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The proposed guideline could mean that small businesses would need to have one worker spend three months a year simply going into information. Bear in mind, this is information the federal government already has but does not gather centrally. While I am all in favor of producing tasks, I do not believe requiring small companies to hire staff members to offer data a 2nd time is a rewarding usage of their dollars or tax dollars, due to the fact that someone has got to pay for this.

Information is not complimentary. Businesses will choose it is better to offer independently of GSA, which will improve the government's expense to buy, or the little companies will drop out of the federal market altogether, decreasing competitors. We have currently lost over 100 small specialists in the previous two years.

I anticipate hearing from our witnesses today about the effects of GSA's proposed rule and any alternative they would recommend to enhance how the federal government buys whatever it buys. I now yield to the ranking member for his opening declaration. Mr. TAKAI. Thank you, Mr. Chairman, and great early morning.

The GSA schedules have a number of advantages for both suppliers and purchasing agencies. Most especially, it creates a simpler system that enables contracting officers direct access to the services and products of many companies without the requirement of releasing numerous solicitations for every single requirement. For small companies with restricted resources, relative inexperience browsing the procurement process, landing on a GSA schedule can be an important primary step towards securing the federal government as a client.

The rule needs that companies that hold schedule contracts while other government-wide acquisition agreements report transactional data through an electronic system. While it appears that much of this data is already readily available to the GSA, the new rule increases the frequency of reporting and expands what details firms are required to supply. GSA SER.

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With that, I thank the witnesses for testifying today, and I yield back. Chairman HANNA. Thank you. If Committee members have an opening statement, I ask that they be submitted for the record. And as you know, you have five minutes. We desire to hear what you say, so we will be a little bit-- I will be a little bit versatile on that, or attempt to be.

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What the rule needs is regular monthly reports from a variety of GSA contractors. This consists of both the schedule contractors, as well as those who hold IDIQ, indefinite delivery, indefinite amount contractors, and what we call GWACs, Government-wide Acquisition Agreements, to prepare these month-to-month reports of all federal sales made during the previous month.

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For those contractors who take part in the pilot program, they will be reduced from a concern, what we call the rate decreases stipulation, which is another compliance provision that is in GSA agreements. In the general public meeting that GSA held on April 17th, I went to essentially. My perception of that meeting is that everybody in the space had concerns about the rule, including GSA's own inspector general.

There is a transcript that is expected to be published of that hearing, however I have not yet seen that transcript. The proposed rule raises a variety of issues. There are four which I would like to attend to briefly today. The first, which I make sure you will hear from all our panel members about, is the cost of implementation and compliance.

I would recommend that for some professionals, it will take six hours for them to determine which of their IT systems hold the various information elements that GSA has actually needed for this guideline. That does not permit at any time for developing a report, making sure that the report is accurate, and training its personnel on how they will send that report on a regular monthly basis.

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This could not perhaps allow any time for the specialists to really examine the reports to ensure that the data is appropriate. There is absolutely nothing in the proposed guideline that recommends what would take place if the contractors submit inaccurate information or if they simply eliminate data due to the fact that it is obviously incorrect.

The second troublesome location is the possible growth of what we call industrial sales practice requirements. GSA specialists are needed to send commercial sales practices prior to contract award and during contract efficiency when particular things take place, like if they go to include products to a professional's increased costs. The proposed rule permits GSA to request CSPs at any time (GSA SER Services).

This needs specialists to go into their information systems and take a look at real discount rates on transactions. I imply, we see news release after news release from the Department of Justice specifying that contractors have actually fraudulently offered this details when in truth they just have not inspected. So this is a big concern.

We understand it is going to cost a lot to collect the info, however what is unclear is what benefit GSA is going to get from the details. And then lastly, is the private and exclusive nature of the details. Transactional information pricing has constantly been secured by the courts under FOIA, and GSA does not appear to value based upon remarks made at the meeting that this holds true.

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As composed, small companies would face increased costs under the proposed guideline. GSA acknowledges the extra reporting requirement will certainly have a cost for afflicted services. SBA's Office of Advocacy and GSA's own inspector general kept in mind that price quotes in the proposed rule appear considerably understated. I know others here today have actually completed more detailed measurements of this cost, and I will defer to them on offering those details.

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Or as I frequently hear from company owners, am I going to need to hire somebody for this? While GSA contents its reporting solution will be user- friendly, our experience is that government information systems are anything.

Often, nevertheless, small organizations provide customized and innovative services that in conjunction with competitive prices make for best worth in procurement rather of most affordable rate. While GSA suggests that rates will only be one consider determining finest value, it lends significant weight. The words "price" or "rates" appear 165 times in the regulation, while "finest value" only appears seven.

This is like asking retailers selling on Amazon to report to Amazon what it sold on Amazon. This appears to be an inefficient method to collect data. Lastly, and speaking to the driver behind this policy, we continue to be concerned about a vision of federal government procurement that seeks to categorize personalized services into narrow categories.

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Thank you, Mr. Stanford. Next, we have Mr. Roger Waldron, who is president of the Union of Government Procurement. We can break now but I think we do have time to get through.



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