those that include products or services that 
would allow straightforward comparisons, such as commodities with 
standard part numbers. The second-most common comment area questioned 
the utility of collecting transactional data for Schedules where 
``apples-to-apples'' comparisons cannot be made, such as contracts for 
professional services and complex solutions. While transactional data 
is most useful for price analysis when comparing like items, it does 
not mean the data is not useful when perfect comparisons cannot be 
made. Government buyers and FSS contracting officers will use the data 
for price analysis and market research, and category managers will use 
the data for consumption analysis to form demand management strategies, 
regardless of whether the data can be used for perfect comparisons. An 
example is the ability to compare labor rates across contract vehicles, 
which is beginning to bear fruit in the form of reduced contract 
duplication. Consequently, GSA decided not to limit the prescription of 
Transactional Data Reporting to certain Schedules or Special Item 
Numbers.

IV. Final Rule Implementation

A. GWAC and Governmentwide IDIQ Contracts

    GSAR clause 552.216-75 Transactional Data Reporting is immediately 
available for GSA's GWACs and non-FSS Governmentwide IDIQ contracts. It 
will be applied to all new vehicles in this class--those vehicles with 
solicitations issued on or after the effective date of this rule--but 
the current contract vehicles with alternative transactional data 
provisions may opt to continue using existing reporting requirements. 
The clause requires contractors to report eleven standard data elements 
and includes a ``fill-in'' for additional data elements. However, GSA's 
Senior Procurement Executive must approve any data elements beyond the 
standard elements in order for them to be included with a tailored 
version of the clause. The determination regarding additional data 
elements will consider the benefits, alternatives, burden, and need for 
additional rulemaking.

B. FSS Contracts

    The new FSS Transactional Data Reporting clause (GSAR clause 
552.238-74, Alternate I), along with the corresponding changes to 
existing pricing disclosure requirements, will be introduced in phases, 
beginning with a pilot for select Schedules and Special Item Numbers 
(SINs). The clause requires vendors to report eleven standard data 
elements and includes a ``fill-in'' for additional data elements. 
However, GSA's Senior Procurement Executive must approve any data 
elements beyond the standard elements in order for them to be included 
with a tailored version of the clause. The determination regarding 
additional data elements will consider the benefits, alternatives, 
burden, and need for additional rulemaking.
    The pilot will begin no sooner than July 1, 2016--details will be 
released at a later date--and will include the following Schedules and 
SINs:
     Schedule 03FAC, Facilities Maintenance and Management: All 
SINs.
     Schedule 51 V, Hardware Superstore: All SINs.
     Schedule 58 I, Professional Audio/Video, Telemetry/
Tracking, Recording/Reproducing and Signal Data Solutions: All SINs.
     Schedule 72, Furnishing and Floor Coverings: All SINs.
     Schedule 73, Food Service, Hospitality, Cleaning Equipment 
and Supplies, Chemicals and Services: All SINs.
     Schedule 75, Office Products: All SINs.
     Schedule 00CORP, The Professional Services Schedule: 
Professional Engineering Services (PES) SINs.
     Schedule 70, General Purpose Information Technology 
Equipment, Software, and Services: SINs 132 8 (Purchase of New 
Equipment); 132 32, 132 33, and 132 34 (Software); and 132 54 and 132 
55 (Commercial Satellite Communications (COMSATCOM)).
    The new reporting clause and corresponding pricing disclosure 
changes will be applied to newly-awarded contracts for the applicable 
Schedules/SINs. Existing contracts for the pilot Schedules/SINs will 
adopt the new reporting clause and corresponding pricing disclosure 
changes after the execution of a bilateral modification between the 
vendor and Government.
    For the two pilot Schedules that include only select SINs--The 
Professional Services Schedule and Schedule 70--contracts subject to 
the Transactional Data Reporting that include those SINs will report 
transactional data for all SINs under those contracts. For example, a 
vendor holding a Schedule 70 contract consisting of SINs 132 33 
(Perpetual Software License), 132 34 (Maintenance of Software as a 
Service), and 132 51 (Information Technology Professional Services) 
will be subject to the Transactional Data Reporting pilot because of 
the inclusion of Software SINs 132 33 and 132 34. However, this vendor 
will report transactional data for all SINs--132 33, 132 34, and 132 
51. Likewise, vendors holding Professional Services Schedule contracts 
that include a Professional Engineering Services SIN in conjunction 
with other SINs under that Schedule (e.g., Environmental Services, 
Mission Oriented Business Integrated Services, etc.) will report 
transactional data for all SINs under the contract.
    The initial pilot will reach approximately 30 percent of GSA's FSS 
contracts, including Schedules/SINs covering a wide array of goods and 
services that account for approximately 43 percent of the GSA Schedules 
sales volume. This scope will enable GSA to evaluate the effectiveness 
of Transactional Data Reporting before deciding whether to expand, 
limit, or discontinue the program. Evaluation

[[Page 41113]]

metrics will include, but not be limited to, changes in price, sales 
volume, and small business participation, as well as macro use of 
transactional data by category managers and teams to create smarter 
buying strategies such as consumption policies. GSA's Senior 
Procurement Executive will regularly evaluate progress against these 
metrics in consultation with the Administrator for Federal Procurement 
Policy and other interested stakeholders to determine whether to 
expand, limit, or discontinue the program. No expansion of the pilot or 
action to make Transactional Data Reporting a permanent fixture on the 
Schedules will occur prior to the careful evaluation of at least one 
year of experience with the pilot.

C. Systems

    Vendors subject to the new Transactional Data Reporting clauses 
will be required to electronically report the data, as outlined in the 
applicable clauses, thirty (30) days after the end of the preceding 
month; reporting instructions will be posted on the Vendor Support 
Center Web site (https://vsc.gsa.gov). To facilitate Transactional Data 
Reporting, GSA is launching a new portal that has several differences 
from the existing 72A Sales Reporting System,\38\ including the 
following:
---------------------------------------------------------------------------

    \38\ See the 72A Sales Reporting System, accessible at https://72a.gsa.gov.
---------------------------------------------------------------------------

     A single sign-on for all contracts. The current system 
requires a different sign-on for each contract.
     Electronic Data Interchange (EDI) upload capability.
     A spreadsheet template that can be downloaded, filled, and 
uploaded in lieu of manual data entry.
     Vendors with $0 sales during a reporting period can now 
click a single field to complete the report, as opposed to the current 
72A requirement of submitting $0 for each SIN.
    The new FSS Transactional Data Reporting clause (552.238-74 
Alternate I) requires monthly reporting but quarterly fee remittance, 
which will also be processed through the new portal. As sales are 
reported, the portal will calculate a running balance and remind users 
to submit payment within 30 days after the end of the quarters ending 
March 31, June 30, September 30, and December 31. However, vendors will 
have the option to pay-as-you-go, meaning they can voluntarily remit 
the fees as sales are reported, rather than doing so on a quarterly 
basis. Portal instructions and training will be posted to GSA's Vendor 
Support Center.\39\
---------------------------------------------------------------------------

    \39\ See the Vendor Support Center, accessible at https://vsc.gsa.gov.
---------------------------------------------------------------------------

    Transactional data collected through the portal will be accessible 
only by authorized users and protected in accordance with GSA's 
information technology security policies. Additionally, GSA intends to 
share transactional data to the maximum extent allowable to promote 
transparency and competition while respecting that some data could be 
exempt from disclosure. Accordingly, a public data extract, containing 
information that would otherwise be releasable under the Freedom of 
Information Act (FOIA), will be created for use by the general public; 
\40\ details about the public data extract will be released through a 
forthcoming notice in the Federal Register. The data released to the 
public will provide valuable market intelligence that can be used by 
vendors for crafting more efficient, targeted business development 
strategies that incur lower administrative costs. This will be 
particularly beneficial for small businesses, which often do not have 
the resources to invest in dedicated business development staff or 
acquire business intelligence through third-parties.
---------------------------------------------------------------------------

    \40\ 5 U.S.C. 552.
---------------------------------------------------------------------------

D. Procedures

    GSA, like other agencies, will use transactional data to support 
its contracting officers in making smarter decisions when purchasing 
goods and services. However, GSA's FSS contracting officers will also 
take this data into consideration when awarding FSS contracts and 
evaluating requests to adjust pricing and add new items to current 
contracts. As a result, GSA is developing training for Government 
buyers and implementing new procedures for its FSS contracting 
officers. Training and guidance deployed in connection with this rule 
emphasizes the importance of considering the best overall value (not 
just unit price) for each procurement, taking into account desired 
terms and conditions, performance levels, past customer satisfaction, 
and other relevant information.
    Training: GSA is updating relevant courseware on the Federal 
Acquisition Institute (FAI) and Defense Acquisition University (DAU) 
portals to educate both customers and GSA contracting officers on how 
to use the data. Similarly, the courseware on how to use the FSS 
program and other non-FSS GWACs and multi-agency IDIQs will be updated 
to educate customers on the new requirements and how they can use the 
data collected to buy smarter. The external courseware will also 
highlight the additional value transactional data offers to GSA's FSS 
and non-FSS contracting programs and emphasize it must be viewed in the 
context of each procurement, taking into account desired terms and 
conditions, performance levels, past customer satisfaction, and other 
relevant information.
    Additionally, FAS also has an internal training course aimed at GSA 
contracting officers awarding and administering FSS contracts--this 
course will be updated to educate contracting officers on how to 
conduct analysis on transactional data, as well as how to use these 
analyses to achieve better pricing on the contracts.
    Guidance: FSS contracting officers follow policy from GSA's 
supplement to the FAR, the General Services Administration Acquisition 
Manual (GSAM), when evaluating offers for FSS contracts. This includes 
the GSAR, GSA's regulatory FAR supplement, and non-regulatory 
acquisition policy, commonly referred to as GSAM guidance.\41\ 
Regulations, such as the GSAR, require formal rulemaking, while non-
regulatory policy, like GSAM guidance, does not.\42\ For example, GSA 
contracting officer responsibilities are found at the non-regulatory 
GSAM 501.602,\43\ while the regulatory CSP instructions are found at 
GSAR 515.408.\44\
---------------------------------------------------------------------------

    \41\ See General Services Administration Acquisition Manual 
section 501.170, available at https://www.acquisition.gov/?q=browsegsam.
    \42\ 41 U.S.C. 1707.
    \43\ See General Services Administration Acquisition Manual 
section 501.602, available at https://www.acquisition.gov/?q=browsegsam.
    \44\ 48 CFR 515.408.
---------------------------------------------------------------------------

    In addition to the regulatory changes made through this final rule, 
non-regulatory instructions for GSA category managers and FSS 
contracting officers are being incorporated into the GSAM. The category 
manager guidance will include instructions to use transactional data 
for category analysis, as well as approval requirements for adding data 
elements to the new Transactional Data Reporting clauses, including 
approvals by the head of contracting activity and GSA's Senior 
Procurement Executive and coordination with the applicable category 
manager. The FSS contracting officer guidance will give instructions 
for evaluating offers for FSS contracts when transactional data is 
available.
    One of the objectives of the new FSS contracting officer guidance 
is to align

[[Page 41114]]

FSS offer evaluation procedures with the FAR. Accordingly, FSS 
contracting officers will be instructed to evaluate the data in the 
context of each offer, taking into account desired terms and 
conditions, quantity discounts, unique attributes, socio-economic 
considerations, and other relevant information. Contracting officers 
are encouraged to discuss with the offeror perceived variances between 
offered prices, transactional data, and existing contract-level prices, 
in order to evaluate whether other attributes (e.g., superior 
warranties, quantity discounts, etc.) justify awarding higher prices.
    The new guidance will include an order of preference for 
information to be used when evaluating FSS offers and establishing 
negotiating objectives, including the following:
    1. Using data that is readily available, in accordance with FAR 
15.404-1(b)(2)(ii),\45\ including prices paid information on contracts 
for the same or similar items; contract-level prices on other FSS 
contracts or Governmentwide contracts for the same or similar items, 
and commercial data sources providing publicly available pricing 
information.
---------------------------------------------------------------------------

    \45\ Federal Acquisition Regulation 15.404-1(b)(2)(ii) (48 CFR 
15.404-1(b)(2)(ii)).
---------------------------------------------------------------------------

    2. Performing market research to compare prices for the same or 
similar items in accordance with FAR 15.404-1(b)(2)(vi).\46\
---------------------------------------------------------------------------

    \46\ Federal Acquisition Regulation 15.404-1(b)(2)(iv) (48 CFR 
15.404-1(b)(2)(iv)).
---------------------------------------------------------------------------

    3. Requesting additional pricing information such as ``data other 
than certified cost or pricing data'' (as defined at FAR 2.101 \47\) 
from the offeror in accordance with FAR 15.404-1(b)(2)(vii) \48\ when 
the offered prices cannot be determined to be fair and reasonable based 
on the data found from other sources.
---------------------------------------------------------------------------

    \47\ Federal Acquisition Regulation 2.101 (48 CFR 2.101).
    \48\ Federal Acquisition Regulation section 15.401-1(b)(2)(vii) 
(48 CFR 15.404-1(b)(2)(vii)).
---------------------------------------------------------------------------

    Traditionally, GSAR section 538.270, Evaluation of multiple award 
schedule (MAS) offers, has instructed FSS contracting officers to 
require pricing information through the CSP format and seek the 
offeror's best price. As these instructions are included in the 
regulatory portion of the GSAM, this case includes new language for 
these instructions to specify their use only when the CSP format is 
included in the solicitation (i.e., for the Schedules and SINs not 
included in the pilot program). The new offer evaluation instructions 
belong in the non-regulatory section of the GSAM because they provide 
supplementary guidance to the FAR and do not impose a regulatory burden 
on the public. However, even though the GSAM guidance is not subject to 
public comment and is not included with the regulatory changes of this 
rule, it will be viewable in tandem with the corresponding GSAR policy 
on Acquisition.gov.\49\
---------------------------------------------------------------------------

    \49\ See the General Services Administration Acquisition Manual, 
available at https://www.acquisition.gov/?q=browsegsam.
---------------------------------------------------------------------------

V. Public Comments Overview and Discussion

    GSA received 26 comment letters in response to the proposed 
rule.\50\ The breakdown along commenter categories is as follows:
---------------------------------------------------------------------------

    \50\ See GSAR Case 2013-G504; 80 FR 11619 (Mar. 4, 2015).

------------------------------------------------------------------------
 
------------------------------------------------------------------------
Vendors.........................................................       9
Industry Associations...........................................       8
Individuals.....................................................       5
Government Stakeholders.........................................       2
Other Groups....................................................       2
------------------------------------------------------------------------

    All comments filed were considered, many of which led to the 
changes described in Section III of this document.\51\ The following is 
an overview of these comments and GSA's responses, organized into 
groupings that are sorted by the number of commenters, with the first 
grouping containing the most commenters. GSA's responses to these 
comments are contained within each grouping.
---------------------------------------------------------------------------

    \51\ See Section III.A, Summary of Changes Made at the Final 
Rule Stage.
---------------------------------------------------------------------------

    Burden.
    Nineteen commenters provided comments related to the compliance 
burden.\52\ Several questioned GSA's burden projections, stating the 
compliance estimates were understated and the projected burden 
reduction was overstated. Multiple commenters stated the Government is 
shifting the burden of gathering transactional data onto vendors, with 
some suggesting the burden will lead to higher prices or that vendors 
should be reimbursed for costs incurred.
---------------------------------------------------------------------------

    \52\ See e.g., ABA Letter, Abt Associates Letter, Allen Letter, 
ARA Letter, CGP Letter, CODSIA Letter, EA Letter, Experian Letter, 
GSA OIG Letter, immixGroup Letter, IOPFDA Letter, Insite.rr.com 
Letter, Johnson & Johnson Letter, NDIA Letter, POGO Letter, RTI 
Letter, SBA Letter, Shepra Letter, SIA Letter.
---------------------------------------------------------------------------

    The proposed rule contained burden estimates in accordance with the 
Paperwork Reduction Act, including a one-time average initial setup 
burden of 6 hours and an average monthly reporting burden of 
approximately .52 of an hour, or 31 minutes. The ongoing reporting 
burden for FSS vendors, following a first-year burden for 
implementation, was estimated to $7.6 million a year. However, the 
proposed rule coupled the new reporting requirement with the removal of 
the PRC tracking customer provision, which would have resulted in an 
estimated burden reduction of $51 million a year if applied to the 
entire GSA Schedules program.\53\
---------------------------------------------------------------------------

    \53\ The $51 million burden reduction was the ongoing FSS 
reporting burden ($7.6 million) minus the PRC burden of $58.5 
million from the 2012 PRC information collection (OMB Control Number 
3090-0235). The $7.6 million FSS reporting burden did not include 
the burden for one-time implementation. The $51 million burden 
reduction applied to the entire GSA Schedules program and was not 
adjusted to only account for vendors participating in the FSS pilot.
---------------------------------------------------------------------------

    Most of the commenters weighing in on the burden stated the 
estimates were significantly underestimated. For example, one 
association compared the proposed rule's burden estimates with the 
results of a survey it conducted among some of its members to assess 
the costs of implemented the requirements set forth in the proposed 
rule. It reported the following for setup time:

    When asked about the estimated number of hours that their 
company would require for initial startup to comply with the 
proposed rule, small business respondents reported that it would 
take on average 232 hours. Large and medium size contractors 
estimated that it would take on average 1192 hours. In the context 
of an average work week, small businesses estimated that it would 
take nearly 6 weeks for initial setup, which would require limited 
resources to be diverted to this effort. Large and medium size 
businesses reported that it would take nearly 8 months on average to 
setup these systems. The proposed rule suggests that contractors 
should undertake this compliance burden at ``no cost to the 
government.'' \54\
---------------------------------------------------------------------------

    \54\ See CGP Letter.
---------------------------------------------------------------------------

    That association also reported much higher figures for its 
monthly reporting estimates:
    In the survey contractors also report a significantly higher 
number of hours required to do the monthly transactional data 
reporting than estimated in the proposed rule. Respondents were 
asked in the survey to estimate the number of hours it would take 
their company to report the transactional data on a monthly basis. 
GSA estimated that it would only take 31 minutes per month. However, 
small businesses reported that it would take 38 hours per month on 
average. Large and medium size businesses estimated that it would 
take an average of 68 hours per month--nearly 2 weeks to conduct the 
reporting.\55\
---------------------------------------------------------------------------

    \55\ Ibid.

    One commenter also questioned GSA's and ordering agencies' ability 
to use the data, and GSA's capability to enforce the reporting 
requirements.'' \56\ Multiple commenters stated they would not realize 
a net burden reduction when the PRC tracking customer provision is 
removed. For example, one commenter

[[Page 41115]]

noted the PRC only requires disclosures when a price reduction is 
triggered, while this rule will require monthly reporting.\57\
---------------------------------------------------------------------------

    \56\ See GSA OIG Letter.
    \57\ See immixGroup Letter.
---------------------------------------------------------------------------

    Finally, multiple commenters stated Government is shifting the 
burden of gathering transactional data onto vendors. Some commenters 
said this will force industry to charge higher prices to recoup their 
costs, while others argued vendors should be directly reimbursed for 
reporting costs.
    Response: As a result of these comments, GSA reevaluated its 
estimation methodology and recalculated the burden based on whether 
vendors use automated or manual systems to identify and report 
transactional data. An automated system is one that relies on 
information technology, such as an accounting system or data management 
software, to identify and compile reportable data. These systems can 
tremendously streamline the reporting process but require upfront 
configuration to perform the tasks, such as coding the data elements to 
be retrieved. Conversely, a manual system is one that incorporates 
little to no automation and instead relies on personnel to manually 
identify and compile the reportable data. An example of a manual system 
would be an accountant reviewing invoices to identify the reportable 
data and then transferring the findings to a spreadsheet. In contrast 
to automation, a manual system requires relatively little setup time 
but the reporting effort will generally increase with the vendor's 
sales volume.
    The likelihood of a vendor adopting an automated system increases 
with their applicable sales volume. Vendors with little to no 
reportable data are unlikely to expend the effort needed to establish 
an automated reporting system since it will be relatively easy to 
identify and report a limited amount of data. In Fiscal Year 2015, 32 
percent of FSS vendors reported $0 sales, while another 34 percent 
reported average sales between $1 and $20,000 per month. If the rule 
were applied to the entire Schedules program, approximately two-thirds, 
or nearly 11,000 vendors, would have a lower reporting burden. However, 
as a vendor's applicable average monthly sales increase, they will be 
increasingly likely to establish an automated system to reduce the 
monthly reporting burden. Consequently, vendors with higher reportable 
sales will likely bear a higher setup burden to create an automated 
system, or absorb a high monthly reporting burden if they choose to 
rely on manual reporting methods.
    This renewed analysis led GSA to increase its burden estimates.\58\ 
For FSS contracts in particular--
---------------------------------------------------------------------------

    \58\ See Section VIII.B for a discussion of the burden estimates 
in accordance with Paperwork Reduction Act requirements.
---------------------------------------------------------------------------

     The projected setup time for an automated system increased 
from an average of 6 hours \59\ to an average of 240 hours, and
---------------------------------------------------------------------------

    \59\ The proposed rule setup time estimates did not 
differentiate between manual and automated reporting systems.
---------------------------------------------------------------------------

     The projected monthly reporting time range grew from 0.3 
minutes-4 hours to 0.25 hours-48 hours.
    However, GSA's estimates are still considerably lower than the 
estimates provided through the public comments,\60\ primarily because--
---------------------------------------------------------------------------

    \60\ See CGP Letter.
---------------------------------------------------------------------------

     At least two-thirds of the potential Transactional Data 
Reporting participants will have a relatively lower burden (e.g., 
vendors with lower or no sales), and
     Vendors with higher reporting volume will face lower setup 
times with a higher monthly reporting burden, or higher setup times 
with a lower monthly reporting burden. In other words, vendors will not 
face a higher setup burden and a higher monthly reporting burden to 
comply with the rule.
    This increase in the burden estimates reinforced the need to 
evaluate existing pricing disclosure requirements that could be 
rendered obsolete once transactional data is collected. After 
evaluating these comments and submitting the Federal Supply Schedule 
Pricing Disclosures information collection request (OMB control number 
3090-0235),\61\ GSA concluded Transactional Data Reporting would not 
only exceed the PRC tracking customer provision benefits, it would also 
alleviate the need for CSP disclosures when combined with automated 
commercial data sources, new data analytic tools, and improved price 
analysis policy. Even with the increased Transactional Data Reporting 
burden estimates, GSA projects an average annual burden reduction of 
approximately $32 million for FSS pilot vendors when the new 
Transactional Data Reporting requirements are paired with the removal 
of CSP disclosures and the PRC tracking customer provision.\62\ As 
noted in Section III of this document, this proposal is particularly 
advantageous for small businesses.\63\ In order to enter the federal 
marketplace through the Schedules program, small businesses have 
traditionally been required to absorb the burden of gathering CSP 
disclosures and developing robust PRC compliance systems before making 
even a dollar in revenue through their Schedule contracts. However, 
under the Transactional Data Reporting model, small businesses entering 
the Schedules program would not, in most cases, be likely to make 
significant upfront investments because they will only be impacted 
after they have won a Schedule order. Additionally, unlike information 
compiled to populate CSPs, which is created specifically for GSA, the 
transactional data reported each month is readily available data used 
to generate invoices.
---------------------------------------------------------------------------

