Public Meeting Transactional Data Reporting Gene neral S Services - - PowerPoint PPT Presentation

Public Meeting Transactional Data Reporting

Gene neral S Services Adm dminis nistratio ion Proposed R Rule 2013 2013-G504, T Trans nsactiona nal Data R Repo porting ing Apri ril 17, 17, 2015 2015 Publ ublic M Meeting be begins pr promptly ly a at 9 a.m. E EST

WELCOME & OPENING REMARKS

JEFF FFRE REY K

• K. K

KOSES SENIOR PROCUREMENT EXECUTIVE, GENERAL SERVICES ADMINISTRATION

CATEGORY MANAGEMENT

ANNE NNE R RUNG ADMINISTRATOR, OFFICE OF FEDERAL PROCUREMENT POLICY

MAS TRANSFORMATION IMPLEMENTATION

KEV EVIN Y YOUEL EL-PA PAGE DEPUTY COMMISSIONER FEDERAL ACQUISITION SERVICE, GENERAL SERVICES ADMINISTRATION

BACKGROUND & CONTEXT

MA MARK J K J. LEE DEPUTY DIRECTOR, OFFICE OF GENERAL SERVICES ACQUISITION POLICY, INTEGRITY & WORKFORCE GENERAL SERVICES ADMINISTRATION

Why are we having this conversation?

Background and Context

• n Key Aspects of the Proposed Rule
• Use o
• f Transactional Data i

in Office Supplies 2 2 (OS OS2)

• Burden A

Analysis

• Analysis o
• f B

Basis of A Award Requirement ( (BOA)

• f t

the P Price ce R Reduct ction Clause (PR PRC)

• Alternative

ves

• Multiple Award Sch

chedules ( (MAS) Pi Pilot

OS2 implementation of Horizontal Price Analysis Techniques and Dynamic Pricing demonstrates how substantial savings rates can be achieved

Comparison of

OS2 Pre-Dynamic Pricing (November 2012 - January 2013) and Dynamic Pricing Savings Rates (June 2013 - present)

Cumulative OS2 Indirect Savings

Current Reporting Burden under Price Reductions Clause

Burden en No.

• . of
• f

Respo ponses es Respo ponses es p per er Responden ent Total A l Annua nnual l Respo ponses es

• Avg. B

Burde den H Hour urs per er R Respo pons nse Total B l Burden H n Hour urs

Training 16,000 1 16,000 4 64,000 000 Training Administration 16,000 1 16,000 5 80,000 000 Compliance Systems (heavier lift) 3,200 1 3,200 55 176, 6,000 000 Compliance Systems (lighter lift) 12,800 1 12,800 30 384, 4,000 000 Negotiations 19,000 1 19,000 7 133, 3,000 000 Audits 70 1 70 445 31,150 150 Total B Burde den H n Hour urs 19,000 00 1 19,000 000 46 46 868, 8,150 150

Gathering transactional data could negate the need for the Price Reductions clause and its associated reporting burden:

*Reporting burden is based on estimated burden from Price Reductions Clause Submission for OMB Review, 9/20/2012: https://federalregister.gov/a/2012-23137

Annual burden hours to be superseded with new policy

Estimated Reporting Burden of Price Reductions Clause*

Distribution of Vendor Sales

The majority of MAS and non-MAS vendors had sales under $2 million in FY13

0% 10% 20% 30% 40% 50% 60% $0 $1 $2 $3 $4 $5 $6 $7 $8 $9 $10 $11 $12 $13 $14 $15 $16 $17 $18 $19 $20 >$20 % of Vendors FY13 Vendor Sales (millions)

Distribution of MAS and non-MAS Contractor Sales, FY13

Median sales for MAS contractors: $33,000 (total vendors: 17,816) Median sales for non-MAS contractors: $1.4M (total vendors: 477) 51 MAS vendors (0.6%) and 18 non-MAS vendors (4%) had sales over $50M in FY13 MAS Vendors Non-MAS Vendors

