General Services Administration Acquisition Regulation; Submission for OMB Review; Transactional Data Reporting, 51573-51578 [2019-21254]

Download as PDF Federal Register / Vol. 84, No. 189 / Monday, September 30, 2019 / Notices Mr. Matthew McFarland, Office of Acquisition Policy, 301–758–5880 or matthew.mcfarland@gsa.gov. SUPPLEMENTARY INFORMATION: FOR FURTHER INFORMATION CONTACT: GENERAL SERVICES ADMINISTRATION [OMB Control No. 3090–0306; Docket No. 2019–0001; Sequence No. 4] General Services Administration Acquisition Regulation; Submission for OMB Review; Transactional Data Reporting Office of Acquisition Policy, General Services Administration (GSA). ACTION: Notice of request for comments regarding an extension to an existing OMB clearance. AGENCY: Under the provisions of the Paperwork Reduction Act, the Regulatory Secretariat Division is submitting a request to the Office of Management and Budget (OMB) to review and approve an extension of a previously approved information collection requirement regarding General Services Administration Acquisition Regulation (GSAR) clauses related to Transactional Data Reporting. GSA uses this information to establish price reasonableness on certain Government-wide contracts, inform category management activities, collect fees due from buying agencies, and administer the respective programs. DATES: Submit comments on or before: October 30, 2019. ADDRESSES: Submit comments identified by Information Collection 3090–0306, Transactional Data Reporting, by any of the following methods: • Regulations.gov: http:// www.regulations.gov. Submit comments via the Federal eRulemaking portal by searching the OMB control number. Select the link ‘‘Submit a Comment’’ that corresponds with ‘‘Information Collection 3090–0306, Transactional Data Reporting.’’ Follow the instructions provided at the ‘‘Submit a Comment’’ screen. Please include your name, company name (if any), and ‘‘Information Collection 3090–0306, Transactional Data Reporting’’ on your attached document. • Mail: General Services Administration, Regulatory Secretariat Division (MVCB), 1800 F Street NW, Washington, DC 20405. ATTN: Ms. Mandell/IC 3090–0306, Transactional Data Reporting. Instructions: Please submit comments only and cite Information Collection 3090–0306, Transactional Data Reporting, in all correspondence related to this collection. All comments received will be posted without change to http://www.regulations.gov, including any personal and/or business confidential information provided. khammond on DSKJM1Z7X2PROD with NOTICES SUMMARY: VerDate Sep<11>2014 19:16 Sep 27, 2019 Jkt 247001 A. Purpose Transactional data is generated when a transaction is made between a buyer and seller and shows details of transactions at the line-item level, such as descriptions, quantities, and the prices paid for the items purchased. The Government is increasingly using this data to gain insight into its purchasing patterns, allowing it to identify the most efficient solutions, channels, and sources to meet its mission critical needs. This data is particularly critical to the Government’s use of category management, the business practice of buying common goods and services as an enterprise to eliminate redundancies, increase efficiency, and deliver more value and savings from acquisition programs. Moreover, individual buyers benefit from this data when conducting market research, price analysis, and negotiations. Transactional data is typically possessed by the buyer and seller in a transaction. On the Government (buyer) side, this data is often found in contract writing systems and financial systems. However, these systems are not shared across agencies; in fact, some agencies use multiple versions of these systems. Hence, no mechanism currently exists to compile and analyze transactional data from a wide-range of purchases made across the Government. GSA sought to improve the Government’s access to this data through the Transactional Data Reporting (TDR) final rule, published on June 23, 2016.1 The rule amended the General Services Administration Acquisition Regulation (GSAR) by establishing two contract clauses requiring contractors to report transactional data from orders placed against GSA’s Government-wide contract vehicles: • Alternate I of GSAR clause 552.238–80 Industrial Funding Fee and Sales Reporting has been introduced to the Federal Supply Schedule (FSS) program on a pilot basis, along with corresponding reductions to existing pricing disclosure requirements. • GSAR clause 552.216–75 Transactional Data Reporting is applicable to GSA’s Government-wide Acquisition Contract (GWAC) and other Government-wide indefinite-delivery indefinite-quantity (IDIQ) contract 1 See GSAR Case 2013–G504; Docket 2014–0020; Sequence 1 [81 FR 41104 (June 23, 2016)]. PO 00000 Frm 00066 Fmt 4703 Sfmt 4703 51573 vehicles established after June 23, 2016.2 As of May 2019, Alliant 2 (unrestricted) is the only vehicle in this class that has been required to, and is using, the TDR clause. This information collection primarily applies to GSA’s FSS contracts, commonly known as GSA Schedules or Multiple Award Schedules (MAS). These Government-wide contracts provide federal agencies with a simplified process for acquiring commercial supplies and services. The GSA FSS program is the Government’s preeminent commercial contracting vehicle, accounting for about 10 percent of all federal contract dollars with approximately $33 billion of purchases made through the program in fiscal year 2018. GSA establishes the pricing and terms of each GSA Schedule contract with its contract holders. Federal agencies then follow GSA’s competitive procedures when placing orders against these contracts and thereby satisfy statutory competition requirements to provide ‘‘the lowest overall cost alternative to meet the needs of the Federal Government.’’ 3 In turn, those agencies must pay an Industrial Funding Fee (IFF) that covers GSA’s costs of operating the FSS program. The fee is currently set at 0.75 percent and is included in the prices ordering activities pay contractors when purchasing from an FSS contract.4 FSS contractors then report GSA Schedule sales data and remit the IFF collected from ordering activities to GSA once a quarter. There were a total of 16,215 FSS contracts in fiscal year 2018. This information collection pertains to the 2,063 contracts that participated in the TDR pilot. The remaining 14,152 contracts are subject to legacy sales reporting requirements and pricing disclosure requirements associated with Commercial Sales Practices (CSP) and GSAR clause 552.238–81 Price Reductions, otherwise known as the Price Reductions Clause (PRC); those requirements are accounted for under separate information collection identified by OMB control number 3090–0235.5 2 The rule does not apply to FSS contracts administered by the Department of Veterans Affairs. 3 41 U.S.C. 152(3)(B) requires FSS ordering procedures to ‘‘result in the lowest overall cost alternative to meet the needs of the Federal Government.’’ 4 The IFF for Schedule 599, Special Item Number 599–2 is $1.50 per transaction. 5 The PRC was formerly found at GSAR 552.238– 75 but was amended to GSAR 552.238–81 per GSAR case 2016–G502, effective May 23, 2019. See 84 FR 17030 from April 23, 2019. E:\FR\FM\30SEN1.SGM 30SEN1 51574 Federal Register / Vol. 84, No. 189 / Monday, September 30, 2019 / Notices khammond on DSKJM1Z7X2PROD with NOTICES GSA believes TDR offers a meaningful burden reduction for FSS contractors. GSA estimates the combined burden of this information collection is 50 percent less per contract than the legacy sales reporting requirements and CSP and PRC disclosures associated with OMB control number 3090–0235. GSA estimates if all FSS contractors participated in TDR, they would realize an estimated annual burden reduction of $64.6 million.6 On the other hand, GSA estimates ending the FSS pilot will cost participating contractors nearly $22.6 million and GSA approximately $3 million to transition to the legacy sales reporting and CSP and PRC disclosure requirements unless an alternate method is created to collect the IFF, monitor program sales and establish and monitor contract pricing.7 The Paperwork Reduction Act generally requires information collections to be renewed every three years.8 Both this information collection (OMB control number 3090–0306) and the information collection associated with legacy sales reporting and CSP and PRC disclosure requirements (OMB control number 3090–0235) were last approved in 2016, so GSA is now obtaining extensions to both information collections.9 6 The estimated burden for this information collection, which applied to the 14,152 contracts not participating in the TDR pilot, is estimated to be $128 million. This equates to a per-contract burden of $9,049/year. The estimated burden for the TDR information collection is $9.2 million/year for the 2,063 contracts participating in the FSS pilot; this equates to a per-contract the burden of $4,483/ year. The estimated $64.6 million/year burden reduction is calculated by taking the updated 3090– 0235 burden estimate ($128 million/year) and subtracting the product of the number of contracts included in 3090–0235 multiplied by the average per-contract burden of TDR (14,152 contracts × $4,483), which equals $63.4 million/year ($128M¥$63.4M = $64.6M). More information about the FSS Pricing Disclosures and Sales Reporting can be found under Information Collection 3090–0235 at http://www.reginfo.gov/ public by searching ‘‘ICR’’ for ‘‘3090–0235’’. 