    \61\ More information about Information Collection 3090-0235 can 
be found at https://www.reginfo.gov/public by searching ``ICR'' for 
``3090-0235''.
    \62\ $32 million does not include costs for non-FSS contracts. 
It is the result of the FSS burden of the initial pilot 
implementation ($12.41 million), minus the share of the combined CSP 
and PRC burden allocated to the FSS pilot vendors ($44.03 million). 
The total CSP and PRC burden from Information Collection 3090-0235, 
if it were applied to all GSA FSS vendors, including those 
participating in the Transactional Data Reporting pilot, would be 
$101.69 million. The share of that burden allocated to the FSS pilot 
vendors. ($44.03 million) is based on the percentage of the overall 
FY15 FSS sales accounted for by the FSS pilot vendors (43.2 
percent).
    \63\ See Section III.B, Alternatives Analysis.
---------------------------------------------------------------------------

    Regarding the ability of GSA and ordering agencies to use the data, 
new systems are being deployed to leverage the information. 
Transactional data reported in accordance with the new clauses will be 
shared with authorized users to craft smarter buying strategies. GSA is 
also developing data visualization tools to make the data more user 
friendly. Within GSA, FAS has established a data analytics team that 
will assist in the establishment and ongoing analysis of contract-level 
prices. In terms of oversight, FAS will use many of the same resources 
it currently deploys to ensure compliance with the existing GSAR clause 
552.238-74, Industrial Funding Fee and Sales Reporting.\64\
---------------------------------------------------------------------------

    \64\ General Services Administration Acquisition Regulation 
clause 552.238-74 (48 CFR 552.238-74).
---------------------------------------------------------------------------

    GSA is pursuing this initiative because obtaining transactional 
data from its industry partners is the most feasible path the 
Government can take to implement smarter buying strategies and promote 
taxpayer value. GSA recognizes the burden that comes with this rule and 
will continually evaluate ways to minimize the data collection. 
However, this rule will not lead to higher costs and subsequently 
higher prices because the changes to the CSP and PRC requirements 
provide a net burden reduction. To the contrary,

[[Page 41116]]

Transactional Data Reporting, as shown by the results shared in Section 
II of this document, will lead to lower prices.\65\
---------------------------------------------------------------------------

    \65\ See Section II.B, Necessity and Value of Transactional 
Data.
---------------------------------------------------------------------------

Using Transactional Data for Imperfect Comparisons
    Fifteen commenters provided comments related to whether 
transactional data is useful for making imperfect comparisons.\66\ The 
proposed rule noted, ``[f]or FSS vehicles, the clause would be 
introduced in phases, beginning with a pilot for select products and 
commoditized services.'' \67\ Following publication of the proposed 
rule, FAS posted a proposed list of Schedules to be included in the 
Transactional Data Reporting pilot; the Schedules chosen primarily 
contained products that generally have standard part numbers, enabling 
direct comparisons between like items.\68\ However, the proposed rule 
was clear the reporting requirements could expand to all Schedules, 
including those for services and complex solutions.
---------------------------------------------------------------------------

    \66\ See e.g., ABA Letter, Abt Associates Letter, Allen Letter, 
ARA Letter, Atkins Letter, CGP Letter, CODSIA Letter, EA Letter, GSA 
OIG Letter, immixGroup Letter, NDIA Letter, NMFTA Letter, RTI 
Letter, Shepra Letter, SIA Letter.
    \67\ See GSAR Case 2013-G504; 80 FR 11619 (Mar. 4, 2015).
    \68\ GSA proposed five Schedules in a GSA Interact posting 
following publication of the proposed rule. Those Schedules were 51 
V, Hardware Superstore; 58 I, Professional Audio/Video, Telemetry/
Tracking, Recording/Reproducing and Signal Data Solutions; 72, 
Furnishing and Floor Coverings; 73, Food Service, Hospitality, 
Cleaning Equipment and Supplies, Chemicals and Services; and 75, 
Office Products.
---------------------------------------------------------------------------

    Commenters expressed concern that transactional data would 
eventually be collected and used for goods and services that do not 
lend themselves to perfect comparisons. Multiple commenters noted it 
will be difficult, and in some cases impossible, to make one-to-one 
comparisons for professional services and complex or customizable 
products, such as laptops. For example, one commenter noted complex 
service offerings are ``priced according to very specific circumstances 
related to risk, security requirements, geographic area of performance, 
and the qualifications of the individuals performing the work.'' \69\ 
Two commenters stated GSA will have difficulty standardizing labor 
categories in order to make comparisons for service-related 
transactional data.\70\ One commenter suggested the pilot include a 
professional services Schedule to allow implementation to proceed ``in 
a controlled manner allowing for continuous feedback from contractors 
and reconsideration of the true intent and usability of the data that 
GSA is trying to gather.'' \71\ Additionally, one commenter stated GSA 
is relying on the reported success of the Office Supplies 2 (OS2) 
contract as validation for transitioning to a horizontal pricing model, 
which is not a representative sample of the Schedules program.\72\
---------------------------------------------------------------------------

    \69\ See NDIA Letter.
    \70\ See e.g., EA Letter, GSA OIG Letter.
    \71\ See Abt Letter.
    \72\ See GSA OIG Letter.
---------------------------------------------------------------------------

    Multiple commenters stated concerns with how the Government will 
use prices paid data when conducting a horizontal price analysis. One 
commenter noted FAR section 15.404-1(b)(2)(ii) allows the ``comparison 
of proposed prices to historical prices paid . . . for the same or 
similar items'' but that paragraph (A) of this FAR section states:

    The prior price must be a valid basis for comparison. If there 
has been a significant time lapse between the last acquisition and 
the present one, if the terms and conditions of the acquisition are 
significantly different, or if the reasonableness of the prior price 
is uncertain, then the prior price may not be a valid basis for 
comparison.\73\ \74\
---------------------------------------------------------------------------

    \73\ Federal Acquisition Regulation section 15.404-1(b)(2)(ii) 
(48 CFR 15.404-1(b)(2)(ii)).
    \74\ See CGP Letter.

    Other commenters gave examples of other factors that should be 
taken into account when making comparisons, such as differing 
quantities or terms and conditions. For example, one commenter was 
concerned the data would create a false expectation for the lowest 
reported prices, as deep discounts can be offered on a one-time based 
or in response to special promotions, ease of service, volume, or 
geographic location.\75\
---------------------------------------------------------------------------

    \75\ See SIA Letter.
---------------------------------------------------------------------------

    Response: GSA gave consideration as to whether Transactional Data 
Reporting should be considered for all FSS contracts or only those that 
include products or services that would allow straightforward 
comparisons, such as commodities with standard part numbers. GSA agrees 
transactional data is most useful for price analysis when comparing 
like items, but disagrees with the notion that the data is not useful 
when perfect comparisons cannot be made. Namely, the FAR allows 
comparisons of prices paid for similar items and data for dissimilar 
items is useful when conducting market research or performing the 
consumption analysis that underlies the formation of demand management 
strategies.
    Transactional data will assist Government buyers and FSS 
contracting officers in using the price analysis techniques found in 
FAR section 15.404-1(b)(2)(ii), as transactional data is necessary to 
make a comparison of ``proposed prices to historical prices paid . . . 
for the same or similar items.'' Although paragraph (A) of FAR section 
FAR section 15.404-1(b)(2)(ii) notes the prior price is not a valid 
basis of comparison if ``there has been a significant time lapse 
between the last acquisition and the present one, if the terms and 
conditions of the acquisition are significantly different, or if the 
reasonableness of the prior price is uncertain . . . ,'' it does allow 
for some variance in factors when making comparisons. Furthermore, 
paragraph (B) of FAR section 15.404-1(b)(2)(ii) not only allows, but 
requires, a prior price to ``be adjusted to account for materially 
differing terms and conditions, quantities and market and economic 
factors.'' In other words, when there has been no significant time 
lapse, the terms and conditions of an acquisition are similar to 
previous purchases, and the reasonableness of the prior price is 
certain, transactional data is valid for comparisons of, if not 
identical, at least similar items and can be adjusted to account for 
materially different terms and conditions, quantities, and market and 
economic factors.
    Transactional data will also be instrumental for informing buying 
decisions and crafting overarching demand management strategies, 
regardless of whether the data is too dissimilar for price comparisons. 
For instance, the availability of transactional data will provide 
buyers visibility into the variables that drive costs, which is key to 
defining requirements and developing accurate cost estimates. Likewise, 
category managers will gain insight into the assorted options available 
for satisfying common requirements, and then use the lessons learned to 
form demand management strategies that promote the most efficient 
methods for meeting the Government's needs.
    Regarding the differences between the Schedules program and OS2, 
GSA agrees that the success of the Federal Strategic Sourcing 
Initiative (FSSI), which includes OS2, was an important factor in GSA's 
decision to pursue Transactional Data Reporting for the larger 
Schedules program. While GSA anticipates Transactional Data Reporting 
will be successful, it recognizes its assumptions should be tested, and 
therefore opted to begin with a pilot. GSA does not expect this pilot 
to replicate or exceed the discounts achieved through FSSI--often up to 
30 percent lower than the comparable Schedule prices--partly because of 
the

[[Page 41117]]

stated differences between the Schedules program and FSSI.
    In response to the suggestion that a professional services Schedule 
be included in the pilot before expanding the requirements across the 
program, GSA has decided to include the Professional Engineering 
Services SINs from the Professional Services Schedule in the pilot. The 
pilot will also now include software SINs under Schedule 70, in order 
to collect data for more complex solutions. The initial pilot will now 
reach approximately 30 percent of GSA's FSS contracts, including 
Schedules/SINs covering a wide array of goods and services that account 
for 43 percent of the Schedules sales volume. This scope will enable 
GSA to evaluate the effectiveness of Transactional Data Reporting 
before deciding whether to expand, limit, or discontinue the program.
    Finally, GSA recognizes the complexities of employing horizontal 
price analysis, whether it is through Transactional Data Reporting or 
other initiatives. For example, the new CPI initiative is built around 
a tool that identifies contract-level pricing outside a range 
determined to be acceptable for identical items; vendors whose prices 
exceed the acceptable range are then notified of their comparative 
pricing. It is important to reiterate that a range is identified 
because GSA appreciates the varying circumstances that can contribute 
to price variation. For CPI, the FSS contracting officer's final 
determination will take into account non-price elements, such as 
materially different terms, quantities, and market and economic 
factors. The GSAM guidance for FSS contracts, which will be viewable on 
Acquisition.gov, instructs FSS contracting officers to make fair and 
reasonable, not lowest-price-regardless, determinations. Contracting 
officers placing orders against GSA's Schedules and other multi-agency 
vehicles will continue to follow the procedures required by the FAR, 
including a preference for ``best value'' solutions.\76\ Also, GSA is 
deploying data visualization tools that provide context for the 
transactional data for a particular good or service.
---------------------------------------------------------------------------

    \76\ Federal Acquisition Regulation section 1.102 (48 CFR 
1.102).
---------------------------------------------------------------------------

Public Disclosure of Transactional Data
    Thirteen parties provided comments related to public disclosure of 
transactional data.\77\ The proposed rule stated, ``GSA also plans to 
implement an [application programming interface (API)] for buyers to 
benefit from using transactional data. Through the API, GSA will make 
this information accessible online for all Government buyers.'' \78\ 
GSA did not address in the proposed rule whether this data would be 
shared with the public. Most of the commenters opposed publicly 
releasing the data and stated GSA must explain how it intends to 
protect it.
---------------------------------------------------------------------------

    \77\ See e.g., ABA Letter, Abt Associates Letter, Allen Letter, 
ARA Letter, CODSIA Letter, CGP Letter, EA Letter, immixGroup Letter, 
IOPFDA Letter, NDIA Letter, NMFTA Letter, SIA Letter.
    \78\ See GSAR Case 2013-G504; Docket 2014-0020; Sequence 1 (80 
FR 11619 (Mar. 4, 2015)).
---------------------------------------------------------------------------

    One commenter asked whether GSA will share the transactional data 
with vendors,\79\ while another commenter suggested vendors should have 
the same access to the data as Government buyers.\80\ Ten commenters 
opposed the release of the data to the public because it will contain 
proprietary and confidential business information, with most stating 
vendors will face adverse impacts if the data is shared and requesting 
GSA explain how it intends to protect the data from unauthorized 
disclosure.\81\ The SBA Office of Advocacy also stated small businesses 
are concerned about how the data will be protected.\82\ Four commenters 
stated this type of data is protected from disclosure under FOIA, which 
states the following are exempted: ``trade secrets and commercial or 
financial information obtained from a person and privileged or 
confidential.'' 83 84 One commenter noted the transactional 
data currently reported under GSA's non-FSS contracts cannot be 
attributed to a specific vendor.\85\ Finally, one vendor stated the 
rule should provide remedies for vendors in the event of improper 
disclosure.\86\
---------------------------------------------------------------------------

    \79\ See ARA Letter.
    \80\ See immixGroup Letter.
    \81\ See e.g., ABA Letter, Abt Associates Letter, Allen Letter, 
CODSIA Letter, CGP Letter, EA Letter, IOPFDA Letter, NDIA Letter, 
NMFTA Letter, SBA Letter, SIA Letter.
    \82\ See SBA Letter.
    \83\ 5 U.S.C. 552(b)(4)
    \84\ See e.g., ABA Letter, Allen Letter, EA Letter, NMFTA 
Letter.
    \85\ See CGP Letter.
    \86\ See ABA Letter.
---------------------------------------------------------------------------

    Response: Transactional data reported in accordance with this rule 
will be accessible only by authorized users. GSA intends to share the 
transactional data with the public to the maximum extent allowable 
while respecting that some data could be exempt from disclosure. 
Consequently, a data extract will be created for use by the general 
public, containing information otherwise releasable under FOIA; \87\ 
details about the public data extract will be released through a 
forthcoming notice in the Federal Register.
---------------------------------------------------------------------------

    \87\ 5 U.S.C. 552.
---------------------------------------------------------------------------

    Transparency will support a dynamic marketplace by providing 
vendors with the business intelligence needed to identify customers, 
determine which products should be included on their contract 
pricelists, and ascertain whether their prices are competitive. This 
will be particularly beneficial for small businesses, which often do 
not have the resources to invest in dedicated business development 
staff or acquire business intelligence through third-parties.
    However, GSA recognizes some information may be protected from 
public release, which led to the decision to create a public data 
extract, as opposed to allowing the public the same access as 
authorized users. The data extract will provide the public a filtered 
view of the data, including information that is releasable under FOIA, 
while protecting information that is not.
    Finally, GSA is not including remedies in this rule for 
unauthorized disclosure of data. GSA is taking precautions to prevent 
unauthorized disclosures of data, but in the event of such an 
occurrence, GSA will address remedies at that time based on the 
specific circumstances and in accordance with applicable statutes and 
regulations.
The Government Already Possesses the Data
    Thirteen commenters stated the Government already possesses this 
data.\88\ Several commenters stated the Government should develop 
systems to collect its own data, with some arguing this will be a 
difficult task for vendors to undertake. Commenters also suggested 
alternatives to requiring vendors to report the data.
---------------------------------------------------------------------------

    \88\ See e.g., Allen Letter, ARA Letter, Atkins Letter, CODSIA 
Letter, CGP Letter, Falcone Letter, immixGroup Letter, IOPFDA 
Letter, Mcdonald Letter, NDIA Letter, NMFTA Letter, RTI Letter, 
Shepra Letter.
---------------------------------------------------------------------------

    Transactional data is generated when a transaction is made between 
a buyer and seller. As such, the parties of the transaction will 
produce and possess this data. For federal contracting, these parties 
are the Government ordering agency and the vendor. On the Government 
side, this data is often found in contract writing systems and 
financial systems. However, these systems are not shared across 
agencies; in fact, many agencies use multiple versions of these 
systems. Moreover, systems that do provide transactional data tend to 
cover a narrow scope of federal spending. For instance, GSA possesses 
data for transactions

[[Page 41118]]

completed through GSA Advantage![supreg], but it only accounts for 
about 1 percent of Schedule sales. Hence, no mechanism exists to 
compile and analyze transactional data from a wide-range of purchases 
made across the Government.
    Several commenters objected to GSA requiring vendors to report data 
that originates from the Government. For example, one commenter stated 
the Government needs to make investments in automated systems that can 
provide the data without burdening vendors, and that this rule only 
delays those eventual investments.\89\
---------------------------------------------------------------------------

    \89\ See NDIA Letter.
---------------------------------------------------------------------------

    Commenters also stated it will not be easier for vendors to provide 
the data. One commenter stated many vendors do not keep this type of 
data as a matter of practice, but for the vendors that do, their 
reporting systems may not be compatible with GSA's reporting site.\90\
---------------------------------------------------------------------------

    \90\ See CODSIA Letter.
---------------------------------------------------------------------------

    Finally, commenters suggested alternatives to vendor-provided 
transactional data. Two commenters stated GSA should obtain data from 
the Federal Procurement Data System (FPDS); \91\ two commenters 
questioned why GSA could not pull data from its GSA eLibrary and GSA 
Advantage![supreg] sites; \92\ two commenters said GSA should rely on 
data collected from Government purchase card transactions; \93\ one 
commenter proposed GSA use free, price comparisons sites available to 
the general public; \94\ and one commenter stated GSA should already 
have the ability to obtain the data from other agencies, or otherwise 
should not be pursuing the rule.\95\
---------------------------------------------------------------------------

    \91\ See e.g., Atkins Letter, Shepra Letter.
    \92\ See Atkins Letter, RTI Letter.
    \93\ See e.g., Allen Letter, Mcdonald Letter.
    \94\ See CGP Letter.
    \95\ See NMFTA Letter.
---------------------------------------------------------------------------

    GSA Response: GSA does not have the systems capability to collect 
transactional data from other agencies. The Initial Regulatory 
Flexibility Analysis published with the proposed rule included an 
evaluation of alternatives for obtaining transactional data--internal 
applications; GSA ordering platforms such as eBuy and GSA 
Advantage![supreg]; the SmartPay credit card purchase program; and 
upgrades to the FPDS. GSA previously concluded these options would not 
provide the breadth of data needed to support the Government's 
objectives or would be unable to do so in the foreseeable future. Since 
the publication of the proposed rule, GSA reevaluated those 
alternatives and reached similar conclusions. Particularly, in regards 
to relying on purchase card data, doing so would limit the Government 
to a small, non-representative sample of data that would be ineffective 
for the broader goals of category management and smarter buying 
strategies. Although one commenter suggested the Government should 
increase its purchase card usage in order for purchase card data to be 
a viable solution, doing so would require numerous regulatory, 
procedural, and security changes to implement, which could not be 
accomplished in the near future and therefore would not support the 
Government's immediate needs.
    Additionally, the Government's electronic invoicing initiative \96\ 
was assessed as a potential alternative. However, following meetings 
regarding electronic invoicing implementation with representatives from 
the Department of Defense, Department of Energy, Department of 
Transportation, Department of Treasury, and Department of Veterans 
Affairs, it was determined these electronic invoicing platforms will 
not provide a Government-wide transactional data reporting solution in 
the near term.
---------------------------------------------------------------------------

    \96\ See Office of Management and Budget memorandum M-15-19, 
``Improving Government Efficiency and Saving Taxpayer Dollars 
Through Electronic Invoicing'', July 17, 2015, available at https://www.whitehouse.gov/sites/default/files/omb/memoranda/2015/m-15-19.pdf.
---------------------------------------------------------------------------

    Lastly, GSA will consider changes, or even rescind Transactional 
Data Reporting, as new data systems come online that improve the 
Government's ability to aggregate and analyze its purchasing data. 
Also, GSA is exploring ways to synchronize its transactional data 
intake system with other applications that share common attributes in 
order to reduce the number of vendor-reported data elements.
Order-Level Competition Ensures Best Value
    Nine commenters stated GSA should rely on order-level competition 
to ensure the Government is receiving the best value.\97\ The general 
sentiment is rather than requiring pricing disclosures or Transactional 
Data Reporting, GSA should promote order-level competition to meet its 
pricing objectives. Many of these comments were in response to the 
following passage from the proposed rule Federal Register notice:
---------------------------------------------------------------------------

    \97\ See e.g., ABA Letter, Allen Letter, CODSIA Letter, CGP 
Letter, EA Letter, immixGroup Letter, IOPFDA Letter, NDIA Letter, 
RTI Letter.

    The Government, and other customers in the category to which the 
government is most typically aligned under the price reductions 
clause, tend to receive voluntary price reductions from the vendor 
as a result of general market forces (e.g., intense competition and 
small profit margins within the IT hardware arena that cause vendors 
to lower their prices for all customers voluntarily to maintain 
market share). In other words, prices are reduced under the 
voluntary provisions of the price reduction clause as a result of 
market rate pricing changes, not under the mandatory tracking 
customer provisions. GSA recently analyzed modifications issued 
between October 1, 2013 and August 4, 2014 under nine of its 
[Schedules] . . . GSA found that only about 3 percent of the total 
price reductions received under the price reduction clause were tied 
to the ``tracking customer'' feature. The vast majority 
(approximately 78 percent) came as a result of commercial pricelist 
adjustments and market rate changes, with the balance for other 
reasons.\98\
---------------------------------------------------------------------------

    \98\ See GSAR Case 2013-G504; Docket 2014-0020; Sequence 1 (80 
FR 11619 (Mar. 4, 2015)).

    Six of those commenters expressed support for the proposed PRC 
changes in the context of the general statement that order-level 
competition is the most effective method for driving down prices.\99\
---------------------------------------------------------------------------

    \99\ See e.g., ABA Letter, Allen Letter, CODSIA Letter, 
immixGroup Letter, NDIA Letter, RTI Letter.
---------------------------------------------------------------------------

    Response: Competition at the task order level is essential for the 
Government to ensure it receives the best value, which is one of the 
reasons GSA is pursuing Transactional Data Reporting. In fact, 
transactional data has a proven history of driving competition, which 
is illustrated by the examples shown in Section II.\100\ These 
successes, along with emerging technology, led to the decision to 
pursue Transactional Data Reporting in lieu of continuing to require 
CSP and PRC disclosures. Furthermore, this initiative promotes 
objectives that are not facilitated by order-level competition, such as 
transparency, demand management, and reducing contract duplication.
---------------------------------------------------------------------------

    \100\ See Section II.B, Necessity and Value of Transactional 
Data.
---------------------------------------------------------------------------

Commercial Sales Practices (CSP) Disclosures
    Nine parties submitted comments related to the proposed rule's 
retention of CSP disclosures.\101\ While the proposed rule included the 
removal of the PRC tracking customer provision, it retained CSP 
disclosures while noting:
---------------------------------------------------------------------------

    \101\ See e.g., Abt Associates Letter, ABA Letter, CODSIA 
Letter, EA Letter, Experian Letter, immixGroup Letter, Johnson & 
Johnson Letter, RTI Letter, SIA Letter.

    [V]endors would still be subject to the commercial sales 
disclosure requirements, including the requirement to disclose 
commercial sales practices when requesting a contract modification 
for additional items or additional Special Item Numbers. In 
addition, GSA would maintain the right throughout the life of the 
FSS contract to ask a vendor for updates to the disclosures made on 
its commercial sales format (which is used

[[Page 41119]]

to negotiate pricing on FSS vehicles) if and as necessary to ensure 
that prices remain fair and reasonable in light of changing market 
---------------------------------------------------------------------------
conditions.