Current vs. New Reporting Burden Comparison

Cur urren ent R Repo portin ing B Burden en (Pric ice R Reduc ductio ions ns C Claus use) e) New R ew Repo portin ing B Bur urde den (Pric icin ing Po Policy)* Saving ings (New ew – Curren ent B Burden en) Average Annual Burden per Vendor 45.7 hours $3,108 6.3 hours (12.3 hours in year 1) $430 ($838 in year 1) 39. 39.4 hours rs (33.4 hours in year 1) $2, $2,67 678 ($2,270 in year 1) Aggregate Annual Burden 868,150 hours $59,034,200 115,631 hours (225,389 hours in year 1) $7,862,942 ($15,326,486 in year 1) 752, 752,519 19 h hours (642,761 hours in year 1) $51, $51,171 71,25 258 ($43,707,714 in year 1)

*Year 1 under new pricing policy includes one-time burden for setting up reporting systems.

By s super persedin eding c current r repo porting ing r requir equiremen ents, t the p e proposed t ed transactio ional d l data repo eportin ing g rule i ule is estim imated t to r result ult i in a net et b bur urde den r redu ductio ion o

• f about 7

752,000 h hour urs / / $51 millio lion p n per er yea ear

Reasons for Multiple Award Schedules (MAS) Price Reduction (PR) Modifications

(FY14 as of August 2014)

33, 3% 750, 78% 16, 2% 116, 12% 51, 5%

Basis of Award (BOA) Pricing Change Commercial Pricelist (CPL)/Market Rate Pricing Change Other: Corrected Errors, Industrial Funding Fee (IFF) miscalculations, etc. Temporary Price Reduction - e.g. Promotions Voluntary Price Reduction

Data Source: FSS19 Database Date Range: Awarded PR Mods from Oct - Aug Data Includes the following Schedules: 66, 84, 70, 899, 738 II, 874 V, 874, 871, 00CORP 33 PR modifications, representing 3%

• f the total, resulted from BOA pricing changes

Reasons for Price Reductions

Alternatives that were considered

• Upda

pdate GSA order ering t tools ( (i.e.

• e. GSA Advantage,

e, eBuy uy, a and nd Reverse A Auc uctio ions) and nd requ quir ire us use for a all orders

• Connections to agency specific contract writing and financial systems

would need to be established

• Significant investment and upgrades would be needed to these

applications

• GSA SmartPay Program data
• Less than 1%

% of procurements are made using the purchase card

• Coll

llect data f from

• m c

custom

• mer a

agencie cies

• Agencies do not store and collect this data in a manner that can be

shared readily with GSA

MAS Transactional Data Reporting Implementation Pilot

• Sco

cope

• Commercial products and commoditized services
• Partic

icipatio ion

• Contractor participation is mandatory on select Schedules
• These contractors would not be subject to the BOA requirements of the

PRC

• Evalua

luatio ion n of pi pilot

• Clearly defined metrics such as savings rate, customer satisfaction,

small business utilization, and commercial benchmarks

• GSA would seek stakeholder feedback on pilot experience
• Category M

Mana nager a and C nd Contracting O Officer R Roles

• Software, T

Tools, a and nd Train ining

Public Meeting Process

• Public M

c Meeti ting P Proce

• cess
• 15 Minute Presentations; Each Presentation followed by 15 Minutes of Questions
• Transcripts from today’s discussion will be posted on Regulations.gov
• Presenters’ Panel will conclude the meeting
• GSA is here to listen and learn
• Thi

his m meeting i is pa part of a an n ong ngoing ing di dialogue ue

• Major themes will be captured by GSA’s Transactional Data Reporting Policy Team
• Public Comments collected from March 3, 2015 to May 4, 2015
• Implementation updates available on interact.gsa.gov
• GSA will reconcile

e all commen ents recei eived ed in response t e to t the p proposed ed r rule

• Comment reconciliation will begin after May 4, 2015
• GSA will continue to work collaboratively with all interested stakeholders

Facilitator Roles

• Ensure a

e all vi views a are e heard

• Adher

ere t e to the he s sche hedu dule led agenda da

• Mov
• ve the dialog
• gue f

for

• rward

The public meeting is an opportunity for everyone to listen and learn from the diverse viewpoints of the federal acquisition community.

