Update 3/18/2022: GSA still plans to expand the TDR program to all SINs, however the timeline has changed slightly. Look for additional updates this summer, with expansion now expected in the fall.
GSA is wrapping up the 2021 calendar year with a big announcement regarding Transactional Data Reporting (TDR). The notice, regarding what is arguably the most significant change to the GSA Schedule program since the Multiple Award Schedule (MAS) Consolidation, was quietly included in an updated version of GSA’s Pathways to Success training.
The training presentation for prospective contractors included one bullet point that will have a major impact on existing and future GSA Contract holders. The bullet states GSA plans to extend TDR to all GSA Multiple Award Schedule Special Item Numbers (SINs) in fiscal year 2022. Steve Sizemore, the Deputy Director of GSA’s MAS Program Management Office, informed us that more information will be released next month and GSA generally expects “to see all product SINs become available to TDR in the spring and services in the Summer.”
What is TDR? Why is the Expansion of Transactional Data Reporting Important?
While Transactional Data Reporting was created to support government-wide category management initiatives, it has the impact of modernizing how pricing is negotiated and maintained under the GSA MAS program. In exchange for monthly sales reports, TDR allows companies to enjoy the benefits of the GSA MAS Contract, without the burden of the legacy Price Reductions Clause (PRC) and the disclosures and restrictions that come with it.
Since its introduction in 2016, TDR has only been an available option to companies that hold or pursue select SINs. The program is widely viewed as a success to those who can participate. In 2020, GSA indicated they were continuing to evaluate TDR and it would most likely continue as-is, under select SINs, or be expanded to include all GSA SINs. However, despite favorable reports from GSA, the fate of the program became uncertain after a negative Office of Inspector General (OIG) report become public earlier this year. Irrespective of the view of the OIG, GSA’s confirmation this month that TDR will be available to all GSA MAS Contractors in fiscal year 2022 is welcome news to the contracting community.
The Benefits of TDR
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, and 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. All of these burdensome responsibilities are eliminated for companies that participate in TDR.
Companies that Participate in TDR Are NOT Required to:
- Disclose Commercial Sales Practices
- Establish a Most Favored Customer (MFC)/Basis of Award (BOA)
- Track and maintain the relationship between GSA pricing and BOA/MFC customer pricing
- Comply with the Price Reductions Clause, which may require a reduction in GSA pricing if pricing is discounted commercially or to a company’s BOA/MFC
TDR Reporting Requirements
Companies that participate in TDR are required to report transactional level data, including 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.
TDR and Category Management
GSA Schedule Contractors view Transactional Data Reporting as something that allows them to avoid the Price Reductions Clause (PRC) and tracking pricing relationships. However, as we mentioned earlier, TDR was introduced to the GSA Schedules program as a way to support category management.
Category Management is an initiative that drives federal contract awards through specific contract vehicles 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 considered a Tier 2 solution, but certain SINs are considered a Tier 3, Best-in-Class solution. Transactional data is a crucial component of evaluating the effectiveness of government-wide category management and is a requirement to be considered as a Best-in-Class (BIC) solutions. Opening up all GSA MAS Contract SINs to Transactional Data Reporting, provides the possibility of additional SINs receiving a future BIC classification.
Transactional Data Reporting Highlights
- TDR allows companies to hold a GSA MAS Contract without the burden of legacy pricing restrictions
- TDR requires companies to submit monthly reports on GSA Contract sales with specific data points, including prices paid
- TDR is currently only available to companies that hold or pursue at least one these SINs
- GSA plans to extend TDR to all GSA MAS Contract SINs in fiscal year 2022, providing all GSA MAS Contractors with the option to participate in the program
- VA Schedule Contracts are not included in the TDR expansion plans
- TDR is required to be considered as a Best-in-Class solution
Next month, GSA plans to provide more information regarding the expansion of TDR to all SINs. If your company has been deterred from pursuing a GSA MAS Contract in the past because of the Price Reductions Clause, contact us to discuss reevaluating the contract under TDR. Subscribe to our news alerts for the latest information.