    Nine commenters stated removing the PRC tracking customer feature 
does not relieve vendors of the burden of tracking commercial pricing, 
which will still be necessary to provide CSP disclosures.\102\ Five 
commenters stated the proposed rule language would lead to more 
requests for CSP disclosures.\103\ For example, one commenter noted the 
burden reduction achieved through the PRC changes would be in some 
cases more than offset by Transactional Data Reporting requirements and 
increased CSP disclosures.\104\
---------------------------------------------------------------------------

    \102\ See e.g., Abt Associates Letter, ABA Letter, CODSIA 
Letter, EA Letter, Experian Letter, immixGroup Letter, Johnson & 
Johnson Letter, RTI Letter, SIA Letter.
    \103\ See e.g., Abt Associates Letter, ABA Letter, CODSIA 
Letter, EA Letter, SIA Letter.
    \104\ See CODSIA Letter.
---------------------------------------------------------------------------

    Response: GSA did not intend for the proposed rule language 
relating to CSPs to increase disclosures. However, these comments did 
lead to a reevaluation of the CSP disclosure burden and ultimately the 
removal of CSP disclosures for FSS vendors subject to the Transactional 
Data Reporting requirement.
    As noted in Section III of this document, GSA also began preparing 
its routine renewal request for the PRC information collection, 
identified under OMB Control Number 3090-0235, in the summer of 
2015.\105\ Since the PRC information collection was last approved in 
2012, GSA needed to prepare its information collection renewal request 
after publishing the Transactional Data Reporting proposed rule. While 
GSA would have proceeded with a renewal request regardless, the timing 
did allow for the consideration of the Transactional Data Reporting 
comments. In particular, GSA agreed with the general industry comment 
that burdens of the PRC and CSP are related and therefore decided to 
include CSP disclosure burden estimates with the PRC information 
collection request (ICR). GSA also opted to change the name of 
Information Collection 3090-0235 from ``Price Reductions Clause'' to 
``Federal Supply Schedule Pricing Disclosures'' to more accurately 
reflect the scope of the information collected.
---------------------------------------------------------------------------

    \105\ See Section III.B, Alternatives Analysis.
---------------------------------------------------------------------------

    Following two Federal Register notices requesting comments on the 
FSS Pricing Disclosures ICR,\106\ GSA increased its annual burden 
estimates for GSA FSS contractors, including those who would 
participate in the Transactional Data Reporting pilot, from $59 million 
\107\ to $102 million.\108\ These higher burden projections, coupled 
with the increased Transactional Data Reporting burden estimates 
calculated in response to the public comments, were a significant 
concern and reinforced the need to pair Transactional Data Reporting 
with other significant forms of burden reductions. Therefore, GSA is 
removing CSP disclosures in addition to the PRC tracking customer 
provision for FSS vendors subject to the new Transactional Data 
Reporting clause, resulting in an average annual burden reduction for 
FSS pilot contractors of approximately $32 million.\109\ Additionally, 
implementing the FSS pilot without the existing CSP and PRC 
requirements lowers the Government's burden by about $3 million a 
year.\110\
---------------------------------------------------------------------------

    \106\ See 80 FR 72060 (Nov. 18, 2015) and 81 FR 21346 (Apr. 11, 
2016).
    \107\ 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.
    \108\ The annual public reporting burden for the CSP and PRC, 
excluding FSS vendors participating in the Transactional Data 
Reporting pilot, is $57.66 million. If FSS pilot vendors were still 
subject to the CSP and PRC reporting requirements, the total annual 
public reporting burden would be $101.69 million. The FSS pilot 
vendors' share of the total CSP and PRC reporting burden is based 
upon their share of the GSA FSS fiscal year 2015 sales volume, 43.2 
percent. The annual $44.03 million reporting burden reduction 
attributed to this rule is 43.2 percent of the $101.69 million 
annual reporting burden if it were applied to the entire GSA FSS 
program. More information about Information Collection 3090-0235 can 
be found at https://www.reginfo.gov/public by searching ``ICR'' for 
``3090-0235''.
    \109\ $32 million does not include costs for non-FSS contracts. 
It is the result of the FSS burden of the initial pilot 
implementation ($12.41 million), minus the share of the combined CSP 
and PRC burden allocated to the FSS pilot vendors ($44.03 million). 
The total CSP and PRC burden from Information Collection 3090-0235, 
if it were applied to all GSA FSS vendors, including those 
participating in the Transactional Data Reporting pilot, would be 
$101.69 million. The share of that burden allocated to the FSS pilot 
vendors ($44.03 million) is based on the percentage of the overall 
FY15 FSS sales accounted for by the FSS pilot vendors (43.2 
percent).
    \110\ $3 million is the result of the Government's annual burden 
for this rule ($2.34 million) minus the share of the combined CSP 
and PRC burden for the Government allocated to the FSS pilot 
contracts ($5.58 million).
---------------------------------------------------------------------------

    Transactional Data Reporting negates the need for CSP disclosures 
when used in conjunction with automated commercial data sources, new 
data analytic tools, and improved price analysis policy. As discussed 
in Section IV of this document,\111\ GSA is releasing new GSAM 
guidance, which will be viewable on Acquisition.gov, that provides 
instructions to FSS contracting officers on how to evaluate offers and 
establish negotiating objectives without relying on CSP disclosures. 
For example, the new guidance provides the following order of 
preference for information:
---------------------------------------------------------------------------

    \111\ See Section IV.D, Procedures.
---------------------------------------------------------------------------

    1. Use data that is readily available, in accordance with FAR 
15.404-1(b)(2)(ii),\112\ including prices paid information on contracts 
for the same or similar items; contract-level prices on other FSS 
contracts or Governmentwide contracts for the same or similar items, 
and commercial data sources providing publicly available pricing 
information.
---------------------------------------------------------------------------

    \112\ Federal Acquisition Regulation section 15.404-1(b)(2)(ii) 
(48 CFR 15.404-1(b)(2)(ii)).
---------------------------------------------------------------------------

    2. Perform market research to compare prices for the same or 
similar items in accordance with FAR 15.404-1(b)(2)(vi).\113\
---------------------------------------------------------------------------

    \113\ Federal Acquisition Regulation section 15.404-1(b)(2)(iv) 
(48 CFR 15.404-1(b)(2)(iv)).
---------------------------------------------------------------------------

    3. Request additional pricing information such as ``data other than 
certified cost or pricing data'' (as defined at FAR 2.101 \114\) from 
the offeror in accordance with FAR 15.404-1(b)(2)(vii) \115\ when the 
offered prices cannot be determined to be fair and reasonable based on 
the data found from other sources.
---------------------------------------------------------------------------

    \114\ Federal Acquisition Regulation 2.101 (48 CFR 2.101).
    \115\ Federal Acquisition Regulation section 15.401-1(b)(2)(vii) 
(48 CFR 15.404-1(b)(2)(vii)).
---------------------------------------------------------------------------

Small Business Impacts
    Multiple commenters addressed small businesses in other comments, 
but six commenters stated there are certain aspects of the rule are 
especially impactful on small business.\116\ In the proposed rule, GSA 
did not create separate requirements for small businesses or other 
classes of vendors. Additionally, the burden analysis separated FSS 
vendors into categories based on Schedule sales volume but did not 
calculate separate burden estimates for small or other-than-small 
businesses.
---------------------------------------------------------------------------

    \116\ See e.g., ABA Letter, CGP Letter, Falcone Letter, 
Insite.rr.com Letter, RTI Letter, SBA Letter.
---------------------------------------------------------------------------

    Three commenters noted that this rule will make it more difficult 
for small businesses to compete against other-than-small businesses in 
the federal marketplace,\117\ citing an overemphasis on pricing over 
value-added services. Two of those commenters stated GSA did not 
adequately address small business impacts.\118\ Additionally, four 
commenters expressed concern over small businesses' ability to absorb 
the costs associated with the new reporting requirements, which creates 
a barrier to

[[Page 41120]]

entry into the federal marketplace.\119\ Lastly, one commenter stated 
the Initial Regulatory Flexibility Analysis did not provide a clear 
understanding of the legal framework for requiring Transactional Data 
Reporting.\120\
---------------------------------------------------------------------------

    \117\ See e.g., ABA Letter, CGP Letter, SBA Letter.
    \118\ See e.g., ABA Letter, SBA Letter.
    \119\ See e.g., ABA Letter, Falcone Letter, Insite.rr.com 
Letter, RTI Letter.
    \120\ See SBA Letter.
---------------------------------------------------------------------------

    Response: GSA was especially mindful of small business concerns 
when forming this rule and believes small businesses will benefit 
significantly by no longer being subjected to the complex CSP and PRC 
pricing disclosure requirements. Moreover, under the Transactional Data 
Reporting, burden is tied to sales volume, which will also benefit 
small businesses, as they hold 80 percent of the total contracts and 
account for 39 percent of sales.\121\ Unlike the new data reporting 
requirements, the current CSP and PRC disclosure requirements are 
constant, meaning vendors, especially those with a higher number of FSS 
contract offerings, must bear the burden even if they have little to no 
sales through their FSS contracts. Thus, small businesses are 
disproportionately affected by the current reporting requirements 
because they account for the bulk of lower volume contracts.
---------------------------------------------------------------------------

    \121\ Based on fiscal year 2015 Federal Supply Schedule contract 
data.
---------------------------------------------------------------------------

    GSA intends to share transactional data to the maximum extent 
allowable to promote transparency and competition while respecting that 
some data could be exempt from disclosure. The data will serve as 
valuable market intelligence for vendors to use for crafting more 
efficient, targeted business development strategies that incur lower 
administrative costs. This will be particularly beneficial for small 
businesses, which often do not have the resources to invest in 
dedicated business development staff or acquire business intelligence 
through third-parties.
    Nevertheless, GSA will be mindful of Transactional Data Reporting's 
small business impacts. The initiative is being phased in on a pilot 
basis. GSA's Senior Procurement Executive will regularly evaluate 
progress against metrics, including small business participation, in 
consultation with the Administrator for Federal Procurement Policy and 
other interested stakeholders to determine whether to expand, limit, or 
discontinue the program. No expansion of the pilot or action to make 
Transactional Data Reporting a permanent fixture on the Schedules will 
occur prior to the careful evaluation of at least one year of 
experience with the pilot.
    With respect to the burden analysis, GSA did not differentiate 
between small businesses and other-than-small businesses in its burden 
estimates because Transactional Data Reporting imposes a progressive 
burden--one that increases with a vendor's sales volume. Namely, 
monthly reporting time will increase with a vendor's applicable sales 
volume, as vendors with lower to no reportable sales will spend little 
time on monthly reporting, while those businesses with more reportable 
sales will face a higher reporting burden. Likewise, setup costs will 
be a major driver of the new reporting burden, but vendors with little 
to no activity on their FSS contracts will likely forgo investments in 
new reporting systems because the reporting burden will not be 
significantly more than that of the current quarterly sales reporting 
requirements.
    Finally, in regards to the legal framework of the new system, GSA 
will be implementing the Transactional Data Reporting clauses through 
bilateral modifications on existing contracts, meaning vendors must 
agree to the changes before GSA can insert a new clause in a contract. 
New contracts awarded under the pilot Schedules/SINs or future 
Governmentwide IDIQ vehicles will include the new Transactional Data 
Reporting clauses, but vendors will have an opportunity to view the 
requirements before agreeing to a contract. For the Schedules, GSA is 
instituting this program to meet its obligations under 41 U.S.C. 
152(3)(b), which states that orders and contracts awarded under the FSS 
program must result in ``the lowest overall cost alternative to meet 
the needs of the Federal Government.''
Transactional Data Reporting Will Have Adverse Impacts for the 
Government
    Six commenters stated Transactional Data Reporting will lead to a 
counterproductive fixation on lower prices.\122\ Two commenters stated 
horizontal price analysis will obscure differences in terms and 
conditions and adversely impact the Government's ability to achieve the 
best value.\123\ Three commenters also said there is a significant risk 
of horizontal pricing forcing quality providers to leave the FSS 
program because of an expectation of untenable low prices.\124\ Another 
commenter stated price transparency will provide a disincentive for 
offering spot discounts because doing so will create a permanent 
expectation for those prices.\125\ Finally, one commenter stated this 
rule may cause prices to increase because costs to comply with 
Transactional Data Reporting will outweigh the potential gains achieved 
through horizontal pricing.\126\
---------------------------------------------------------------------------

    \122\ See e.g., ABA Letter, Allen Letter, CGP Letter, CODSIA 
Letter, Experian Letter, SIA Letter.
    \123\ See e.g., EA Letter, CGP Letter.
    \124\ See e.g., Experian Letter, SIA Letter, CGP Letter.
    \125\ See Allen Letter.
    \126\ See ABA Letter.
---------------------------------------------------------------------------

    Response: Horizontal pricing models that leverage transactional 
data have a proven track record of lowering prices. As shown in Section 
II of this document,\127\ GSA has successfully instituted horizontal 
pricing models, resulting in savings of nearly 30 percent on Office 
Supplies 3 (OS3), 26 percent on FSSI Wireless, and 34 percent on 
COMSATCOM. These are savings that taxpayers rightfully deserve.
---------------------------------------------------------------------------

    \127\ See Section II.B, Necessity and Value of Transactional 
Data.
---------------------------------------------------------------------------

    FSS contracting officers will be instructed to evaluate the data in 
the context of each offer, taking into account not only cost and 
quantity discounts, but desired terms and conditions, unique 
attributes, socio-economic considerations, and other relevant 
information. Contracting officers will further be encouraged to discuss 
with the offeror perceived variances between offered prices, 
transactional data, and existing contract-level prices, in order to 
evaluate whether other attributes (e.g., superior warranties, quantity 
discounts) justify awarding higher prices.
    More importantly, transactional data provides benefits beyond 
better pricing. For instance, it supports the key category management 
principles of optimizing existing contract vehicles and reducing 
contract duplication.\128\ With transactional data, the Government can 
analyze its consumption patterns, evaluate and compare purchasing 
channels, and identify best-in-class solutions. Thereafter, the 
Government can leverage its buying power and demand management 
strategies to achieve taxpayer savings as it concentrates its purchases 
through fewer channels, while vendors realize lower administrative 
costs. Facilitating the development of demand management strategies is 
also a significant benefit. As illustrated by GSA's Domestic Delivery 
Services 2 (DDS2), transactional data provided valuable insight into 
how shipping

[[Page 41121]]

needs were met and helped the Government change its consumption 
behavior by foregoing unnecessary express air shipments in favor of 
less expensive ground shipments. By Fiscal Year 2015, air shipments 
shrank from 90 percent to 60 percent of revenue and 46 percent of total 
shipments, while ground shipments grew to 40 percent of revenue and 54 
percent of total shipments.
---------------------------------------------------------------------------

    \128\ See ``Government-wide Category Management, Guidance 
Document, Version 1.0,'' Office of Management Budget, May 2015, 
available at https://hallways.cap.gsa.gov/information/Gov-wide_CM_Guidance_V1.pdf.
---------------------------------------------------------------------------

    Lastly, GSA recognizes the costs for compliance with the 
Transactional Data Reporting requirements make it necessary to 
alleviate the burden of other compliance requirements. Therefore, this 
rule removes CSP disclosures and the PRC tracking customer provision 
for FSS vendors subject to the new Transactional Data Reporting clause, 
resulting in an average annual burden reduction of approximately $32 
million for FSS pilot vendors.\129\ Additionally, implementing the FSS 
pilot without the existing CSP and PRC requirements lowers the 
Government's burden by about $3 million a year.\130\ These changes, 
coupled with transactional data's virtues, ensure this rule will 
benefit the Government and lead to savings for the American taxpayer.
---------------------------------------------------------------------------

    \129\ $32 million does not include costs for non-FSS contracts. 
It is the result of the FSS burden of the initial pilot 
implementation ($12.41 million), minus the share of the combined CSP 
and PRC burden allocated to the FSS pilot vendors ($44.03 million). 
The total CSP and PRC burden from Information Collection 3090-0235, 
if it were applied to all GSA FSS vendors, including those 
participating in the Transactional Data Reporting pilot, would be 
$101.69 million. The share of that burden allocated to the FSS pilot 
vendors ($44.03 million) is based on the percentage of the overall 
FY15 FSS sales accounted for by the FSS pilot vendors (43.2 
percent).
    \130\ $3 million is the result of the Government's annual burden 
for this rule ($2.34 million) minus the share of the combined CSP 
and PRC burden for the Government allocated to the FSS pilot 
contracts ($5.58 million).
---------------------------------------------------------------------------

Business Liability Risk
    Four parties submitted comments relating to increased business 
liability risks.\131\ Two commenters stated the transactional data 
vendors submit would increase the amount of information that can be 
audited, and thereby, more audits, investigations, lawsuits, and other 
punitive actions.\132\ The other two commenters predicted increased 
allegations of fraud under the False Claims Act stemming from data 
inaccuracies.
---------------------------------------------------------------------------

    \131\ See e.g., Allen Letter, CODSIA Letter, CGP Letter, EA 
Letter.
    \132\ See Allen Letter, EA Letter.
---------------------------------------------------------------------------

    Response: False Claims arise when a person ``knowingly'' deceives 
the Government.\133\ As such, GSA does not anticipate increased False 
Claims actions because there is no expectation of an increase in 
vendors ``knowingly'' deceiving the Government. Moreover, the new 
Transactional Data Reporting site will allow vendors more leeway to fix 
errors than the current 72A Reporting System. While sales adjustments 
submitted through the 72A system must be approved by the assigned 
Industrial Operations Analyst (IOA), vendors will be able to submit 
data corrections through the new site on their own, although IOAs will 
be notified of corrections over a certain dollar threshold.
---------------------------------------------------------------------------

    \133\ 31 U.S.C 3729.
---------------------------------------------------------------------------

    Transactional Data Reporting will also provide greater ease of 
compliance with the removal of CSP disclosures and the PRC tracking 
customer provision. Reporting transactional data is based upon data 
used to generate a standard invoice. On the other hand, navigating the 
PRC and CSP requirements is complex because they require industry 
partners to track their GSA pricing relative to all of their commercial 
customers, and monitor and control all of their commercial sale 
transactions.
Government Usage of Transactional Data
    Four parties submitted comments related to the Government's 
procedures for using transactional data.\134\ One commenter stated 
there will be risk to the contracting officer and asked what will 
happen if they do not succeed in obtaining the lowest price.\135\ 
Another commenter asked how the Government will account for 
jurisdictional and geographic pricing variances; if there will be a 
mechanism to correct erroneous data; and how does GSA plan to analyze 
data that can rapidly fluctuate.\136\ Two commenters asked what tools 
and training will be available to ensure price is not the sole award 
criteria.\137\ Finally, one commenter stated this rule will lead to GSA 
contracting officers seeking to continually renegotiate Schedule 
contracts.\138\
---------------------------------------------------------------------------

    \134\ See e.g., ARA Letter, EA Letter, Experian Letter, 
immixGroup Letter.
    \135\ See immixGroup Letter.
    \136\ See ARA Letter.
    \137\ See ARA Letter, Experian Letter.
    \138\ See EA Letter.
---------------------------------------------------------------------------

    Response: GSA is creating procedures and training to address the 
use of transactional data, as outlined in Section IV.\139\ GSA will not 
mandate contracting officers to receive the lowest reported price when 
conducting best value procurements. In these forums, consideration will 
be given to pricing variances caused by factors such as differing terms 
and conditions, places of performance, and quantity.
---------------------------------------------------------------------------

    \139\ See Section IV.D, Procedures.
---------------------------------------------------------------------------

    GSA will offer training and guidance for category managers and 
contracting officers. The Category Management Leadership Council has 
released a guidance document for category managers. The document 
provides ``guidance for the governance, management and operations of 
category management, taking into consideration the inherent 
complexities of a Federal-wide initiative.'' \140\ It does not dictate 
operational contracting decisions, nor does it supersede the FAR, which 
states a preference for ``best value'' solutions.\141\ GSA is also 
updating relevant courseware on the Federal Acquisition Institute (FAI) 
and Defense Acquisition University (DAU) portals to educate both 
customers and GSA contracting officers on how to use the data. 
Similarly, the courseware on how to use the FSS program and other non-
FSS GWACs and multi-agency IDIQs will be updated to educate customers 
on the new requirements and how they can use the data collected to buy 
smarter. The external courseware will also highlight the additional 
value transactional data offers to GSA's FSS and non-FSS contracting 
programs and emphasize it must be viewed in the context of each 
procurement, taking into account desired terms and conditions, 
performance levels, past customer satisfaction, and other relevant 
information.
---------------------------------------------------------------------------

    \140\ See ``Government-wide Category Management, Guidance 
Document, Version 1.0,'' Office of Management Budget, May 2015, 
available at https://hallways.cap.gsa.gov/information/Gov-wide_CM_Guidance_V1.pdf.
    \141\ Federal Acquisition Regulation section 1.102 (48 CFR 
1.102).
---------------------------------------------------------------------------

    To address erroneous data, the new Transactional Data Reporting 
site will allow vendors more leeway to correct mistakes than the 
current 72A Reporting System. While sales adjustments submitted through 
the 72A system must be approved by the assigned IOA, vendors will be 
able to submit data corrections through the new site on their own, 
although IOAs will be notified of corrections over a certain dollar 
threshold.
    As for evaluating rapidly changing data, GSA opted to require 
monthly, rather than quarterly, data reporting to improve the recency 
of the data. However, GSA acknowledges prices may fluctuate for reasons 
including, but not limited to, changing and cyclical demand. This is 
why, among other reasons such as varying attributes, that GSA does not 
have an expectation to always receive the lowest reported price.

[[Page 41122]]

    Finally, GSA does not intend to continually renegotiate all prices 
based on transactional data; doing so would be an administrative burden 
for all parties involved. However, GSA is beginning to employ automated 
analysis techniques for its contract-level prices to reduce 
variability. For example, the new Formatted Product Tool (FPT) 
identifies pricing outside a range determined to be acceptable for 
identical items; vendors whose prices exceed the acceptable range are 
then notified of their comparative pricing. Currently, this initiative 
applies only to products, while services will be addressed at a later 
date. However, whether it be the FPT or other tools, it is important to 
note GSA intends to view pricing in a range, so renegotiations will not 
be triggered merely because a vendor does not meet the lowest-reported 
price.
The Price Reductions Clause Tracking Customer Provision Should Not Be 
Eliminated
    Two commenters stated GSA should not pair Transactional Data 
Reporting with the removal of the PRC tracking customer provision. The 
first commenter stated prices paid by the Government do not necessarily 
equate to the best price,\142\ while the second commenter stated the 
proposed rule failed to justify removing the tracking customer feature 
in favor of Transactional Data Reporting, noting ``there is no price 
protection provision built into the alternative language of the 
proposed rule.'' \143\ Both commenters stated removing the PRC would 
sever the Schedules program's link to the commercial marketplace.
---------------------------------------------------------------------------

    \142\ See POGO Letter.
    \143\ See GSA OIG Letter.
---------------------------------------------------------------------------

    GSA currently 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. Contractors are then required, under the PRC, to 
monitor their pricing over the life of the contract and provide the 
Government with the same price reductions they give to the class of 
commercial customers upon which the original contract award was 
predicated.\144\ In addition to the tracking customer requirement, the 
PRC allows vendors to voluntarily reduce prices to the Government and 
for the Government to request a price reduction at any time during the 
contract period, such as where market analysis indicates that lower 
prices are being offered or paid for the same items under similar 
conditions.
---------------------------------------------------------------------------

    \144\ General Services Administration Acquisition Regulation 
clause 552.238-75 (48 CFR 552.238-75).
---------------------------------------------------------------------------

    In the proposed rule, GSA moved to couple the FSS Transactional 
Data Reporting clause with a new alternate version of the PRC that did 
not include the tracking customer provision. This new alternate PRC 
would only retain the Government's right to request price reductions 
and the contractor's right to offer them. The rationale for this idea 
was explained in the proposed rule Federal Register notice:

    GSA believes the collection and use of transactional data may be 
a more efficient and effective way for driving price reductions on 
FSS buys than through use of the tracking customer mechanism. In 
addition to avoiding the challenges associated with the tracking 
customer mechanism described above, the transactional data reporting 
clause would allow for greater reliance on horizontal pricing in the 
FSS program so that GSA and its customers can easily evaluate the 
relative competitiveness of prices between FSS vendors. Moreover, 
the transactional data reporting clause, if used as an alternative 
to tracking customer mechanism, could significantly reduce 
contractor burden. The Chief Acquisition Officers Council recently 
conducted an Open Dialogue through an online platform on improving 
how to do business with the Federal Government. Contractors pointed 
to the price reductions clause as one of the most complicated and 
burdensome requirements in Federal contracting, and GSA's own 
estimates suggest FSS contractors spend over 860,000 hours a year 
(at a cost of approximately $58.5 million) on compliance with this 
clause.\145\
---------------------------------------------------------------------------

    \145\ See GSAR Case 2013-G504; (80 FR 11619 (Mar. 4, 2015)).

