GSA Finally Begins to Change FSS Pricing Requirements

GovConAdvisors® Blog

On June 23, 2016, the General Services Administration ("GSA") issued a Final Rule in the Federal Register to implement transactional data collection requirements for orders placed against GSA Federal Supply Schedule ("FSS") contracts, GSA Government-wide Acquisition Contracts ("GWACs") and GSA Indefinitely-Delivery Indefinite Quantity ("IDIQ") contracts. The Final Rule follows a proposed rule published by GSA in the Federal Register on March 4, 2015, which we addressed in a previous blog post. The Final Rule is effective immediately, but will be implemented at first on a pilot basis and phased in over time.

The Final Rule represents a momentous change in GSA pricing requirements for the FSS program. While the primary purpose of the Final Rule is to implement new transactional reporting requirements, which will prove onerous for many GSA contractors, in return GSA is finally eliminating the price disclosure requirements of the Commercial Sales Practices form ("CSP") as well as the price monitoring requirements of the Price Reductions Clause ("PRC") from FSS contracts when they become subject to the new transactional reporting requirements. The onerous and widely criticized CSP and PRC requirements are unique to GSA's FSS program, and have generated enormous confusion and liability for FSS contractors.

Under the Final Rule, contractors will be required to report transactional data for each order under a GSA FSS, GWAC or IDIQ contract on a monthly basis in a new GSA system created to capture the data. The data elements required to be reported include:

1. Contract or BPA Number
2. Order Number
3. Non-Federal Entity
4. Description of Deliverable
5. Manufacturer Name
6. Manufacturer Part Number
7. Unit of Measure
8. Quantity of Item Sold
9. Universal Product Code
10. Price Paid per Unit
11. Total Price

For FSS contracts, the reporting requirement will be implemented under an updated version of the Industrial Funding Fee ("IFF") clause, and for other GSA GWAC and IDIQ contracts, the reporting requirement will be implemented under a new contract clause entitled 552.216-75, Transactional Data Reporting. The data elements to be reported are identical and will use the same GSA data collection system.

The Final Rule will be implemented in phases. It will be applicable immediately for all new solicitations for GSA GWACs and non-FSS IDIQs issued on or after the effective date of the Final Rule. Existing GWACs and non-FSS IDIQ contracts may opt into the requirement by executing a bilateral modification. The transaction reporting requirement will be implemented under a pilot program for FSS contracts, which initially includes only the following FSS contracts and Special Item Numbers ("SINs"):

1. Schedule 03FAC, All SINs
2. Schedule 51 V, All SINs
3. Schedule 58 I, All SINs
4. Schedule 72, All SINs
5. Schedule 73, All SINs
6. Schedule 75, All SINs
7. Schedule 00CORP, PES SINs.
8. Schedule 70, SINs 132-8, 132-32, 132-33, 132-34, 132-54 & 132-55

The transactional data reporting requirement will prove extremely burdensome to some GSA contractors. In particular, GSA contractors holding an affected contract with significant low dollar transactions would seem most impacted by the administrative burden associated with the new reporting requirement, at least until automated systems can be implemented to facilitate reporting. In this regard, much will depend on how friendly GSA's systems are. In addition, significant churn will undoubtedly arise for some contractors when GSA begins using the data it collects to support price negotiations. Contractors will need to be prepared to explain disparate pricing among agencies for seemingly identical items to manage GSA demands for the lowest price ever afforded any agency.

The Final Rule arguably places an unreasonable new burden on contractors to report transactional data already in the Government's possession. Ideally, this burden would be handled internally by GSA. However, nothing has ever precluded GSA's use of order-level pricing to evaluate and negotiate future GSA pricing. Non-FSS GSA contractors with affected contracts may simply have to charge more to offset any additional administrative burden imposed by the new reporting requirement. For FSS contractors, however, reporting transactional data that GSA is already entitled to collect should prove to be a small price for the significant relief elimination of the PRC and CSP requirements represents.

Good riddance to CSPs and the PRC!

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