SUPPLEMENTARY INFORMATION:

A. Purpose

GSA's Federal Supply Schedule (FSS) program, commonly known as the GSA Schedules program or Multiple Award Schedule (MAS) program provides federal agencies with a simplified process for acquiring commercial supplies and services. The FSS program is the Government's preeminent contracting vehicle, accounting for approximately 10 percent of all federal contract dollars with $33 billion of purchases made through the program in fiscal year 2016.

Activities placing orders against a GSA Schedule contract must pay an Industrial Funding Fee (IFF) that reimburses GSA's Federal Acquisition Service (FAS) for the costs of operating the FSS program. FAS recoups its operating costs from ordering activities ( i.e. customers) as set forth in 40 U.S.C. 321: Acquisition Services Fund. Net operating revenues generated by the IFF are also applied to fund initiatives ( printed page 16212) benefitting other authorized FAS programs, in accordance with 40 U.S.C. 321. The IFF, currently set at 0.75 percent, is included in the order price, so when a vendor is paid for an FSS order, it is also collecting the IFF. Collection is similar to a state sales tax, where a customer pays the tax due to a merchant, and then the merchant remits the taxes collected to the state government.

GSA requires vendors to report their FSS sales each quarter so it can determine the amount of IFF the vendors have collected from customers, and therefore must remit to GSA. However, GSA also uses this information for other purposes, including budgeting, determining whether vendors have met the minimum sales requirement,^[1] evaluating the program's performance, and monitoring small business participation.

Vendor reporting and remittance requirements are set forth in General Services Administration Acquisition Regulation (GSAR) clause 552.238-74, Industrial Funding Fee and Sales Reporting, or Alternate I of that clause. While both clause versions govern how the IFF is calculated and remitted, the reporting requirements differ between the basic version and Alternate I:

Clause 552.238-75: Basic Version: This version requires vendors to report their FSS contract sales to GSA once a quarter. GSA then calculates the IFF due based on the total amount of sales reported, and the vendor must remit that amount within 30 days after the end of the quarter. The basic version of the clause applies to approximately 72 percent of GSA Schedule contracts.

Clause 552.238-75: Alternate I: While the basic version requires vendors to report their total FSS sales each quarter, Alternate I requires vendors to report the transactional data generated from orders each month. GSA then calculates the IFF due based on the transactional data reported, and the vendor must remit that amount within 30 days after the end of the quarter. Alternate I of the clause applies to FSS contracts participating in the Transactional Data Reporting pilot. The pilot commenced on June 23, 2016 and will run for at least a year before substantial changes are considered. Approximately 28 percent of GSA Schedule contracts are eligible to participate in the pilot.

Since the reporting requirements vary by the two versions of clause 552.238-74, separate Paperwork Reduction Act information collections have been established for each version. The information collection associated with OMB control number 3090-0306, which expires on 8/31/2019, applies to Alternate I. This information collection (OMB control number 3090-0121) applies to the basic version of the clause.

Information Collection Changes and Updates

• The population of vendors subject to this information collection is smaller than the previous version, as FSS contracts eligible to participate in the Transactional Data Reporting pilot (approximately 28 percent of all GSA Schedule contracts) are now included under OMB control number 3090-0306.
• Previous justifications for this information collection limited the burden to the amount of time needed for vendors to input sales data in the 72A Reporting System and remit IFF payments. However, GSA now recognizes recordkeeping, quality assurance, reporting, and remittance should be included in the burden estimates. Since recordkeeping and quality assurance are the largest burden drivers for both vendors and the Government, the burden estimates for both the public and Government have increased.

B. Annual Reporting Burden

Population Overview: The basic version of clause 552.238-74 is included in 14,306 contracts held by 12,254 vendors. This includes 1,128 new contracts awarded to 819 vendors.^[2]

Cost Estimates: The estimated cost burden for respondents was calculated by multiplying the burden hours by an estimated cost of $68/hour ($50/hour with a 36% overhead rate).^[3]

Categorization of Vendors by Quarterly Sales Revenue: Sales reporting imposes a progressive burden—one that increases with a vendor's sales volume. Quarterly reporting times will increase with a vendor's applicable sales volume, as vendors with lower to no reportable sales will spend little time on quarterly reporting, while those with more reportable sales with face a higher reporting burden.