7 Vendors transitioning back to the CSP/PRC framework would have to submit CSPs to establish basis of award pricing. As of December 2018, 2,158 contractors were participating in the TDR pilot. Using the framework for new offer CSPs in this information collection, 2,158 new offer CSPs would equate to a burden of $19.5 million. This same framework would show increased costs of $3 million for GSA to process 2,158 new offer CSPs. Additionally, these contractors would also need to establish sales tracking systems to comply with the sales reporting requirements of the basic version of GSAR clause 552.238–80. Using the sales reporting cost estimation framework for establishing new systems from OMB control number 3090–0235, this would cost these contractors $3.1 million. 8 44 U.S.C. 3507(g). 9 GSA is consolidating a separate information collection for IFF and sales reporting (OMB control number 3090–0121) with the pricing disclosures information collection (OMB control number 3090– 0235) because the burdens are interdependent. VerDate Sep<11>2014 19:16 Sep 27, 2019 Jkt 247001 This request for comments only pertains to the information collection requirements associated with TDR (OMB control number 3090–0306). GSA has also published a separate notice requesting comments on the information collection associated with legacy sales reporting and CSP and PRC disclosure requirements (OMB control number 3090–0235) elsewhere in this issue of the Federal Register. Information Collection Changes and Updates Adjustments for Actual Number of Contracts: The TDR pilot had yet to launch when these burden estimates were previously calculated in 2016, so GSA based its estimates for the number of contracts that would participate on the total number of contracts under the Schedules and Special Item Numbers eligible for the pilot: • The ratio of GSA Schedule contracts that would continue to require legacy sales reporting and CSP and PRC disclosures was estimated to be 56.8 percent, which was based on the percentage of the program’s sales in fiscal year 2015 for contracts that would not be eligible to participate in the TDR pilot. • The ratio of GSA Schedule contracts slated to be included in the TDR pilot was estimated to account for the remaining 43.2 percent. However, pilot participation became optional in 2017 and the number of contracts that eventually joined the pilot was far lower than anticipated in 2016. Of the 16,215 contracts that were active in FY 2018— • 14,152 contracts, or 87.28 percent of the total, were required to conduct legacy sales reporting and provide CSP and PRC disclosures. • 2,063 contracts, or 12.72 percent of the total, participated in the TDR pilot. Additionally, only one non-FSS contract vehicle, Alliant 2 (unrestricted), currently uses the nonFSS TDR clause. The last revision of these burden estimates relied upon the total number of non-FSS contracts (537) that would be eligible had they been awarded after the TDR rule was promulgated. As a result, the number of non-FSS contracts was lowered from 537 to the actual number of contracts using the applicable clause, 53. Accordingly, the revised participation figures resulted in significantly lower burden estimates for this information collection. On the other hand, the FSS pilot participation revisions resulted in significantly higher burden estimates for the information collection accounting for CSP and PRC disclosures and legacy PO 00000 Frm 00067 Fmt 4703 Sfmt 4703 sales reporting (OMB Control Number 3090–0235). Revised Labor Rates: The previous burden estimates used a fully burdened labor rate of $68/hour. This included a $50/hour base rate, which was based on professional judgment, and 36 percent for fringe benefits, which was rounded down from the 36.25 percent fringe benefit factor included in OMB Circular A–76. The revised burden estimates attempt to align with the Department of Defense’s Regulatory Cost Analysis Tool (RCAT), which was developed to prepare economic analyses in compliance with Executive Order 13771 and uses various Government labor category rates as the basis for cost estimates. As such, GSA determined— • The GS–12, Step 5 labor rate from the RCAT ($55.19/hour) was the most appropriate for the tasks performed by contractors to comply with monthly reporting requirements; and • The GS–14, Step 5 labor rate from the RCAT ($77.25/hour) was the most appropriate for the tasks performed by contractors to comply with the initial setup. B. Annual Reporting Burden This information collection applies to GSA FSS contracts that include GSAR clauses 552.216–75 Transactional Data Reporting and 552.238–80 Industrial Funding Fee and Sales Reporting, Alternate I. In FY 2018, contractors held 53 Alliant 2 contracts subject to clause 552.216–75 and 2,063 GSA FSS contracts subject to Alternate I of GSAR clause 552.238–80. Both clauses require contractors to report the data elements outlined in each clause, such as item descriptions and prices paid, to a GSA website. This data must be reported monthly within 30 calendar days after the end of each calendar month, meaning contractors will furnish 12 reports over the course of a year for each contract containing one of these clauses. Vendors also remit applicable fees, such as the IFF for Schedule contracts, when submitting these reports. Cost Burden Calculation The two primary activities associated with this information collection are the initial setup and monthly reporting. GSA calculated the cost burden for each as follows: • Initial Setup: The duties required for these activities will generally be completely by a senior-level subject matter expert. For the purposes of establishing an hourly rate, GSA equates these duties to those of a GS–14, Step 5 employee, whose hourly rate in 2019 for the ‘‘Rest of U.S.’’ locality is $56.92 E:\FR\FM\30SEN1.SGM 30SEN1 51575 Federal Register / Vol. 84, No. 189 / Monday, September 30, 2019 / Notices an hour.10 When factoring a 36.25 percent overhead rate for fringe benefits, the fully burdened rate is $77.55 an hour.11 • Quarterly Reporting: The duties required for these activities will generally be completed by mid-level personnel. For the purposes of establishing an hourly rate, GSA equates these duties to those of a GS–12, Step 5 employee, whose hourly rate in 2019 for the ‘‘Rest of U.S.’’ locality is $40.51 an hour. When factoring a 36.25 percent overhead rate for fringe benefits, the fully burdened rate is $55.19 an hour. Categorization of Vendors by Monthly Sales Revenue: TDR imposes a progressive burden—one that increases with a contractor’s sales volume. Monthly reporting times increase with a contractor’s applicable sales volume, as contractors with lower to no reportable sales spend relatively little time on monthly reporting, while those with more reportable sales with face a higher reporting burden. GSA separated contractors into categories based on annual sales volume in order to account for the differences in reporting burden. These categories are: • Category 1: No sales activity (annual of $0) • Category 2: Annual sales between $0 and $25,000 • Category 3: Annual sales between $25,000 and $250,000 • Category 4: Annual sales between $250,000 and $1 million • Category 5: Annual sales over $1 million The distribution of contractors by sales category is as follows: FSS AND NON-FSS VENDORS BY SALES CATEGORY FSS vendors (count) Category Category Category Category Category 1 2 3 4 5 FSS vendors (percentage) Non-FSS vendors (count) Non-FSS vendors (percentage) Total vendor count by category ........................................................................... ........................................................................... ........................................................................... ........................................................................... ........................................................................... 318 197 619 407 522 15 10 30 20 25 37 0 0 2 14 70 0 0 4 26 355 197 619 409 536 Total .............................................................................. 2,063 100 53 100 2,116 Automated vs. Manual Reporting Systems: Vendors subject to these clauses must create systems or processes to produce and report accurate data. Generally, contractors 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 contractor’s sales volume. The likelihood of a contractor 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 2018, 15 percent of FSS contracts in the TDR pilot had $0 sales, while another 10 percent reported annual sales between $1 and $25,000 per month. However, as a contractor’s applicable average monthly sales increase, it will be increasingly likely to establish an automated system to reduce the monthly reporting burden. Consequently, contractors 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 current population adopting manual and automated reporting systems: VENDORS BY REPORTING SYSTEM TYPE (MANUAL VS. AUTOMATED) Manual system (percentage) khammond on DSKJM1Z7X2PROD with NOTICES Category Category Category Category Category 1 2 3 4 5 Automated system (percentage) Manual system— vendor count Automated system— vendor count ....................................................................................................... ....................................................................................................... ....................................................................................................... ....................................................................................................... ....................................................................................................... 100 100 90 50 10 0 0 10 50 90 355 197 557 205 54 0 0 62 205 482 Total Count of Vendors by System Type ................................................. ........................ ........................ 