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HORAN. GSA SER Services. Well, the way I would like then to figure it out is if it in fact produces a much better value, best value to the government, considering the expense to the professionals. I do not believe they can do that based upon the manner in which the proposed rule is implemented here.

Little companies are understood for the added worth they can provide companies with benefits such as consumer service - GSA SER. Mr. GSA SER Software. Horan, you stated in your testament that the new guideline does not account for such added value. Again, that it could be-- the procurement could be driven to low cost just, and as an outcome of that, the contractors who offer some of these other terms and services that supply finest value will lose sales at a minimum, perhaps be driven out of the market.

Mr. TAKAI. Because they run out business or they are just not bidding anymore? Mr. HORAN. Because they run out business. I suggest, there are other concerns too. Because there is such pressure on contracting officers to take a look at only low price that sometimes they will exclude consideration of best value but eventually, I think they might be out of business.

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The ratio for federal government procurement study in its survey, little organizations indicate that it would take on average 232 hours to comply with the GSA's proposed guideline. Mr. Stanford, has your business done its own price quote on the hours it will take to comply with the brand-new requirement, and do you discover the outcomes of the survey to be more precise than GSA's own analysis? And while we have looked at their study and the ABA work, we are likewise encouraged in accepting their conclusion due to the fact that likewise SBA Office of Advocacy and GSA's own inspector general figured out that those expenses appear downplayed.

Other than our spin on compliance, can you talk about some other expenses that companies like yours will have to deal with since of this guideline? I will not speak to our business individually, but speaking to the companies we work with as they get in the federal market, the costs beyond compliance are-- for small companies are preliminary costs up front.

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Mentioning the expense of upgrading its data systems, GSA is proposing to ask vendors to report to GSA the information of what was purchased through GSA. This resembles asking merchants selling through Amazon to report to Amazon what it offered, through Amazon. To take this example one action even more, Amazon would then use that info to promote pricing to other consumers, on Amazon.

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While not an ideal contrast, GSA in many ways runs as an Amazon-like part of the acquisition process. The intent behind this guideline is looking for to make a best-in-class contracting marketplace. Yet, GSA has actually chosen to hand down investing in a data collection system that might collect this information automatically.



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II. The Rule Imposes a Significant, Underestimated, and Unnecessary Concern GSA estimates that it will take 6 hours for a specialist to achieve all tasks required to understand the reporting requirements, prepare its systems and personnel, and establish the procedures required for producing the required reports, and a typical 31 minutes each month for ongoing reporting. 2 GSA does not supply enough information to examine how these price quotes are flawed, but practically every informed party who has actually weighed in on these quotes believes they are unreliable.

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Reg. 11625.

Otherwise, the professional will run the risk of an allegation of fraud under the False Claims Act, as has been the case with basically every other type of price or cost reports sent by a specialist to the federal government. Notably for this hearing, small companies will bear the largest part of this concern-- GSA approximated that out of 15,738 vendors holding contracts that would be subject to this Rule, 12,590 are small companies (GSA Search Engine Ranker Services).

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Reg. 11625. III. The Anticipated Benefit is Badly Specified, and Not --------------------------------------------------------------------------- Likely to be Realized GSA expects that the transactional information will "enhance GSA's ability to carry out significant price analysis and more efficiently and successfully validate reasonable and sensible rates"on its agreements and will permit government buyers "to compare costs prior to putting orders." 8 GSA also recognizes a point extremely essential to market-- that price paid is just of lots of "details points"in identifying the very best value to the government. 9 Equally essential are other considerations, "such as overall cost, wanted efficiency levels, shipment schedule, special terms, time considerations, and consumer fulfillment." 10 We can also include customer support, item assistance services, warranty, and other terms to this list (GSA SER Services).

So, according to GSA's own analysis, this concern enforced on specialists will offer the federal government with just one of the essential details points-- transactional price-- with no methods to acquire the other information points necessary to assess cost. Without access to, and consideration of, this other important info, the price info is of little value at best and can be really deceptive at worst.

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In my view, the failure of the Guideline to record these other non-price factors could be specifically damaging to small services. Small companies typically operate as value-added resellers or otherwise differentiate themselves in the competitive market based upon the value they include to a transaction, such as customer and item service ability, that is not caught by deal price.

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