Ground Rules

1. 1. Brie ief & & Concise Q Que uestio ions a and nd Ans nswers

• In-person attendees raise your hands. Virtual attendees enter your

questions in the Q&A pod of GSA’s Virtual Meeting Space

• Questions should request clarification on the views from the

presentations

• Facilitators will alternate between in-person and virtual attendees

2. 2. Toda day’s di discussion i n is abo bout getting ing c clarification f n from pr presenters

• Provide overall comments on the proposed rule in the Federal Register

3. 3. Hold your que questio ions dur during pr presentatio ions ns

OMB & GSA Panel

• 15 Minut

nute o

• ppo

pportun unity t to ask abo bout the he de develo lopment of t the he pr proposed d rul ule and t nd the he imple plementatio ion

15 MINUTE BREAK

Office of Inspector General

U.S. General Services Administration

Transactional Data Reporting: GSAR Case 2013-G504

Brian Gibson, Office of Audits

Public Meeting Presentation

GSA Office of Inspector General

The GSA Office of Inspector General supports the collection and use of transactional data as an additional tool for contracting officers. However, it will not provide the government with the price protections currently afforded under the Price Reductions clause. We have four main areas of concern.

GSA Office of Inspector General

CONCERN ONE

The proposed rule does not justify the elimination of the government’s price protections under the Price Reductions clause.

GSA Office of Inspector General

CONCERN ONE – DETAILS The proposed alternate Price Reductions clause removes all significant price protections – not just the basis of award tracking requirement.

GSA Office of Inspector General

CONCERN ONE – DETAILS As currently proposed, there is no contractual requirement for contractors to lower their prices

• ffered to the government based

upon the transactional data reported.

GSA Office of Inspector General

CONCERN ONE – DETAILS The Price Reductions clause results in real savings for the taxpayer that transactional data alone will not guarantee.

GSA Office of Inspector General

CONCERN TWO

The proposed rule risks overreliance

• n reported transactional data at the

expense of commercial price analysis; as a result, the government may pay more than the commercial market.

GSA Office of Inspector General

CONCERN TWO – DETAILS The premise of the Schedules program is grounded in market- based pricing; however, prices derived from transactional data may not result in the best price for the government.

GSA Office of Inspector General

CONCERN TWO – DETAILS The proposed rule is unclear as to how GSA will use Commercial Sales Practices disclosures and vertical price analysis.

GSA Office of Inspector General

CONCERN THREE

The proposed rule underestimates the burden and resources necessary for:

• contractor data reporting;
• GSA’s and ordering agencies’

use of the data; and

• GSA’s enforcement of

transactional data reporting requirements.

GSA Office of Inspector General

CONCERN THREE – DETAILS The contractor burden estimates are understated. We defer to industry for a more accurate burden calculation.

GSA Office of Inspector General

CONCERN THREE – DETAILS There is little information provided concerning the required systems architecture and costs associated with transactional data analyses.

GSA Office of Inspector General

CONCERN THREE – DETAILS The proposed rule does not provide enforcement provisions necessary to ensure contractor compliance with transactional data reporting requirements.

GSA Office of Inspector General

CONCERN FOUR

The planned expansion of this initiative in the Schedules Program assumes services and solutions can be effectively standardized and relies on undefined criteria to evaluate whether the pilot is successful.

GSA Office of Inspector General

CONCERN FOUR – DETAILS Expansion to services – which make up two-thirds of schedule sales – will be challenging due to the difficulty of standardizing labor categories. A pilot focusing

• n products won’t be applicable to

services.

GSA Office of Inspector General

CONCERN FOUR – DETAILS The proposed rule lacks specifics regarding the pilot’s evaluation criteria, such as “commercial benchmarks” and “other available data.”

GSA Office of Inspector General

SUMMARY Outside of the Price Reductions clause, there is no requirement for contractors to lower their prices

• ffered to the government.

GSA Office of Inspector General

SUMMARY

Prices Paid within the Government

≠

Best Price

GSA Office of Inspector General

This presentation represents a summary

• f our position related to GSAR Case

2013-G504. Upon formal submission, this presentation and our written response will be available at www.gsaig.gov.