    One commenter acknowledged the benefits of transactional data to 
impact pricing but stated the new Transactional Data Reporting clause 
will not require vendors to offer price reductions based upon 
transactional data, in contrast to the PRC, which has protections to 
require FSS vendors to offer price reductions following a triggering 
event. In the proposed rule, GSA also stated it found only 3 percent of 
price reduction modifications were tied to the tracking customer 
feature, while approximately 78 percent of those modifications were 
voluntary, resulting from commercial pricelist adjustments and market 
rate changes.\146\ The commenter responded to these claims by arguing 
many of the voluntary price reduction modifications may have been 
requested in order to comply with the PRC, as well as noting that GSA 
did not quantify the savings resulting from the modifications tied to 
the tracking customer feature. Additionally, the commenter stated a 
more comprehensive analysis of the PRC's values and benefits is needed 
before acting to remove the tracking customer feature. Finally, the 
commenter questioned the methodology used to form the PRC burden 
estimates included in the 2012 information collection request (ICR), 
which relied upon a survey conducted by The Coalition for Government 
Procurement. GSA included the 2012 ICR burden estimates in its 
calculation that resulted in a net burden reduction, but the commenter 
stated the underlying survey did not use a representative sample as it 
included responses from less than 1 percent of FSS contractors.\147\
---------------------------------------------------------------------------

    \146\ Id.
    \147\ See GSA OIG Letter.
---------------------------------------------------------------------------

    Response: Pricing disclosures, such as the CSP and PRC, have served 
as the bedrock of the Schedules program pricing approach at least as 
far back as the 1980s. With limited other means of data collection 
available, they offered a way to ensure fair and reasonable pricing 
through the life of a contract with the goal of achieving most favored 
customer pricing. However, changes in the federal marketplace have 
eroded the effectiveness of these practices over time. Of particular 
note are the explosive growth of services, increase in share of 
contracts held by resellers rather than manufacturers, and 
establishment of elaborate structures by contractors seeking to limit 
potential liability. Moreover, due to the various exceptions included 
in the PRC, the tracking customer feature ties pricing for reductions 
to sales of single items and plays little role in blanket purchase 
agreement and order purchases reflecting volume sales. Further, many 
products sold under the FSS program are commercial-off-the-shelf (COTS) 
products or other commercial items for which the Government is not a 
market driver.
    Using transactional data will be a more efficient and effective way 
for driving price reductions. In addition to avoiding the challenges 
associated with the tracking customer mechanism described above, the 
transactional data reporting clause would allow for greater reliance on 
horizontal pricing in the FSS program so that GSA and its customers can 
easily evaluate the relative competitiveness of prices between FSS 
vendors. Although this rule removes the PRC's price protection 
provision, order-level competition and transparency will proactively 
achieve the same objective without relying on retroactive enforcement. 
Companies seeking to win Schedules business will offer discounts or 
better value than their

[[Page 41123]]

competitors. Currently, the lack of transparency encourages vendors to 
offer inconsistent pricing to federal buyers. In contrast, the 
availability of transactional data will mean all federal buyers may be 
rewarded by the success of a single buyer. In turn, competing companies 
will have a better understanding of what it takes to win federal 
business and will therefore submit stronger offers. GSA's successful 
use of transactional data to date has shown the benefits of horizontal 
price analysis will outweigh the value of the PRC. While the Government 
often recoups millions of dollars through PRC enforcement, the American 
taxpayer may save billions of dollars as the Government leverages 
transactional data.
    However, initiating Transactional Data Reporting in conjunction 
with the existing PRC and CSP disclosure requirements would be unduly 
burdensome and likely counterproductive. For example, performance under 
the Office Supplies 3 (OS3) vehicle began in Fiscal Year 2015. Like its 
predecessor, OS2, OS3 relies on transactional data and horizontal 
pricing techniques to drive savings. But unlike the Schedules-based 
OS2, OS3 is a standalone IDIQ that does not include the traditional FSS 
CSP and PRC requirements. As such, OS3's pricing is 17 percent lower 
than its predecessor's prices.\148\ This reinforces the case for 
coupling Transactional Data Reporting with the removal of the CSP and 
PRC requirements, which will provide a $32 million a year burden 
reduction for FSS pilot vendors.\149\
---------------------------------------------------------------------------

    \148\ GSA analyzed pricing awarded through August 31, 2015 in 
its analysis.
    \149\ $32 million does not include costs for non-FSS contracts. 
It is the result of the FSS burden of the initial pilot 
implementation ($12.41 million), minus the share of the combined CSP 
and PRC burden allocated to the FSS pilot vendors ($44.03 million). 
The total CSP and PRC burden from Information Collection 3090-0235, 
if it were applied to all GSA FSS vendors, including those 
participating in the Transactional Data Reporting pilot, would be 
$101.69 million. The share of that burden allocated to the FSS pilot 
vendors ($44.03 million) is based on the percentage of the overall 
FY15 FSS sales accounted for by the FSS pilot vendors (43.2 
percent).
---------------------------------------------------------------------------

    To preserve its link to the commercial marketplace, GSA is posting 
new GSAM guidance for FSS contracting officers to use when relying on 
transactional data in lieu of CSP disclosures and the basis of award 
enforced by the PRC. The new guidance will include an order of 
preference for that includes prices paid information on contracts for 
the same or similar items; contract-level prices on other FSS contracts 
or Government-wide contracts for the same or similar items; and 
commercial data sources providing publicly available pricing 
information. FSS contracting officers will also still have the ability 
to request additional pricing information such as ``data other than 
certified cost or pricing data'' (as defined at FAR 2.101 \150\) in 
accordance with FAR 15.404-1(b)(2)(vii) \151\ when the offered prices 
cannot be determined to be fair and reasonable based on the data found 
from other sources.
---------------------------------------------------------------------------

    \150\ Federal Acquisition Regulation section 2.101 (48 CFR 
2.101).
    \151\ Federal Acquisition Regulation section 15.401-1(b)(2)(vii) 
(48 CFR 15.404-1(b)(2)(vii)).
---------------------------------------------------------------------------

    With respect to the 2012 survey sample size, GSA acknowledges this 
concern but did not base its projections solely on the survey. The PRC 
projections were recently reevaluated for the renewal of the related 
information collection request and increased from $59 million \152\ to 
$74 million, if the PRC were to apply to all GSA FSS contracts.\153\
---------------------------------------------------------------------------

    \152\ 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.
    \153\ The CSP and PRC burden estimates are from Information 
Collection 3090-0235, FSS Pricing Disclosures. The total annual 
public reporting burden for the CSP and PRC, excluding FSS vendors 
participating in the Transactional Data Reporting pilot, is $57.66 
million, $41.73 million of which is attributed to the PRC. If FSS 
pilot vendors were still subject to the CSP and PRC reporting 
requirements, the total annual public reporting burden would be 
$101.69 million, of which $73.73 million would be attributed to the 
PRC. The FSS pilot vendors' share of the total CSP and PRC reporting 
burden is based upon their share of the GSA FSS fiscal year 2015 
sales volume, 43.2 percent. The annual $44.03 million reporting 
burden reduction attributed to this rule is 43.2 percent of the 
$101.69 million annual reporting burden if it were applied to the 
entire GSA FSS program. More information about Information 
Collection 3090-0235 can be found at https://www.reginfo.gov/public 
by searching ``ICR'' for ``3090-0235''.
---------------------------------------------------------------------------

Reporting Frequency
    Two parties submitted comments related to the proposed reporting 
frequency. GSA proposed for non-FSS vendors subject to the rule to 
report sales monthly within 15 calendar days after the end of the 
calendar month and to remit any Contract Access Fee (CAF) due within 15 
calendar days after the end of the calendar month. For FSS vendors, GSA 
proposed that they report sales monthly within 15 calendar days after 
the end of the calendar month and to remit any Industrial Funding Fee 
(IFF) due within 30 calendar days after the end of each quarter.
    The first commenter stated the proposed 15-day reporting window did 
not provide vendors enough time to prepare and review the data to be 
reported. This commenter also stated the inconsistency between monthly 
reporting and quarterly payments may be unnecessarily confusing for 
vendors.\154\ The second commenter stated GSA should reconsider the 
frequency, as monthly reporting is excessive, and particularly 
duplicative for service-providers whose prices may not change over the 
course of year; the commenter suggested having professional services 
vendors only report once or twice a year.\155\
---------------------------------------------------------------------------

    \154\ See ABA Letter.
    \155\ See Abt Letter.
---------------------------------------------------------------------------

    Response: GSA considered the comment relating to the 15-day 
reporting window and agrees it is insufficient. Therefore, the new 
reporting clauses require vendors to report sales within 30 calendar 
days after the end of each calendar month.
    With respect to monthly reporting versus quarterly payment, GSA 
opted to not require monthly payment for the FSS clause (GSAR 552.238-
74 Alternate I) because doing so would be disproportionately harmful 
for small businesses, many of whom remit fees based on accrued billings 
before they actually receive payments from their Government customers. 
Payment frequency is not addressed in the non-FSS clause (GSAR 552.216-
75) but vendors will have at least 30 days after the last day of the 
month to remit fees, as applicable.
    Finally, GSA chose not to require less frequent reporting because 
doing so would lessen the impact of transactional data, which becomes 
less actionable as time passes.
Recommended Changes to Regulatory Text
    Two commenters provided suggested changes to GSA's regulatory text. 
The first commenter stated GSA must update GSAR Figure 515.4-2 \156\ 
and GSAR section 538.272 \157\ to address the proposed PRC changes. 
This commenter also stated the sections of the basic PRC that were 
retained in the new PRC Alternate II, which allow the Government to 
seek price reductions and a contractor to offer them, are not necessary 
because both parties would normally have these rights during 
negotiations.\158\
---------------------------------------------------------------------------

    \156\ General Services Administration Acquisition Regulation 
Figure 515.4-2 (48 CFR 515.4-2).
    \157\ General Services Administration Acquisition Regulation 
section 538.272 (48 CFR 538.272).
    \158\ See ABA Letter.
---------------------------------------------------------------------------

    The second commenter suggested two changes to the regulatory text. 
The first change would replace ``Offerors must include the CAF in their 
prices'' with ``The CAF will be charged as a separate and distinct line 
item on every order''

[[Page 41124]]

in paragraph (c) of the proposed non-FSS Transactional Data Reporting 
clause, 552.216-75. The second suggestion was to insert ``or services'' 
in the description of contract sales ``and sales made to other 
contractors authorized under FAR part 51 or the FAR part 51 deviation 
authorities'' in the last sentence of paragraph (a)(1) of the proposed 
FSS Transactional Data Reporting clause, 552.238-74 Alternate 1.\159\
---------------------------------------------------------------------------

    \159\ See deMers Letter.
---------------------------------------------------------------------------

    Response: GSA concurs with the suggested changes for GSAR Figure 
515.4-2 and GSAR section 538.272 and is subsequently amending those 
sections. The prescription for Figure 515.4-2 has been revised to only 
be required when the basic clause 552.238-74 Industrial Funding Fee and 
Sales Reporting is in solicitations and contracts. Additionally, GSAR 
section 538.272 has been changed to only apply to the basic PRC and 
Alternate I; the new PRC Alternate II, created by this rule, is not 
included.
    As for the suggested updates to GSAR clause 552.216-75, GSA no 
longer instructs offerors to include the CAF in their prices because 
many non-FSS programs include the CAF as a separate line item. However, 
GSA wants its non-FSS contract programs to have the flexibility to 
structure the CAF to meet their business needs, so it is instead 
choosing to provide the contractor with relevant instructions within 60 
days of award or inclusion of this clause in the contract.
    With respect to the suggestions to paragraph (a)(1) for GSAR clause 
552.238-74 Alternate I, GSA has removed the definition for ``contract 
sale'' and instead included similar language in paragraph (c)(3).
    ``Contract sale'' was removed from the definitions because this 
clause requires contractors to report transactional data, not 
``contract sales'' as required by the basic version of GSAR clause 
552.238-74.
Transactional Data Reporting on Cost Reimbursable Contracts
    Comment: Two commenters stated the rule should exclude cost 
reimbursable contracts.\160\ One commenter stated cost-type contracts 
should be excluded because the pricing will be based on Defense 
Contract Audit Agency pricing practices. The other commenter stated 
collecting data on these contracts will not be useful because the cost 
elements will be unique and the contracting officer already receives 
the information upfront to make pricing determinations.\161\
---------------------------------------------------------------------------

    \160\ See e.g., CGP Letter, RTI Letter.
    \161\ See RTI Letter.
---------------------------------------------------------------------------

    Response: GSA will only collect data on cost reimbursable contracts 
awarded under contracts subject to clause 552.216-75, as cost-type 
contracts are not permitted under the Schedules program. GSA recognizes 
cost reimbursable data may not have the same utility as data collected 
under time and materials and labor hour orders, but there are still 
numerous benefits. For example, the Government can use this data to 
analyze its consumption patterns, evaluate and compare purchasing 
channels, and identify best-in-class solutions. Thereafter, the 
Government can leverage its buying power and demand management 
strategies to achieve taxpayer savings as it concentrates its purchases 
through fewer channels, while vendors realize lower administrative 
costs.
Other Comments
    The following are comments submitted by a single party and GSA's 
corresponding responses.
    Comment: A commenter stated vendors ``should pay back the 
overcharge part of the time, back to the taxpayers with a hefty fine 
included.'' \162\
---------------------------------------------------------------------------

    \162\ See Lynch Letter.
---------------------------------------------------------------------------

    Response: GSA does not concur because the comment is outside the 
scope of this rule.
    Comment: GSA cannot claim the Multiple Award Schedule Advisory 
Panel recommendation as a mandate for this rule because panel members 
expressed concern that price comparison tools would have to provide 
accurate comparisons.\163\
---------------------------------------------------------------------------

    \163\ See Allen Letter.
---------------------------------------------------------------------------

    Response: The Panel reference in the proposed rule Federal Register 
notice referred to a recommendation to remove the PRC ``as the GSA 
Administrator implements recommendations for competition and price 
transparency at the Schedule contract level and the order level.''
    Comment: One commenter stated this rule is inconsistent with the 
Federal Acquisition Streamlining Act of 1994 (FASA) \164\ and the 
subsequent procedures in FAR Part 12, which aims to ``establish 
policies more closely resembling those of the commercial marketplace.'' 
\165\
---------------------------------------------------------------------------

    \164\ Pubic Law 103-355.
    \165\ Federal Acquisition Regulation section 12.000 (48 CFR 
12.000).
---------------------------------------------------------------------------

    Response: GSA's intention is to further align itself with 
commercial buying practices. Horizontal price analysis is a common 
technique used by commercial firms and individual citizens, and one 
that GSA plans to further leverage through the use of transactional 
data. To the contrary, the removal of CSP disclosures and the PRC 
tracking customer provision, which both predate FASA, are an attempt, 
in conjunction with horizontal pricing techniques, to harmonize GSA 
policies with the FAR and commercial buying practices.
    Comment: One commenter expressed concern that GSA is planning to 
eliminate the Schedules program and will require vendors to provide 
transactional data from commercial accounts.\166\
---------------------------------------------------------------------------

    \166\ See IOPFDA Letter.
---------------------------------------------------------------------------

    Response: GSA is not planning on eliminating the Schedules program 
and will not require vendors to provide transactional data from 
commercial accounts.
    Comment: GSA should slow down implementation of the rule to spend 
more time working with industry on its impacts.\167\
---------------------------------------------------------------------------

    \167\ Ibid.
---------------------------------------------------------------------------

    Response: GSA has already undertaken a lengthy process to implement 
Transactional Data Reporting, starting with the rulemaking process that 
included a Federal Register notice of proposed rulemaking and a public 
meeting, and continuing with a pilot that will allow GSA to evaluate 
the program's effectiveness and collect stakeholder feedback as it is 
implemented.
    Comment: One commenter stated details regarding the pilot's 
evaluation metrics and expansion are undefined.\168\
---------------------------------------------------------------------------

    \168\ See GSA OIG Letter.
---------------------------------------------------------------------------

    Response: GSA will use evaluation metrics including, but not be 
limited to, changes in price, sales volume, and small business 
participation, as well as macro use of transactional data by category 
managers and teams to create smarter buying strategies such as 
consumption policies. GSA's Senior Procurement Executive will regularly 
evaluate progress against these metrics in consultation with the 
Administrator for Federal Procurement Policy and other interested 
stakeholders to determine whether to expand, limit, or discontinue the 
program. No expansion of the pilot or action to make Transactional Data 
Reporting a permanent fixture on the Schedules will occur prior to the 
careful evaluation of at least one year of experience with the pilot.
    Comment: The proposed rule does not account for the resources 
expended by vendors and Government to implement

[[Page 41125]]

the requirements in the event GSA chooses to abandon the pilot and 
revert back to its current practices.\169\
---------------------------------------------------------------------------

    \169\ Id.
---------------------------------------------------------------------------

    Response: GSA anticipates Transactional Data Reporting will be 
successful but recognizes its assumptions should be tested, hence its 
preference for a pilot. CSP disclosures and the basic versions of the 
PRC and FSS sales reporting clause (552.238-74) are being retained 
during the course of the pilot and will be available for use if GSA 
chooses not to continue Transactional Data Reporting. However, the 
agency is continually improving its tools and procedures and may opt to 
retain facets of this rule, or rely on new tools, if either proves to 
be more effective than the current pricing disclosure practices. 
Impacts on industry partners will be given significant consideration as 
these decisions are made.
    Comment: Transactional Data Reporting should exclude blanket 
purchase agreements (BPAs) because there will likely be quantity 
discounts offered and fixed price-type contracts because the prices are 
not relevant as the terms are determined based on unique agency 
requirements.\170\
---------------------------------------------------------------------------

    \170\ See CGP Letter.
---------------------------------------------------------------------------

    Response: GSA is collecting contract and BPA numbers in order to 
tie the transactional data to records in the Federal Procurement Data 
System (FPDS). Doing so will not only make the transactional data more 
useful, but will also reduce the number of data elements vendors need 
to report to GSA. As FPDS is upgraded, GSA intends to evaluate whether 
any of the data elements currently included in the new reporting 
clauses can be excluded. For BPAs in particular, policy and training 
will instruct contracting officers to evaluate the data in the context 
of each offer, taking into account desired terms and conditions, 
quantity discounts, unique attributes, socio-economic considerations, 
and other relevant information.
    Finally, GSA recognizes fixed price data will have limited value 
compared to data reported for other contract types, but there are still 
numerous benefits. The Government can use fixed price data to analyze 
its consumption patterns, evaluate and compare purchasing channels, and 
identify best-in-class solutions. Thereafter, the Government can 
leverage its buying power and demand management strategies to achieve 
taxpayer savings as it concentrates its purchases through fewer 
channels, while vendors realize lower administrative costs. Fixed price 
data will also be useful for market research; for example, the data 
will be especially useful when combined with information from the eBuy 
statement of work (SOW) library.
    Comment: The rule should impose limits on the timeframe for which 
data is reported and used by contracting officers for price analysis. 
The commenter provided the following example: ``[I]f a company 
currently has a contract with a 10-year period of performance and is in 
contract year 4, the contractor should not be required to report prices 
paid from inception-to-date. In essence, the rule should not be 
retroactive.'' \171\
---------------------------------------------------------------------------

    \171\ Id.
---------------------------------------------------------------------------

    Response: Vendors are required to report data based on invoices 
issued or payments received against applicable invoices during the 
month. This ensures the data is relatively recent, which provides 
buyers with a more accurate picture of the marketplace.
    Comment: One commenter offered the following recommendations to 
reduce price variability without implementing this rule: (1) Reject 
offers for products that fall outside of an acceptable pricing range 
compared to the contract-prices for identical products; (2) assure 
offers are authorized resellers; (3) encourage vendors to update their 
GSA Advantage![supreg] catalogs and remove products that are no longer 
available; (4) increase customer training to reinforce the requirements 
of FAR subpart 8.4; (5) collect data internally to test transactional 
data concepts; and (6) eliminate the PRC.\172\
---------------------------------------------------------------------------

    \172\ Id.
---------------------------------------------------------------------------

    Response: GSA's responses to each item are as follows:
    (1) GSA concurs. It is pursuing this objective with its Formatted 
Product Tool (FPT), which identifies pricing outside a range determined 
to be acceptable for identical items; vendors whose prices exceed the 
acceptable range are then notified of their comparative pricing.
    (2) As noted by the commenter in their full comment, GSA requires 
offerors to submit letters of supply/commitment. GSA works to remedy 
situations when it is notified that a vendor is not an authorized 
reseller.
    (3) GSA currently encourages vendors to maintain accurate GSA 
Advantage![supreg] catalogs. GSA is also working on implementing 
updates to GSA Advantage![supreg] that will make it easier for vendors 
to maintain current catalogs.
    (4) GSA is updating relevant courseware on the Federal Acquisition 
Institute (FAI) and Defense Acquisition University (DAU) portals to 
educate both customers and GSA contracting officers on how to use the 
data. Similarly, the courseware on how to use the FSS program and other 
non-FSS GWACs and multi-agency IDIQs will be updated to educate 
customers on the new requirements and how they can use the data 
collected to buy smarter. The external courseware will also highlight 
the additional value transactional data offers to GSA's FSS and non-FSS 
contracting programs and emphasize it must be viewed in the context of 
each procurement, taking into account desired terms and conditions, 
performance levels, past customer satisfaction, and other relevant 
information.
    (5) GSA considered relying on data from transactions completed 
through GSA Advantage![supreg], but it only accounts for about 1 
percent of Schedule sales. Thus, the breadth of data is not adequate to 
meet the Government's objectives.
    (6) As noted previously, GSA is removing the PRC tracking customer 
provision and CSP disclosures for vendors subject to the Transactional 
Data Reporting requirements, in part to reduce costs and simplify 
procedures for industry partners.
    Comment: One commenter stated GSA should provide guidelines for 
using transactional data, as the proposed use contradicts the proposal 
analysis techniques found in FAR 15.404-1.\173\
---------------------------------------------------------------------------

    \173\ See ABA Letter.
---------------------------------------------------------------------------

    Response: GSA is developing training for Government buyers and 
implementing new procedures for its FSS contracting officers. Training 
and guidance deployed in connection with this rule emphasizes the 
importance of considering the best overall value (not just unit price) 
for each procurement, taking into account desired terms and conditions, 
performance levels, past customer satisfaction, and other relevant 
information. Additionally, the new GSAM guidance released in tandem 
with this rule instructs FSS contracting officers to follow the 
techniques found in FAR 15.404-1(b).\174\
---------------------------------------------------------------------------

