[Federal Register Volume 80, Number 222 (Wednesday, November 18, 2015)]
[Notices]
[Pages 72060-72063]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-29396]
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GENERAL SERVICES ADMINISTRATION
[OMB Control No. 3090-0235; Docket No. 2015-0001; Sequence 13]
General Services Administration Acquisition Regulation;
Information Collection; Federal Supply Schedule Pricing Disclosures
AGENCY: Office of Acquisition Policy, General Services Administration
(GSA).
ACTION: Notice of request for comments regarding an extension to an
existing OMB clearance.
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[[Page 72061]]
SUMMARY: Under the provisions of the Paperwork Reduction Act, the
Regulatory Secretariat Division is submitting a request to the Office
of Management and Budget (OMB) to review and approve an extension of a
previously approved information collection requirement regarding
General Services Administration Acquisition Regulation clause 552.238-
75, Price Reductions, otherwise known as the Price Reductions clause.
The requested extension has been renamed ``Federal Supply Schedule
Pricing Disclosures'' because it now includes a burden estimate for
Commercial Sales Practices disclosures. The information collected is
used to establish and maintain Federal Supply Schedule pricing and
price related terms and conditions.
DATES: Submit comments on or before: January 19, 2016.
ADDRESSES: Submit comments identified by Information Collection 3090-
0235, Federal Supply Schedule Pricing Disclosures, by any of the
following methods:
Regulations.gov: http://www.regulations.gov. Submit
comments via the Federal eRulemaking portal by searching the OMB
control number. Select the link ``Submit a Comment'' that corresponds
with ``Information Collection 3090-0235, Federal Supply Schedule
Pricing Disclosures.'' Follow the instructions provided at the ``Submit
a Comment'' screen. Please include your name, company name (if any),
and ``Information Collection 3090-0235, Federal Supply Schedule Pricing
Disclosures'' on your attached document.
Mail: General Services Administration, Regulatory
Secretariat Division (MVCB), 1800 F Street, NW., Washington, DC 20405.
ATTN: Ms. Flowers/IC 3090-0235, Federal Supply Schedule Pricing
Disclosures.
Instructions: Please submit comments only and cite Information
Collection 3090-0235, Federal Supply Schedule Pricing Disclosures, in
all correspondence related to this collection. Comments received
generally will be posted without change to http://www.regulations.gov,
including any personal and/or business confidential information
provided. To confirm receipt of your comment(s), please check
www.regulations.gov, approximately two to three days after submission
to verify posting (except allow 30 days for posting of comments
submitted by mail).
FOR FURTHER INFORMATION CONTACT: Mr. Matthew McFarland, General
Services Acquisition Policy Division, 202-690-9232 or [email protected].
SUPPLEMENTARY INFORMATION:
A. Purpose
GSA's Federal Supply Schedule (FSS) program, commonly known as the
GSA Schedules program or Multiple Award Schedule (MAS) program,
provides federal agencies with a simplified process for acquiring
commercial supplies and services. The FSS program is the Government's
preeminent contracting vehicle, accounting for approximately 10 percent
of all federal contract dollars, with approximately $33 billion in
purchases made through the program in fiscal year 2014.
GSA is requesting an extension of a previously approved information
collection requirement related to one of the major components of the
FSS program, General Services Administration Acquisition Regulation
(GSAR) clause 552.238-75, Price Reductions, otherwise known as the
Price Reductions clause. However, this requested extension has been
renamed ``Federal Supply Schedule Pricing Disclosures'' because it now
includes a burden estimate for Commercial Sales Practices disclosures.
FSS Pricing Practices
GSA establishes price reasonableness on its FSS contracts by
comparing a contractor's prices and price-related terms and conditions
with those offered to their other customers. Through analysis and
negotiations, GSA establishes a favorable pricing relationship in
comparison to one of the contractor's customers (or category of
customers) and then maintains that pricing relationship for the life of
the contract. In order to carry out this practice, GSA collects pricing
information through Commercial Sales Practices (CSP) disclosures and
enforces the pricing relationship through General Services
Administration Acquisition Regulation (GSAR) clause 552.238-75, Price
Reductions, commonly known as the Price Reductions clause (PRC).
Commercial Sales Practices (CSP): In accordance with GSAR
515.408(a)(2), offerors must submit information in the Commercial Sales
Practices Format provided in the solicitation, following the
instructions at GSAR Figure 515.4-2, or submit information in their own
format. In addition to when an offer is submitted, CSP disclosures are
also required prior to executing bilateral modifications for exercising
a contract option period, adding items to the contract, or increasing
pricing under the Economic Price Adjustment clause (GSAR 552.216-70).
