GSA's pricing data plan may do more harm than good
GSA wants to continue a pilot that collects pricing data on contracts but its inspector general warns that nothing useful has come from the pilot over the last two years.
NOTE: This article first appeared on FCW.com.
The General Services Administration's watchdog again raised concerns over plans to move ahead with a three-year Transactional Data Reporting (TDR) pilot program, at the expense of two other contract provisions it says helps federal buyers save money.
In comments on the GSA's strategy to extend its TDR pilot for another year after its planned conclusion this December, the GSA Office of Inspector General said it remains concerned TDR could cripple the agency's buying schedules, which include IT Schedule 70, because it has yet to produce useable pricing data. The comments were dated July 26 but publicly released this week.
GSA's TDR pilot collects pricing data from vendor volunteers, including prices paid by government customers, for products and services sold under agency contracts. It hopes the data gathered could level out pricing for federal buyers. When it was launched, the GSA OIG characterized the pilot as "the most significant change to GSA's Multiple Award Schedules Program in over 20 years." However, it warned at the beginning of the pilot and again in recent comments that the effort had produced no significant measurable pricing data federal agencies could use.
In the filing, the OIG warned GSA's move to replace two significant data programs with TDR could leave the schedules program without a way to measure vendor pricing data. TDR would replace Commercial Sales Practices (CSP), where contractors disclose commercial sales data, and the Price Reductions Clause (PRC) that requires vendors to adjust pricing for an item across the board if they negotiate an initial lower price for it with a single agency.
"Ultimately, we are concerned that, if the TDR pilot continues or TDR is implemented across all schedules as currently stipulated, the Schedules Program will no longer serve its intended purpose -- to 'provide competitive, market-based pricing that leverages the buying power of the federal government' -- to the detriment of government agencies and taxpayers," OIG wrote.
The OIG also took issue with the GSA's characterization of the cost "burden" of auditing GSA schedule contracts to verify vendors' compliance with contractual CSP and PRC requirements. It said GSA had overstated vendor cost and labor for those audits and that those reviews had found millions in unreported vendor price reductions.
The OIG report maintained that the data from the CSP and pricing adjustments in the PRC are the "cornerstone" of GSA's general schedule program because they deliver on the goal of providing lowest cost goods and services.