    \174\ Federal Acquisition Regulation section 15.404-1(b) (48 CFR 
15.404-1(b)).
---------------------------------------------------------------------------

    Comment: One commenter expressed concern that GSA is announcing 
elements of the rule implementation on its blog, GSA Interact, and 
urged GSA to release such details through the Federal Register.
    Response: GSA is committed to transparency and appreciates concerns 
regarding communication related to this rule. As such, we conducted a 
public meeting regarding the rule on April 17,

[[Page 41126]]

2015 and included additional details in this Federal Register notice. 
However, the Interact platform, as well as other Internet forums, help 
GSA remain transparent by providing quick, efficient methods to 
disseminate to, and receive information from, its stakeholders. GSA 
will continue to make rulemaking-related announcements through the 
Federal Register. Additionally, announcements regarding reportable data 
elements will be posted in the Federal Register. Yet, GSA intends to 
continue using other mediums, as appropriate, to help it maintain a 
dialog with its stakeholders and promote transparency.
    Comment: It is unclear if the proposed data element, ``Non-Federal 
Entity, if applicable'' \175\ applies to authorized state and local 
governments, authorized prime contractors purchasing under the FAR Part 
51 authority, or another entity.\176\
---------------------------------------------------------------------------

    \175\ See GSAR Case 2013-G504; Docket 2014-0020; Sequence 1 (80 
FR 11619 (Mar. 4, 2015)).
    \176\ See ABA Letter.
---------------------------------------------------------------------------

    Response: ``Non-Federal Entity, if applicable,'' in both 
Transactional Data Reporting clauses (GSAR 552.216-75 and 552.238-74 
Alternate I), applies to any non-federal user authorized to purchase 
from the respective contract. For the FSS clause, this can include 
authorized state and local users under the Cooperative Purchasing 
program or contractors purchasing through the FAR Part 51 
authority.\177\
---------------------------------------------------------------------------

    \177\ Federal Acquisition Regulation subpart 51.1 (48 CFR 51.1).
---------------------------------------------------------------------------

    Comment: One commenter expressed concern that GSA's ability to 
unilaterally add data elements to the reporting clauses will add 
uncertainty for contractors.\178\
---------------------------------------------------------------------------

    \178\ Id.
---------------------------------------------------------------------------

    Response: The new GSAM guidance released in tandem with this rule 
requires FSS contracting officers and GSA program offices seeking to 
add new standard data elements to the reporting clauses to coordinate 
with the applicable category manager and obtain approval from the 
respective head of contracting activity (HCA) and GSA's Senior 
Procurement Executive. The clauses themselves also note GSA Senior 
Procurement Executive approval is required to add new data elements. If 
new data elements are approved, announcements will be made in the 
Vendor Support Center Web site,\179\ and additional forums as 
necessary.
---------------------------------------------------------------------------

    \179\ The Vendor Support Center can be accessed at https://vsc.gsa.gov.
---------------------------------------------------------------------------

    Comment: GSA should limit the rule to products and services that 
have ``substantially similar pricing structures'' for a ``defined pilot 
program.'' \180\
---------------------------------------------------------------------------

    \180\ See ABA Letter.
---------------------------------------------------------------------------

    Response: GSA considered whether Transactional Data Reporting 
should be applied only to certain subsets of contracts. The proposed 
requirement was retained for GSA's non-FSS Governmentwide vehicles 
because most of those contracts currently have transactional data 
reporting requirements that exceed those created through this rule. 
However, the new applicable Transactional Data Reporting clause (GSAR 
clause 552.216-75) will provide a consistent reporting mechanism for 
future non-FSS vehicles, or for current vehicles that adopt the new 
clause. For FSS contracts, an analysis was conducted to determine 
whether Transactional Data Reporting should be considered for all FSS 
contracts, or only those that include products or services that would 
allow straightforward comparisons, such as commodities with standard 
part numbers. While transactional data is most useful for price 
analysis when comparing like items, it does not mean the data is not 
useful when perfect comparisons cannot be made. Government buyers and 
FSS contracting officers will still use the data for price analysis and 
market research, and category managers will use the data for 
consumption analysis to form demand management strategies, regardless 
of whether the data can be used for perfect comparisons. An example is 
the ability to compare labor rates across contract vehicles, which is 
beginning to bear fruit in the form of reduced contract duplication. 
Consequently, GSA decided not to limit the prescription of 
Transactional Data Reporting to certain Schedules or Special Item 
Numbers.
    Comment: One commenter cited several concerns regarding the rule's 
potential application to transportation services providers for the 
Federal Government. Specifically, the commenter asked whether the rule 
will apply to GSA's freight management program; does the rule apply to 
contracts between federal vendors and their suppliers; and does the 
rule cover commercial-to-commercial transactions. The commenter also 
stated the rule is outside of GSA's jurisdiction; is an unwarranted 
expansion of the former alternation of rates doctrine; is a violation 
of antitrust principles, and is implementing a new fee (the Contract 
Access Fee) that will be an unauthorized burden on federal 
vendors.\181\
---------------------------------------------------------------------------

    \181\ See NMFTA Letter.
---------------------------------------------------------------------------

    Response: This rule applies to certain Federal Supply Schedule 
(FSS) contracts, Governmentwide Acquisition Contracts (GWACs), and 
Governmentwide Indefinite-Delivery, Indefinite-Quantity (IDIQ) 
contracts awarded by GSA. This rule does not require vendors to report 
transactional data on orders placed outside of these contracts and does 
not require them to report transactional data generated for 
transactions between vendors and their suppliers, or commercial-to-
commercial transactions.
    GSA has the authority to issue regulations relating to its 
contracting programs. GSA's primary statutory authorities for the FSS 
program are 41 U.S.C. 152(3), Competitive Procedures, and 40 U.S.C. 
501, Services for Executive Agencies. For GWACs, GSA is an executive 
agent designated by the Office of Management and Budget pursuant to 40 
U.S.C. 11302(e). Furthermore, 40 U.S.C. 121(c) authorizes GSA to 
prescribe regulations for its other multi-agency contracts, including 
Governmentwide IDIQ contracts. This rule is not an unwarranted 
expansion of the former alternation of rates doctrine and is not a 
violation of antitrust principles.
    Lastly, the rule is not creating a new Contract Access Fee (CAF). 
Currently, GSA charges ordering activities a CAF on many of its 
Governmentwide Acquisition Contracts (GWACs) and Governmentwide 
Indefinite-Delivery, Indefinite-Quantity (IDIQ) contracts, such as 
Alliant and OASIS. The CAF serves a similar purpose for those contracts 
as the Industrial Funding Fee (IFF) does for the FSS program. These 
fees are generally remitted by vendors on behalf of the ordering 
activity but are not actually paid by the vendor. Future contracts 
including GSAR clause 552.216-75 may apply a CAF, but the CAF will not 
be applied primarily because of the clause's inclusion.
    Comment: Finally, a former Multiple Award Schedule Advisory Panel 
member expressed his support for the rule, noting ``GSA should be 
encouraged to implement these changes and move forward with the 
improvement of the management of its Government-wide contract vehicles. 
. .'' \182\
---------------------------------------------------------------------------

    \182\ See Perry Letter.
---------------------------------------------------------------------------

    Response: GSA appreciates the support and will continue to improve 
its contract solutions to serve its Government customers and the 
American taxpayer.

VI. Executive Orders 12866 and 13563

    Executive Order (E.O.) 12866 of September 30, 1993, Regulatory

[[Page 41127]]

Planning and Review, directs agencies to assess all costs and benefits 
of available regulatory alternatives and, if regulation is necessary, 
to select regulatory approaches that maximize net benefits (including 
potential economic, environmental, public health and safety effects, 
distributive impacts, and equity). Section 6(b) of the E.O. requires 
the OMB Office of Information and Regulatory Affairs (OIRA) to review 
regulatory actions that have been identified as significant regulatory 
actions by the promulgating agency or OIRA.\183\ This final rule has 
been determined to be a significant regulatory action and was therefore 
subject to OIRA review. However, this rule is not a ``major rule,'' as 
defined by 5 U.S.C. 804.
---------------------------------------------------------------------------

    \183\ E.O. 12866 section 3(f) states, `` `Significant regulatory 
action' means any regulatory action that is like to result in a rule 
that may:
    (1) Have an annual effect on the economy of $100 million or more 
or adversely affect in a material way the economy, a sector of the 
economy, productivity, competition, jobs, the environment, public 
health or safety, or State, local, or tribal governments or 
communities;
    (2) Create a serious inconsistency or otherwise interfere with 
an action taken or planned by another agency;
    (3) Materially alter the budgetary impact of entitlements, 
grants, user fees, or loan programs or the rights and obligations of 
recipients thereof; or
    (4) Raise novel legal or policy issues arising out of legal 
mandates, the President's priorities, or the principles set forth in 
this Executive order.''
---------------------------------------------------------------------------

    E.O. 13563 of January 18, 2011, Improving Regulation and Regulatory 
Review, supplements and reaffirms the principles of E.O. 12866 of 
September 30, 1993. Section 1(c) of E.O. 13563 directs agencies to 
``use the best available techniques to quantify anticipated present and 
future benefits and costs as accurately as possible.'' Accordingly, GSA 
offers the following summary of the costs and benefits associated with 
this final rule.

Transactional Data Reporting Costs

    The total costs associated with this rule are $15 million per year 
for participating vendors and $2 million per year for the Federal 
Government.\184\ These costs are attributable to GSA's Federal Supply 
Schedules and its other non-FSS Governmentwide IDIQ vehicles as 
follows:
---------------------------------------------------------------------------

    \184\ See Section VIII.B for a discussion of the burden 
estimates in accordance with Paperwork Reduction Act requirements.
---------------------------------------------------------------------------

     For FSS contracts, the new reporting requirements will be 
initially implemented for select Schedules and Special Item Numbers on 
a pilot basis. GSA estimates the costs associated with these 
requirements to be $12 million per year for vendors participating in 
the FSS pilot.\185\ However, the new Transactional Data Reporting 
clause, GSAR Alternate I, 552.238-74 Industrial Funding Fee and Sales 
Reporting (Federal Supply Schedule), will be paired with changes to 
existing FSS pricing disclosure requirements. Specifically, FSS vendors 
subject to the Transactional Data Reporting rule will no longer provide 
CSP disclosures and will no longer be subject to the PRC tracking 
customer provision. GSA estimates the total burden of these existing 
FSS pricing disclosure requirements to be $102 million per year, with 
FSS pilot vendors accounting for $44 million of that burden. Therefore, 
replacing the existing FSS pricing disclosure requirements with 
transactional data reporting results in a net burden reduction of 
approximately $32 million per year for FSS pilot vendors.\186\ 
Furthermore, implementing the FSS pilot without the existing CSP and 
PRC requirements lowers the Government's burden by about $3 million per 
year.\187\
---------------------------------------------------------------------------

    \185\ Id.
    \186\ $32 million does not include costs for non-FSS contracts. 
It is the result of the FSS burden of the initial pilot 
implementation ($12.41 million), minus the share of the combined CSP 
and PRC burden allocated to the FSS pilot vendors ($44.03 million). 
The total CSP and PRC burden from Information Collection 3090-0235, 
if it were applied to all GSA FSS vendors, including those 
participating in the Transactional Data Reporting pilot, would be 
$101.69 million. The share of that burden allocated to the FSS pilot 
vendors ($44.03 million) is based on the percentage of the overall 
FY15 FSS sales accounted for by the FSS pilot vendors (43.2 
percent).
    \187\ $3 million is the result of the Government's annual burden 
for this rule ($2.34 million) minus the share of the combined CSP 
and PRC burden for the Government allocated to the FSS pilot 
contracts ($5.58 million).
---------------------------------------------------------------------------

     Non-FSS Governmentwide IDIQs, including GWACs, will be 
subject to GSAR clause 552.216-75 Transactional Data Reporting. GSA 
estimates the costs for vendors holding these contracts to be up to 
almost $3 million per year.
    The estimated costs for vendors affected by this rule are limited 
to the time needed to implement reporting procedures and fulfill 
monthly reporting obligations. Implementation costs include the time to 
configure systems, train personnel, and institute procedures. Monthly 
reporting costs include the time needed for identifying reportable 
data, performing quality assurance checks, and transmitting the data. 
GSA's burden estimates account for vendors that may want to hire 
personnel and update information technology systems to meet the 
reporting requirements. Existing FSS vendors participating in the 
Transactional Data Reporting pilot will initially be the only ones that 
will absorb new reporting burdens in the course of their current 
contract performance. However, these vendors will not necessarily need 
to hire additional personnel because the rule provides a net burden 
reduction with the removal of the CSP and PRC disclosure requirements. 
Likewise, the rule does not require vendors to acquire information 
technology tools, although some vendors, particularly those with higher 
sales volume, may choose to adopt automated systems to meet the 
reporting requirement. Nevertheless, the new FSS reporting clause will 
be incorporated into existing contracts through bilateral 
modifications, so vendors may choose not to participate. Otherwise, the 
new Transactional Data Reporting clauses will apply to new contracts 
awarded under the pilot Schedules and Special Item Numbers and new 
contracts awarded under non-FSS Governmentwide IDIQ programs. As such, 
these new vendors will have an opportunity to evaluate the costs 
associated with meeting these reporting requirements prior to entering 
into the contract.

Transactional Data Reporting Benefits

    This rule will save taxpayer dollars because it supports smarter 
buying practices and will improve pricing. Transactional Data Reporting 
supports the Government's shift towards category management and 
provides vendors with a more open marketplace.
    GSA has found transactional data to be instrumental for improving 
competition, lowering pricing, and increasing transparency through its 
Federal Strategic Sourcing Initiative (FSSI) contracts. GSA does not 
expect this pilot to replicate or exceed the discounts achieved through 
FSSI--often up to 30 percent lower than the comparable Schedule 
prices--mostly because of the diversity of offerings in the greater 
Schedules program. Yet, GSA does anticipate lower prices in addition to 
other key benefits. For instance, it supports the category management 
principles of optimizing existing contract vehicles and reducing 
contract duplication. The Government can use transactional data to 
analyze its consumption patterns, evaluate and compare purchasing 
channels, and identify best-in-class solutions. Thereafter, the 
Government can leverage its buying power and demand management 
strategies to achieve taxpayer savings as it concentrates its purchases 
through fewer channels, which will in turn provide lower administrative 
costs for vendors.
    Today, vendors incur heavy upfront costs when submitting an offer 
for an FSS contract, which is frequently the

[[Page 41128]]

entry-point to the greater federal marketplace. They are required to 
supply GSA contracting officers with CSP disclosures and set up 
mechanisms to track their sales in order to comply with the PRC. These 
costs are incurred before a vendor wins any federal dollars through the 
FSS contract. In contrast, vendors participating in Transactional Data 
Reporting will only incur costs after receiving an order against their 
FSS contract, and the costs will only increase when they win more 
orders. Thus, GSA is removing barriers to entry into the federal 
marketplace, which GSA believes is particularly beneficial to small 
businesses that have fewer resources for upfront investments. With 
Transactional Data Reporting, GSA will use the data it collects, along 
with data from other sources, to determine whether an offer is fair and 
reasonable. As a result, fewer vendors will need to rely on outside 
support when preparing an offer for a GSA contract vehicle.
    Lastly, the transactional data released to the public will provide 
valuable market intelligence that can be used by vendors for crafting 
more efficient, targeted business development strategies that incur 
lower administrative costs. This will be particularly beneficial for 
small businesses, which often do not have the resources to invest in 
dedicated business development staff or acquire business intelligence 
through third-parties.

VII. Regulatory Flexibility Act

    GSA expects this final rule to have a significant economic impact 
on a substantial number of small entities within the meaning of the 
Regulatory Flexibility Act, 5 U.S.C. 601, et seq., because it involves 
providing transactional data on FSS and non-FSS orders that may 
ultimately affect the end pricing of products offered through GSA. 
However, the cost to comply with the additional reporting requirement 
will be offset by the benefits provided by the transactional data, such 
as greater insight and visibility into customer buying habits and 
knowledge of market competition. Additional benefits to FSS vendors 
include the addition of the Transactional Data Reporting clause (GSAR 
clause 552.238-74 Alternate I) being coupled with the elimination of 
Commercial Sales Practices (CSP) disclosures and an alternate version 
of the Price Reductions clause (PRC) (GSAR clause 552.238-75) that does 
not include the basis of award ``tracking customer'' requirement.
    Following receipt of the public comments in response to the 
proposed rule, GSA concluded the horizontal pricing ability afforded by 
Transactional Data Reporting would not only exceed the PRC tracking 
customer provision benefits, it could also alleviate the need for CSP 
disclosures when combined with automated commercial data sources, new 
data analytic tools, and improved price analysis policy. For the 
Schedules pilot, pairing Transactional Data Reporting with a removal of 
CSP disclosures and the PRC tracking customer provision will result in 
an average annual burden reduction of approximately $32 million for 
participating FSS vendors.\188\ Furthermore, implementing the FSS pilot 
without the existing CSP and PRC requirements lowers the Government's 
burden by about $3 million a year.\189\
---------------------------------------------------------------------------

    \188\ $32 million does not include costs for non-FSS contracts. 
It is the result of the FSS burden of the initial pilot 
implementation ($12.41 million), minus the share of the combined CSP 
and PRC burden allocated to the FSS pilot vendors ($44.03 million). 
The total CSP and PRC burden from Information Collection 3090-0235, 
if it were applied to all GSA FSS vendors, including those 
participating in the Transactional Data Reporting pilot, would be 
$101.69 million. The share of that burden allocated to the FSS pilot 
vendors ($44.03 million) is based on the percentage of the overall 
FY15 FSS sales accounted for by the FSS pilot vendors (43.2 
percent).
    \189\ $3 million is the result of the Government's annual burden 
for this rule ($2.34 million) minus the share of the combined CSP 
and PRC burden for the Government allocated to the FSS pilot 
contracts ($5.58 million).
---------------------------------------------------------------------------

    Providing the required transactional data will impose significant 
economic impact on all vendors, both small and other than small, doing 
business on GSA-managed contracts. Therefore, Final Regulatory 
Flexibility Analysis (FRFA) has been prepared consistent with 5 U.S.C. 
603, and is summarized as follows:

    1. Statement of the need for, and the objectives of, the rule.
    The General Services Administration (GSA) is amending the 
General Services Administration Acquisition Regulation (GSAR) to 
require vendors to report transactional data generated from orders 
placed against certain contracts. The primary changes are the 
creation of three clauses: 552.216-75 Sales Reporting and Fee 
Remittance; 552.238-74 Industrial Funding Fee (IFF) and Sales 
Reporting, Alternate I; and 552.238-75 Price Reductions, Alternate 
II.
    Clauses 552.238-74, Alternate I and 552.216-75 will require 
vendors to provide transactional data from orders placed against 
GSA's Governmentwide contracts. Clause 552.238-74, Alternate I 
applies to orders placed against Federal Supply Schedule (FSS) 
contract vehicles. FSS vendors that agree to the new transactional 
data reporting requirement will have their contracts modified to 
include clause 552.238-75 Price Reductions, Alternate II, which 
removes the basis of award tracking requirement found in the basic 
Price Reductions clause (PRC). These vendors will also no longer be 
required to provide Commercial Sales Practices (CSP) disclosures, as 
required by GSAR section 515.408. Removing these two disclosure 
requirements in favor of a new transactional data reporting clause 
will provide a net burden reduction for FSS vendors.
    The other transactional data reporting clause, 552.216-75, 
applies to GSA's non-FSS contract vehicles--Governmentwide 
Acquisition Contracts (GWACs) and Multi-Agency Contracts (MACs). 
Most of these contracts already contain transactional data reporting 
requirements and are not subject to the FSS PRC and CSP disclosure 
requirements. Once implemented, the new GSAR reporting clauses will 
further the objective of using actual transactional data in order to 
negotiate better pricing for GSA's Governmentwide contracting 
programs and enable GSA to provide federal agencies with market 
intelligence and expert guidance in procuring goods and services 
from GSA acquisition vehicles. Additionally, collecting 
transactional data will allow customers to analyze spending patterns 
and develop new acquisition strategies to fully leverage the 
Government's spend. Finally, reducing FSS pricing disclosure 
requirements will provide vendors a net burden reduction, make FSS 
contracts easier to administer, and improve accessibility for new 
vendors.
    2. Summary of the significant issues raised by the public 
comments in response to the initial regulatory flexibility analysis.
    GSA received 26 comment letters on the proposed rule, including 
comments from industry associations, vendors, individuals, 
Government stakeholders, and other interested groups. Commenters 
representing industry interests cited the high reporting burden 
imposed by the rule, while stating GSA was underestimating the 
potential burden. However, these commenters supported the removal of 
the PRC basis of award tracking customer requirement.
    Other areas with significant industry concern included:
     The retention, and potential increase, of CSP 
disclosures.
     Releasability of the transactional data to the public.
     Using transactional data for other than one-to-one 
comparisons.
    3. Summary of the assessment of such issues, and a statement of 
any changes made to the proposed/interim rule as a result of such 
comments.
    To address concerns with its Transactional Data Reporting burden 
estimates, GSA reevaluated its Paperwork Reduction Act burden 
estimation methodology and substantially increased its burden 
estimates. These higher burden projections were a significant 
concern and they reinforced the need to couple Transactional Data 
Reporting with other significant forms of burden reductions.
    However, Transactional Data Reporting could negate that 
disclosure burden because not only does it exceed the PRC tracking 
customer provision benefits, it could also alleviate the need for 
CSP disclosures when combined with automated commercial data 
sources, new data analytic tools, and

[[Page 41129]]

improved price analysis policy. Consequently, GSA decided to pair 
the new reporting requirements with the removal of CSP disclosures 
and the PRC tracking customer provision, resulting in an average 
annual burden reduction of approximately $32 million for vendors 
participating in the FSS pilot.\190\ GSA has also reevaluated its 
plans for disclosure of the reported data. Transactional data 
collected through the portal will be accessible only by authorized 
users and protected in accordance with GSA's information technology 
security policies. This data will be used by category managers and 
acquisition professionals to implement smarter buying strategies.
---------------------------------------------------------------------------

    \190\ $32 million does not include costs for non-FSS contracts. 
It is the result of the FSS burden of the initial pilot 
implementation ($12.41 million), minus the share of the combined CSP 
and PRC burden allocated to the FSS pilot vendors ($44.03 million). 
The total CSP and PRC burden from Information Collection 3090-0235, 
if it were applied to all GSA FSS vendors, including those 
participating in the Transactional Data Reporting pilot, would be 
$101.69 million. The share of that burden allocated to the FSS pilot 
vendors ($44.03 million) is based on the percentage of the overall 
FY15 FSS sales accounted for by the FSS pilot vendors (43.2 
percent).
---------------------------------------------------------------------------