1,367 749 10 General Schedule (GS) labor rates may be viewed on the Office of Personnel Management (OPM) under Pay & Leave: Salaries and Wages, SALARY TABLE 2019–RUS at https:// www.opm.gov/policy-data-oversight/pay-leave/ VerDate Sep<11>2014 19:16 Sep 27, 2019 Jkt 247001 salaries-wages/salary-tables/19Tables/html/RUS_ h.aspx. 11 36.25% 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 PO 00000 Frm 00068 Fmt 4703 Sfmt 4703 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. E:\FR\FM\30SEN1.SGM 30SEN1 51576 Federal Register / Vol. 84, No. 189 / Monday, September 30, 2019 / Notices VENDORS BY REPORTING SYSTEM TYPE (MANUAL VS. AUTOMATED)—Continued Percentage of Vendors by System Type ........................................................ Manual system (percentage) Automated system (percentage) ........................ ........................ for all pilot contracts (64% manual, 36% automated). The initial setup burden for those contracts is illustrated below: Initial Setup Annual Burden (Hours): 34,412 Annual Burden (Cost): $2,668,613 Transactional data was reported for 2,063 FSS contracts in FY 2018. As previously noted, the reporting burden for contractors using manual systems increases with their reported sales, while the reporting burden for contractors using automated systems remains constant regardless of the reported sales volume. The reporting burden for those contracts is illustrated below: Quarterly Reporting Annual Burden (Hours): 119,207 Annual Burden (Cost): $6,579,023 Non-FSS Burden Estimates: The only non-FSS contract vehicle currently using the clause is the Alliant 2 unrestricted contract. 53 Alliant 2 contracts were awarded in FY 2018, meaning each of the contract holders incurred initial setup costs. The initial setup burden was split between manual and automated systems, the number of which was estimated based on the ratio for the Alliant 2 contracts (74% manual, 26% automated). The initial setup burden for those contracts is illustrated below: Initial Setup Annual Burden (Hours): 3,672 Annual Burden (Cost): $284,764 As previously noted, the reporting burden for contractors using manual MONTHLY REPORTING HOURS BY systems increases with their reported sales while the reporting burden for SYSTEM TYPE AND CATEGORY contractors using automated systems Manual Automated remains constant regardless of the systems systems reported sales volume. The reporting burden for those contracts is as follows: Category 1 ........ 0.25 2.00 Category 2 ........ 2.00 2.00 Quarterly Reporting Annual Burden (Hours): 1,445 Category 3 ........ 4.00 2.00 Annual Burden (Cost): $79,772 Category 4 ........ 16.00 2.00 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 estimates the average one-time setup burden is 8 hours for contractors with a manual system and 240 hours for those with an automated system. Monthly Reporting: After initial setup, contractors subject to these clauses are required to report sales 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 categories. GSA estimates contractors using a manual system will have average monthly reporting times ranging from 15 minutes (0.25 hours) for contractors with $0 sales to an average of 48 hours for contractors with monthly sales over $1 million. On the other hand, GSA projects contractors 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: khammond on DSKJM1Z7X2PROD with NOTICES Category 5 ........ 48.00 2.00 FSS Burden Estimates: A total of 376 FSS contracts joined the TDR pilot in FY 2018, including 139 newly awarded contracts and 237 existing contracts that voluntarily joined the pilot. The initial setup burden was split between manual and automated systems, the number of which was estimated based on the ratio VerDate Sep<11>2014 19:16 Sep 27, 2019 Jkt 247001 Total Annual Burden The total estimated burden imposed by TDR is as follows: Estimated Annual Time Burden (Hours) FSS Vendors: 153,619 Non-FSS Vendors: 5,117 Total Annual Time Burden: 158,736 Estimated Annual Cost Burden FSS Vendors: $9,247,636 PO 00000 Frm 00069 Fmt 4703 Sfmt 4703 Manual system— vendor count 65 Automated system— vendor count 35 Non-FSS Vendors: $364,535 Total Annual Cost Burden: $9,612,171 C. Public Comments An initial notice of request for comments regarding the extension of this information collection was published in the Federal Register at 84 FR 24512 on May 28, 2019. GSA sought comments regarding (1) whether this information collection is necessary and has practical utility, and (2) if GSA’s estimate of the collection burden is accurate, and based on valid assumptions and methodology. In response, GSA received comment letters from immixGroup, Inc. (immixGroup), the GSA Office of Inspector General (GSA OIG, and the Coalition for Government Procurement (The Coalition). immixGroup’s letter, dated July 24, 2019, addressed this information collection. The GSA OIG’s letter, dated July 26, 2019, expressly provided comments for this information collection and the FSS Pricing Disclosures and Sales Reporting information collection (OMB control number 3090–0235). The Coalition’s letter, dated July 29, 2019, is limited to this information collection, although they provided a separate letter with comments on the FSS Pricing Disclosures and Sales Reporting information collection (OMB control number 3090–0235). GSA is providing responses to FSS Pricing Disclosures and Sales Reporting in documents associated with the extension of that information collection (OMB control number 3090–0235). The following are summaries of the respondents’ comments related to this information collection, grouped by subject matter, and GSA’s responses: Burden Estimates Comments: immixGroup and the Coalition commented on GSA’s burden estimates. immixGroup stated the initial setup took about half the time estimated by GSA and noted it takes them four hours to complete monthly reporting requirements. The Coalition, on the other hand, stated three of GSA’s reporting burden assumptions are invalid— • The monthly reporting burden for TDR is largely alleviated through E:\FR\FM\30SEN1.SGM 30SEN1 khammond on DSKJM1Z7X2PROD with NOTICES Federal Register / Vol. 84, No. 189 / Monday, September 30, 2019 / Notices automated systems: The Coalition stated they conducted a survey among their members in 2015 and the respondents, all of which would fall into GSA’s Category 5 of contractors (Schedule sales over $1 million), estimated the monthly reporting burden to be 68 hours, even when using automated systems. • Contractor employees responsible for the initial setup are paid at a fully burdened labor rate of $77.55/hour: The Coalition estimated this cost to be an average of $140/hour. • The number of companies accepting TDR will remain constant year to year: The Coalition noted GSA is currently consolidating the Schedules into a single solicitation; if the current scope of the pilot remains unchanged, this would allow almost 400 more contractors to join the pilot. GSA Response: GSA believes its burden estimates are valid and the comments underscore the fact that the burden varies widely by contractor, which is why GSA separated the reporting burden by sales volume and reporting system (automated vs. manual). GSA’s estimates for the automated and manual categories are intended to be an average within that category. For example, immixGroup holds 2 of the 12 pilot contracts with FY 2018 sales exceeding $100 million, while the other 510 contracts under Category 5 each had less than $100 million in sales, including 172 contracts with sales between $1 million and $2 million. GSA believes a contractor with sales similar to those of immixGroup would have a reporting burden toward the higher end of the population of Category 5 contractors. Likewise, GSA believes some contractors will have a higher reporting burden than that shared by immixGroup, such as those reported by the Coalition’s members in 2015, but GSA also estimates most Category 5 contractors using automated systems will have a lower burden. Consequently, GSA believes its estimate is representative of the average Category 5 reporting burden. GSA also believes the labor rates provided by the Coalition are significantly higher than those typically paid by contractors to fulfill these functions. GSA believes these functions are typically performed by accounting staff with occasional assistance from higher-paid professionals, such as attorneys and consultants. The most comparable labor category for the accounting staff analyzed by the Bureau of Labor Statistics (BLS) are accountants and auditors (13–2011). BLS’s most recently published mean hourly rate for VerDate Sep<11>2014 19:16 Sep 27, 2019 Jkt 247001 this category was $37.89/hour; 12 when factoring a 36.25 percent overhead rate for fringe benefits, the fully burdened rate is $51.63 an hour.13 However, GSA chose to use the higher $77.55/hour rate to account for the occasional involvement of higher-paid professionals. Finally, GSA acknowledges pilot participation may increase by the number of contractors estimated by the Coalition, but also notes that it is difficult to forecast future pilot participation because it is uncertain how many of those contractors would join the pilot if given the opportunity. On the other hand, a historical average would be skewed because most pilot contractors joined within the pilot’s first year. As a result, the number of contractors that joined the pilot in the last fiscal year (FY 2018) is the most representative figure to use for the current burden estimate. TDR Pilot Continuation Comments: The GSA OIG questioned why GSA is continuing the TDR pilot beyond FY 2019, stating GSA has yet to include transactional data in its pricing analyses and decisions and TDR has yet to have an impact on order-level outcomes. Conversely, the Coalition and immixGroup stated TDR is less burdensome than CSP and PRC disclosures and reverting back to CSP and PRC disclosures if the TDR pilot is discontinued would be extremely burdensome. GSA Response: GSA’s premise has been TDR can meet or exceed the CSP and PRC’s value while supporting better buying outcomes and reducing contractor reporting burden. Two-thirds of the way through the pilot, TDR has proven to be a less burdensome alternative, has had no adverse impact on contract-level pricing, and is starting to be used by contracting officers and category managers to improve buying outcomes. Accordingly, GSA has decided to continue the pilot through FY 2020 while it focuses on consolidating all 24 Schedules into one single Schedule. This decision removes uncertainty for contract partners and allows them to plan accordingly. 