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Tag: IG

Not everyone is sold on the Transactional Data Reporting (TDR) pilot

Almost five years ago GSA launched the Transactional Data Reporting (TDR) pilot to replace the Price Reduction Clause (PRC). GSA’s goal is to use the data received, to obtain better pricing from contractors. GSA calls TDR a success, critics are not so quick to agree. (Federal News Network May 10, 2021)

Jeff Koses, GSA’s senior procurement executive said, “GSA has successfully demonstrated the value of TDR under the existing scope of the pilot. It has shown steady progress over the past four years, met most of the pilot’s objectives in the most recent year, and has made the necessary investments to leverage TDR’s potential in the years to come. We will continue to make improvements, especially in contracting officer usage.” However, Koses made no mention of using the TDR information in 2019 or 2020 (ibid).

Some argue that TDR works on paper, but not in reality. Many contracting officers are reluctant to use the data for decision-making. One industry expert went so far as to say, “I have not experienced any negotiations based on TDR data in order to form an opinion.” Others have suggested that the data is incomplete and that GSA has no strategy to back the pilot. (ibid)

One consultant pointed out that as more companies participate in TDR, the IG’s ability to audit prices before an award is made is more difficult. She noted, “under the TDR pilot, the population of auditable contracts has ostensibly been cut in half. When you remove the major resellers and the integrators, what remains are largely professional service contractors and products companies under Schedules 84 (Law Enforcement), 71 (Furniture), and 66 (Scientific). The audit threshold for annual sales is also reduced due to the smaller pool of contracts from which the OIG is selecting. Small businesses who would never have been a blip on the OIG’s radar are now at much higher risk of pre-award audit.” (ibid)

Another complication is GSA’s move toward unpriced contracts under Section 876 of the 2018 National Defense Authorization Act. The Act makes the Price Reduction Clause as well as TDR less necessary because the burden is on vendors to provide the lowest price possible as part of contract negotiations. (ibid)

Koses said GSA will refine and consider:

  • The ability of Federal Supply Schedule contracting officers to use transactional data for price negotiations in lieu of commercial sales practices and price reduction clause disclosures
  • The impact of an expanded data collection on GSA’s ability to use the data it currently collects
  • The impact on current/future GSA schedule contract holders
  • Communication to industry partners
  • Training and tools for category managers not impacted by TDR
  • Possible impacts on other FAS initiatives such as the National Defense Authorization Act (ibid)

So when will the pilot move to production? The waters remain murky. Whether the IG will move from the production stage should be made more clear when the Inspector General report on the TDR pilot is released, in the coming weeks. Vendors should be ready to invest in systems to collect and report pricing data, should the TDR pilot go into production.

Questions concerning how to collect and report pricing data? Give us a call.

Just the Facts FAS, Please

Earlier this week, a GSA watchdog discovered erroneous reporting of small business contracts by the Federal Acquisition Service (FAS). (Government Executive September 17, 2020)

The General Service Administration (GSA) inspector general (IG) recently provided a report that focused on the data entered into the Federal Procurement Data System – Next Generation, which is managed by GSA. The Small Business Administration (SBA) uses the system data provided to determine if the federal government is achieving its annual goal of awarding 23 percent of contracts to small businesses. An IG review of FAS procurements from fiscal 2016 and 2017 and shows that small business procurements have been grossly overstated.

“We found that FAS’s reporting of small business procurements contained significant inaccuracies. We identified $89 million in procurements erroneously recorded as small business in the Federal Procurement Data System – Next Generation. Additionally, FAS’ small business procurement reporting does not identify the extent of the work performed by large businesses. We found approximately $120 million of small business procurements in which large businesses performed a portion of the work.” (ibid)

After interviewing small business contractors and GSA officials as well as analyzing agency contracting data, the IG determined many of the issues to be out of GSA’s control. For instance, the IG found that classification codes  often “pre-populate” for task orders; due to the nature of the software, officers cannot override the system to update the task order codes. In addition, no mandate exists for FAS or small businesses to report how much of the work completed on a contract is subcontracted to large businesses. This leads to inaccuracies when assessing FAS’s small business procurements. Many believe the inaccuracies will never be fully fixed due to the competing policy issues and marketplace anomalies. (ibid)

The IG recommended the following:

  • Fix the limitations of the contracting system to enable accurate reporting
  • SBA and the commissioner discuss how subcontracting and reseller agreements are reported

How does this affect your contract or an upcoming proposal? Give us a call.

GSA Pricing Tools, Untooling

A GSA internal watchdog has found the two comparative labor pricing tools contain flawed data and recommends GSA stop using the pricing tools. GSA however, plans to keep the current pricing tools in place for now. (FCS, January 2, 2020)

This report shows the use of discrepant data in flawed equations, thus arriving at unreliable pricing data. GSA’s Inspector General (IG) said, “the data and calculations are so flawed, they’re dulling the federal government’s buying power edge, as well as possibly resulting in the overpayment on contracts.” (ibid)

Julie Dunne, FAS Acting Commissioner, agrees with the IG that the two tools, Contract-Awarded Labor Category tool (CALC)  and Contract Operations Division Contractors Database (CODCD) used for labor pricing, are not the optimal. She also agrees about a need for pricing comparison capabilities; however, she refrains from wanting to scrap these tools in lieu of something else that might bring even greater inaccuracies. 

Dunne went on to say that without the current tools, labor pricing would be determined by individual searches via the internet resulting in more inaccuracies. She acknowledged that decisions on comparison pricing for labor have always been the judgment of FAS contracting officers. “Disallowing access to aggregated information about previously-awarded MAS contracts does not further our goal of improving pricing. Quality price analyses are the result of training, expertise and appropriate controls. FAS believes our continued focus in these areas will improve how comparative data is used in our MAS award documentation.” (ibid)

Have questions concerning your current labor pricing? Give us a call.