GSA separated vendors into categories based on average quarterly sales volume ^[4] in order to account for the differences in reporting burden. These categories are:

Category 1: No sales activity (average quarterly sales of $0)

Category 2: Average quarterly sales between $0 and $60,000

Category 3: Average quarterly sales between $60,000 and $600,000

Category 4: Average quarterly sales between $600,000 and $3 million

Category 5: Average quarterly sales over $3 million

The distribution of vendors by sales category is as follows:

( printed page 16213)

Automated vs. Manual Reporting Systems: Vendors subject to these clauses must create systems or processes to produce and report accurate data. Generally, vendors will use automated or manual systems to identify the quarter's reportable sales. An automated system is one that relies on information technology, such as an accounting system or data management software, to identify and compile reportable data. These systems can tremendously streamline the reporting process but require upfront configuration to perform the tasks, such as coding the sales types to be retrieved. Conversely, a manual system is one that incorporates little to no automation and instead relies on personnel to manually identify and compile the reportable data. An example of a manual system would be an accountant reviewing invoices to identify the reportable data and then transferring the findings to a spreadsheet. In contrast to automation, a manual system requires relatively little setup time but the reporting effort will generally increase with the vendor's sales volume.

The likelihood of a vendor adopting an automated system increases with their applicable sales volume. Vendors with little to no reportable data are unlikely to expend the effort needed to establish an automated reporting system since it will be relatively easy to identify and report a limited amount of data. In fiscal year 2015, 34 percent of FSS vendors subject to this collection reported $0 sales, while another 33 percent reported average quarterly sales between $1 and $60,000 per quarter. However, as a vendor's applicable average quarterly sales increase, they will be increasingly likely to establish an automated system to reduce the quarterly reporting burden. Consequently, vendors with higher reportable sales will likely bear a higher setup burden to create an automated system, or absorb a high quarterly reporting burden if they choose to rely on manual reporting methods.

The following chart depicts the likelihood of the population of vendors adopting manual and automated reporting systems:

Initial Setup: Vendors with active FSS contracts already have procedures in place to meet these longstanding reporting requirements. However, new FSS vendors will absorb a one-time setup burden to establish reporting systems. The estimated setup time varies between automated and manual reporting systems. Vendors implementing a manual system must acclimate themselves with the new reporting requirements and train their staff as accordingly, while those with automated systems must perform these tasks in addition to configuring information technology resources. GSA is attributing the setup burden by vendor, not by contracts, because a vendor holding multiple contracts subject to this rule will likely use a single reporting system.

GSA estimates the average one-time setup burden is 8 hours for vendors with a manual system and 40 hours for those with an automated system. GSA also attributes the same system type probabilities (manual system 92%, automated system 8%) to the population of new vendors. These estimates apply to the 819 vendors awarded FSS contracts in fiscal year 2015.

Quarterly Reporting: Vendors are required to report sales within 30 calendar days after the end of each quarter. The average reporting times vary by system type (manual or automated) and by sales categories. GSA estimates vendors using a manual system will have average quarterly reporting times ranging from 15 minutes (0.25 hours) per quarter for vendors with $0 sales, to an average of 8 hours per quarter for vendors with quarterly sales over $3 million. On the other hand, GSA projects vendors with automated systems will have reporting times of 2 hours per quarter, irrespective of quarterly sales volume, as a result of efficiencies achieved through automated processes. The following table shows GSA's projected quarterly reporting times per sales category and system type.

( printed page 16214)

Annualized Public Burden Estimates

The burden estimates consist of quarterly reporting times for all 12,254 participating vendors and a one-time setup burden for the 819 new vendors:

Quarterly Reporting

Annual Burden (Hours): 56,983.

Annual Burden (Cost): $3,874,817.

Initial Setup

Annual Burden (Hours): 8,718.

Annual Burden (Cost): $592,846.

Total Information Collection Burden

Number of Respondents: 12,254.

Response per Respondent: 4.

Total Annual Responses: 49, 016.

Hours per Response: 1.3404.

Total Burden (Hours): 65,701.

Annual Burden (Cost): $4,467,663.

C. Public Comments

Public comments are particularly invited on: Whether this collection of information is necessary and whether it will have practical utility; whether our estimate of the public burden of this collection of information is accurate, and based on valid assumptions and methodology; ways to enhance the quality, utility, and clarity of the information to be collected.

Obtaining Copies of Proposals: Requesters may obtain a copy of the information collection documents from the General Services Administration, Regulatory Secretariat Division (MVCB), 1800 F Street NW., Washington, DC 20405, telephone 202-501-4755.

Please cite OMB Control No. 3090-0235, Price Reductions Clause, in all correspondence.