The Transactional Data Reporting Rule

In an ongoing effort to reduce procurement costs, The General Services Administration has announced that it will be rolling out a Transactional Data Reporting Rule designed to increase transparency and reduce the persistent inefficiencies that have plagued Government acquisition for many years.

GSA points to a $370 million savings in its Federal Strategic Source (FSSI) initiative with office supplies acquisition as proof positive that using transactional data can produce immediate and dramatic results.  However, FSSI savings have proven less successful in government categories in which recording transactional data is not required.  In fact, some of the main targets of FSSI, such as contract duplication and extreme price disparity of up to 300%, continue to exist. This has dulled the impact of FSSI on procurement as envisioned at the time it was originally introduced, and prompted GSA to look into more intensive data capture to produce tangible results.  GSA believes that the Transactional Data Reporting Rule, when combined with the ongoing push toward Category Management, will yield the type of efficiency and functionality that has been sought after, but not quite achieved, at this time.

The Transactional Data Reporting Rule would require vendors to report a host of details for each sale made through their GSA Schedule contracts.  This data includes, but is not limited to: manufacturer name and part number, unit of measure, quantity sold, Universal Product Code, and price paid per unit.  GSA intends to add this requirement in phases, starting with a pilot of select products and commoditized services, then increasing over time.

GSA looks to offset the increased level of detail in capturing transactional data by removing the more cumbersome and unpopular tracking and reporting requirements currently required by the Price Reductions Clause (PRC).  GSA has admitted that the PRC has been a problem in its current form for some time, but there have been no large scale improvement efforts.  GSA’s Senior Procurement Executive, Jeffrey Koses, has stated that the removal of the tracking requirements will translate to a massive 757,000 hour, 85 percent, and $51 million reduction for Federal contractors.

Impressions from Contractors

Federal Contractors are paying close attention to these developments, and many are doing so with a critical eye.  It is normal for large initiatives to encounter some level of resistance upon announcement or rollout, and the Transactional Data Reporting Rule has certainly been no exception.  As voices continue to join the chorus of critics, some common themes have surfaced as to why GSA must tread very carefully in crafting this solution.

Some contractors are rallying behind a familiar line of caution, asserting that the “lower prices at all cost” mantra indeed comes at a cost.  There is concern that increased business costs resulting from the burden of developing more sophisticated tracking and reporting systems will actually discourage, rather than encourage, lower prices.   Additionally, there is the likelihood that businesses will be suspicious that GSA intends to use this sensitive date for undisclosed purposes other than “lower prices,” and will balk at the notion of disclosing this data.  Both of these factors may cause firms to back away from, rather than embrace, Government business.

On a broader, economic level, critics argue that GSA is once again missing the larger picture, a criticism that conjures up the more generalized backlash against FSSI itself over the last several years.  The concern is that transactional data establishes a framework for wage and price controls that reverberates to the wages of commercial employees; suppressing their salaries and suffocating innovation and quality.  Critics feel that these measures will discourage small business growth by narrowing already slim profit margins, which in turn reduces competition across the board.

To its credit, GSA has displayed a willingness to listen to all points of view as it moves forward. An Industry Day has been established for further discussion of these topics on April 17, 2015.  Businesses looking to provide feedback or concerns are encouraged to attend.

As this rule is unrolled, we can assist with the development of modifications or eCatalog development and upload.  Contact us at [email protected].

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