Price Reductions Clause (PRC): GSAR 538.273(b)(2) prescribes the
PRC for use in all FSS solicitations and contracts. The clause is
intended to ensure the Government maintains its price/discount (and/or
term and condition) advantage in relation to the contractor's customer
(or category of customer) upon which the FSS contract is based. The
basis of award customer (or category of customer) is identified at the
conclusion of negotiations and noted in the contract. Thereafter, the
PRC requires FSS contractors to inform the contracting officer of price
reductions within 15 calendar days. Per GSAR 552.238-75(c)(1),
A price reduction shall apply to purchases under this contract
if, after the date negotiations conclude, the Contractor--
(i) Revises the commercial catalog, pricelist, schedule or other
document upon which contract award was predicated to reduce prices;
(ii) Grants more favorable discounts or terms and conditions
than those contained in the commercial catalog, pricelist, schedule
or other documents upon which contract award was predicated; or
(iii) Grants special discounts to the customer (or category of
customers) that formed the basis of award, and the change disturbs
the price/discount relationship of the Government to the customer
(or category of customers) that was the basis of award.
41 U.S.C. 152(3)(B) requires FSS ordering procedures to ``result in
the lowest overall cost alternative to meet the needs of the Federal
Government.'' CSP disclosures and the PRC ensure GSA meets this
objective by giving it insight into a contractor's pricing practices,
which is proprietary information that can only be obtained directly
from the contractor.
Information Collection Changes and Updates
GSA has revised this information collection by adding CSP
disclosure burden estimates, renaming the information collection, and
updating figures.
Including the CSP Disclosure Burden: GSA is adding CSP disclosure
burden estimates to this information collection because of comments
received for its Transactional Data Reporting proposed rule (GSAR case
2013-G504), published in the Federal Register at 80 FR 11619, on March
4, 2015. GSA proposed to amend the GSAR to include a clause that would
require FSS vendors to report transactional data from orders and prices
paid by ordering activities. The new clause would be paired with
changes to the basis of award monitoring, or ``tracking customer,''
requirement of the existing Price Reductions clause, resulting in a
burden
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reduction for participating FSS contractors. The proposed rule also
noted, ``. . . GSA would maintain the right throughout the life of the
FSS contract to ask a vendor for updates to the disclosures made on its
[CSP] format . . . if and as necessary to ensure that prices remain
fair and reasonable in light of changing market conditions.''
In comments received regarding the proposed rule, industry
respondents indicated retaining CSP disclosures would cancel out any
burden reduction achieved by eliminating the PRC tracking customer
requirement. Specifically, respondents were concerned that CSP
disclosures still force them to monitor their commercial prices, which
ultimately causes the associated burden for both disclosure
requirements. In response, GSA agrees the burden of the PRC and CSP is
related and is therefore including CSP disclosure burden estimates in
this information collection extension request.
Renaming the Information Collection: GSA is changing the
information collection name from ``Price Reductions Clause'' to
``Federal Supply Schedule Pricing Disclosures'' to more accurately
reflect the scope of the information collected.
Updated Figures: The following figures were updated for the current
information collection:
Increased the number of FSS contracts and vendors from
19,000 FSS contracts held by 16,000 vendors to 20,094 FSS contracts
were held by 17,302 vendors.
Increased the number of price reduction modifications from
1,560 to 2,148.
Decreased the number of GSA OIG pre-award audits from an
average of 70 to 59.
Increased the estimated annual time burden from 868,920
hours to 1,324,343 hours.
Increased the estimated annual cost burden; the new
estimated annual cost burden is $90,055,353. The 2012 information
collection did not provide a cost burden estimate, but if the same
hourly rate ($68) was applied to the 2012 time burden, the 2012 cost
burden would have been $59,086,560.
B. Annual Reporting Burden
This information collection applies to all companies that held, or
submitted offers for, FSS contracts. In fiscal year 2014:
20,094 contracts were active, including 1,411 contracts
that were awarded and 2,213 contracts that ended over that time period.
17,302 companies held FSS contracts (some companies held
more than one contract).
3,464 offers were submitted for FSS contracts.
However, the number of responses consists of the number of CSP
disclosures and price reduction notifications made in FY2014, as well
as the average number of GSA Office of Inspector General audits
performed between fiscal years 2012 and 2014.
Heavier Lifts and Lighter Lifts
FSS contracts are held by a diverse set of companies, which vary in
terms of business size, offerings, and FSS sales volume. For example,
in fiscal year 2014:
32.8 percent, or 5,673 companies, reported $0 in FSS
contracts.
