[Federal Register Volume 77, Number 114 (Wednesday, June 13, 2012)]
[Notices]
[Pages 35355-35357]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-14472]
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DEPARTMENT OF COMMERCE
International Trade Administration
[Docket No. 120216141-2141-01]
RIN 0625-XA17
User Fee Schedule for Trade Promotion Services
AGENCY: U.S. & Foreign Commercial Service, International Trade
Administration, Department of Commerce.
ACTION: Notice and request for comment.
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SUMMARY: The U.S. & Foreign Commercial Service (US&FCS) within the
International Trade Administration (ITA) publishes this notice to
announce its intent to adjust user fees in light of an independent cost
of service study finding, which concluded that the US&FCS is not fully
covering its costs for providing trade promotion services under the
current fee structure. ITA provides a wide range of trade promotion
information and services to U.S. businesses that are exporting or
seeking to export. The services considered here are a subset of ITA
activities that involve relatively more intensive time engagements with
particular client firms; ITA will continue to provide its core
information and services without charge. The primary objective of the
adjustment to the User Fee Schedule is to ensure that the fees for the
more intensive services reflect, to the extent possible, the actual
costs incurred by the United States for providing these more intensive
trade promotion services. The fee revenue is expected to continue to
contribute to ITA's capabilities for assisting U.S. businesses in
accessing export markets.
In addition, in revising the user fees, the US&FCS proposes to
revise the small & medium-sized enterprises (SME) hourly rate discount
as well as the SME incentive program piloted in 2008. The US&FCS has
historically offered a discount to SME's, defined as those which employ
500 or less persons. Under the User Fee Schedule proposed in this
notice, US&FCS will offer a discount of 50 percent per hour to SMEs.
The purpose of this notice is to align user fees and authorized
activities with actual program costs; and improve our ability to
properly recover direct and indirect costs associated with service
delivery.
DATES: We will consider all comments that we receive on or before 60
days after publication in the Federal Register.
ADDRESSES: You may submit comments by either of the following methods:
Federal eRulemaking Portal: www.Regulations.gov.
Postal Mail/Commercial Delivery: Docket No. ITA-2012-0001 U.S. &
Foreign Commercial Service, Office of Strategic Planning & Resource
Management, 1400 Constitution Avenue NW., Rm. C125, Washington, DC
20235.
Supporting documents and any comments we receive on this docket may
be viewed at http://www.regulations.gov/#!docketDetail; D ITA-2012-
0001.
SUPPLEMENTARY INFORMATION:
Background
The statutory mission of US&FCS is to ``place primary emphasis on
the promotion of exports of goods and services from the United States,
particularly by small businesses and medium-sized businesses, and on
the protection of United States business interests abroad * * * through
activities that include assisting United States exporters.'' 15 U.S.C.
4721(b). The statute further defines the term ``United States
exporter'' at 15 U.S.C. 4721(j) as a U.S. citizen, U.S. corporation, or
foreign corporation that is more than 95% U.S.-owned that ``exports or
seeks to export, goods or services produced in the United States.''
User fees may be collected from U.S. exporters that meet the Service
Eligibility Policy issued in FY 2011.
The Office of Management and Budget (OMB) Circular A-25 encourages
the
[[Page 35356]]
full recovery of costs through user fees for an appropriate share of
goods and services provided to recipients of benefits beyond those
accruing to the general public. Specifically, section 6 of Circular A-
25 states that ``when a service (or privilege) provides special
benefits to an identifiable recipient beyond those that accrue to the
general public, a charge will be imposed (to recover the full cost to
the Federal Government for providing the special benefit, or the market
price).'' A ``user fee'' is the amount paid by a recipient of a special
benefit beyond those benefits accruing to the general public. A
``special benefit'' may accrue and a user fee be imposed when a
government service: (a) Enables the beneficiary to obtain more
immediate or substantial gains or values than those that accrue to the
general public; (b) is performed at the request or for the convenience
of the recipient, and is beyond the services regularly received by
members of the same industry or group or by the general public; or (c)
provides business stability or contributes to public confidence in the
business activity of the beneficiary.
