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Which is one of the important things that substantially increases the costs. And we are talking here about federal orders. We are not speaking about business orders. GSA is looking for details on federal orders. That details is within the federal government. I believe GSA requires to take a look at its own systems and develop a method that they can use the details currently in their ownership.

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TAKAI. Thank you. Mr. Stanford, some have actually argued that the GSA will use this brand-new details to make services-- require them to decrease their costs if they feel the supplier is no longer using a competitive rate. Little company margins, as many of you pointed out, are very low and they, at times, can not manage bulk discounts like the huge business.

Either the little company would leave the federal market if they might no longer bear the small margins to make sure they were profitable. Or, as in the case for some small businesses that rely 80-90 percent of profits in the federal market, they would go out of organization.

And my last question, and I believe numerous of you mentioned this, has to do with the failure of GSA to truly figure this thing out themselves due to their old computer system. I just wanted to dig a little much deeper, and maybe, Mr. Horan, you can spend some time talking about that remark you made in your testament about it would be simply simpler for them to upgrade their system so that they can track and monitor the info that they are asking for on their side, rather than leave it to the burden of the little services.

I am not certain it will be much easier, but it will be definitely-- they would have to deal with some of the exact same complexities that they are ready to enforce on contractors. The point I was trying to make is that GSA, most likely anticipating the criticism that they are imposing this obligation on contractors, took an appearance at their system and suggested in the function itself the choice to the guideline modifications that their systems would need changes since all this data is not included in a single spot and they would have to undergo the effort.

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So they were reluctant to take that cost despite the information being similarly offered to GSA as the professionals, and want to impose that on professionals. GSA having access to this information though might easily produce a database or modify databases to do exactly what they want to do.

They are simply reluctant to incur that cost. Mr. TAKAI. Any person have any more remarks concerning this particular question? Mr. WALDRON. Yes. I do not know if it is the irony of the situation or not, is that GSA is going to need to invest cash to develop systems in any event.

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So why do they not have a look internally and see what is most effective for them, for the government to attempt to find out to handle its own data. Due to the fact that they are going to have to build systems. We are talking, when you discuss regular monthly reporting throughout the GSA Schedules program, you are talking of hundreds of countless transactions, millions and countless information aspects to be reported, accessed, collected.



Simply a couple other points. With regard to the gain access to, the question was excellent about, you know, with recent occasions, security of the secret information, you know, there is even another location, and GSA did not-- I think the public conference that was held on the guideline, they got a gratitude of the level of issue across industry with regard to this concern, and even in that context they have specialists supporting their effort.

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And last but not least, just a thought on the concern about whether individuals would need to leave, you know, if they are informed lower your cost, we get reports regularly of business being asked to either lower their cost or eliminate the item from the contract. And the GSA leadership is taking the position that that is not, and they have, to their credit, have actually stated that is not the goal here from their point of view, but at the working level and the operational level, contracting officers almost daily are asking companies to either lower their price since they discovered a lower price on a horizontal contrast.

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Mr. TAKAI. Thank you, Mr. Chairman. Chairman HANNA. Do you indicate to say-- is that not in an odd way collusion, understanding somebody else's cost and calling another person and saying-- another bidder for the same product and saying, "You are too expensive, lower your rate"? I indicate, it is a severe word but-- Mr. GSA Search Engine Ranker.

I would state it is misdirected. GSA Search Engine Ranker. I believe it is bad procurement policy because in this problem, you enter the relative terms, and is someone an authorized reseller; are they not a licensed reseller? Is it a gray market item; is it not? These are things-- due diligent things that GSA requires to be taking a look at.

And it appears like GSA is focusing so much on the agreement level cost at this level. When the rate is paid is at the task order level, which is the level below competitors under the agreements. And the focus is more on this rather than let us get the best, you understand, an excellent cost and a best worth solution at the job order level.

How do you enhance, streamline, and accept competition at the job order level so that the American individuals, consumer companies get finest worth products and services-- business best items and solutions. Chairman HANNA. They are asking for something that they are not prepared to take from a group of specialists who will incur huge expense and eventually GSA would likewise sustain a massive cost to accept this, and yet already admits it does not have the capacity actually to utilize it.

WALDRON. I believe it is reasonable to state that a lot more believed needs to go into the present technique. Our members oppose this guideline. We think GSA needs to begin over from scratch and look internally. Our composed testament includes a number of various recommendations. I will point to one. GSA conducting its own internal pilot of gathering its own information or other info of other firms and seeing how-- to start with, what data aspects are actually crucial? And much of what is being gathered overlooks the very best worth context or the nexus of it and conditions that drive rate (GSA SER Services).

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And to the extent they are utilizing it to compare to contract pricing, as I said previously in the testament and we make clear in our written testimony, that is apples and, I do not know, watermelons. It is such a total distinction in terms of the conditions. GSA Search Engine Ranker Software.

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