5.6 percent, or 975 companies, accounted for 80 percent of
all FSS sales.
The top 20 percent of FSS contractors (in terms of FY2014
sales) accounted for 95.7 percent of FSS sales.
Only 2.6 percent of FSS contractors reported more than $1
million in FSS sales.
In general, a contractor's FSS sales volume will have the greatest
effect on the associated burden of these requirements, although the
number and type of offerings, and business structure, can also be
significant factors. As shown by the above figures, a relatively small
number of FSS contractors account for the vast majority of FSS sales
and accordingly, likely bear a heavier burden for these requirements.
Conversely, the majority of FSS vendors, which are typically small
businesses with lower sales volume, absorb a lighter burden for these
requirements.
To account for the differences among FSS contractors, GSA is
utilizing the Pareto principle, or ``80/20 rule,'' which states 80
percent of effects comes from 20 percent of the population.
Accordingly, GSA is separating FSS contractors among those that have a
``heavier lift'' (20 percent) from those that have a ``lighter lift''
(80 percent). Contractors with heavier lifts are those with the
characteristics that lead to increased burden--more sales volume,
higher number of contract items, more complex offerings, more
transactions, more complex transactions, and/or intricate business
structures. This methodology is used for several components of the
burden analysis.
Cost Burden Calculation
The estimated cost burden for respondents was calculated by
multiplying the burden hours by an estimated cost of $68/hour ($50/hour
with a 36 percent overhead rate).
Price Reductions Clause
For this information collection clearance, GSA attributes the PRC-
related burden to training, compliance systems, and audits, as well as
a burden associated with notifying GSA of price reductions within 15
calendar days after their occurrence.
Training: FSS contractors provide training to their employees to
ensure compliance with FSS pricing disclosure requirements. In FY2014,
there were 17,302 contractors, 3,460 (20 percent) with a heavier lift
and 13,842 (80 percent) with a lighter lift. Contractors within the
heavier lift category may need to develop formal training programs and
conduct training for numerous divisions and offices, while contractors
in the lighter lift category may have no need for training design and
administration due to having as few as one person responsible for PRC
compliance.
Training--Heavier Lift
Total Annual Responses: 3,460
Average Hours per Response: 40
Total Time Burden (Hours): 138,400
Total Cost Burden: $9,411,200
Training--Lighter Lift
Total Annual Responses: 13,842
Average Hours per Response: 20
Total Time Burden (Hours): 276,840
Total Cost Burden: $18,825,120
Compliance Systems: FSS contractors must develop systems to control
discount relationships with other customers/categories of customer to
ensure the basis of award pricing relationship is not disturbed. In
response to the 2012 information collection request, the Coalition for
Government Procurement provided the results from a survey it conducted
among its members regarding the PRC burden. The Coalition survey
results attributed 1,100 burden hours to developing compliance systems.
However, GSA believes this figure is only attributable to heavier lift
contractors and should be allocated over the 20-year life of an FSS
contract because a significant part of a burden is the effort to
establish a compliance system that will be used over the life of the
contract. GSA is attributing a total of 600 burden hours to compliance
systems for contractors with a lighter lift and is also allocating that
burden over a 20-year period. The results are an annual 55-hour burden
for heavier lift contractors (1,100 hours divided by 20 years) and an
annual 30-hour burden for
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lighter lift contractors (600 hours divided by 20 years).
In FY2014, there were 17,302 contractors, 3,460 (20 percent) with a
heavier lift and 13,842 (80 percent) with a lighter lift:
Compliance Systems--Heavier Lift
Total Annual Responses: 3,460
Average Hours per Response: 55
Total Time Burden (Hours): 190,322
Total Cost Burden: $12,940,400
Compliance Systems--Lighter Lift
Total Annual Responses: 13,842
Average Hours per Response: 30
Total Time Burden (Hours): 415,248
Total Cost Burden: $28,237,680
Audits: The GSA Office of Inspector General (OIG) performed an
average of 59 pre-award audits of FSS contracts between FY2012 and
FY2014, according to the OIG's Semiannual Congressional Reports over
that time period. Respondents to a 2012 Coalition for Government
Procurement survey estimated that approximately 440-470 hours were
spent preparing for audits involving the PRC; the 455 hour figure is
the median point in the range:
GSA OIG Audits
Total Annual Responses: 59
Average Hours per Response: 455
Total Time Burden (Hours): 26,845
Total Cost Burden: $1,825,460
Price Reduction Notifications: 2,148 price reduction modifications
were completed in FY14, with each modification requiring a notification
from the contractor. In a survey conducted among GSA FSS contracting
officers, respondents estimated it took an average of 4.25 hours to
complete a price reduction modification. GSA believes FSS contractors
bear a similar burden for this task and is therefore using the same
burden estimate.