The direct or indirect cost of a service provided by the Federal
Government includes, but is not limited to, the following:
Direct and indirect personnel costs, including salaries
and fringe benefits such as medical insurance and retirement.
Retirement costs should include all (funded or unfunded) accrued costs
not covered by employee contributions as specified in Circular A-11.
Physical overhead, consulting, or other indirect costs
including material and supply costs, utilities, insurance travel, and
rents or imputed rents on land, buildings, and equipment.
The management and supervisory costs.
The costs of enforcement, collection, research,
establishment of standards, and regulation, including any environmental
impact statements.
User Fee Schedule
The US&FCS offers Trade Promotion Services to U.S. businesses that
consist of Standard Services and Customized Services. For each of these
services, the US&FCS collects fees according to the User Fee Schedule
that is made available on its Web site and agency publications. The
``Standard Services'' listed in the User Fee Schedule are services that
are performed in the same manner by all US&FCS field units. Other
``Customized Services,'' not shown in the chart below, entail
substantive variation of the scope of work.
The US&FCS proposes to modify the user fees for both Standard
Services and Customized Services. The Standard Services described below
will no longer be assigned a standard global price. The proposed new
User Fee Schedule provided below lists each standard service and the
estimated number of hours for completion of service delivery. To
determine the fee for any service, a flat hourly rate of $55.33 is
multiplied by the estimated workload hours. Direct costs, such as
transportation or an interpreter, will be discussed with the client and
assessed in addition to the user fee. For Customized Services, the
estimated workload hours will vary but the user fee will be calculated
based on the flat rate of $55.33 per hour.
The Standard Services that will be assessed under the new fees are
described below.
1. Business Service Provider is a program where the US&FCS offers
both U.S. and non-U.S. professional service providers the opportunity
to introduce their services to U.S. exporters via the web. This service
helps U.S. or foreign firms promote services which facilitate export
transactions, such as market assessments, financing, accounting or
legal services. The duration of the web promotional message is one
year.
2. Featured U.S. Exporter is a service where the US&FCS provides a
virtual directory of U.S. products featured on USFCS Web sites around
the world. It enables U.S. exporters an opportunity to target specific
markets in the local language of business. The duration of the
advertisement is one year.
3. Gold Key Service is a service where the US&FCS arranges meetings
in foreign markets to match U.S. exporters with prospective sales
agents or distributors, manufacturers, licensees, franchisees or
strategic partners. The U.S. exporter identifies the type of firm it
desires US&FCS to identify, screen, and evaluate according to criteria
established by the U.S. exporter. The number of firms to be identified
is determined by the client. A market briefing is provided.
4. International Company Profile is a service where the US&FCS
provides a research report on a prospective business partner's
commercial viability and financial circumstances, which includes topics
such as business registration, credit rating, profit and loss data,
pending litigation, reputation, and US&FCS opinion about the firm and
export prospects.
5. International Partner Service is a service where the US&FCS
provides a report concerning prospective sales agents or distributors,
manufacturers, licensees, franchisees or strategic partners. The U.S.
exporter identifies the type of firm it desires US&FCS to identify,
screen, and evaluate according to criteria established by the U.S.
exporter. The number of firms to be identified is determined by the
client.
6. Quicktake is a service where the US&FCS assists U.S. exporters
to quickly determine which among more than 30 European markets offer
the best export opportunities for a specific product or service and
provides direction on how to enter those markets.
Pricing Discounts
The US&FCS currently offers various discounts to SMEs. For all
SMEs, the hourly rate is discounted 65 percent. In addition, the SME
Incentive Program offers new-to-exporting firms a 50 percent discount
from the full rate on the first Gold Key service, International Company
Profile service or International Partner Search service, provided the
firm meets the following criteria: (1) The firm's products are eligible
for US&FCS fee-based assistance; (2) the firm has not exported in the
prior 24 months; and (3) the firm has not previously received
assistance from US&FCS. Other discounts involving bundling or bulk
service orders were also offered in the past.