GSA Office of Inspector General

If you have any questions, please contact:

Theodore R. Stehney Assistant Inspector General for Auditing 202-501-0374 ted.stehney@gsaig.gov James P. Hayes Deputy Assistant Inspector General for Acquisition Programs Audits 202-273-7321 jamesp.hayes@gsaig.gov Brian J. Gibson Program Director 202-273-7278 brian.gibson@gsaig.gov

ROGER WALDRON

PRE PRESID IDENT THE COALITION FOR GOVERNMENT PROCUREMENT

GLENN PERRY

RE RETIRE RED FORMER SENIOR PROCUREMENT EXECUTIVE, DEPARTMENT OF EDUCATION

LUNCH BREAK

MAUREEN REGAN

COUNS NSELOR T TO THE INS NSPECTOR GENERAL DEPARTMENT OF VETERANS AFFAIRS

CHRISTOPHER WOLF

VICE PRE PRESIDENT, C , CONTRACTS & & PR PROCURE REMENT THE LOUIS BERGER GROUP, INC.

COMMENT ON GSA’S PROPOSED TRANSACTIONAL REPORTING RULE

• J. RUAIRI MACDONALD

MASTERS IN GOVERNMENT PROCUREMENT LAW (LLM) CANDIDATE GEORGE WASHINGTON UNIVERSITY

PU BLI C M EET I N G APRI L 1 7 , 2 0 1 5 , GSA H EADQUART ERS

OVERVIEW

I . PROBLEM STAT EM EN T I I . COM M EN T S ON GSA’S PROPOSED SOLU T I ON

• Data
• Standards
• System

I I I . CON CLU SI ON

• I. PROBLEM STATEMENT
• Competition => fair and reasonable price.
• If you narrow competition, you need data
• n wider market.
• IDIQs, FSS, and BPA narrow competition,

but additional data is not collected or available to COs.

• II. COMMENTS ON GSA’S

PROPOSED SOLUTION

Helpful to distinguish three things:

Data | Standards | System

DATA | STANDARDS | SYSTEM

• Why limited focus on modernizing consumer

(i.e. government) generated review data?

• What data would be available by expanding

the use of Purchase Cards?

• Open data and access to information
• Is an expansion of great risk / liability to

contractors necessary or helpful?

Harmony with DATA Act

• May 2015 – May 2017: Agencies must begin using data

standards for financial, budget, payment, grant, and contract reports to Treasury, OMB, and GSA.

• 2016-2018: Inspectors general report on completeness,

timeliness, quality, and accuracy of each agencies’ standardized spending data.

• August 2018: OMB may decide to adopt data standards for

all contractor and grantee reporting; agencies implement.

DATA | STANDARDS | SYSTEM

Source: Data Transparency Coalition http://www.datacoalition.org/wp-content/uploads/2014/11/dataactinfographic.pdf

• Will Common Acquisition

Platform be an open source solution?

• Purchase card systems?
• API important.

DATA | STANDARDS | SYSTEM

GSA is addressing a significant problem. Take-Aways:

• More data from Consumers (i.e. Gov.)
• Embrace DATA Act
• Expand Gov. Purchase Card
• III. CONCLUSION

THANK YOU!

• J. Ruairi Macdonald

Masters in Government Procurement Law (LLM) Candidate GEORGE WASHINGTON UNIVERSITY LAW SCHOOL jrmacdonald@law.gwu.edu linkedin.com/in/ruairimacdonald @RuairiMacd

15 MINUTE BREAK

58

GSA TRANSACTIONAL DATA REPORTING RULE

• Mr. Will Goodman

Vice President for Policy

58

Burden Reduction?

• “GSA believes replacing the price reduction clause’s tracking

customer requirement with transactional data reporting could reduce the annual burden on contractors by more than 85 percent, or approximately $51 million in administrative costs…”

• This estimate is based on an exchange of the Price Reduction Clause

(PRC) for new Transactional Data Reporting.

• But it is not immediately clear, other than trading the PRC’s tracking

for transactional data reporting, what other burdens will be reduced.

• The exchange of the two processes, if not coupled with other burden

reductions through relief from the PRC, could essentially be a one-for-

• ne trade, or the burdens could even increase.
• The rule makes these costs non-reimbursable (“at no cost to the

government”) in Part 552.216-75, which means the government has fully shed any costs it might suffer as a result of increased burdens.

• Whatever the government chooses to do in this area, the costs it

creates for contractors through distortions not found in the commercial marketplace should be fully recoverable by contractors.

