Transactional Data Reporting (TDR) is transforming the way GSA Multiple Award Schedule (MAS) Contracts are negotiated and managed, with most agreeing that TDR brings beneficial changes to the GSA Schedule program. Having navigated thousands of contractors through the GSA MAS Contract acquisition and management process, FEDSched has seen the substantial benefits TDR offers in comparison to the traditional, non-TDR GSA MAS Contract. The TDR program eliminates many of the concerns that have historically deterred companies from pursuing a GSA MAS Contract in the past.
TDR was first introduced to select GSA Schedule contractors in 2016 as a pilot program. The fate of the program had been in limbo until late last year when GSA announced plans to extend TDR to all GSA MAS Contractors. Currently, TDR is only available to companies who hold or are pursuing certain Special Item Numbers (SINs) — view the list here. When the program is extended to all GSA MAS SINs, contractors will have the ability to either opt-in to TDR or to continue with the traditional, non-TDR GSA MAS Contract.
GSA anticipates expanding TDR to all GSA MAS Contractors in the next few months, however there is currently no set date. As we await the official announcement, we’ve highlighted six of the benefits of TDR to help you decide if the TDR program is right for your company.
6 Benefits of a TDR vs Non-TDR GSA MAS Contract
❶ Eliminates the Need to Disclose Commercial Sales Practices (CSP)
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 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.
❷ Removes the Most Favored Customer (MFC)/Basis of Award (BOA) Requirement
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 or Basis of Award. TDR removes this requirement altogether.
❸ Eliminates the Need to Track GSA and BOA/MFC Pricing Relationship
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.
❹ Exempts Contractors from Complying with the Price Reductions Clause
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.
❺ Reduces the Scope of a Potential OIG Audit
GSA Office of Inspector General (OIG) audits can be conducted for cause, volume of sales, or randomly. 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. The OIG can still audit a contract for a number of factors, to include compliance with prompt payment discounts, TAA, and labor category qualifications. However, TDR reduces the scope of a potential audit, removing the factors surrounding CSP, BOA, and PRC, which traditionally have been a strong focus of audits.
❻ Supports Category Management & Increases the Potential for a Best-in-Class Designation.
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.
Should You Opt-In to TDR?
Some people, even those at GSA, would describe the long-standing and traditional method of negotiating GSA MAS Contract pricing as antiquated and cumbersome. Transactional Data Reporting provides an alternative, allowing 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, it reduces the barrier of entry for all businesses, and for small businesses in particular. It not only benefits contractors, but it also reduces the administrative burden of GSA Contracting Officers in evaluating pricing.
While we’ve highlighted reasons to opt-in to TDR, there are still other factors to consider. Whether you are ready to submit a new offer or would like guidance when TDR becomes available to your GSA MAS Contract, we can help. Learn more about Transactional Data Reporting here and contact us if you’d like assistance further evaluating the program.
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