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The proposed guideline could suggest that small companies would require to have one worker spend three months a year just entering information. Keep in mind, this is information the federal government currently has however does not gather centrally. While I am all in favor of producing tasks, I do not think requiring small organizations to hire workers to offer data a 2nd time is a beneficial use of their dollars or tax dollars, due to the fact that somebody has got to spend for this.

Information is not totally free. Services will decide it is better to offer independently of GSA, which will enhance the government's cost to buy, or the small companies will leave of the federal market entirely, decreasing competitors. In reality, we have already lost over 100 little contractors in the past 2 years.

I look forward to speaking with our witnesses today about the effects of GSA's proposed guideline and any option they would suggest to enhance how the federal government purchases whatever it buys. I now accept the ranking member for his opening statement. Mr. TAKAI. Thank you, Mr. Chairman, and excellent morning.

The GSA schedules have a variety of benefits for both vendors and buying companies. Most notably, it produces an easier system that enables contracting officers direct access to the product or services of various companies without the need of releasing numerous solicitations for every requirement. For small companies with minimal resources, relative inexperience navigating the procurement procedure, landing on a GSA schedule can be a crucial first step towards securing the federal government as a customer.

The rule requires that companies that hold schedule contracts while other government-wide acquisition agreements report transactional information through an electronic system. While it appears that much of this information is currently offered to the GSA, the new rule increases the frequency of reporting and broadens what information firms are required to provide. 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 sent for the record. And as you understand, you have five minutes. We wish to hear what you say, so we will be a little bit-- I will be a little bit flexible on that, or try to be.

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

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For those professionals who get involved in the pilot program, they will be relieved from a concern, what we call the price reductions stipulation, which is another compliance stipulation that remains in GSA contracts. In the public meeting that GSA hung on April 17th, I went to essentially. My perception of that conference is that everybody in the room had issues about the guideline, including GSA's own inspector general.

The proposed rule raises a variety of concerns (GSA Search Engine Ranker Software). The very first, which I am sure you will hear from all our panel members about, is the expense of execution and compliance.



I would suggest that for some specialists, it will take 6 hours for them to determine which of their IT systems hold the various data elements that GSA has needed for this rule. That does not permit at any time for developing a report, guaranteeing that the report is precise, and training its workers on how they will submit that report on a monthly basis.

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This might not possibly allow at any time for the professionals to actually review the reports to make sure that the data is right. There is absolutely nothing in the proposed rule that recommends what would happen if the professionals submit incorrect information or if they merely get rid of data because it is certainly incorrect.

The 2nd troublesome location is the prospective expansion of what we call business sales practice requirements. GSA contractors are needed to send industrial sales practices prior to agreement award and throughout agreement performance when specific things take place, like if they go to add items to a contractor's increased prices. The proposed guideline allows GSA to request for CSPs at any time (GSA Search Engine Ranker Software).

This requires professionals to enter into their data systems and take a look at real discount rates on deals. I indicate, we see press release after news release from the Department of Justice stating that contractors have actually fraudulently offered this info when in reality they simply have actually not checked. So this is a big concern.

We understand it is going to cost a lot to collect the information, but what is not clear is what advantage GSA is going to receive from the info. And after that lastly, is the confidential and proprietary nature of the details. Transactional data prices has actually 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 written, little businesses would deal with increased costs under the proposed guideline. GSA acknowledges the extra reporting requirement will certainly have a cost for afflicted organizations. SBA's Workplace of Advocacy and GSA's own inspector general kept in mind that price quotes in the proposed guideline appear considerably downplayed. I know others here today have finished more comprehensive measurements of this cost, and I will accept them on offering those details.

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Complexity, on the other hand, steps if a policy change will make selling to the federal government harder or easier. Essentially, will the federal market be basically difficult to understand? Or as I frequently hear from company owners, am I going to need to employ someone for this? While GSA contents its reporting solution will be user- friendly, our experience is that government data systems are anything.

Frequently, however, small organizations use tailored and innovative solutions that in conjunction with competitive pricing produce best value in procurement instead of lowest cost. While GSA suggests that pricing will only be one element in identifying finest value, it provides significant weight. The words "rate" or "rates" appear 165 times in the policy, while "best worth" only appears 7.

This is like asking sellers selling on Amazon to report to Amazon what it sold on Amazon. This appears to be an inefficient method to gather information. Finally, and speaking with the motorist behind this guideline, we continue to be concerned about a vision of government procurement that seeks to classify customized services into narrow categories.

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

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