12 See the Bureau of Labor Statistics Occupational Employment and Wages for Compliance Officers, available at https://www.bls.gov/oes/current/ oes132011.htm. 13 36.25% 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. PO 00000 Frm 00070 Fmt 4703 Sfmt 4703 51577 TDR Alternatives Comments: immixGroup stated neither TDR or the Price Reductions clause (PRC) and Commercial Sales Practices (CSP) have much utility when technology enables the acquisition workforce to comparison shop and review pricing data, but applauds GSA for moving to TDR in lieu of the more burdensome legacy PRC and CSP requirements. The Coalition recommends GSA reduce its reliance on TDR, the PRC and CSP and instead rely on market competition to reduce prices. The Coalition also recommends GSA seek technological solutions, such investing in automated systems and upgrading its existing ordering tools, rather than relying on a regulatory solution such as TDR. Finally, the GSA OIG stated the CSP and PRC are needed for GSA to meet its statutory pricing obligations. They argued TDR ‘‘severs the link to the commercial marketplace’’ and is ineffective because it has not met its stated objectives or effectively replaced the CSP and PRC as pricing tools. GSA Responses: GSA believes TDR, in conjunction with other horizontal pricing techniques, will be a superior method of ensuring FSS ordering procedures ‘‘result in the lowest overall cost alternative to meet the needs of the Federal Government,’’ as required by 41 U.S.C. 152(3)(B). To date, the TDR pilot has lowered industry burden while maintaining the Schedule pricing position. Additionally, contracting officers and category managers are beginning to use the data and GSA is continuously improving TDR data analytics. Pilot Participation Comments: immixGroup and the Coalition commented on pilot participation. immixGroup stated the pilot is more popular than the participation figures indicate because only certain Special Item Numbers are eligible for the pilot. Additionally, the Coalition recommended ‘‘that GSA provide TDR as an option for all Schedule holders, in place of PRC compliance and submission of the CSP, so that each contractor has the opportunity to make a business decision about the least burdensome, least costly, and most efficient compliance mechanism under the Schedules program.’’ GSA Response: GSA has decided to extend the TDR pilot through FY 2020 while maintaining the current scope. This will enable GSA to focus on consolidating all 24 Schedules into one E:\FR\FM\30SEN1.SGM 30SEN1 51578 Federal Register / Vol. 84, No. 189 / Monday, September 30, 2019 / Notices single Schedule and enable contractors and the GSA acquisition workforce to spend their resources understanding and participating in the consolidated Schedule. Additionally, maintaining the pilot’s current scope will allow GSA to understand the implications of the new consolidated Schedule environment on TDR. khammond on DSKJM1Z7X2PROD with NOTICES The Government Already Possesses the Data Comments: immixGroup noted GSA acknowledges the data it collects through TDR also exists in Government contract writing and financial systems and therefore asked, ‘‘if agencies are unwilling to share their transactional data with GSA, how is it that we, as contractors, should feel comfortable doing so?’’ The Coalition stated they are ‘‘. . . concerned that the Government already possesses the data that it is requesting through TDR. Furthermore, TDR, which focuses on transactions for commercial products, has limited utility for services and solutions which comprise almost 70 percent of spending under the Schedules program.’’ GSA Response: Agencies are not unwilling to share transactional data with GSA. Instead, a lack of system interoperability prevents GSA from harvesting the transactional data residing on the multitude of contract writing and financial systems used across the Government. GSA explored several alternatives for obtaining transactional data prior to publishing the final rule in 2016—internal applications; GSA ordering platforms such as eBuy and GSA Advantage!®; the SmartPay credit card purchase program; upgrades to the Federal Procurement Data System; and the Government electronic invoicing initiative. GSA concluded in 2016 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, and this remains the case in 2019. In regards to using data from services and solutions, GSA acknowledges transactional data is most useful for price analysis when comparing like items, but this does not mean the data is not useful for services and solutions. 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 VerDate Sep<11>2014 19:16 Sep 27, 2019 Jkt 247001 vehicles, which is beginning to reduce contract duplication. Data Usage Comments: The Coalition and immixGroup expressed concern that transactional data will lead ordering contracting officers to always expect the lowest price paid by the Government, regardless of the terms, quantities purchased, or other circumstances that affect the prices offered on those orders. The Coalition also stated a lowest price expectation may cause the Government to favor cheaper products IT products that are more susceptible to cyber risks. With respect to order-level price negotiations, the Coalition recommended the Government standardize the way it conducts horizontal price comparisons because they are concerned there will be ‘‘wide variations in practices for horizontal price comparisons across, and even within, agencies. This lack of consistency will increase contract administration costs for industry.’’ Regarding contract-level price negotiations, the Coalition stated, ‘‘GSA should acknowledge that while negotiating Schedule contracts the terms and conditions of the order will dictate the price.’’ Finally, the Coalition stated GSA should provide agencies guidance on gray market and counterfeit items, which could be low-price outliers and skew price comparisons. GSA Response: Contracting officers will continue to conduct acquisitions in accordance with the Federal Acquisition Regulation, which states a preference for ‘‘best value’’ solutions.14 Moreover, GSA instructs its contracting officers to take into account whether the data is current, the terms and conditions of the acquisition related to the prices paid, quantities purchased, and other material factors affecting the prices paid, such as blanket purchase agreements, temporary price reductions/promotional prices, and differing labor qualifications. Regarding gray market and counterfeit items, transactional data prevents, rather than promotes, procurement of these items, as the data helps GSA identify and subsequently remove these items from the Schedules marketplace. Finally, additional public comments are particularly invited on: Whether this collection of information is necessary and whether it will have practical utility; whether our estimate of the public burden of this collection of information is accurate, and based on valid assumptions and methodology; 14 Federal Acquisition Regulation section 1.102 (48 CFR 1.102). PO 00000 Frm 00071 Fmt 4703 Sfmt 4703 ways to enhance the quality, utility, and clarity of the information to be collected. Obtaining Copies of Proposals: Requesters may obtain a copy of the information collection documents from the General Services Administration, Regulatory Secretariat Division (MVCB), 1800 F Street NW, Washington, DC 20405, telephone 202–501–4755. Please cite Information Collection 3090–0306, Transactional Data Reporting, in all correspondence. Jeffrey A. Koses, Senior Procurement Executive, Office of Acquisition Policy, Office of Governmentwide Policy. [FR Doc. 2019–21254 Filed 9–27–19; 8:45 am] BILLING CODE 6820–61–P GENERAL SERVICES ADMINISTRATION [OMB Control No. 3090–0235; Docket No. 2019–0001; Sequence No. 1] General Services Administration Acquisition Regulation; Submission for OMB Review; Federal Supply Schedule Pricing Disclosures and Sales Reporting Office of Acquisition Policy, General Services Administration (GSA). ACTION: Notice of request for comments regarding an extension to an existing OMB clearance. AGENCY: Under the provisions of the Paperwork Reduction Act, the Regulatory Secretariat Division is submitting a request to the Office of Management and Budget (OMB) to review and approve an extension of a previously approved information collection requirement regarding Commercial Sales Practices disclosures and the General Services Administration Acquisition Regulation (GSAR) clause regarding price reductions. The information collected is used to establish and maintain Federal Supply Schedule (FSS) pricing and price-related terms and conditions. The extension has been renamed ‘‘Federal Supply Schedule Pricing Disclosures and Sales Reporting’’ because it now includes a burden estimate associated with the basic version of the GSAR clause regarding industrial funding fee and sales reporting. GSA uses this information to collect the Industrial Funding Fee and administer the FSS program. This burden was included under a separate approved information collection identified by OMB control number 3090–0121. SUMMARY: E:\FR\FM\30SEN1.SGM 30SEN1