    GSA intends to share transactional data to the maximum extent 
allowable to promote transparency and competition while respecting 
that some data could be exempt from disclosure. Accordingly, a data 
extract will be created for use by the general public, containing 
information otherwise releasable under the Freedom of Information 
Act; details about the public data extract will be released through 
a forthcoming notice in the Federal Register. This data will provide 
valuable market intelligence that can be used by vendors for 
crafting more efficient, targeted business development strategies 
that incur lower administrative costs. This will be particularly 
beneficial for small businesses, which often do not have the 
resources to invest in dedicated business development staff or 
acquire business intelligence through third-parties.
    Finally, GSA gave consideration as to whether Transactional Data 
Reporting should be considered for all FSS contracts or only those 
that include products or services that would allow straightforward 
comparisons, such as commodities with standard part numbers. GSA 
agrees transactional data is most useful for price analysis when 
comparing like items, but that does not mean the data is not useful 
when perfect comparisons cannot be made. Government buyers and FSS 
contracting officers will use the data for price analysis and market 
research, and category managers will use the data for consumption 
analysis to form demand management strategies, regardless of whether 
the data can be used for perfect comparisons.
    4. The response of the agency to any comments filed by the Chief 
Counsel for Advocacy of the Small Business Administration in 
response to the rule, and a detailed statement of any change made in 
the final rule as a result of the comments.
    The Chief Counsel for Advocacy of the Small Business 
Administration provided comments in response to the proposed rule; 
the following is a summary of those comments and GSA's responses:
    Comment: While GSA recognizes that this proposed rule will have 
a significant economic impact on a substantial number of small 
businesses, the Initial Regulatory Flexibility Analysis (IRFA) does 
not provide sufficient data for the public to examine the potential 
impact of the rule on small entities.
    Response: GSA did not differentiate between small businesses and 
other-than-small businesses in its burden estimates because 
Transactional Data Reporting imposes a progressive burden-one that 
increases with a vendor's sales volume. Namely, monthly reporting 
time will increase with a vendor's applicable sales volume, as 
vendors with lower to no reportable sales will spend little time on 
monthly reporting, while those businesses with more reportable sales 
will face a higher reporting burden. Likewise, setup costs will be a 
major driver of the new reporting burden, but vendors with little to 
no activity on their FSS contracts will likely forgo investments in 
new reporting systems because the reporting burden will not be 
significantly more than that of the current quarterly sales 
reporting requirements.
    However, GSA was especially mindful of small business concerns 
when forming this rule. For instance, tying the reporting burden to 
sales volume is particularly beneficial for small businesses, as 
they hold 80 percent of the total contracts but only account for 
approximately 39 percent of the sales.\191\ Moreover, the decision 
to streamline the existing pricing disclosure requirements was 
partially motivated by the positive impact on small businesses. 
Unlike the new data reporting requirements, the current CSP and PRC 
disclosure requirements are constant, meaning vendors, especially 
those with a higher number of FSS contract offerings, must bear the 
burden even if they have little to no sales through their FSS 
contracts. Thus, small businesses are disproportionately affected 
because they account for the bulk of lower volume contracts. 
Moreover, small businesses, which generally have fewer resources to 
devote to contract management, will no longer be subjected to the 
complex CSP and PRC pricing disclosure requirements.
---------------------------------------------------------------------------

    \191\ Based on fiscal year 2015 Federal Supply Schedule contract 
data.
---------------------------------------------------------------------------

    The public data extract will also benefit small businesses. GSA 
intends to share transactional data to the maximum extent allowable 
to promote transparency and competition while respecting that some 
data could be exempt from disclosure. The data will serve as 
valuable market intelligence for vendors to use for crafting more 
efficient, targeted business development strategies that incur lower 
administrative costs. This will be particularly beneficial for small 
businesses, which often do not have the resources to invest in 
dedicated business development staff or acquire business 
intelligence through third-parties. Details about the public data 
extract will be released in a forthcoming Federal Register notice.
    Comment: Small businesses are concerned that the IRF A for this 
transactional data collection and reporting rule does not provide 
them with a clear understanding of GSA's legal framework for 
requiring this new system.
    Response: GSA will be implementing the Transactional Data 
Reporting clauses through bilateral modifications on existing 
contracts, meaning vendors must agree to the changes before GSA can 
insert a new clause in a contract. New contracts awarded under the 
pilot Schedules/Special Item Numbers or future Governmentwide 
indefinite-delivery indefinite-quantity (IDIQ) vehicles will include 
the new Transactional Data Reporting clauses, but vendors will have 
an opportunity to view the requirements before agreeing to a 
contract. For the Schedules, GSA is instituting this program to meet 
its obligations under 41 U.S.C. 152(3)(b), which states that orders 
and contracts awarded under the FSS program must result in ``the 
lowest overall cost alternative to meet the needs of the Federal 
Government.''
    Comment: Small businesses expressed some of the similar concerns 
as shared by the GSA Office of Inspector General during the public 
forum. The IG stated that the proposed rule under estimates the 
burden and resources.
    Response: As a result of these comments, GSA reevaluated its 
estimation methodology and recalculated the burden based on whether 
vendors use automated or manual systems to identify and report 
transactional data. An automated system is one that relies on 
information technology, such as an accounting system or data 
management software, to identify and compile reportable data. These 
systems can tremendously streamline the reporting process but 
require upfront configuration to perform the tasks, such as coding 
the data elements to be retrieved. Conversely, a manual system is 
one that incorporates little to no automation and instead relies on 
personnel to manually identify and compile the reportable data. An 
example of a manual system would be an accountant reviewing invoices 
to identify the reportable data and then transferring the findings 
to a spreadsheet. In contrast to automation, a manual system 
requires relatively little setup time but the reporting effort will 
generally increase with the vendor's sales volume.
    The likelihood of a vendor adopting an automated system 
increases with their applicable sales volume. Vendors with little to 
no reportable data are unlikely to expend the effort needed to 
establish an automated reporting system since it will be relatively 
easy to identify and report a limited amount of data. In fiscal year 
2015, 32 percent of FSS vendors reported $0 sales, while another 34 
percent reported average sales between $1 and $20,000 per month. If 
the rule were applied to the entire Schedules program, approximately 
two-thirds, or nearly 11,000 vendors, would have a lower reporting 
burden. However, as a vendor's applicable average monthly sales 
increase, they will be increasingly likely to establish an automated 
system to reduce the monthly reporting burden. Consequently, vendors 
with higher reportable sales will likely bear a higher setup burden 
to create an automated system, or absorb a high monthly reporting 
burden if

[[Page 41130]]

they choose to rely on manual reporting methods.
    This renewed analysis led GSA to increase its burden estimates. 
For FSS contracts in particular--
     The projected setup time for an automated system 
increased from an average of 6 hours \192\ to an average of 240 
hours; and
---------------------------------------------------------------------------

    \192\ The proposed rule setup time estimates did not 
differentiate between manual and automated reporting systems.
---------------------------------------------------------------------------

     The projected monthly reporting time range grew from 
0.3 minutes-4 hours to 0.25 hours-48 hours.
    However, GSA's estimates are still considerably lower than the 
estimates provided through the public comments,\193\ primarily 
because--
---------------------------------------------------------------------------

    \193\ One commenter provided its own estimates on the reporting 
burden.
---------------------------------------------------------------------------

     At least two-thirds of the potential Transactional Data 
Reporting participants will have a relatively lower burden (e.g., 
vendors with lower or no sales); and
     Vendors with higher reporting volume will face lower 
setup times with a higher monthly reporting burden, or higher setup 
times with a lower monthly reporting burden. In other words, vendors 
will not face a higher setup burden and a higher monthly reporting 
burden to comply with the rule.
    Comment: Small businesses fear that the proposed rule will have 
unintended consequence of further reduction of an already reduced 
federal small business industrial base. Small businesses in this 
regard point to the negative impact of Strategic Sourcing (SS) on 
the number of small businesses that are now participating in the 
federal procurement system. Some postulate that SS has not harmed 
the small business community citing the actual dollars being awarded 
to small businesses. However, while the dollars are increasing the 
actual participation rate of small businesses is decreasing.
    Response: GSA will be mindful of Transactional Data Reporting's 
small business impacts. The initiative is being phased in on a pilot 
basis. GSA's Senior Procurement Executive will regularly evaluate 
progress against metrics, including small business participating, in 
consultation with the Administrator for Federal Procurement Policy 
and other interested stakeholders to determine whether to expand, 
limit, or discontinue the program. No expansion of the pilot or 
action to make Transactional Data Reporting a permanent fixture on 
the Schedules will occur prior to the careful evaluation of at least 
one year of experience with the pilot.
    Comment: GSA will sort the monthly reporting of the 
transactional data and share it across the federal government but 
small businesses are concerned that the proposed rule does not 
contemplate privacy issues nor other proprietary business concerns. 
Small businesses have concerns about how transactional data will be 
protected from competitors.
    Response: Transactional data reported in accordance with this 
rule will be accessible only by authorized Government users. GSA 
intends to share the transactional data with the public to the 
maximum extent allowable while respecting that some data could be 
exempt from disclosure. Consequently, a data extract will be created 
for use by the general public, containing information otherwise 
releasable under the Freedom of Information Act (FOIA); \194\ 
details about the public data extract will be released through a 
forthcoming notice in the Federal Register.
---------------------------------------------------------------------------

    \194\ 5 U.S.C. 552.
---------------------------------------------------------------------------

    Transparency will support a dynamic marketplace by providing 
contractors with the business intelligence needed to identify 
customers, determine which products should be included on their 
contract pricelists, and ascertain whether their prices are 
competitive. This will be particularly beneficial for small 
businesses, which often do not have the resources to invest in 
dedicated business development staff or acquire business 
intelligence through third-parties.
    However, GSA recognizes some information may be protected from 
public release, which led to the decision to create a public data 
extract, as opposed to allowing the public the same access as 
authorized users. The data extract will provide the public a 
filtered view of the data, including information that is releasable 
under FOIA while protecting information that is not.
    Comment: Small business owners are concerned that this new 
vision of transactional data reporting and utilization will reduce 
the values added that they bring to an acquisition process. The 
proposal's new vision and the transactional proposal would seem to 
place price as opposed to best value as its single most important 
consideration for contract award. Best value has emerged over the 
years as a strong federal government benchmark for evaluating and 
awarding contracts and it allows for small businesses to compete on 
a more level playing field. While trying to improve the acquisition 
process, the government should not abandon this long established and 
proven acquisition tool. Price should not be the sole measure of 
awarding a contract.
    Response: Transactional data will not transform the federal 
acquisition system into a lowest-price procurement model. The 
Federal Acquisition Regulation (FAR) has a stated vision ``to 
deliver on a timely basis the best value product or service to the 
customer, while maintaining the public's trust and fulfilling public 
policy objectives.'' \195\ The Government's preference will continue 
to be ``best value,'' or defined in the FAR, ``the expected outcome 
of an acquisition that, in the Government's estimation, provides the 
greatest overall benefit in response to the requirement.'' \196\ 
Transactional data is viewed in the context of each procurement, 
taking into account desired terms and conditions, performance 
levels, past customer satisfaction, and other relevant information. 
Using and understanding the data will help inform requirements 
definition and reduce excess consumption.
---------------------------------------------------------------------------

    \195\ Federal Acquisition Regulation section 1.102 (48 CFR 
1.102).
    \196\ Federal Acquisition Regulation section 2.101 (48 CFR 
2.101).
---------------------------------------------------------------------------

    Comment: The proposed rule would seem to require contractors to 
pay a Contractor Access Fee (CAF) fee and an industrial funding fee. 
The proposed rule is unclear as to how these fees interact with each 
other.
    Response: The Contract Access Fee (CAF) and Industrial Funding 
Fee (IFF) will not be charged in tandem. The IFF is applied to GSA's 
Federal Supply Schedule contracts while the CAF is only applied to 
GSA's other Governmentwide vehicles, such as Governmentwide 
Acquisition Contracts (GWACs), indefinite-delivery indefinite-
quantity (IDIQ), and other multi-agency contracts.
    Comment: Because of the economic impact of this proposed 
regulation on a substantial number of small entities, GSA should 
extend the comment period for an additional sixty days and conduct 
field hearings in other parts of the United States.
    Response: GSA extended the proposed rule comment period from May 
4, 2015 to May 15, 2015. Additionally, the public meeting it held on 
April 17, 2015 in Washington, DC was accessible through an Internet 
simulcast to interested parties outside of the Washington, DC area. 
In total, the meeting was attended by 120 in-person participants and 
153 remote attendees.
    Comment: GSA should conduct a more detailed impact assessment of 
this proposed rule on small businesses. During the April 17, 2015 
public forum, Advocacy asked GSA if an analysis had been performed 
on the impact of this rule on small businesses and GSA's response 
was to cite the number of small businesses that are on schedule and 
the dollar amount being awarded to these businesses. However this 
statement does not delve into the more structural issue of small 
business commodity pricing. Since most small businesses that are on 
a GSA schedule are value added resellers and since many of the 
original equipment makers are also on GSA schedules it is unclear 
because of the lack of data how GSA will balance the potential 
conflict of these two types of business entities.
    Response: Pricing will not be GSA's sole consideration when 
awarding items on its Governmentwide contract vehicles, and the 
Government will continue to have a preference for best value 
solutions. However, when price is evaluated, it will be done so 
within a range, as GSA recognizes other factors should be taken into 
consideration, such as socio-economic concerns. For example, GSA is 
beginning to employ automated analysis techniques for its contract-
level prices to reduce variability. GSA recently launched its 
Formatted Product Tool (FPT) that identifies pricing outside a range 
determined to be acceptable for identical items; vendors whose 
prices exceed the acceptable range are then notified of their 
comparative pricing. Currently, this initiative applies only to 
products, while services will be addressed at a later date. However, 
whether it be the FPT or other tools, it is important to note GSA 
intends to view pricing in a range, so renegotiations will not be 
triggered merely because a vendor does not meet the lowest-reported 
price.
    5. Description and an estimate of the number of small entities 
to which the rule will apply.
    The reporting clauses created by this rule will initially apply 
to a subset of the GSA's

[[Page 41131]]

Federal Supply Schedule program on a pilot basis and will be 
available for use for all of GSA's non-FSS Governmentwide IDIQ 
contracts. This population consists of 6,017 contracts, of which 
4,852 (81 percent) are held by small business concerns. The vast 
majority of these small business contracts (4,358) are under GSA's 
FSS program.
    This rule may eventually apply to all contractors who hold GSA 
Federal Supply Schedule contracts and other GSA Governmentwide 
contract vehicles. This population consists of 20,323 contracts, 
16,308 (80 percent) of which are held by small businesses. The vast 
majority of these small businesses contracts (15,837) are under 
GSA's FSS program.
    6. A description of the projected reporting, recordkeeping, and 
other compliance requirements of the rule, including an estimate of 
the classes of small entities that will be subject to the 
requirement and the type of professional skills necessary for 
preparation of the report or record.
    Vendors subject to the rule will be required to report 
transactional data and remit fees paid by ordering activities to 
GSA. The data reporting responsibilities are new for FSS vendors, 
but most of GSA's Governmentwide non-FSS contracts already contain 
transactional data reporting requirements.
    The reporting aspect of the rule requires vendors to identify, 
compile, and report transactional data--historical information 
encompassing the products and services delivered during the 
performance of a task or delivery order placed against this 
contract. Furnishing electronic reports is an existing requirement 
for all affected vendors but FSS vendors will be required to furnish 
more detailed information than currently required under their FSS 
contracts. The clauses require vendors to report data once a month--
within 30 days after the last day of the end of the month.
    Vendors will be responsible for remitting applicable fees paid 
by ordering activities to GSA. FSS vendors must remit fees four 
times a year (30 days after the end of the last day of each quarter) 
and non-FSS vendors may have to remit fees up to, but no more than, 
once a month. These fee remittance requirements are generally the 
same as what is currently required under these contracts.
    The reporting clauses created by this rule will initially apply 
to a subset of the GSA's Federal Supply Schedule program on a pilot 
basis and will be available for use for all of GSA's non-FSS 
Governmentwide IDIQ contracts; this population consists of 6,017 
contracts, of which 4,852 (81 percent) are held by small business 
concerns. This rule may eventually apply to all contractors who hold 
GSA Federal Supply Schedule contracts and other GSA Governmentwide 
contract vehicles; this population consists of 20,323 contracts, 
16,308 (80 percent) of which are held by small businesses. These 
small business contract holders include SBA certified 8(a) firms; 
SBA certified small disadvantaged businesses; HUBZone firms; service 
disabled veteran-owned small businesses; veteran-owned small 
businesses; economically disadvantaged women-owned small businesses; 
and women-owned small businesses.
    The professional skills needed to comply with these requirements 
are generally the same as those needed to comply with existing FSS 
and non-FSS reporting requirements and invoicing functions. 
Generally, reporting personnel must have an understanding of the 
reporting system and the transactional data they are reporting.
    7. An account of the steps taken to minimize the significant 
economic impact of the rule on small entities consistent with the 
stated objectives of applicable statutes, including:
     A statement of the factual, policy, and legal reasons 
for selecting the alternative adopted in the final rule; and
     Why each one of the other considered significant 
alternatives, that affect the impact on small entities, was 
rejected.
    GSA determined it is necessary to obtain and analyze 
transactional data for purchases made through its contract vehicles 
in order to support the Government's category management vision and 
improve acquisition outcomes in general. For the Schedules, GSA is 
instituting this program to meet its obligations under 41 U.S.C. 
152(3)(b), which states that orders and contracts awarded under the 
FSS program must result in ``the lowest overall cost alternative to 
meet the needs of the Federal Government.''
    Following the April 17, 2015 public meeting and subsequent 
receipt of the public comments, GSA was compelled to further 
evaluate the spectrum of alternatives for Transactional Data 
Reporting, ranging from withdrawing the rule in favor of different 
approaches for obtaining the data to applying the new reporting 
clauses without corresponding changes to existing disclosure 
requirements. Ultimately, the decision to proceed hinged on 
considerations including, but not limited to, alternatives for 
collecting transactional data; the burden associated with reporting 
transactional data; opportunities to reduce burden through changes 
to existing disclosure requirements, and the associated impacts of 
those changes; effects on small businesses; and the benefits of 
collecting transactional data for non-standard products and 
services.
    GSA's Initial Regulatory Flexibility Analysis included an 
evaluation of alternatives for obtaining transactional data--
internal applications; GSA ordering platforms such as eBuy and GSA 
Advantage![supreg]; the SmartPay credit card purchase program; and 
upgrades to the Federal Procurement Data System. GSA previously 
concluded these options would not provide the breadth of data needed 
to support the Government's objectives or would be unable to do so 
in the foreseeable future. Since the publication of the proposed 
rule, GSA reevaluated those alternatives and reached similar 
conclusions. Additionally, the Government's electronic invoicing 
initiative \197\ was assessed as a potential alternative. However, 
following meetings regarding electronic invoicing implementation 
with representatives from the Department of Defense, Department of 
Energy, Department of Transportation, Department of Treasury, and 
Department of Veterans Affairs, it was determined these electronic 
invoicing platforms will not provide a Government-wide transactional 
data reporting solution in the near term. Consequently, GSA 
continued to evaluate solutions that relied on vendor-provided 
transactional data.
---------------------------------------------------------------------------

    \197\ See Office of Management and Budget memorandum M-15-19, 
``Improving Government Efficiency and Saving Taxpayer Dollars 
Through Electronic Invoicing'', July 17, 2015, available at https://www.whitehouse.gov/sites/default/files/omb/memoranda/2015/m-15-19.pdf.
---------------------------------------------------------------------------

    The most common concern, in terms of the number of respondents, 
regarded the associated burden of reporting transactional data. In 
general, commenters felt the burden was underestimated and/or the 
requirement was too burdensome. To address the concerns with its 
Transactional Data Reporting burden estimates, GSA reevaluated its 
methodology and substantially increased its burden estimates. These 
higher burden projections were a significant concern and they 
reinforced the need to couple Transactional Data Reporting with 
other significant forms of burden reductions.
    A notable concern expressed by industry stakeholders was the 
retention, and potential increase, of CSP disclosures. GSA noted in 
the proposed rule it ``. . . would maintain the right throughout the 
life of the FSS contract to ask a vendor for updates to the 
disclosures made on its commercial sales format (which is used to 
negotiate pricing on FSS vehicles) if and as necessary to ensure 
that prices remain fair and reasonable in light of changing market 
conditions.'' \198\ In response, industry stakeholders indicated 
retaining CSP disclosures would undercut any burden reduction 
achieved by eliminating the PRC tracking customer requirement. 
Specifically, respondents were concerned CSP disclosures will still 
force them to monitor their commercial prices, which ultimately 
causes the associated burden for both disclosure requirements.
---------------------------------------------------------------------------

    \198\ See GSAR Case 2013-G504; Docket 2014-0020; Sequence 1 (80 
FR 25994 (May 6, 2015)).
---------------------------------------------------------------------------

    In 2015, GSA also began preparing its request to renew the PRC 
information collection request (ICR) in accordance with the 
Paperwork Reduction Act of 1995.\199\ While GSA would have proceeded 
with a renewal request regardless of this case, the timing did allow 
for the consideration of the Transactional Data Reporting comments. 
GSA agreed with the general comment that burdens of the PRC and CSP 
are related; as a result, it included CSP disclosure burden 
estimates in the ICR and renamed it ``Federal Supply Schedule 
Pricing Disclosures'' to more accurately reflect the scope of the 
information collected.
---------------------------------------------------------------------------

    \199\ Public Law 104-13, 109 Stat. 163.
---------------------------------------------------------------------------

    Following two Federal Register notices requesting comments on 
the FSS Pricing Disclosures ICR,\200\ GSA increased its annual 
burden estimates for GSA FSS vendors, including those who would 
participate in the Transactional Data Reporting pilot, from $59

[[Page 41132]]

million \201\ to $102 million.\202\ Yet, Transactional Data 
Reporting alleviates the need for these FSS pricing disclosures when 
combined with automated commercial data sources, new data analytic 
tools, and improved price analysis policy. As a result, GSA decided 
to pair Transactional Data Reporting with the removal of CSP 
disclosures and the PRC tracking customer provision, resulting in an 
average annual burden reduction of approximately $32 million for 
participating FSS vendors.\203\ Furthermore, implementing the FSS 
pilot without the existing CSP and PRC requirements lowers the 
Government's burden by about $3 million a year.\204\
---------------------------------------------------------------------------

    \200\ See 80 FR 72060 (Nov. 18, 2015) and 81 FR 21346 (Apr. 11, 
2016).
    \201\ 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.
    \202\ The annual public reporting burden for the CSP and PRC, 
excluding FSS vendors participating in the Transactional Data 
Reporting pilot, is $57.66 million. If FSS pilot vendors were still 
subject to the CSP and PRC reporting requirements, the total annual 
public reporting burden would be $101.69 million. The FSS pilot 
vendors' share of the total CSP and PRC reporting burden is based 
upon their share of the GSA FSS fiscal year 2015 sales volume, 43.2 
percent. The annual $44.03 million reporting burden reduction 
attributed to this rule is 43.2 percent of the $101.69 million 
annual reporting burden if it were applied to the entire GSA FSS 
program. More information about Information Collection 3090-0235 can 
be found at https://www.reginfo.gov/public by searching ``ICR'' for 
``3090-0235''.
    \203\ $32 million does not include costs for non-FSS contracts. 
It is the result of the FSS burden of the initial pilot 
implementation ($12.41 million), minus the share of the combined CSP 
and PRC burden allocated to the FSS pilot vendors ($44.03 million). 
The total CSP and PRC burden from Information Collection 3090-0235, 
if it were applied to all GSA FSS vendors, including those 
participating in the Transactional Data Reporting pilot, would be 
$101.69 million. The share of that burden allocated to the FSS pilot 
vendors ($44.03 million) is based on the percentage of the overall 
FY15 FSS sales accounted for by the FSS pilot vendors (43.2 
percent).
    \204\ $3 million is the result of the Government's annual burden 
for this rule ($2.34 million) minus the share of the combined CSP 
and PRC burden for the Government allocated to the FSS pilot 
contracts ($5.58 million).
---------------------------------------------------------------------------

    Streamlining the existing pricing disclosure requirements is 
particularly beneficial for small businesses. The current CSP and 
PRC disclosure requirements are constant, meaning vendors, 
especially those with a higher number of FSS contract offerings, 
must bear the burden even if they have little to no sales through 
their FSS contracts. Thus, small businesses are disproportionately 
impacted because they account for the bulk of lower volume 
contracts. Moreover, small businesses, which generally have fewer 
resources to devote to contract management, will no longer be 
subjected to the complex CSP and PRC pricing disclosure 
requirements.

