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Transactional Data Reporting (TDR) is transforming the way GSA Multiple Award Schedule (MAS) Contracts are negotiated and managed. For contractors, TDR provides the option of holding a GSA Contract without the burden of the infamous Price Reductions Clause (PRC). For GSA, TDR provides critical insight into what the federal government is buying to help fuel smarter purchasing.
Transactional Data Reporting (TDR) is an optional pilot program introduced in August of 2016 under select GSA Special Item Numbers (SINs). TDR requires participating GSA contractors to submit monthly reports of the prices paid for GSA products and services, along with other transactional data, on a line-item basis.
In exchange for this additional data, contractors are exempt from:
While it appears TDR is here to stay, it has yet to move out of the pilot phase. However, the program took a significant step forward in August of 2024, when TDR was expanded to 67 additional SINs.
GSA Contractors view Transactional Data Reporting as a way to avoid the Price Reductions Clause and tracking pricing relationships. However, GSA originally introduced TDR, in part, to support Category Management.
Category Management is a government-wide initiative to approach federal buying as a single enterprise. Transactional level data on federal purchases provides the government with market intelligence to make smarter acquisitions and achieve taxpayer savings, which are key Category Management goals.
Category Management goals also include driving federal spend through contract vehicles that meet certain criteria, and away from open market procurements and duplicative contracts. Agencies are tasked with increasing their “Spend Under Management” each year, which means spending through contract vehicles classified as Tier 1, 2, or 3 solutions.
As a whole, the GSA MAS Contract is a Tier 2 solution, but certain SINs are considered the highest level, Tier 3, Best-in-Class solutions. Transactional data is not only a crucial component of evaluating the effectiveness of government-wide Category Management, it’s a requirement for any Best-in-Class (BIC) solutions. Opening all GSA MAS Contract SINs to Transactional Data Reporting, provides the possibility of additional SINs receiving a future BIC classification.
A GSA MAS Contract provides contractors with a broad range of benefits. However, it has traditionally come with a tradeoff – disclosing commercial sales practices, tracking sales to a Basis of Award Class of Customer, and continuous adherence to the infamous PRC.
To obtain a GSA MAS Contract without TDR, companies must disclose their commercial sales policies and practices. They must also offer pricing that reflects equal to or better than the most favorable pricing granted to a customer or class of customers that most resembles the buying habits of the federal government. This is known as the Most Favored Customer (MFC) or Basis of Award (BOA). Following the award of a GSA Contract, companies must track pricing to their MFC/BOA, report any price reductions, and depending on the circumstances, reduce their GSA pricing. TDR eliminates all of these burdensome responsibilities for companies.
Whether your company is submitting an offer to obtain a GSA MAS Contract or a modification to make certain types of contract updates, you will be required to disclose your Commercial Sales Practices (CSP) to GSA. That is, unless your company opts to participate in TDR. Under a traditional, non-TDR contract, disclosing Commercial Sales Practices is the first step of a complicated process of negotiating pricing.
In order to evaluate pricing under TDR, GSA uses internally available information on prices paid, as well as contractor provided pricing for same or similar items. This eliminates the need for companies to disclose their commercial sales practices.
This ties back to the traditional, non-TDR process for negotiating pricing. Without TDR, contractors must determine the customer or type of customer that not only receives their best pricing, but also most resembles the buying practices of the federal government. This customer or class of customer is then established as a Most Favored Customer (MFC) or Basis of Award (BOA). TDR removes this requirement altogether.
Under a traditional, non-TDR contract, pricing is negotiated based upon the pricing and discounts offered to a company’s MFC/BOA customer. Any change in pricing offered to the MFC/BOA necessitates a change in GSA MAS Contract pricing. This is due to the Price Reductions Clause, which we’ll cover next. This is why, absent TDR, companies are saddled with the burdensome requirement of tracking and maintaining the relationship between their GSA pricing and MFC/BOA pricing.
Again, this requirement stems from GSA’s legacy method of negotiating pricing and is not a concern to companies that hold TDR contracts.
Holding a GSA MAS Contract comes with a host of benefits. However, the Price Reductions Clause (PRC) is not one of them. If a non-TDR contractor provides a price reduction to their BOA customer, the PRC requires that contractor to make applicable adjustments to GSA pricing and/or terms and conditions, based upon the discount relationship between the BOA customer and GSA pricing.
While tracking and maintaining your GSA/BOA pricing relationship is one of the most onerous responsibilities associated with holding a GSA MAS Contract, the PRC is arguably the most consequential obligation of non-TDR contracts.
Once again, the PRC is a by-product of how GSA has traditionally negotiated contract pricing. Contractors that opt-in to GSA Transactional Data Reporting are not subject to the Price Reductions Clause and are free from the concerns that accompany it.
GSA Office of Inspector General (OIG) audits are intended to determine if any non-compliance should result in refunds, retroactive price reductions, permanent price reductions, and/or a change in the Basis of Award customer.
Traditionally, OIG audits focus primarily on non-compliance with Commercial Sales Practices, Basis of Award, and the Price Reductions Clause. If your contract is opted in to TDR, it eliminates all of these factors.
While the OIG can still audit compliance with other requirements, including prompt payment discounts, TAA, and labor category qualifications, TDR significantly reduces the scope of an audit.
Collecting transactional data is a key component of Category Management. A simplified explanation of Category Management is that it is a business practice employed governmentwide that helps federal buyers make more effective purchasing decisions. It directs federal buyers away from open market contracts and towards specific contracts that meet Category Management principles.
To select top tier and Best-in-Class contract solutions, Category Management relies heavily on data elements, including prices paid. All GSA MAS Contracts are considered a Tier 2 solution under Category Management; however, some GSA SINs receive the highest designation of Best-in-Class Tier 3 solutions. Opening TDR to all GSA MAS SINs increases the potential for additional SIN offerings to rise to the level of Best-in-Class solutions.
Companies that participate in TDR must report transactional level data. This includes the price paid by federal buyers for products and services purchased through the company’s GSA Contract. The transactional level data provides the government with market intelligence to make smarter acquisitions and achieve taxpayer savings, which are key Category Management goals.
If You Participate in TDR, What Data Do You Have to Submit?
As of July 1, 2024, contractors have four additional reporting fields that are currently optional. While these four fields will remain optional through at least February of 2025, they may become mandatory in the future:
Some might describe the traditional method of negotiating GSA MAS Contract pricing as antiquated and cumbersome. Transactional Data Reporting provides an alternative that allows for a modern, market-based approach to determining GSA pricing. By eliminating Commercial Sales Practices disclosures and the responsibilities associated with the Price Reductions Clause, TDR reduces the barrier of entry for all businesses, and for small businesses in particular. GSA estimates that TDR saves contractors an average of 22 labor hours per contract annually.
While we’ve highlighted reasons to opt-in to TDR, it is important to consider the additional reporting requirements. Before opting-in to TDR, ensure your company has the resources and systems capabilities to capture and report the line-item level data required under the program. In our experience, most companies find the benefits of Transactional Data Reporting outweigh the increased reporting requirements. However, it something your company must consider prior to participating in TDR.
Federal Schedules has helped businesses of all sizes successfully obtain, manage and grow with GSA and VA Schedule Contracts for more than 35 years. As the leading government contracts consultant, FEDSched provides an unrivaled level of expertise and guidance businesses can trust to navigate the intricacies of the GSA Schedule Contract and stand out in the federal market space.
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