GSA Plans to Expand TDR Draws Fire from Inspector General

Blog
July 22, 2022

The battle between GSA’s Federal Acquisition Service (FAS) and its Office of Inspector General (OIG) over the controversial Transactional Data Reporting (TDR) pilot is heating up ahead of the planned expansion of TDR. FAS and OIG have been diametrically opposed on TDR from the initial rule-making process. Since the pilot launched in August 2016, the OIG has issued three blistering audit reports on FAS’s implementation of the new pricing methodology.

With TDR opening to all Multiple Award Schedule (MAS) contractors by November 1, 2022, the OIG issued an Alert Memorandum this week warning that “FAS [plans] to expand the Transactional Data Reporting rule despite ongoing data quality and access issues.” The memorandum rehashes criticisms levied in prior audit reports, but also includes eye-raising new details:

  • In FY22, 64% of product sales under TDR had part numbers and product details that did not match the contractors’ GSA pricelists. This means $1.6 billion in sales was unusable for pricing analysis.
  • “FAS does not consistently verify the product and pricing information entered by contractors.” Ongoing inconsistencies in part numbers, manufacturer names, units of measure, and more prevent FAS from being able to properly compare transactions

Most astoundingly, the OIG states that “TDR data for professional services is almost completely unusable and was never included in any GSA evaluations (emphasis added).” Professional services constitute the majority of sales under the MAS Program. The OIG and industry have raised concerns about the application of TDR to professional services from the beginning. The audit memorandum shows concerns were justified.

MAS contracts don’t use standard labor categories and ordering agencies often employ their own labor category titles at the task order level. This makes reasonable comparisons next to impossible and is compounded by inconsistencies in how services are reported in GSA’s Sales Reporting Portal (SRP). Some contractors put the labor category title in the description rather than the part number field. Others used the employee name or the task order title. These errors prevent the system from properly matching the sales for pricing comparisons.

The OIG has less-than-altruistic reasons for opposing TDR. The elimination of Commercial Sales Practices (CSP) disclosures and the Price Reductions Clause (PRC) destroys their preaward audit framework and a source of “big money” findings. Even so, the issues they note are consistent with what Aronson sees in its GSA practice. After almost six years, we haven’t had a single negotiation based on TDR information.

Regardless of what the OIG says, FAS is going ahead with the TDR expansion. So what does Aronson say when clients ask whether they should participate? We acknowledge we are working with limited information. Because GSA isn’t negotiating with TDR data yet, we can only speculate how that will work. Even so, the benefit of eliminating the CSP is generally worth it. If and when GSA has clean TDR data to use, we expect them to use it in all negotiations, not just on TDR-covered contracts. Contractors might as well get out from under the PRC.

Aronson’s GSA practice will be posting more information on the TDR expansion leading up to November 1, 2022. If you have questions about the program, please contact Jennifer Aubel or Julia Coon for more information.