The newly proposed rule (GSAR 552.216-75 Sales Reporting and Fee Remittance) would require contractors to submit transactional data on a monthly basis for sales made pursuant to GSA Schedule contracts and other government contracts administered by the agency. This reporting obligation would replace the requirement that FSS contractors track sales to its Basis of Award customer(s) as currently set forth in the Price Reductions Clause (GSAR 552.238-75) – an element of the PRC that has been deemed ineffective for government and overly burdensome for contractors. The transactional data provided would be used by GSA to continually evaluate the reasonableness of offered prices under these contracts as compared to pre-established commercial benchmarks and metrics. Additional details regarding the proposed rule are as follows:

  • The proposed rule would first be applied to GSA’s government-wide, non-FSS contract vehicles, where transactional data is not already being collected.
  • Before implementing the rule on a broader scale across all  GSA Schedule contracts, GSA would test its effectiveness under a pilot that would be mandatory for contractors offering select products and commoditized services.  VA Schedule contractors would be unaffected by the proposed rule change.
  • This would not preclude contractors from having to provide current, accurate and complete Commercial Sales Practices disclosures. GSA would reserve the right to require updated disclosures at any point during the contract period, which may prove problematic given the time and effort it takes to prepare thorough disclosures that effectively mitigate potential risk.
  • GSA is projecting that this would reduce the annual administrative burden on contractors by more than 85% - with estimates of only 6 hours for the initial set-up and 30 minutes each month thereafter to run the reports. By most accounts, contractors would likely agree that these hours estimate appear to be grossly underestimated.

For more details please visit the Federal Register.

For more information on this topic, or to learn how Baker Tilly government contract specialists can help, contact our team.

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