Agencies

[Federal Register Volume 84, Number 189 (Monday, September 30, 2019)]
[Notices]
[Pages 51573-51578]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-21254]



[[Page 51573]]

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

GENERAL SERVICES ADMINISTRATION

[OMB Control No. 3090-0306; Docket No. 2019-0001; Sequence No. 4]


General Services Administration Acquisition Regulation; 
Submission for OMB Review; Transactional Data Reporting

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

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

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

SUMMARY: Under the provisions of the Paperwork Reduction Act, the 
Regulatory Secretariat Division is submitting a request to the Office 
of Management and Budget (OMB) to review and approve an extension of a 
previously approved information collection requirement regarding 
General Services Administration Acquisition Regulation (GSAR) clauses 
related to Transactional Data Reporting. GSA uses this information to 
establish price reasonableness on certain Government-wide contracts, 
inform category management activities, collect fees due from buying 
agencies, and administer the respective programs.

DATES: Submit comments on or before: October 30, 2019.

ADDRESSES: Submit comments identified by Information Collection 3090-
0306, Transactional Data Reporting, by any of the following methods:
     Regulations.gov: http://www.regulations.gov. Submit 
comments via the Federal eRulemaking portal by searching the OMB 
control number. Select the link ``Submit a Comment'' that corresponds 
with ``Information Collection 3090-0306, Transactional Data 
Reporting.'' Follow the instructions provided at the ``Submit a 
Comment'' screen. Please include your name, company name (if any), and 
``Information Collection 3090-0306, Transactional Data Reporting'' on 
your attached document.
     Mail: General Services Administration, Regulatory 
Secretariat Division (MVCB), 1800 F Street NW, Washington, DC 20405. 
ATTN: Ms. Mandell/IC 3090-0306, Transactional Data Reporting.
    Instructions: Please submit comments only and cite Information 
Collection 3090-0306, Transactional Data Reporting, in all 
correspondence related to this collection. All comments received will 
be posted without change to http://www.regulations.gov, including any 
personal and/or business confidential information provided.

FOR FURTHER INFORMATION CONTACT: Mr. Matthew McFarland, Office of 
Acquisition Policy, 301-758-5880 or [email protected].

SUPPLEMENTARY INFORMATION: 

A. Purpose

    Transactional data is generated when a transaction is made between 
a buyer and seller and shows details of transactions at the line-item 
level, such as descriptions, quantities, and the prices paid for the 
items purchased. The Government is increasingly using this data to gain 
insight into its purchasing patterns, allowing it to identify the most 
efficient solutions, channels, and sources to meet its mission critical 
needs. This data is particularly critical to the Government's use of 
category management, the business practice of buying common goods and 
services as an enterprise to eliminate redundancies, increase 
efficiency, and deliver more value and savings from acquisition 
programs. Moreover, individual buyers benefit from this data when 
conducting market research, price analysis, and negotiations.
    Transactional data is typically possessed by the buyer and seller 
in a transaction. On the Government (buyer) side, this data is often 
found in contract writing systems and financial systems. However, these 
systems are not shared across agencies; in fact, some agencies use 
multiple versions of these systems. Hence, no mechanism currently 
exists to compile and analyze transactional data from a wide-range of 
purchases made across the Government.
    GSA sought to improve the Government's access to this data through 
the Transactional Data Reporting (TDR) final rule, published on June 
23, 2016.\1\ The rule amended the General Services Administration 
Acquisition Regulation (GSAR) by establishing two contract clauses 
requiring contractors to report transactional data from orders placed 
against GSA's Government-wide contract vehicles:
---------------------------------------------------------------------------

    \1\ See GSAR Case 2013-G504; Docket 2014-0020; Sequence 1 [81 FR 
41104 (June 23, 2016)].
---------------------------------------------------------------------------

     Alternate I of GSAR clause 552.238-80 Industrial Funding 
Fee and Sales Reporting has been introduced to the Federal Supply 
Schedule (FSS) program on a pilot basis, along with corresponding 
reductions to existing pricing disclosure requirements.
     GSAR clause 552.216-75 Transactional Data Reporting is 
applicable to GSA's Government-wide Acquisition Contract (GWAC) and 
other Government-wide indefinite-delivery indefinite-quantity (IDIQ) 
contract vehicles established after June 23, 2016.\2\ As of May 2019, 
Alliant 2 (unrestricted) is the only vehicle in this class that has 
been required to, and is using, the TDR clause.
---------------------------------------------------------------------------

    \2\ The rule does not apply to FSS contracts administered by the 
Department of Veterans Affairs.
---------------------------------------------------------------------------

    This information collection primarily applies to GSA's FSS 
contracts, commonly known as GSA Schedules or Multiple Award Schedules 
(MAS). These Government-wide contracts provide federal agencies with a 
simplified process for acquiring commercial supplies and services. The 
GSA FSS program is the Government's preeminent commercial contracting 
vehicle, accounting for about 10 percent of all federal contract 
dollars with approximately $33 billion of purchases made through the 
program in fiscal year 2018.
    GSA establishes the pricing and terms of each GSA Schedule contract 
with its contract holders. Federal agencies then follow GSA's 
competitive procedures when placing orders against these contracts and 
thereby satisfy statutory competition requirements to provide ``the 
lowest overall cost alternative to meet the needs of the Federal 
Government.'' \3\ In turn, those agencies must pay an Industrial 
Funding Fee (IFF) that covers GSA's costs of operating the FSS program. 
The fee is currently set at 0.75 percent and is included in the prices 
ordering activities pay contractors when purchasing from an FSS 
contract.\4\ FSS contractors then report GSA Schedule sales data and 
remit the IFF collected from ordering activities to GSA once a quarter.
---------------------------------------------------------------------------

    \3\ 41 U.S.C. 152(3)(B) requires FSS ordering procedures to 
``result in the lowest overall cost alternative to meet the needs of 
the Federal Government.''
    \4\ The IFF for Schedule 599, Special Item Number 599-2 is $1.50 
per transaction.
---------------------------------------------------------------------------

    There were a total of 16,215 FSS contracts in fiscal year 2018. 
This information collection pertains to the 2,063 contracts that 
participated in the TDR pilot. The remaining 14,152 contracts are 
subject to legacy sales reporting requirements and pricing disclosure 
requirements associated with Commercial Sales Practices (CSP) and GSAR 
clause 552.238-81 Price Reductions, otherwise known as the Price 
Reductions Clause (PRC); those requirements are accounted for under 
separate information collection identified by OMB control number 3090-
0235.\5\
---------------------------------------------------------------------------

    \5\ The PRC was formerly found at GSAR 552.238-75 but was 
amended to GSAR 552.238-81 per GSAR case 2016-G502, effective May 
23, 2019. See 84 FR 17030 from April 23, 2019.

