GSA Inspector General Fumbles on Transactional Data: Larry Allen

Federal contractors in dynamic markets benefit from the General Services Administration’s pilot program allowing them to report transactional data rather than certain pricing information. Larry Allen discusses the merits of the pilot program and the problems with the GSA auditor’s view of it.

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The GSA Office of the Inspector General (OIG) issued a report this week again criticizing the Multiple Award Schedule’s Transactional Data Reporting (TDR) pilot program.

It’s not clear the office understands the program’s goal. Established in 2016, its intent was to allow certain vendors on the goverment’s multiple award contracts to report transactional data, including prices paid by government customers, for products and services sold. In exchange for the transactional data, these contractors were no longer required to provide commercial pricing information or track certain information for price reduction purposes.

A May 1 press release announcing the report said “the agency has never used TDR pilot data in contract price negotiations.” It then went on to say “the collection of TDR data GSA has amassed is almost entirely unusable.”

It’s unclear whether the OIG was more upset that the collected TDR data was unusable or whether Schedule’s program officials didn’t use it in making price reasonableness determinations.

What is clear is that the OIG either doesn’t know, or has forgotten, that the purpose of the TDR pilot was to move away from the use of contractor-supplied information to determine the price reasonableness of items offered through Schedule contracts.

The General Services Administration Multiple Award Schedule is the government’s largest central indefinite delivery, indefinite quantity contract. It offers thousands of commercial solutions from a wide range of contractors, most of which are small businesses. Schedule sales in fiscal 2022 were approximately $40 billion.

Traditional GSA Schedule contracts rely on data supplied by contractors on their own commercial sales and discounting practices, as well as a horizontal review of market data to ensure that those net prices are in-line with those for the same or similar products already on a Schedule contract. This approach ties a contractor’s Schedule price to a “Basis of Award” customer or class of customers, requiring contractors to consistently monitor discounting changes to that class to ensure compliance with the Schedules’ Price Reductions Clause.

This can be difficult for companies with dynamic, market-driven pricing. The TDR pilot was developed to create an alternative for such companies, doing away with a Basis of Award customer by using market research to determine whether offered prices and discounts were competitive. Federal customers have benefited because a wider range of solutions are available via Schedule contracts and enhanced competition.

The TDR data collected is post-award. It tracks transaction-level information on federal, not commercial, sales. It was originally intended to be used by other federal agencies in determining whether the pricing they were offered on specific projects was competitive.

While this information may be of some use to GSA Schedule contracting officers in their market research work, the agency has already developed its own pricing tool for this purpose. It doesn’t need to rely on “unusable” TDR information as it has its own analysis tool.

The OIG report makes it seem as if a lack of usable TDR data leaves contracting officers without a reliable means to review important pricing information. This, manifestly, is not the case.

It’s tough to take the OIG report seriously because of these flaws. The stridency with which the OIG has consistently opposed the TDR program may have clouded its ability to impartially evaluate it. The conflicting statements in the press release are just one example. Selective evaluation of information may be another.

GSA Senior Procurement Executive Jeff Koses, for example, recently told a Coalition for Government Procurement spring conference that the agency’s data show that TDR contracts actually result in better contract-level pricing than those negotiated through the traditional Schedule contracting route.

TDR has become a valuable way to enable innovative businesses to participate on the GSA Schedules program. Federal customers definitely benefit as a result. The OIG may want to stop sputtering long enough to look at those benefits.

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Author Information

Larry Allen, president of Allen Federal Business Partners , has 33 years’ experience in government acquisition. He has provided critical information and advice to most of the top 10 federal contractors doing business with the government today.

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