Price Reduction Notifications
Total Annual Responses: 2,148
Average Hours per Response: 4.25
Total Time Burden (Hours): 9,129
Total Cost Burden: $620,772
Commercial Sales Practices Disclosures
The CSP burden results from disclosures required of any contractor
submitting an offer for an FSS contract or modifying an FSS contract to
increase prices, add items and Special Item Numbers, or exercise
options. GSA attributed a negotiations burden to the PRC in the
previous information collection, but is now including that burden
within the CSP disclosure estimates.
The burden estimates for CSP disclosures are based upon the
estimates provided by respondents to the GSA FSS contracting officer
survey. While the 77 survey respondents provided estimates regarding
the amount of time it takes FSS contracting officers to complete CSP-
related tasks, GSA believes FSS contractors bear a similar burden for
these tasks and is therefore using the same burden estimates.
Pre-award Disclosures: In FY2014, contractors submitted 3,464
offers for FSS contracts, with 693 (20 percent) offerors having a
heavier lift (20 percent) and 2,771 (80 percent) with a lighter lift:
Pre-award Disclosures--Heavier Lift
Total Annual Responses: 693
Average Hours per Response: 41.48
Total Time Burden (Hours): 28,746
Total Cost Burden: $1,954,704
Pre-award Disclosures--Lighter Lift
Total Annual Responses: 2,771
Average Hours per Response: 32.41
Total Time Burden (Hours): 89,808
Total Cost Burden: $6,106,951
Price Increase Modifications: In FY2014, 2,509 price increase
modifications were processed, including 502 (20 percent) with a heavier
lift and 2,007 (80 percent) with a lighter lift:
Price Increases--Heavier Lift
Total Annual Responses: 502
Average Hours per Response: 10.45
Total Time Burden (Hours): 5,246
Total Cost Burden: $356,721
Price Increases--Lighter Lift
Total Annual Responses: 2,007
Average Hours per Response: 9.71
Total Time Burden (Hours): 18,404
Total Cost Burden: $1,251,485
Adding Items and Special Item Numbers (SINs): In FY2014, 6,861
modifications to add contract items or SINs were processed, including
1,372 (20 percent) with a heavier lift and 5,489 (80 percent) with a
lighter lift:
Addition Modifications--Heavier Lift
Total Annual Responses: 1,372
Average Hours per Response: 11.13
Total Time Burden (Hours): 15,270
Total Cost Burden: $1,038,384
Addition Modifications--Lighter Lift
Total Annual Responses: 5,489
Average Hours per Response: 10.65
Total Time Burden (Hours): 58,458
Total Cost Burden: $3,975,134
Exercising Options: In FY2014, 2,237 modifications to exercise
options were processed, including 447 (20 percent) with a heavier lift
and 1,790 (80 percent) with a lighter lift:
Option Modifications--Heavier Lift
Total Annual Responses: 447
Average Hours per Response: 26.14
Total Time Burden (Hours): 11,685
Total Cost Burden: $794,551
Option Modifications--Lighter Lift
Total Annual Responses: 1,790
Average Hours per Response: 22.32
Total Time Burden (Hours): 39,953
Total Cost Burden: $2,716,790
Total Annual Burden
The total estimated burden imposed by Federal Supply Schedule
pricing disclosures is as follows:
Estimated Annual Time Burden (Hours)
Price Reductions Clause: 1,056,774
CSP Disclosures: 267,569
Total Annual Time Burden: 1,324,343
Estimated Annual Cost Burden
Price Reductions Clause: $71,860,632
CSP Disclosures: $18,194,721
Total Annual Cost Burden: $90,055,353
C. Public Comments
Public comments are particularly invited on: Whether this
collection of information is necessary and whether it will have
practical utility; whether our estimate of the public burden of this
collection of information is accurate, and based on valid assumptions
and methodology; ways to enhance the quality, utility, and clarity of
the information to be collected.
Obtaining Copies Of Proposals: Requesters may obtain a copy of the
information collection documents from the General Services
Administration, Regulatory Secretariat Division (MVCB), 1800 F Street
NW., Washington, DC 20405, telephone 202-501-4755. Please cite OMB
Control No. 3090-0235, Price Reductions Clause, in all correspondence.
Dated: November 12, 2015.
Jeffrey A. Koses,
Director, Office of Acquisition Policy, Office of Government-wide
Policy.
[FR Doc. 2015-29396 Filed 11-17-15; 8:45 am]
BILLING CODE 6820-61-P