    The Regulatory Secretariat has submitted a copy of the Final 
Regulatory Flexibility Analysis (FRFA) to the Chief Counsel for 
Advocacy of the Small Business Administration. A copy of the FRFA may 
be obtained from the Regulatory Secretariat.

VIII. Paperwork Reduction Act

    The Paperwork Reduction Act (44 U.S.C. Chapter 35) applies to this 
final rule because it contains information collection requirements. 
Accordingly, the Regulatory Secretariat submitted a request for 
approval of a new information collection requirement concerning this 
rule to the Office of Management and Budget under 44 U.S.C. 3501, et 
seq.
    GSA has increased its burden estimates for the final rule. For the 
proposed rule, GSA chose to estimate the burden for the entire 
population of contracts that may ultimately be affected by this rule. 
However, as this rule will only initially apply to select Schedules and 
SINs under the FSS program on a pilot basis, GSA is now estimating the 
burden impact for vendors participating in the FSS pilot and those 
holding other GSA Governmentwide contracts that may include the 
Transactional Data Reporting clause (552.216-75). Although the burden 
estimates have increased, the final rule will still provide a net 
burden reduction based on the difference between the CSP and PRC 
disclosure requirements and the new reporting requirements (i.e., 
clauses 552.238-74 Alternate I and 552.216-75). An analysis of these 
burden estimates, as well as the underlying assumptions, is presented 
below.

A. New Reporting Requirements

    The new reporting clauses require vendors to report transactional 
data elements such as item descriptions and prices paid to a GSA Web 
site. This data must be reported monthly within 30 calendar days after 
the of each calendar month, meaning vendors will furnish 12 reports 
over the course of a year for each contract containing one of these 
clauses.
    Categorization of Vendors by Monthly Sales Revenue: Transactional 
Data Reporting imposes a progressive burden--one that increases with a 
vendor's sales volume. Monthly reporting times will increase with a 
vendor's applicable sales volume, as vendors with lower to no 
reportable sales will spend little time on monthly reporting, while 
those with more reportable sales with face a higher reporting burden.
    The reporting clauses created by this rule will initially apply to 
a subset of the FSS program on a pilot basis and will be available for 
use for all of GSA's non-FSS Governmentwide IDIQ contracts. The pilot 
population may include up to 4,978 FSS vendors and 537 non-FSS vendors, 
for a total of 5,515 vendors. However, this number may be lower 
depending on the number of FSS vendors that accept the bilateral 
modification to include GSAR clause 552.238-74 Alternate I, or whether 
existing non-FSS Governmentwide contracting programs opt not to use 
GSAR clause 552.216-75.
    GSA separated vendors into categories based on average monthly 
sales volume \205\ in order to account for the differences in reporting 
burden. These categories are:
---------------------------------------------------------------------------

    \205\ Average monthly sales volume was computed by taking a 
vendor's total annual sales volume and dividing it by 12. All FSS 
and non-FSS sales figures are based on FY2015 sales data.
---------------------------------------------------------------------------

     Category 1: No sales activity (average monthly sales of 
$0).
     Category 2: Average monthly sales between $0 and $20,000.
     Category 3: Average monthly sales between $20,000 and 
$200,000.
     Category 4: Average monthly sales between $200,000 and $1 
million.
     Category 5: Average monthly sales over $1 million.
    The distribution by sales category of vendors initially impacted by 
this rule (i.e., the pilot) is as follows:

                                    FSS and Non-FSS Vendors by Sales Category
----------------------------------------------------------------------------------------------------------------
                                                                      Non-FSS         Non-FSS      Total vendor
                                    FSS vendors     FSS vendors       vendors         vendors        count by
                                      (count)      (percentage)       (count)      (percentage)      category
----------------------------------------------------------------------------------------------------------------
Category 1......................           1,343           26.98              31            5.77           1,374
Category 2......................           1,800           36.19              42            7.82           1,842
Category 3......................           1,219           24.49             196           36.50           1,415
Category 4......................             426            8.56             173           32.22             599
Category 5......................             190            3.82              95           17.69             285
                                 -------------------------------------------------------------------------------

[[Page 41133]]

 
    Total.......................           4,978          100.00             537          100.00           5,515
----------------------------------------------------------------------------------------------------------------

    Automated vs. Manual Reporting Systems: Vendors subject to these 
clauses must create systems or processes to produce and report accurate 
data. Generally, vendors will use automated or manual systems to 
identify the transactional data to be reported each month. An automated 
system is one that relies on information technology, such as an 
accounting system or data management software, to identify and compile 
reportable data. These systems can tremendously streamline the 
reporting process but require upfront configuration to perform the 
tasks, such as coding the data elements to be retrieved. Conversely, a 
manual system is one that incorporates little to no automation and 
instead relies on personnel to manually identify and compile the 
reportable data. An example of a manual system would be an accountant 
reviewing invoices to identify the reportable data and then 
transferring the findings to a spreadsheet. In contrast to automation, 
a manual system requires relatively little setup time but the reporting 
effort will generally increase with the vendor's sales volume.
    The likelihood of a vendor adopting an automated system increases 
with their applicable sales volume. Vendors with little to no 
reportable data are unlikely to expend the effort needed to establish 
an automated reporting system since it will be relatively easy to 
identify and report a limited amount of data. In fiscal year 2015, 32 
percent of FSS vendors reported $0 sales, while another 34 percent 
reported average sales between $1 and $20,000 per month. If the rule 
were applied to the entire Schedules program, approximately two-thirds, 
or nearly 11,000 vendors, would have a lower reporting burden. However, 
as a vendor's applicable average monthly sales increase, they will be 
increasingly likely to establish an automated system to reduce the 
monthly reporting burden. Consequently, vendors with higher reportable 
sales will likely bear a higher setup burden to create an automated 
system, or absorb a high monthly reporting burden if they choose to 
rely on manual reporting methods.
    The following chart depicts the likelihood of the pilot population 
of vendors initially impacted by this rule adopting manual and 
automated reporting systems:

                                        Vendors by Reporting System Type
                                             [Manual vs. automated]
----------------------------------------------------------------------------------------------------------------
                                                                     Automated    Manual system--    Automated
                                                   Manual system      system        vendor count     system--
                                                   (percentage)    (percentage)                    vendor count
----------------------------------------------------------------------------------------------------------------
Category 1......................................             100               0           1,374               0
Category 2......................................             100               0           1,842               0
Category 3......................................              90              10           1,274             142
Category 4......................................              50              50             299             300
Category 5......................................              10              90              29             257
                                                                                 -------------------------------
    Total Count of Vendors by System Type.......  ..............  ..............           4,818             698
    Percentage of Vendors by System Type........  ..............  ..............           87.35           12.65
----------------------------------------------------------------------------------------------------------------

    Initial Setup: Vendors complying with this rule will absorb a one-
time setup burden to establish reporting systems. The estimated setup 
time varies between automated and manual reporting systems. Vendors 
implementing a manual system must acclimate themselves with the new 
reporting requirements and train their staff accordingly, while those 
with automated systems must perform these tasks in addition to 
configuring information technology resources. GSA is attributing the 
setup burden by vendor, not by contracts, because a vendor holding 
multiple contracts subject to this rule will likely use a single 
reporting system. GSA estimates the average one-time setup burden is 8 
hours for vendors with a manual system and 240 hours for those with an 
automated system.
    Monthly Reporting: After initial setup, vendors subject to these 
reporting clauses are required to report transactional data within 30 
calendar days after the end of each calendar month. The average 
reporting times vary by system type (manual or automated) and by sales 
category. GSA estimates vendors using a manual system will have average 
monthly reporting times ranging from 15 minutes (0.25 hours) per month 
for vendors with $0 sales, to an average of 48 hours per month for 
vendors with monthly sales over $1 million. On the other hand, GSA 
projects vendors with automated systems will have reporting times of 2 
hours per month, irrespective of monthly sales volume, as a result of 
efficiencies achieved through automated processes.
    The following table shows GSA's projected monthly reporting times 
per sales category and system type:

           Monthly Reporting Hours by System Type and Category
------------------------------------------------------------------------
                                                    Manual     Automated
                                                    systems     systems
------------------------------------------------------------------------
Category 1......................................        0.25        2.00
Category 2......................................        2.00        2.00
Category 3......................................        4.00        2.00
Category 4......................................       16.00        2.00
Category 5......................................       48.00        2.00
------------------------------------------------------------------------

B. Annualized Public Burden Estimates

    The time and cost estimates for vendors initially impacted by the 
rule (i.e., the pilot) include one-time setup and monthly reporting 
burdens to comply with both reporting clauses.

[[Page 41134]]

Cost estimates were calculated by multiplying the estimated burden 
hours by an hourly rate of $68 ($50/hour with a 36 percent overhead 
rate \206\). However, other aspects of the calculation methodology vary 
between FSS and non-FSS vendors:
---------------------------------------------------------------------------

    \206\ The 36 percent overhead rate was used in reference to 
Office of Management and Budget (OMB) Circular No. A-76. Circular A-
76 requires agencies to use standard cost factors to estimate 
certain costs of Government performance. These cost factors 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 cost 
factor for fringe benefits is 36.25 percent; GSA opted to round to 
the nearest whole number for the basis of its burden estimates.
---------------------------------------------------------------------------

     FSS estimates are made on a 20-year contract life cycle 
because the maximum length of an FSS contract is 20 years. The 
estimates include a one-time setup burden for all 4,978 FSS pilot 
vendors in Year 1. For each year thereafter, the estimates include the 
one-time setup burden for new FSS vendors under the pilot Schedules and 
SINs \207\ and the monthly reporting burden for all impacted FSS 
vendors. The total Year 1 hours and costs were added to the aggregate 
hours and costs from Years 2 through 20 to arrive at the total life 
cycle figures, and then those figures were divided by 20 to arrive at 
the average annual figures:
---------------------------------------------------------------------------

    \207\ 1,434 vendors were awarded a total of 1,493 FSS contracts 
in FY2015. The 1,434 figure was used to project the number of new 
vendors each year from Years 2 through 20.
---------------------------------------------------------------------------

    FSS Burden.
    Year 1 Time Burden: 321,064 hours.
    Year 1 Cost: $21,832,365.60.
    Years 2 through 20 Average Annual Time Burden: 175,239 hours.
    Years 2 through 20 Average Annual Cost Burden: $11,916,272.42.
    Total Average Annual Time Burden: 182,531 hours.
    Total Average Annual Cost Burden: $12,412,077.08.
     Non-FSS estimates are made on a 10-year contract life 
cycle because the maximum length of a non-FSS contract is 10 years. The 
estimates include a one-time setup burden for all 537 non-FSS vendors 
in Year 1. For each year thereafter, the estimates only include the 
monthly reporting burden because contracts are typically not added to a 
non-FSS program following the initial awards. The total Year 1 hours 
and costs were added to the aggregate hours and costs from Years 2 
through 10 to arrive at the total life cycle figures, and then those 
figures were divided by 10 to arrive at the average annual figures.
    Non-FSS Burden.
    Year 1 Time Burden: 84,994 hours.
    Year 1 Cost Burden: $5,779,578.40.
    Years 2 through 10 Average Annual Time Burden: 36,247 hours.
    Years 2 through 10 Average Annual Cost Burden: $2,464,768.80.
    Total Average Annual Time Burden: 41,121 hours.
    Total Average Annual Cost Burden: $2,796,249.76.
    Based on this methodology, the average annual time burden for 
vendors initially complying with this rule is 205,900 hours:
    Average Annual Time Burden.
    FSS Pilot Vendors (Clause 552.238-74 Alternate I): 182,531 hours.
    Non-FSS Vendors (Clause 552.216-75): 41,121 hours.
    Total Average Annual Time Burden: 223,652 hours.
    The average annual cost burden for vendors initially complying with 
this rule is $15,208,326.84:
    Average Annual Cost Burden.
    FSS Pilot Vendors (Clause 552.238-74 Alternate I): $12,412,077.08.
    Non-FSS Vendors (Clause 552.216-75): $2,796,249.76.
    Total Average Annual Time Burden: $15,208,326.84.

C. Annualized Federal Government Burden Estimates

    The Government also incurs costs through this rule when collecting 
data and performing quality assurance functions. Cost estimates use an 
hourly rate of $41.48, which is derived from a GS-12, Step 5 salary in 
the Washington, DC locality area.\208\ The burden includes costs 
specific to FSS contracts, non-FSS contracts, and information 
technology systems:
---------------------------------------------------------------------------

    \208\ Office of Personnel Management Salary Table 2015-DCB 
Washington-Baltimore-Northern Virginia, DC-MD-VA-WV-PA, effective 
January 2015.
---------------------------------------------------------------------------

     FSS Contracts: Industrial Operations Analysts (IOAs) 
conduct compliance reviews that include analyzing the completeness and 
accuracy of reported data. IOAs are also responsible for reviewing 
reported data and data corrections, as necessary. IOAs reported 
spending 62,769 hours on compliance reviews in fiscal year 2014. GSA 
personnel spent approximately 1 hour reviewing 2,851 sales adjustments 
over that same time period, a task that has since been transferred to 
IOAs. Therefore, the total time estimate for FSS contracts is 65,620 
hours per year, for an estimated annual cost of $2,721,927.97.
     Non-FSS Contracts: GSA personnel estimated it currently 
takes them an average of 2.5 hours per contract per month to process 
transactional data. Multiplied by the number of applicable non-FSS 
contracts in fiscal year 2015 (537), this equates to 16,110 hours, or 
an estimated annual cost of $668,242.80.
     Information Technology Systems: The system needed to 
collect and process transactional data will cost GSA an average of 
$491,500.00, spread across a 20-year contract life cycle.
    Combining the costs for FSS contracts, non-FSS contracts, and 
information technology systems, the total annualized cost to the 
Government for the reporting clauses would be $3,881,670.77 if the rule 
were implemented across the FSS program.\209\ However, since the rule 
is being implemented for the FSS program on a pilot basis for select 
Schedules and SINs, the initial implementation costs only include a 
share of the full FSS implementation burden. As the pilot contracts 
represented 43.2 percent of the total fiscal year 2015 FSS sales, GSA 
is allocating the same share for the FSS burden relating to IOAs, which 
amounts to $1,175,872.88. As a result, the initial Government burden is 
$2,335,615.68.
---------------------------------------------------------------------------

    \209\ Excluding costs for FSS contracts administered by the 
Department of Veterans Affairs.
---------------------------------------------------------------------------

D. Differences From the Previous Burden Estimates

    Nineteen commenters provided comments related to the compliance 
burden.\210\ Several questioned GSA's burden projections, stating the 
compliance estimates were understated and the projected burden 
reduction was overstated. Multiple commenters stated the Government is 
shifting the burden of gathering transactional data onto vendors, with 
some suggesting the burden will lead to higher prices or that vendors 
should be reimbursed for costs incurred.
---------------------------------------------------------------------------

    \210\ See e.g., ABA Letter, Abt Associates Letter, Allen Letter, 
ARA Letter, CGP Letter, CODSIA Letter, EA Letter, Experian Letter, 
GSA OIG Letter, immixGroup Letter, IOPFDA Letter, Insite.rr.com 
Letter, Johnson & Johnson Letter, NDIA Letter, POGO Letter, RTI 
Letter, SBA Letter, Shepra Letter, SIA Letter.
---------------------------------------------------------------------------

    The proposed rule contained burden estimates in accordance with the 
Paperwork Reduction Act, including a one-time average initial setup 
burden of 6 hours and an average monthly reporting burden of 
approximately .52 of an hour, or 31 minutes. The ongoing reporting 
burden for FSS vendors, following a first-year burden for 
implementation, was estimated to $7.6 million a year. However, the 
proposed rule coupled the new reporting requirements with the removal 
of the PRC tracking customer provision, which was projected to provide 
an estimated burden reduction of approximately $51 million a year if 
the rule were applied

[[Page 41135]]

to the entire GSA Schedules program,\211\ based upon PRC burden 
estimates from the 2012 approval of the information collection tracked 
under OMB Control Number 3090-0235.
---------------------------------------------------------------------------

    \211\ The $51 million burden reduction was the ongoing FSS 
reporting burden ($7.6 million) minus the PRC burden of $58.5 
million from the 2012 PRC information collection (OMB Control Number 
3090-0235). The $7.6 million FSS reporting burden did not include 
the burden for one-time implementation. The $51 million burden 
reduction applied to the entire GSA Schedules program and was not 
adjusted to only account for vendors participating in the FSS pilot.
---------------------------------------------------------------------------

    Coincidentally, GSA began preparing its request to renew 
Information Collection 3090-0235 in the summer of 2015, as it was due 
to be renewed three years after its 2012 approval. While GSA would have 
proceeded with a renewal request regardless, the timing did allow for 
consideration of the Transactional Data Reporting comments. In 
particular, GSA agreed with the general industry comment that the 
burdens of the PRC and CSP are related, and GSA therefore decided to 
include CSP disclosure burden estimates in its information collection 
request. Following two Federal Register notices requesting comments on 
the FSS Pricing Disclosures ICR,\212\ GSA increased its annual burden 
estimates for GSA FSS vendors, including those who would participate in 
the Transactional Data Reporting pilot, from $59 million \213\ to $102 
million.\214\
---------------------------------------------------------------------------

    \212\ See 80 FR 72060 (Nov. 18, 2015) and 81 FR 21346 (Apr. 11, 
2016).
    \213\ 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.
    \214\ The annual public reporting burden for the CSP and PRC, 
excluding FSS vendors participating in the Transactional Data 
Reporting pilot, is $57.66 million. If FSS pilot vendors were still 
subject to the CSP and PRC reporting requirements, the total annual 
public reporting burden would be $101.69 million. The FSS pilot 
vendors' share of the total CSP and PRC reporting burden is based 
upon their share of the GSA FSS fiscal year 2015 sales volume, 43.2 
percent. The annual $44.03 million reporting burden reduction 
attributed to this rule is 43.2 percent of the $101.69 million 
annual reporting burden if it were applied to the entire GSA FSS 
program. More information about Information Collection 3090-0235 can 
be found at https://www.reginfo.gov/public by searching ``ICR'' for 
``3090-0235''.
---------------------------------------------------------------------------

    To address the concerns with the Transactional Data Reporting 
proposed rule burden estimates, GSA reevaluated its methodology and 
substantially increased its burden estimates. For the proposed rule, 
GSA's public burden estimates included an average initial setup time of 
6 hours and average ongoing monthly reporting times ranging from 2 
minutes to 4 hours, depending on a vendor's sales volume.\215\ In 
contrast, the final rule burden estimates include initial average setup 
times of 8 hours for vendors using manual systems and 240 hours for 
vendors using automated systems, and average ongoing monthly reporting 
times ranging from 15 minutes to 48 hours, depending on a vendor's 
sales volume and reporting system type.
---------------------------------------------------------------------------

    \215\ See GSAR Case 2013-G504; Docket 2014-0020; Sequence 1 (80 
FR 11619 (Mar. 4, 2015)).
---------------------------------------------------------------------------

    These higher burden projections, coupled with the increased 
Transactional Data Reporting burden estimates calculated in response to 
the public comments, were a significant concern and reinforced the need 
to pair Transactional Data Reporting with other significant forms of 
burden reductions. Consequently, the FSS Transactional Data Reporting 
clause (552.238-74 Alternate I) is now coupled with the removal of the 
CSP and PRC burdens shown in Information Collection 3090-0235, 
resulting in an overall annual public burden reduction of approximately 
$32 million for the initial implementation of the rule.\216\ 
Furthermore, implementing the FSS pilot without the existing CSP and 
PRC requirements lowers the Government's burden by about $3 million a 
year.\217\
---------------------------------------------------------------------------

    \216\ $32 million does not include costs for non-FSS contracts. 
It is the result of the FSS burden of the initial pilot 
implementation ($12.41 million), minus the share of the combined CSP 
and PRC burden allocated to the FSS pilot vendors ($44.03 million). 
The total CSP and PRC burden from Information Collection 3090-0235, 
if it were applied to all GSA FSS vendors, including those 
participating in the Transactional Data Reporting pilot, would be 
$101.69 million. The share of that burden allocated to the FSS pilot 
vendors ($44.03 million) is based on the percentage of the overall 
FY15 FSS sales accounted for by the FSS pilot vendors (43.2 
percent).
    \217\ $3 million is the result of the Government's annual burden 
for this rule ($2.34 million) minus the share of the combined CSP 
and PRC burden for the Government allocated to the FSS pilot 
contracts ($5.58 million).
---------------------------------------------------------------------------

E. Information Collection Supporting Statement

    Requesters may obtain a copy of the supporting statement from the 
General Services Administration, Regulatory Secretariat Division 
(MVCB), ATTN: Ms. Flowers, 1800 F Street NW., 2nd Floor, Washington, DC 
20407. Please cite OMB Control Number 3090-0306, Transactional Data 
Reporting, in all correspondence.

Exhibit A: List of Comment Letters Received

    Note: The following Exhibit A will not appear in the Code of 
Federal Regulations.

    ABA: Letter from Stuart B. Nibley, Chair, American Bar 
Association, Section of Public Contract Law, May 11, 2015.
    Abt Associates: Letter from Marcia King, Associate Director, 
Contracts, Abt Associates, May 1, 2015.
    Allen: Letter from Larry Allen, President, Allen Federal 
Business Partners, May 4, 2015.
    ARA: Letter from John McClelland, Vice President, Government 
Affairs & Chief Economist, American Rental Association, May 4, 2015.
    Atkins: Letter from Carol Hardaker, Atkins North America, Inc., 
March 11, 2015.
    CODSIA: Letter from Bettie McCarthy, Administrative Officer, 
Council of Defense and Space Industry Associations, on behalf of: R. 
Bruce Josten, Executive Vice President, Government Affairs, Chamber 
of Commerce of the U.S.; A.R. ``Trey'' Hodgkins, III, Senior Vice 
President for the Public Sector, Information Technology Alliance for 
the Public Sector; Will Goodman, Vice President for Policy, National 
Defense Industrial Association; Alan Chvotkin, Executive Vice 
President & Counsel, Professional Services Counsel; May 4, 2015.
    CGP: Letter from Roger Waldron, President, The Coalition for 
Government Procurement, May 4, 2015.
    deMers: Letter from Brad deMers, March 4, 2015.
    EA: Letter from Frank J. Aquino, Vice President and General 
Counsel, EA Engineering, Science, and Technology, Inc., PBC, May 4, 
2015.
    Experian: Letter from Heather Richey, Experian, May 11, 2015.
    Falcone: Letter from Ronald Falcone, May 4, 2015.
    GSA OIG: Letter from Theodore R. Stehney, Assistant Inspector 
General for Auditing, GSA Office of Inspector General, Office of 
Audits, May 4, 2015.
    immixGroup: Letter from Jeffrey Ellinport, Senior Director & 
Deputy General Counsel, immixGroup, May 1, 2015.
    Insite.rr.com: Letter from Randall Sweeney, Insite.rr.com, April 
22, 2015.
    IOPFDA: Letter from Paul Miller, Independent Office Products and 
Furniture Dealers Association, March 30, 2015.
    Johnson & Johnson: Letter from Colleen Menges, Director, 
Government Contracts, Johnson & Johnson Health Care Systems Inc., 
May 4, 2015.
    Lynch: Letter from Rod Lynch, March 4, 2015.
    Macdonald: Letter from J. Ruairi Macdonald, L.L.M. Government 
Procurement Law Candidate, George Washington University Law School, 
May 4, 2015.
    NDIA: Letter from Will Goodman, Vice President for Policy, 
National Defense Industrial Association, April 28, 2015.
    NMFTA: Letter from Paul D. Cullen, Jr. and John R. Bagileo, 
National Motor Freight Traffic Association, Inc., May 11, 2015.
    Perry: Letter from Glenn Perry, Multiple Award Schedule Advisory 
Panel Member and former senior procurement official, April 17, 2015.
    POGO: Letter from Scott H. Amey, General Counsel, Project on 
Government Oversight, May 4, 2015.
    RTI: Letter from Don Enichen, Research Triangle Institute, May 
11, 2015.
    SBA: Letter from Claudia R. Rogers, Acting Chief Counsel for 
Advocacy, and Major L. Clark III, Assistant Chief Counsel for 
Advocacy, U.S. Small Business Administration, Office of Advocacy, 
May 4, 2015.
    Shepra: Letter from Stephen Roadfeldt, Shepra, Inc., April 9, 
2015.