Under this notice, US&FCS proposes to eliminate the SME incentive
program. A SME discount of 50 percent per hour will be offered as an
exception to the OMB full cost recovery guidance, resulting in a hourly
rate of $27.66 for all SMEs.
Full cost rates and SME discount rates are provided on the next
page so that the public can comment upon the implications of full and
SME rates.
[[Page 35357]]
Proposed User Fee Schedule
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Average Proposed fee for Current fee schedule Dollar change in Percentage change in
service average workload ------------------------ pricing pricing
Standard service delivery ------------------------ -----------------------------------------------
hours Full SME Full SME Full SME Full SME
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Business Service Provider................... 12 664 332 600 300 64 32 11 11
Featured U.S. Exporter...................... 6 332 166 300 150 32 16 11 11
Gold Key Service............................ 64 3,541 1,771 2,300 700 1,241 1,071 54 153
International Company Profile............... 23 1,273 636 900 600 373 36 41 6
International Partner Search................ 49 2,711 1,356 1,400 500 1,311 856 94 171
Quicktake................................... 15 830 830 750 750 80 80 11 11
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Determining the Cost of Performing Each Service
The cost of service methodology developed by US&FCS was designed to
bring the organization closer to full cost recovery guidance set forth
in OMB Circular A-25. To set prices that are ``self sustaining,'' the
US&FCS had to determine the true cost of providing various trade
promotion services.
Federal Accounting Standards permit US&FCS to use an activity-based
costing model to determine the true cost of services listed in the
proposed User Fee Schedule. The activities were defined in accordance
with the US&FCS list of eleven (11) services offered by US&FCS,
including both standard (6) and customized (5) services.
As part of the cost of service study, the US&FCS conducted a
workload survey to obtain a more accurate estimate of the true cost for
delivery of specific services. The workload survey was designed and
distributed to all US&FCS international and domestic field units. An
operational audit technique was used for this workload survey. The
operational data is based on level of effort exerted by a cross-section
of staff members who are subject matter experts and practitioners. The
independent contractor commissioned for the cost of service study
reviewed the workflow process for delivery of standard and customized
services, breaking out the discrete steps of each activity to obtain
the estimated time to complete each step, then combined the step
workload to determine the total workload estimate per service. The data
submitted by various US&FCS field units was then aggregated to
determine the global average of workload for each standard or
customized service.
The proposed global average hourly rate of $55.33 was based on
actual staffing data and payroll for staff specifically engaged in the
delivery of trade promotion services, rather than data aggregated from
US&FCS staff as a whole. This resulted in a weighted average hourly
rate that did not include overhead, benefits and other burdening
factors. (These burdening factors were later added to produce the
burdened hourly rate of $55.33.) Using FY2010 ITA budget data, fringe
benefits and non-labor related costs (e.g. materials, supplies, rent,
utilities, equipment) were prorated to determine the burdening rate
that was to be added to the hourly rate. This resulted in an hourly
rate that accounts for all applicable labor and non-labor costs
specifically related to the delivery of services, which is consistent
with federal accounting standards.
Conclusion
Based on the information provided above, the US&FCS believes its
proposed fees are consistent with the objective of OMB Circular A-25 to
``promote efficient allocation of the nation's resources by
establishing charges for special benefits provided to the recipient
that are at least as great as the cost to the U.S. Government of
providing the special benefits * * * '' OMB Circular A-25(5)(b).
FOR FURTHER INFORMATION CONTACT: Ms. Erin Sullivan, U.S. & Foreign
Commercial Service, Office of Strategic Planning & Resource Management,
1400 Constitution Avenue NW., Rm. C125, Washington, DC 20235, Phone:
(202) 482-1539.
Elnora Moye,
Trade Program Assistant.
[FR Doc. 2012-14472 Filed 6-12-12; 8:45 am]
BILLING CODE 3510-FP-P