Government Contracts Monitor

New GSA Transactional Reporting Rule Substantially Changes FSS and GWACs Contracting

July 24, 2016

The General Services Administration (GSA) has issued its final rule significantly revising the General Services Acquisition Regulation (GSAR) to add the new transactional data reporting requirement. The rule imposes new reporting requirements on contractors holding certain Federal Supply Schedule (FSS) contracts, Government-wide Acquisition Contracts (GWACs) and Government-wide Indefinite Delivery-Indefinite Quantity (ID/IQ) contracts. GSA says that the scope of contracts covered by the new requirements may eventually be expanded.

Jackson Kelly previously reported on the proposed transactional data reporting rule. The final version issued on June 23, however, differs from that originally proposed in a number of important ways. The new rule still requires contractors to report specific details of transactions with the government, such as descriptions of what is purchased, part numbers, quantities, and pricing data, with the goal of improving competition, lowering prices, and increasing transparency in procurement. Unlike the proposed rule, however, the final rule exempts contractors subject to transactional data reporting requirements not only from the Price Reductions Clause (PRC) tracking requirements as originally proposed but also from the requirement to comply with the existing Commercial Sales Practices (CSP) disclosure requirements. This change was driven in large part by feedback received during the public comment period.

The requirements will apply to all new GSA government-wide acquisition contracts in which transactional data is not already collected through other methods. In addition, they will be implemented as a pilot program in GSA’s Federal Supply Schedules program, where they will be introduced in phases, for newly issued contracts, starting with eight GSA schedules (including specific special item numbers (SINs) under Schedule 70 and the Professional Services Schedule). (FSS contracts managed by the Department of Veterans Affairs will not be included as part of the pilot program.) The specific schedules selected account for approximately 30% of GSA’s FSS contracts, and 40% of the overall FSS sales volume. Covered contracts will include the new transactional data reporting clause set forth in the final rule. According to GSA, implementing the rule initially through a pilot program will give GSA a better awareness of its impacts, particularly those resulting from the removal of the CSP requirement. As with the FSS contracts that will switch to a Transactional Data Reporting scheme, GSA has the authority to apply new reporting requirement to any existing GWACs and Governmentwide ID/IQs that do not contain other transactional data requirements, and existing IDIQ/GWAC contract holders have the option to bilaterally modify contracts to include the transactional data reporting requirement.

In another departure from the proposed rule, GSA decreased the required frequency of reporting transactional data. The proposed rule had required all contractors—FSS and non-FSS alike—to report sales within 15 days after the end of each calendar month. In contrast, the final rule allows non-FSS contractors 30 days before monthly reports of sales and the accompanying Contract Access Fee are due, and, for FSS contractors, only requires quarterly reports and payment of the Industrial Finding Fee 30 days after the quarter ends.

The GSA has concluded that replacing the onerous CSP and PRC tracking requirements with the new transaction data reporting rules would address much of the negative feedback it has received regarding CSP and PRC tracking requirements, which contractors routinely cite as among the most burdensome and complicated requirements in government contracting. GSA calculated that the new rule would create a $15 million total burden: $12 million on FSS contracts, and $3 million on other-than-FSS contracts. Notably, though, it also determined that for FSS contracts, removal of the CSP requirement would result in a net savings of $44 million—and thus, GSA anticipates that Transactional Data Reporting will result in an overall $29 million reduction in the overall burden on FSS contractors. Because of the changed approach to how FSS contract pricing, GSA also anticipates greater price efficiencies and competition at the order level, but the true burden on all involved will begin to become clear as the rule takes effect.

FSS contracts account for $33 billion in federal procurements, which is more than 7% of all federal government contracting dollars. Many of the vendors on FSS schedules are small businesses, so GSA is particularly optimistic that the rule will benefit these types of entities, which have fewer resources to meet the more onerous CSP requirements. GSA will analyze the data electronically reported under the new rule to improve its buying power, and will also share the data with agencies who procure from the schedules so they can make more educated, better-value procurement decisions. GSA claims that, instead of setting a price at the beginning of a contract and sticking with it for the duration, the new system strives to adopt a more dynamic, market-driven pricing model that recognizes that the value of goods can differ dramatically in a short time period. GSA says that an offeror’s real-time price competitiveness, as compared to other contract holders, will be the key driver in awarding orders.

Of course, the success of the rule remains to be seen, and there will no doubt be a period of adjustment as GSA, agency personnel, and contractors transition to the new requirements. However, GSA is hopeful that its phased adoption of the new requirements will ease some of the anxiety associated with the transition, and make the process as painless as possible for all involved. Of course, as we near the end of the fiscal year, potential hiccups in implementing the new requirements may become obvious sooner rather than later.

Jackson Kelly will continue to monitor the implementation and report new developments.