[[Page 41136]]

    SIA: Letter from Don Erickson, CEO, Security Industry 
Association, May 4, 2015.

List of Subjects in 48 CFR Parts 501, 515, 516, 538, and 552

    Government procurement.

    Dated: June 16, 2016.
Jeffrey A. Koses,
Senior Procurement Executive, Office of Acquisition Policy, Office of 
Government-wide Policy.

    For the reasons described in the preamble, GSA amends 48 CFR parts 
501, 515, 516, 538, and 552 as follows:

PART 501--GENERAL SERVICES ADMINISTRATION ACQUISITION REGULATION 
SYSTEM

0
1. The authority citation for 48 CFR part 501 continues to read as 
follows:

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


501.106  [Amended]

0
2. Amend section 501.106 in the table, by--
0
a. Adding in numerical sequence, GSAR Reference ``515.408'' and its 
corresponding OMB Control Number ``3090-0235'';
0
b. Adding in numerical sequence, GSAR Reference ``552.216-75'' and its 
corresponding OMB Control Number ``3090-0306'';
0
c. Removing GSAR Reference ``552.238-74'' and its corresponding OMB 
Control Numbers ``3090-0121'' and ``3090-0250''; and
0
d. Adding in numerical sequence, GSAR Reference ``552.238-74'' and its 
corresponding OMB Control Numbers ``3090-0121'' and ``3090-0306''.

PART 515--CONTRACT BY NEGOTIATION

0
3. The authority citation for 48 CFR part 515 is revised to read as 
follows:

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


0
4. Amend section 515.408 by--
0
a. Revising the introductory text of paragraph (a), and paragraph 
(a)(2);
0
b. Revising the introductory text of paragraphs (b) and (c);
0
c. Revising paragraph (d); and
0
d. Revising the introductory text of paragraph (e) and paragraph 
(e)(1).
    The revisions read as follows:


515.408  Solicitation provisions and contract clauses.

* * * * *
    (a) Use Alternate IV of the FAR provision at 52.215-20, 
Requirements for Cost or Pricing Data or Information Other Than Cost or 
Pricing Data, for MAS solicitations to provide the format for 
submission of information other than cost or pricing data for MAS 
solicitations. To provide uniformity in requests under the MAS program, 
insert the following in paragraph (b) of the provision:
* * * * *
    (2) Commercial sales practices. When the solicitation contains the 
basic clause 552.238-74 Industrial Funding Fee and Sales Reporting, the 
Offeror must submit information in the format provided in this 
solicitation in accordance with the instructions at Figure 515.4-2 of 
the GSA Acquisition Regulation (48 CFR 515.4-2), or submit information 
in the Offeror's own format.
* * * * *
    (b) When the contract contains the basic clause 552.238-74 
Industrial Funding Fee and Sales Reporting, insert the following format 
for commercial sales practices in the exhibits or attachments section 
of the solicitation and resulting contract (see FAR 12.303).
* * * * *
    (c) When the contract contains the basic clause 552.238-74 
Industrial Funding Fee and Sales Reporting, include the instructions 
for completing the commercial sales practices format in Figure 515.4-2 
in solicitations issued under the MAS program.
* * * * *
    (d) When the contract contains the basic clause 552.238-74 
Industrial Funding Fee and Sales Reporting, insert the clause at 
552.215-72, Price Adjustment--Failure to Provide Accurate Information, 
in solicitations and contracts under the MAS program.
* * * * *
    (e) Use Alternate IV of FAR 52.215-21, Requirements for Cost or 
Pricing Data or Information Other Than Cost or Pricing Data--
Modifications, to provide for submission of information other than cost 
or pricing data for MAS contracts. To provide for uniformity in 
requests under the MAS program, insert the following in paragraph (b) 
of the clause:
    (1) Information required by the clause at 552.238-81, Modifications 
(Multiple Award Schedule).
* * * * *

PART 516--TYPES OF CONTRACTS

0
5. The authority citation for 48 CFR part 516 continues to read as 
follows:

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


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


516.506  Solicitation provisions and contract clauses.

* * * * *
    (d) The Contracting Officer may insert clause 552.216-75 in 
solicitations and GSA-awarded IDIQ contracts, not including Federal 
Supply Schedule (FSS) contracts. This clause should be included in all 
GSA-awarded Governmentwide acquisition contracts and multi-agency 
contracts. See 538.273 for clauses applicable to FSS contracts.

PART 538--FEDERAL SUPPLY SCHEDULE CONTRACTING

0
7. The authority citation for 48 CFR part 538 continues to read as 
follows:

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


0
8. Revise section 538.270 to read as follows:


538.270  Evaluation of multiple award schedule (MAS) offers.

0
9. Add section 538.270-1 to read as follows:


538.270-1  Evaluation of offers without access to transactional data.

    (a) Applicability. Utilize this evaluation methodology for 
negotiating MAS offers when the commercial sales practices format is 
included in the solicitation (see 515.408).
    (b) When offerors have commercial catalogs, negotiate concessions 
from established catalogs, including price and non-price terms and 
conditions.
    (c) The Government will seek to obtain the offeror's best price 
(the best price given to the most favored customer). However, the 
Government recognizes that the terms and conditions of commercial sales 
vary and there may be legitimate reasons why the best price is not 
achieved.
    (d) Establish negotiation objectives based on a review of relevant 
data and determine price reasonableness.
    (e) When establishing negotiation objectives and determining price 
reasonableness, compare the terms and conditions of the MAS 
solicitation with the terms and conditions of agreements with the 
offeror's commercial customers. When determining the Government's price 
negotiation objectives, consider the following factors:
    (1) Aggregate volume of anticipated purchases.
    (2) The purchase of a minimum quantity or a pattern of historic 
purchases.
    (3) Prices taking into consideration any combination of discounts 
and concessions offered to commercial customers.
    (4) Length of the contract period.
    (5) Warranties, training, and/or maintenance included in the 
purchase price or provided at additional cost to the product prices.
    (6) Ordering and delivery practices.

[[Page 41137]]

    (7) Any other relevant information, including differences between 
the MAS solicitation and commercial terms and conditions that may 
warrant differentials between the offer and the discounts offered to 
the most favored commercial customer(s). For example, an offeror may 
incur more expense selling to the Government than to the customer who 
receives the offeror's best price, or the customer (e.g., dealer, 
distributor, original equipment manufacturer, other reseller) who 
receives the best price may perform certain value-added functions for 
the offeror that the Government does not perform. In such cases, some 
reduction in the discount given to the Government may be appropriate. 
If the best price is not offered to the Government, you should ask the 
offeror to identify and explain the reason for any differences. Do not 
require offerors to provide detailed cost breakdowns.
    (f) You may award a contract containing pricing which is less 
favorable than the best price the offeror extends to any commercial 
customer for similar purchases if you make a determination that both of 
the following conditions exist:
    (1) The prices offered to the Government are fair and reasonable, 
even though comparable discounts were not negotiated.
    (2) Award is otherwise in the best interest of the Government.
    (g) State clearly in the award document the price/discount 
relationship between the Government and the identified commercial 
customer (or category of customers) upon which the award is based.

0
10. Amend section 538.271 by revising paragraph (a) and removing 
paragraph (c).
    The revision reads as follows:


538.271  MAS contract awards.

    (a) MAS awards will be for commercial items as defined in FAR 
2.101.
* * * * *

0
11. Revise section 538.272 to read as follows:


538.272  MAS price reductions.

    (a) Applicability. This section applies when the contract contains 
the basic clause 552.238-74 Industrial Funding Fee and Sales Reporting.
    (b) The basic clause and Alternate I of 552.238-75, Price 
Reductions, requires the contractor to maintain during the contract 
period the negotiated price/discount relationship (and/or term and 
condition relationship) between the eligible ordering activities and 
the offeror's customer or category of customers on which the contract 
award was predicated (see 538.271(c)). If a change occurs in the 
contractor's commercial pricing or discount arrangement applicable to 
the identified commercial customer (or category of customers) that 
results in a less advantageous relationship between the eligible 
ordering activities and this customer or category of customers, the 
change constitutes a ``price reduction.''
    (c) Ensure that the contractor understands the requirements of 
section 552.238-75 and agrees to report all price reductions to the 
Contracting Officer as provided for in the clause.

0
12. Amend section 538.273 by revising paragraph (b) to read as follows:


538.273  Contract clauses.

* * * * *
    (b) Multiple and single award schedules. Insert the following in 
solicitations and contracts:
    (1) 552.238-74, Industrial Funding Fee and Sales Reporting. Use 
Alternate I for Federal Supply Schedules with Transactional Data 
Reporting requirements. Clause 552.238-75 Alternate II should also be 
used when vendors agree to include clause 552.238-74 Alternate I in the 
contract.
    (2) 552.238-75, Price Reductions. (i) Except in cases where 
Alternate II is used, use Alternate I in solicitations and contracts 
for--
    (A) Federal Supply Schedule 70;
    (B) The Consolidated Schedule containing information technology 
Special Item Numbers;
    (C) Federal Supply Schedule 84; and
    (D) Federal Supply Schedules for recovery purchasing (see 
538.7102).
    (ii) Use Alternate II for Federal Supply Schedules with 
Transactional Data Reporting requirements. This alternate clause is 
used when vendors agree to include clause 552.238-74 Alternate I in the 
contract.
    (3) 552.238-81, Modifications (Federal Supply Schedule). (i) Use 
Alternate I for Federal Supply Schedules that only accept electronic 
modifications.
    (ii) Use Alternate II for Federal Supply Schedules with 
Transactional Data Reporting requirements. This alternate clause is 
used when vendors agree to include clause 552.238-74 Alternate I in the 
contract.

PART 552--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

0
13. The authority citation for 48 CFR part 552 continues to read as 
follows:

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


0
14. Amend section 552.212-71 by revising the date of the clause and 
removing from paragraph (b) ``__552.243-72 Modifications (Multiple 
Award Schedule)'' and adding, in numerical sequence, ``__552.238-81 
Modifications (Multiple Award Schedule)''. The revision reads as 
follows:


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

* * * * *

Contract Terms and Conditions Applicable to GSA Acquisition of 
Commercial Items JUN 2016)

* * * * *

0
15. Add section 552.216-75 to read as follows:


552.216-75  Transactional Data Reporting.

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

Transactional Data Reporting (JUN 2016)

    (a) Definition. Transactional data encompasses the historical 
details of the products or services delivered by the Contractor during 
the performance of task or delivery orders issued against this 
contract.
    (b) Reporting of Transactional Data. The Contractor must report all 
transactional data under this contract as follows:
    (1) The Contractor must electronically report transactional data by 
utilizing the automated reporting system at an Internet Web site 
designated by the General Services Administration (GSA) or by uploading 
the data according to GSA instructions. GSA will post registration 
instructions and reporting procedures on the Vendor Support Center Web 
site, https://vsc.gsa.gov. The reporting system Web site address, as 
well as registration instructions and reporting procedures, will be 
provided at the time of award or inclusion of this clause in the 
contract.
    (2) The Contractor must provide, at no additional cost to the 
Government, the following transactional data elements, as applicable:
    (i) Contract or Blanket Purchase Agreement (BPA) Number.
    (ii) Delivery/Task Order Number/Procurement Instrument Identifier 
(PIID).
    (iii) Non Federal Entity.
    (iv) Description of Deliverable.
    (v) Manufacturer Name.
    (vi) Manufacturer Part Number.
    (vii) Unit Measure (each, hour, case, lot).
    (viii) Quantity of Item Sold.

[[Page 41138]]

    (ix) Universal Product Code.
    (x) Price Paid per Unit.
    (xi) Total Price.
    Note to paragraph (b)(2): The Contracting Officer may add data 
elements to the standard elements listed in paragraph (b)(2) of this 
section with the approvals listed in GSAM 507.105(c)(3).
    (3) The Contractor must report transactional data within 30 
calendar days from the last calendar day of the month. If there was no 
contract activity during the month, the Contractor must submit a 
confirmation of no reportable transactional data within 30 calendar 
days of the last calendar day of the month.
    (4) The Contractor must report the price paid per unit, total 
price, or any other data elements with an associated monetary value 
listed in (b)(2) of this section, in U.S. dollars.
    (5) The Contractor must maintain a consistent accounting method of 
transactional data reporting, based on the Contractor's established 
commercial accounting practice.
    (6) Reporting Points. (i) The acceptable points at which 
transactional data may be reported include--
    (A) Issuance of an invoice; or
    (B) Receipt of payment.
    (ii) The Contractor must determine whether to report transactional 
data on the basis of invoices issued or payments received.
    (7) The Contractor must continue to furnish reports, including 
confirmation of no transactional data, through physical completion of 
the last outstanding task or delivery order issued against the 
contract.
    (8) Unless otherwise expressly stated by the ordering activity, 
orders that contain classified information or other information that 
would compromise national security are exempt from this reporting 
requirement.
    (9) This clause does not exempt the Contractor from fulfilling 
existing reporting requirements contained elsewhere in the contract.
    (10) GSA reserves the unilateral right to change reporting 
instructions following 60 calendar days' advance notification to the 
Contractor.
    (c) Contract Access Fee (CAF). (1) GSA's operating costs are 
reimbursed through a CAF charged on orders placed against this 
contract. The CAF is paid by the ordering activity but remitted to GSA 
by the Contractor. GSA has the unilateral right to change the fee 
structure at any time, but not more than once per year; GSA will 
provide reasonable notice prior to the effective date of any change.
    (2) Within 60 calendar days of award or inclusion of this clause in 
the contract, a GSA representative will provide the Contractor with 
specific written procedural instructions on remitting the CAF, 
including the deadline by which the Contractor must remit the CAF. The 
deadline specified in the written procedural instructions will be no 
less than 30 calendar days after the last calendar day of the month. 
GSA reserves the unilateral right to change remittance instructions 
following 60 calendar days' advance notification to the Contractor.
    (3) The Contractor must remit the CAF to GSA in U.S. dollars.
    (4) The Contractor's failure to remit the full amount of the CAF 
within the specified deadline constitutes a contract debt to the United 
States Government under the terms of FAR Subpart 32.6. The Government 
may exercise all rights under the Debt Collection Improvement Act of 
1996, including withholding or offsetting payments and interest on the 
debt (see FAR clause 52.232-17, Interest). If the Contractor fails to 
submit the required sales reports, falsifies them, or fails to timely 
pay the CAF, these reasons constitute sufficient cause for the 
Government to terminate the contract for cause.


(End of Provision)


0
16. Amend section 552.238-74 by adding Alternate I to read as follows:


552.238-74  Industrial Funding Fee and Sales Reporting.

* * * * *
    Alternate I ([Insert abbreviated month and year of publication in 
the Federal Register.]): As prescribed in 538.273(b)(1), substitute the 
following paragraphs (a), (b), (c), and (d) for paragraphs (a), (b), 
(c), and (d) of the basic clause:
    (a) Definition. Transactional data encompasses the historical 
details of the products or services delivered by the Contractor during 
the performance of task or delivery orders issued against this 
contract.
    (b) Reporting of Transactional Data. The Contractor must report all 
transactional data under this contract as follows:

    (1) The Contractor must electronically report transactional data 
by utilizing the automated reporting system at an Internet Web site 
designated by the General Services Administration (GSA) or by 
uploading the data according to GSA instructions. GSA will post 
registration instructions and reporting procedures on the Vendor 
Support Center Web site, https://vsc.gsa.gov. The reporting system 
Web site address, as well as registration instructions and reporting 
procedures, will be provided at the time of award or inclusion of 
this clause in the contract.

    (2) The Contractor must provide, at no additional cost to the 
Government, the following transactional data elements, as applicable:
    (i) Contract or Blanket Purchase Agreement (BPA) Number.
    (ii) Delivery/Task Order Number/Procurement Instrument Identifier 
(PIID).
    (iii) Non Federal Entity.
    (iv) Description of Deliverable.
    (v) Manufacturer Name.
    (vi) Manufacturer Part Number.
    (vii) Unit Measure (each, hour, case, lot).
    (viii) Quantity of Item Sold.
    (ix) Universal Product Code.
    (x) Price Paid per Unit.
    (xi) Total Price.
    Note to paragraph (b)(2): The Contracting Officer may add data 
elements to the standard elements listed in paragraph (b)(2) of this 
section with the approvals listed in GSAM 507.105(c)(3).
    (3) The contractor must report transactional data within 30 
calendar days from the last calendar day of the month. If there was no 
contract activity during the month, the Contractor must submit a 
confirmation of no reportable transactional data within 30 calendar 
days of the last calendar day of the month.
    (4) The Contractor must report the price paid per unit, total 
price, or any other data elements with an associated monetary value 
listed in (b)(2) of this section, in U.S. dollars.
    (5) The reported price paid per unit and total price must include 
the Industrial Funding Fee (IFF).
    (6) The Contractor must maintain a consistent accounting method of 
transactional data reporting, based on the Contractor's established 
commercial accounting practice.
    (7) Reporting Points. (i) The acceptable points at which 
transactional data may be reported include--
    (A) Issuance of an invoice; or
    (B) Receipt of payment.
    (ii) The Contractor must determine whether to report transactional 
data on the basis of invoices issued or payments received.
    (8) The Contractor must continue to furnish reports, including 
confirmation of no transactional data, through physical completion of 
the last outstanding task or delivery order of the contract.
    (9) Unless otherwise expressly stated by the ordering activity, 
orders that contain classified information or other or information that 
would compromise national security are exempt from this reporting 
requirement.
    (10) This clause does not exempt the Contractor from fulfilling 
existing

[[Page 41139]]

reporting requirements contained elsewhere in the contract.
    (11) GSA reserves the unilateral right to change reporting 
instructions following 60 calendar days' advance notification to the 
Contractor.
    (c) Industrial Funding Fee (IFF). (1) This contract includes an IFF 
charged on orders placed against this contract. The IFF is paid by the 
authorized ordering activity but remitted to GSA by the Contractor. The 
IFF reimburses GSA for the costs of operating the Federal Supply 
Schedule program, as set forth in 40 U.S.C. 321: Acquisition Services 
Fund. Net operating revenues generated by the IFF are also applied to 
fund initiatives benefitting other authorized GSA programs, in 
accordance with 40 U.S.C. 321.
    (2) GSA has the unilateral right to change the fee amount at any 
time, but not more than once per year; GSA will provide reasonable 
notice prior to the effective date of any change. GSA will post notice 
of the current IFF on the Vendor Support Center Web site at https://vsc.gsa.gov.
    (3) Offerors must include the IFF in their prices. The fee is 
included in the awarded price(s) and reflected in the total amount 
charged to ordering activities. The fee will not be included in the 
price of non-contract items purchased pursuant to a separate 
contracting authority, such as a Governmentwide Acquisition Contract 
(GWAC); a separately awarded Federal Acquisition Regulation (FAR) Part 
12, FAR Part 13, FAR Part 14, or FAR Part 15 procurement; or a non-FAR 
contract.
    (4) The Contractor must remit the IFF to GSA in U.S. dollars within 
30 calendar days after the last calendar day of the reporting quarter; 
final payment must be remitted within 30 calendar days after physical 
completion of the last outstanding task order or delivery order issued 
against the contract.
    (5) GSA reserves the unilateral right to change remittance 
instructions following 60 calendar days' advance notification to the 
Contractor.
    (d) The Contractor's failure to remit the full amount of the IFF 
within 30 calendar days after the end of the applicable reporting 
period constitutes a contract debt to the United States Government 
under the terms of FAR Subpart 32.6. The Government may exercise all 
rights under the Debt Collection Improvement Act of 1996, including 
withholding or offsetting payments and interest on the debt (see FAR 
clause 52.232-17, Interest). If the Contractor fails to submit the 
required transactional data reports, falsifies them, or fails to timely 
pay the IFF, these reasons constitute sufficient cause for the 
Government to terminate the contract for cause.

0
17. Amend section 552.238-75 by adding Alternate II to read as follows:


552.238-75  Price Reductions.

* * * * *
    Alternate II ([Insert abbreviated month and year of publication in 
the Federal Register.]). As prescribed in 538.273(b)(2)(ii), substitute 
the following paragraphs (a) and (b) for paragraphs (a), (b), (c), (d), 
(e), (f) and (g) of the basic clause:
    (a) The Government may request from the Contractor, and the 
Contractor may provide to the Government, a temporary or permanent 
price reduction at any time during the contract period.
    (b) The Contractor may offer the Contracting Officer a voluntary 
price reduction at any time during the contract period.

0
18. Amend section 552.238-81 by--
0
a. In Alternate I, revising the date of the alternate and the 
introductory text; and
0
b. Adding Alternate II.
    The revisions and addition read as follows:


552.238-81  Modification (Federal Supply Schedule).

* * * * *
    Alternate I ([Insert abbreviated month and year of publication in 
the Federal Register.]). As prescribed in 538.273(b)(3)(i), add the 
following paragraph (f) to the basic clause:
* * * * *
    Alternate II ([Insert abbreviated month and year of publication in 
the Federal Register.]). As prescribed in 538.273(b)(3)(ii), substitute 
the following paragraph (b) for paragraph (b) of the basic clause:
    (b) Types of Modifications.
    (1) Additional items/additional SINs. When requesting additions, 
the Contractor must submit the following information:

    (i) Information about the new item(s) or the item(s) under the 
new SIN(s) must be submitted in accordance with the instructions in 
the solicitation.
    (ii) Delivery time(s) for the new item(s) or the item(s) under 
the new SIN(s) must be submitted in accordance with the request for 
proposal.
    (iii) Production point(s) for the new item(s) or the item(s) 
under the new SIN(s) must be submitted if required by FAR 52.215-6, 
Place of Performance.
    (iv) Hazardous Material information (if applicable) must be 
submitted as required by FAR 52.223-3 (Alternate I), Hazardous 
Material Identification and Material Safety Data.
    (v) Any information requested by FAR 52.212-3(f), Offeror 
Representations and Certifications-Commercial Items, that may be 
necessary to assure compliance with FAR 52.225-1, Buy American Act-
Balance of Payments Programs-Supplies.
    (2) Deletions. The Contractor must provide an explanation for 
the deletion. The Government reserves the right to reject any 
subsequent offer of the same item or a substantially equal item at a 
higher price during the same contract period, if the Contracting 
Officer determines that the higher price is unreasonable compared to 
the price of the deleted item.

[FR Doc. 2016-14728 Filed 6-22-16; 8:45 am]
 BILLING CODE 6820-61-P