59

Shift the Burden on What Basis?

• “The Federal Acquisition Regulation (FAR) has long emphasized the

need for contracting officers to conduct price analysis as part of their responsibility to establish that offered prices are fair and reasonable.”

• “GSA proposes to address this [requirement] through the use of a

transaction data reporting clause. Under the clause contractors would be required to report historical information…”

• The best way to work toward appropriate administrative burden

reductions is to place those burdens on the government, to create incentives for the government to streamline.

• (A good example of this incentive in action is the Pentagon’s recent

legislative proposal to the Congress to streamline reporting burdens

• n program managers.)
• The government is more likely to forget and excuse burdens placed on

contractors than burdens that it must directly carry.

• Furthermore, shifting the burden from the government to contractors

to establish price reasonableness undermines the goal of the Paperwork Reduction Act.

60

Why Not Automation and Expertise?

• “The current lack of transparency on prices paid by government customers has

led to significant price variation, sometimes 300 percent or more, for identical purchases by federal agencies from the same commercial vendor as well as the unnecessary duplication of contract vehicles.”

• Yet “the current lack of transparency” is a statement made by the government

about information to which the government already has access, if not in a form that is readily accessible to contracting officers.

• Rather than establishing a new manual process, the government should take

advantage of this evident need to update its systems to track these data in an automated fashion.

• Creating information systems capable of automatically capturing the data

would not only increase its accuracy and timeliness, but it would help bring the government closer to “state of the practice” processes used outside of government.

• The government is likely to make these investments at some point, and the

sooner they are made, the sooner the government will have access to the information it needs without needless investment in a manual system that may not prove much cheaper than a more efficient automated collection system.

• Creating sophisticated price research tools and cultivating expertise in

supplier selection will bring the government more closely in line with commercial practices.

61

Why Not Competition?

• “GSA found that only about 3 percent of the total price

reductions received under the [PRC] came as a result of commercial pricelist adjustments and market rate changes, with the balance for other reasons,” e.g., competition.

• While transactional data reporting can contribute to

competition, if the vast majority of price reductions are already

• ccurring due to competition, the current competitive

environment appears to be sufficient.

• FAR 15.404-1(b)(1) states, “Price analysis may include

evaluating data other than certified cost or pricing data

• btained from the offeror or contractor when there is no other

means for determining a fair and reasonable price.”

• If 97 percent of current price reductions result from task award

competition, not from PRC requirements, that fact suggests that there are other means than obtaining pricing data from contractors to establish price reasonableness—there is active and effective task award competition.

62

Category or Item Analysis?

• The horizontal price comparison proposed by GSA is not likely

to lead to a true “apples-to-apples” comparison of items.

• Complex services offerings are priced according to very

specific circumstances related to risk, security requirements, geographic area of performance, and the qualifications of the individuals performing the work.

• The wide product quality variation in a category like “laptop

computers” suggests that such comparisons will be equally difficult for customized or complex products.

• Horizontal price comparisons are unlikely to take into account

these specific circumstances at this level of detail when looking at prices paid by different government customers.

• Grouping by categories will therefore likely lead to

inappropriate price comparisons in some cases.

63

Protection of Proprietary Pricing Information from Competitors?

• Certain pricing data, such as terms and conditions or discounts
• ffered to a specific government customer under a Blanket

Purchase Agreement (BPA), are sensitive and would affect competition.

• The rule is silent as to restrictions on GSA’s disclosure of

sensitive pricing information to competitors during price

• negotiations. Industry opposes the exposure of its proprietary

BPA information from one offeror to another offeror by the government for negotiation purposes.

• GSA should include specific restrictions on the disclosure of

sensitive pricing information and explain the safeguards it will put in place to prevent accidental exposure of such information.

64

PRESENTERS’ PANEL

CLOSING REMARKS

JEFF FFRE REY K

• K. K

KOSES SENIOR PROCUREMENT EXECUTIVE, GENERAL SERVICES ADMINISTRATION

Public Meeting Transactional Data Reporting

Gene neral S Services Adm dminis nistratio ion Proposed R Rule 2013 2013-G504, T Trans nsactiona nal Data R Repo porting ing Apri ril 17, 17, 2015 2015