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

[[Page 51574]]

    GSA believes TDR offers a meaningful burden reduction for FSS 
contractors. GSA estimates the combined burden of this information 
collection is 50 percent less per contract than the legacy sales 
reporting requirements and CSP and PRC disclosures associated with OMB 
control number 3090-0235. GSA estimates if all FSS contractors 
participated in TDR, they would realize an estimated annual burden 
reduction of $64.6 million.\6\ On the other hand, GSA estimates ending 
the FSS pilot will cost participating contractors nearly $22.6 million 
and GSA approximately $3 million to transition to the legacy sales 
reporting and CSP and PRC disclosure requirements unless an alternate 
method is created to collect the IFF, monitor program sales and 
establish and monitor contract pricing.\7\
---------------------------------------------------------------------------

    \6\ The estimated burden for this information collection, which 
applied to the 14,152 contracts not participating in the TDR pilot, 
is estimated to be $128 million. This equates to a per-contract 
burden of $9,049/year. The estimated burden for the TDR information 
collection is $9.2 million/year for the 2,063 contracts 
participating in the FSS pilot; this equates to a per-contract the 
burden of $4,483/year. The estimated $64.6 million/year burden 
reduction is calculated by taking the updated 3090-0235 burden 
estimate ($128 million/year) and subtracting the product of the 
number of contracts included in 3090-0235 multiplied by the average 
per-contract burden of TDR (14,152 contracts x $4,483), which equals 
$63.4 million/year ($128M-$63.4M = $64.6M). More information about 
the FSS Pricing Disclosures and Sales Reporting can be found under 
Information Collection 3090-0235 at http://www.reginfo.gov/public by 
searching ``ICR'' for ``3090-0235''.
    \7\ Vendors transitioning back to the CSP/PRC framework would 
have to submit CSPs to establish basis of award pricing. As of 
December 2018, 2,158 contractors were participating in the TDR 
pilot. Using the framework for new offer CSPs in this information 
collection, 2,158 new offer CSPs would equate to a burden of $19.5 
million. This same framework would show increased costs of $3 
million for GSA to process 2,158 new offer CSPs. Additionally, these 
contractors would also need to establish sales tracking systems to 
comply with the sales reporting requirements of the basic version of 
GSAR clause 552.238-80. Using the sales reporting cost estimation 
framework for establishing new systems from OMB control number 3090-
0235, this would cost these contractors $3.1 million.
---------------------------------------------------------------------------

    The Paperwork Reduction Act generally requires information 
collections to be renewed every three years.\8\ Both this information 
collection (OMB control number 3090-0306) and the information 
collection associated with legacy sales reporting and CSP and PRC 
disclosure requirements (OMB control number 3090-0235) were last 
approved in 2016, so GSA is now obtaining extensions to both 
information collections.\9\
---------------------------------------------------------------------------

    \8\ 44 U.S.C. 3507(g).
    \9\ GSA is consolidating a separate information collection for 
IFF and sales reporting (OMB control number 3090-0121) with the 
pricing disclosures information collection (OMB control number 3090-
0235) because the burdens are interdependent.
---------------------------------------------------------------------------

    This request for comments only pertains to the information 
collection requirements associated with TDR (OMB control number 3090-
0306). GSA has also published a separate notice requesting comments on 
the information collection associated with legacy sales reporting and 
CSP and PRC disclosure requirements (OMB control number 3090-0235) 
elsewhere in this issue of the Federal Register.

Information Collection Changes and Updates

    Adjustments for Actual Number of Contracts: The TDR pilot had yet 
to launch when these burden estimates were previously calculated in 
2016, so GSA based its estimates for the number of contracts that would 
participate on the total number of contracts under the Schedules and 
Special Item Numbers eligible for the pilot:
     The ratio of GSA Schedule contracts that would continue to 
require legacy sales reporting and CSP and PRC disclosures was 
estimated to be 56.8 percent, which was based on the percentage of the 
program's sales in fiscal year 2015 for contracts that would not be 
eligible to participate in the TDR pilot.
     The ratio of GSA Schedule contracts slated to be included 
in the TDR pilot was estimated to account for the remaining 43.2 
percent.
    However, pilot participation became optional in 2017 and the number 
of contracts that eventually joined the pilot was far lower than 
anticipated in 2016. Of the 16,215 contracts that were active in FY 
2018--
     14,152 contracts, or 87.28 percent of the total, were 
required to conduct legacy sales reporting and provide CSP and PRC 
disclosures.
     2,063 contracts, or 12.72 percent of the total, 
participated in the TDR pilot.
    Additionally, only one non-FSS contract vehicle, Alliant 2 
(unrestricted), currently uses the non-FSS TDR clause. The last 
revision of these burden estimates relied upon the total number of non-
FSS contracts (537) that would be eligible had they been awarded after 
the TDR rule was promulgated. As a result, the number of non-FSS 
contracts was lowered from 537 to the actual number of contracts using 
the applicable clause, 53.
    Accordingly, the revised participation figures resulted in 
significantly lower burden estimates for this information collection. 
On the other hand, the FSS pilot participation revisions resulted in 
significantly higher burden estimates for the information collection 
accounting for CSP and PRC disclosures and legacy sales reporting (OMB 
Control Number 3090-0235).
    Revised Labor Rates: The previous burden estimates used a fully 
burdened labor rate of $68/hour. This included a $50/hour base rate, 
which was based on professional judgment, and 36 percent for fringe 
benefits, which was rounded down from the 36.25 percent fringe benefit 
factor included in OMB Circular A-76. The revised burden estimates 
attempt to align with the Department of Defense's Regulatory Cost 
Analysis Tool (RCAT), which was developed to prepare economic analyses 
in compliance with Executive Order 13771 and uses various Government 
labor category rates as the basis for cost estimates. As such, GSA 
determined--
     The GS-12, Step 5 labor rate from the RCAT ($55.19/hour) 
was the most appropriate for the tasks performed by contractors to 
comply with monthly reporting requirements; and
     The GS-14, Step 5 labor rate from the RCAT ($77.25/hour) 
was the most appropriate for the tasks performed by contractors to 
comply with the initial setup.

B. Annual Reporting Burden

    This information collection applies to GSA FSS contracts that 
include GSAR clauses 552.216-75 Transactional Data Reporting and 
552.238-80 Industrial Funding Fee and Sales Reporting, Alternate I. In 
FY 2018, contractors held 53 Alliant 2 contracts subject to clause 
552.216-75 and 2,063 GSA FSS contracts subject to Alternate I of GSAR 
clause 552.238-80.
    Both clauses require contractors to report the data elements 
outlined in each clause, such as item descriptions and prices paid, to 
a GSA website. This data must be reported monthly within 30 calendar 
days after the end of each calendar month, meaning contractors will 
furnish 12 reports over the course of a year for each contract 
containing one of these clauses. Vendors also remit applicable fees, 
such as the IFF for Schedule contracts, when submitting these reports.

Cost Burden Calculation

    The two primary activities associated with this information 
collection are the initial setup and monthly reporting. GSA calculated 
the cost burden for each as follows:
     Initial Setup: The duties required for these activities 
will generally be completely by a senior-level subject matter expert. 
For the purposes of establishing an hourly rate, GSA equates these 
duties to those of a GS-14, Step 5 employee, whose hourly rate in 2019 
for the ``Rest of U.S.'' locality is $56.92

[[Page 51575]]

an hour.\10\ When factoring a 36.25 percent overhead rate for fringe 
benefits, the fully burdened rate is $77.55 an hour.\11\
---------------------------------------------------------------------------

    \10\ General Schedule (GS) labor rates may be viewed on the 
Office of Personnel Management (OPM) under Pay & Leave: Salaries and 
Wages, SALARY TABLE 2019-RUS at https://www.opm.gov/policy-data-oversight/pay-leave/salaries-wages/salary-tables/19Tables/html/RUS_h.aspx.
    \11\ 36.25% 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.
---------------------------------------------------------------------------

     Quarterly Reporting: The duties required for these 
activities will generally be completed by mid-level personnel. For the 
purposes of establishing an hourly rate, GSA equates these duties to 
those of a GS-12, Step 5 employee, whose hourly rate in 2019 for the 
``Rest of U.S.'' locality is $40.51 an hour. When factoring a 36.25 
percent overhead rate for fringe benefits, the fully burdened rate is 
$55.19 an hour.
    Categorization of Vendors by Monthly Sales Revenue: TDR imposes a 
progressive burden--one that increases with a contractor's sales 
volume. Monthly reporting times increase with a contractor's applicable 
sales volume, as contractors with lower to no reportable sales spend 
relatively little time on monthly reporting, while those with more 
reportable sales with face a higher reporting burden.
    GSA separated contractors into categories based on annual sales 
volume in order to account for the differences in reporting burden. 
These categories are:

 Category 1: No sales activity (annual of $0)
 Category 2: Annual sales between $0 and $25,000
 Category 3: Annual sales between $25,000 and $250,000
 Category 4: Annual sales between $250,000 and $1 million
 Category 5: Annual sales over $1 million

    The distribution of contractors by sales category 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......................             318              15              37              70             355
Category 2......................             197              10               0               0             197
Category 3......................             619              30               0               0             619
Category 4......................             407              20               2               4             409
Category 5......................             522              25              14              26             536
                                 -------------------------------------------------------------------------------
    Total.......................           2,063             100              53             100           2,116
----------------------------------------------------------------------------------------------------------------

    Automated vs. Manual Reporting Systems: Vendors subject to these 
clauses must create systems or processes to produce and report accurate 
data. Generally, contractors 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 contractor's sales volume.
    The likelihood of a contractor 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 2018, 15 
percent of FSS contracts in the TDR pilot had $0 sales, while another 
10 percent reported annual sales between $1 and $25,000 per month. 
However, as a contractor's applicable average monthly sales increase, 
it will be increasingly likely to establish an automated system to 
reduce the monthly reporting burden. Consequently, contractors 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 current 
population 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             355               0
Category 2......................................             100               0             197               0
Category 3......................................              90              10             557              62
Category 4......................................              50              50             205             205
Category 5......................................              10              90              54             482
                                                 ---------------------------------------------------------------
    Total Count of Vendors by System Type.......  ..............  ..............           1,367             749
                                                 ---------------------------------------------------------------

[[Page 51576]]

 
Percentage of Vendors by System Type............  ..............  ..............              65              35
----------------------------------------------------------------------------------------------------------------

    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 estimates the average 
one-time setup burden is 8 hours for contractors with a manual system 
and 240 hours for those with an automated system.
    Monthly Reporting: After initial setup, contractors subject to 
these clauses are required to report sales 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 categories. GSA 
estimates contractors using a manual system will have average monthly 
reporting times ranging from 15 minutes (0.25 hours) for contractors 
with $0 sales to an average of 48 hours for contractors with monthly 
sales over $1 million. On the other hand, GSA projects contractors 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
------------------------------------------------------------------------

    FSS Burden Estimates: A total of 376 FSS contracts joined the TDR 
pilot in FY 2018, including 139 newly awarded contracts and 237 
existing contracts that voluntarily joined the pilot. The initial setup 
burden was split between manual and automated systems, the number of 
which was estimated based on the ratio for all pilot contracts (64% 
manual, 36% automated). The initial setup burden for those contracts is 
illustrated below:

Initial Setup
    Annual Burden (Hours): 34,412
    Annual Burden (Cost): $2,668,613

    Transactional data was reported for 2,063 FSS contracts in FY 2018. 
As previously noted, the reporting burden for contractors using manual 
systems increases with their reported sales, while the reporting burden 
for contractors using automated systems remains constant regardless of 
the reported sales volume. The reporting burden for those contracts is 
illustrated below:

Quarterly Reporting
    Annual Burden (Hours): 119,207
    Annual Burden (Cost): $6,579,023

    Non-FSS Burden Estimates: The only non-FSS contract vehicle 
currently using the clause is the Alliant 2 unrestricted contract. 53 
Alliant 2 contracts were awarded in FY 2018, meaning each of the 
contract holders incurred initial setup costs. The initial setup burden 
was split between manual and automated systems, the number of which was 
estimated based on the ratio for the Alliant 2 contracts (74% manual, 
26% automated). The initial setup burden for those contracts is 
illustrated below:

Initial Setup
    Annual Burden (Hours): 3,672
    Annual Burden (Cost): $284,764

    As previously noted, the reporting burden for contractors using 
manual systems increases with their reported sales while the reporting 
burden for contractors using automated systems remains constant 
regardless of the reported sales volume. The reporting burden for those 
contracts is as follows:

Quarterly Reporting
    Annual Burden (Hours): 1,445
    Annual Burden (Cost): $79,772

Total Annual Burden

    The total estimated burden imposed by TDR is as follows:

Estimated Annual Time Burden (Hours)
    FSS Vendors: 153,619
    Non-FSS Vendors: 5,117
    Total Annual Time Burden: 158,736
Estimated Annual Cost Burden
    FSS Vendors: $9,247,636
    Non-FSS Vendors: $364,535
    Total Annual Cost Burden: $9,612,171

C. Public Comments

    An initial notice of request for comments regarding the extension 
of this information collection was published in the Federal Register at 
84 FR 24512 on May 28, 2019. GSA sought comments regarding (1) whether 
this information collection is necessary and has practical utility, and 
(2) if GSA's estimate of the collection burden is accurate, and based 
on valid assumptions and methodology. In response, GSA received comment 
letters from immixGroup, Inc. (immixGroup), the GSA Office of Inspector 
General (GSA OIG, and the Coalition for Government Procurement (The 
Coalition).
    immixGroup's letter, dated July 24, 2019, addressed this 
information collection. The GSA OIG's letter, dated July 26, 2019, 
expressly provided comments for this information collection and the FSS 
Pricing Disclosures and Sales Reporting information collection (OMB 
control number 3090-0235). The Coalition's letter, dated July 29, 2019, 
is limited to this information collection, although they provided a 
separate letter with comments on the FSS Pricing Disclosures and Sales 
Reporting information collection (OMB control number 3090-0235). GSA is 
providing responses to FSS Pricing Disclosures and Sales Reporting in 
documents associated with the extension of that information collection 
(OMB control number 3090-0235).
    The following are summaries of the respondents' comments related to 
this information collection, grouped by subject matter, and GSA's 
responses:

Burden Estimates

    Comments: immixGroup and the Coalition commented on GSA's burden 
estimates. immixGroup stated the initial setup took about half the time 
estimated by GSA and noted it takes them four hours to complete monthly 
reporting requirements. The Coalition, on the other hand, stated three 
of GSA's reporting burden assumptions are invalid--
     The monthly reporting burden for TDR is largely alleviated 
through

[[Page 51577]]

automated systems: The Coalition stated they conducted a survey among 
their members in 2015 and the respondents, all of which would fall into 
GSA's Category 5 of contractors (Schedule sales over $1 million), 
estimated the monthly reporting burden to be 68 hours, even when using 
automated systems.
     Contractor employees responsible for the initial setup are 
paid at a fully burdened labor rate of $77.55/hour: The Coalition 
estimated this cost to be an average of $140/hour.
     The number of companies accepting TDR will remain constant 
year to year: The Coalition noted GSA is currently consolidating the 
Schedules into a single solicitation; if the current scope of the pilot 
remains unchanged, this would allow almost 400 more contractors to join 
the pilot.
    GSA Response: GSA believes its burden estimates are valid and the 
comments underscore the fact that the burden varies widely by 
contractor, which is why GSA separated the reporting burden by sales 
volume and reporting system (automated vs. manual).
    GSA's estimates for the automated and manual categories are 
intended to be an average within that category. For example, immixGroup 
holds 2 of the 12 pilot contracts with FY 2018 sales exceeding $100 
million, while the other 510 contracts under Category 5 each had less 
than $100 million in sales, including 172 contracts with sales between 
$1 million and $2 million. GSA believes a contractor with sales similar 
to those of immixGroup would have a reporting burden toward the higher 
end of the population of Category 5 contractors. Likewise, GSA believes 
some contractors will have a higher reporting burden than that shared 
by immixGroup, such as those reported by the Coalition's members in 
2015, but GSA also estimates most Category 5 contractors using 
automated systems will have a lower burden. Consequently, GSA believes 
its estimate is representative of the average Category 5 reporting 
burden.
    GSA also believes the labor rates provided by the Coalition are 
significantly higher than those typically paid by contractors to 
fulfill these functions. GSA believes these functions are typically 
performed by accounting staff with occasional assistance from higher-
paid professionals, such as attorneys and consultants. The most 
comparable labor category for the accounting staff analyzed by the 
Bureau of Labor Statistics (BLS) are accountants and auditors (13-
2011). BLS's most recently published mean hourly rate for this category 
was $37.89/hour; \12\ when factoring a 36.25 percent overhead rate for 
fringe benefits, the fully burdened rate is $51.63 an hour.\13\ 
However, GSA chose to use the higher $77.55/hour rate to account for 
the occasional involvement of higher-paid professionals.
---------------------------------------------------------------------------

    \12\ See the Bureau of Labor Statistics Occupational Employment 
and Wages for Compliance Officers, available at https://www.bls.gov/oes/current/oes132011.htm.
    \13\ 36.25% 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.
---------------------------------------------------------------------------

    Finally, GSA acknowledges pilot participation may increase by the 
number of contractors estimated by the Coalition, but also notes that 
it is difficult to forecast future pilot participation because it is 
uncertain how many of those contractors would join the pilot if given 
the opportunity. On the other hand, a historical average would be 
skewed because most pilot contractors joined within the pilot's first 
year. As a result, the number of contractors that joined the pilot in 
the last fiscal year (FY 2018) is the most representative figure to use 
for the current burden estimate.

