In 2016, the General Services Administration (GSA) issued a final rule to amend the GSA Acquisition Regulation (GSAR) to require that vendors report transactional data from, among other things, GSA Schedules orders. This data includes purchasing information associated with orders for goods and services, like product descriptions, quantities purchased, and prices paid. At the time, GSA had “experimented with collecting transactional data through some of its contracts and found it instrumental for improving competition, lowering pricing, and increasing transparency.” Though many of us in industry had concerns about how this rule would be implemented, in the fullness of time, we have come to see that Transactional Data Reporting (TDR) really represents the next logical step in the evolution of the MAS Program as that program responds to the dynamic commercial market…
Notwithstanding the benefits and efficiencies associated with the use of TDR, there are some stakeholders that have expressed concerns about its use. They worry about the reduction in the totality of information provided by contractors, and they question whether TDR will yield the lowest cost alternative to the government. Against the totality of circumstances, however, these concerns may be misplaced.
To begin with, not all reductions in access to information carry negative consequences. As stated, over time, with each evolution of the tools utilized to assess pricing, the government has enjoyed significant benefit notwithstanding the fact that the aperture of the lens focusing on information has narrowed. Without a cost-justified program purpose, it makes no sense to cast away that benefit for the sake of simply accessing more information…
Regarding whether TDR yields the lowest cost alternative to the government, 41 USC 152(3), when discussing competitive procedures, recognizes that competitive procedures established by the GSA Administrator are to include those resulting “in the lowest overall cost alternative to meet the needs of the Federal Government.” (Emphasis added.) This standard is important because it reflects a recognition that there are multiple program drivers associated with procurement, like time, system compatibility, supply chain continuity, and administrative cost, that impact price and yield a Total Acquisition Cost (TAC). A narrow fixation simply on the lowest price, rather than TAC, could yield a perverse result where the government’s administrative cost of chasing the lowest price exceeds the benefit of isolating that price. Such a result is hinted at in GSA’s proposed TDR rule, where it noted that only 3% of contract price reductions under the PRC came from the tracking customer process, notwithstanding the PRC’s unnecessary compliance cost impact on businesses, especially small businesses. Rather, “[t]he vast majority (approximately 78 percent) came as a result of commercial pricelist adjustments and market rate changes, with the balance for other reasons.” … Read the full article here.
