TDR Wars—Episode V: OIG Strikes Back

On July 18, the GSA Office of the Inspector General (OIG) issued an Alert Memorandum both broadcasting and criticizing the Federal Acquisition Service’s (FAS) apparent decision to expand the Transactional Data Reporting (TDR) rule to the entire Multiple Award Schedule (MAS). The TDR Pilot Program studied the potential for TDR to reduce the compliance burdens of the MAS program by replacing the various requirements Federal Supply Schedule (FSS) contractors must fulfill to ensure the pricing offered to GSA customers is fair and reasonable, including the obligation to make Commercial Sales Practice disclosures and to track commercial pricing and discounts to the negotiated Basis of Award customer under the Price Reductions Clause. The GSA OIG previously criticized the TDR Pilot Program.

In its Alert Memorandum, the OIG highlights two “persistent issues” with the TDR Pilot Program. First, the OIG found that the data underlying the TDR Pilot Program is inconsistent. Specifically, the OIG found (1) a misalignment between TDR product part numbers and product descriptions on the one hand and those part numbers and descriptions in contractors’ MAS contracts on the other; and (2) a lack of standard part numbers for labor categories on professional services contracts that constituted approximately 75.5% of the total FSS sales in 2021. According to the OIG, these inconsistencies render it “almost impossible” to match TDR data to MAS contracts for goods, and standardize TDR data across MAS contracts for services. 

Second, the OIG found that contracting personnel never actually used TDR data for pricing decisions during the Pilot Program. As a result, the OIG’s Alert Memorandum expresses concern that GSA is expanding the TDR Pilot Program—and making the underlying data available to all FAS contracting personnel for pricing evaluations—without having observed how contracting personnel use the TDR data, or evaluating the effects of that use. 

The OIG’s Alert Memorandum concludes that the TDR Pilot Program places government agencies at further risk of overpaying for products and services when ordering from FAS’ MAS contracts and calls into question the TDR Pilot Program’s continued viability. Nonetheless, the TDR Pilot Program has been well-received by industry, and FAS’ continued support for TDR should be a positive sign for contractors.