TDR Pilot Continuation

    Comments: The GSA OIG questioned why GSA is continuing the TDR 
pilot beyond FY 2019, stating GSA has yet to include transactional data 
in its pricing analyses and decisions and TDR has yet to have an impact 
on order-level outcomes. Conversely, the Coalition and immixGroup 
stated TDR is less burdensome than CSP and PRC disclosures and 
reverting back to CSP and PRC disclosures if the TDR pilot is 
discontinued would be extremely burdensome.
    GSA Response: GSA's premise has been TDR can meet or exceed the CSP 
and PRC's value while supporting better buying outcomes and reducing 
contractor reporting burden. Two-thirds of the way through the pilot, 
TDR has proven to be a less burdensome alternative, has had no adverse 
impact on contract-level pricing, and is starting to be used by 
contracting officers and category managers to improve buying outcomes. 
Accordingly, GSA has decided to continue the pilot through FY 2020 
while it focuses on consolidating all 24 Schedules into one single 
Schedule. This decision removes uncertainty for contract partners and 
allows them to plan accordingly.

TDR Alternatives

    Comments: immixGroup stated neither TDR or the Price Reductions 
clause (PRC) and Commercial Sales Practices (CSP) have much utility 
when technology enables the acquisition workforce to comparison shop 
and review pricing data, but applauds GSA for moving to TDR in lieu of 
the more burdensome legacy PRC and CSP requirements.
    The Coalition recommends GSA reduce its reliance on TDR, the PRC 
and CSP and instead rely on market competition to reduce prices. The 
Coalition also recommends GSA seek technological solutions, such 
investing in automated systems and upgrading its existing ordering 
tools, rather than relying on a regulatory solution such as TDR.
    Finally, the GSA OIG stated the CSP and PRC are needed for GSA to 
meet its statutory pricing obligations. They argued TDR ``severs the 
link to the commercial marketplace'' and is ineffective because it has 
not met its stated objectives or effectively replaced the CSP and PRC 
as pricing tools.
    GSA Responses: GSA believes TDR, in conjunction with other 
horizontal pricing techniques, will be a superior method of ensuring 
FSS ordering procedures ``result in the lowest overall cost alternative 
to meet the needs of the Federal Government,'' as required by 41 U.S.C. 
152(3)(B). To date, the TDR pilot has lowered industry burden while 
maintaining the Schedule pricing position. Additionally, contracting 
officers and category managers are beginning to use the data and GSA is 
continuously improving TDR data analytics.

Pilot Participation

    Comments: immixGroup and the Coalition commented on pilot 
participation. immixGroup stated the pilot is more popular than the 
participation figures indicate because only certain Special Item 
Numbers are eligible for the pilot. Additionally, the Coalition 
recommended ``that GSA provide TDR as an option for all Schedule 
holders, in place of PRC compliance and submission of the CSP, so that 
each contractor has the opportunity to make a business decision about 
the least burdensome, least costly, and most efficient compliance 
mechanism under the Schedules program.''
    GSA Response: GSA has decided to extend the TDR pilot through FY 
2020 while maintaining the current scope. This will enable GSA to focus 
on consolidating all 24 Schedules into one

[[Page 51578]]

single Schedule and enable contractors and the GSA acquisition 
workforce to spend their resources understanding and participating in 
the consolidated Schedule. Additionally, maintaining the pilot's 
current scope will allow GSA to understand the implications of the new 
consolidated Schedule environment on TDR.

The Government Already Possesses the Data

    Comments: immixGroup noted GSA acknowledges the data it collects 
through TDR also exists in Government contract writing and financial 
systems and therefore asked, ``if agencies are unwilling to share their 
transactional data with GSA, how is it that we, as contractors, should 
feel comfortable doing so?''
    The Coalition stated they are ``. . . concerned that the Government 
already possesses the data that it is requesting through TDR. 
Furthermore, TDR, which focuses on transactions for commercial 
products, has limited utility for services and solutions which comprise 
almost 70 percent of spending under the Schedules program.''
    GSA Response: Agencies are not unwilling to share transactional 
data with GSA. Instead, a lack of system interoperability prevents GSA 
from harvesting the transactional data residing on the multitude of 
contract writing and financial systems used across the Government. GSA 
explored several alternatives for obtaining transactional data prior to 
publishing the final rule in 2016--internal applications; GSA ordering 
platforms such as eBuy and GSA Advantage![supreg]; the SmartPay credit 
card purchase program; upgrades to the Federal Procurement Data System; 
and the Government electronic invoicing initiative. GSA concluded in 
2016 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, and this remains the case in 2019.
    In regards to using data from services and solutions, GSA 
acknowledges transactional data is most useful for price analysis when 
comparing like items, but this does not mean the data is not useful for 
services and solutions. 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 reduce 
contract duplication.

Data Usage

    Comments: The Coalition and immixGroup expressed concern that 
transactional data will lead ordering contracting officers to always 
expect the lowest price paid by the Government, regardless of the 
terms, quantities purchased, or other circumstances that affect the 
prices offered on those orders. The Coalition also stated a lowest 
price expectation may cause the Government to favor cheaper products IT 
products that are more susceptible to cyber risks.
    With respect to order-level price negotiations, the Coalition 
recommended the Government standardize the way it conducts horizontal 
price comparisons because they are concerned there will be ``wide 
variations in practices for horizontal price comparisons across, and 
even within, agencies. This lack of consistency will increase contract 
administration costs for industry.'' Regarding contract-level price 
negotiations, the Coalition stated, ``GSA should acknowledge that while 
negotiating Schedule contracts the terms and conditions of the order 
will dictate the price.''
    Finally, the Coalition stated GSA should provide agencies guidance 
on gray market and counterfeit items, which could be low-price outliers 
and skew price comparisons.
    GSA Response: Contracting officers will continue to conduct 
acquisitions in accordance with the Federal Acquisition Regulation, 
which states a preference for ``best value'' solutions.\14\ Moreover, 
GSA instructs its contracting officers to take into account whether the 
data is current, the terms and conditions of the acquisition related to 
the prices paid, quantities purchased, and other material factors 
affecting the prices paid, such as blanket purchase agreements, 
temporary price reductions/promotional prices, and differing labor 
qualifications.
---------------------------------------------------------------------------

    \14\ Federal Acquisition Regulation section 1.102 (48 CFR 
1.102).
---------------------------------------------------------------------------

    Regarding gray market and counterfeit items, transactional data 
prevents, rather than promotes, procurement of these items, as the data 
helps GSA identify and subsequently remove these items from the 
Schedules marketplace.
    Finally, additional public comments are particularly invited on: 
Whether this collection of information is necessary and whether it will 
have practical utility; whether our estimate of the public burden of 
this collection of information is accurate, and based on valid 
assumptions and methodology; ways to enhance the quality, utility, and 
clarity of the information to be collected.
    Obtaining Copies of Proposals: Requesters may obtain a copy of the 
information collection documents from the General Services 
Administration, Regulatory Secretariat Division (MVCB), 1800 F Street 
NW, Washington, DC 20405, telephone 202-501-4755. Please cite 
Information Collection 3090-0306, Transactional Data Reporting, in all 
correspondence.

Jeffrey A. Koses,
Senior Procurement Executive, Office of Acquisition Policy, Office of 
Government-wide Policy.
[FR Doc. 2019-21254 Filed 9-27-19; 8:45 am]
BILLING CODE 6820-61-P