The Office of Inspector General for the General Services Administration and the agency’s Federal Acquisition Service generally disagree about the success of the Multiple Award Schedule to guarantee agencies are receiving competitive contract prices.
In particular, the watchdog repeated its recommendation from last year that the agency cancel the Transaction Data Reporting pilot program, due to a lack of promised price guarantees.
The OIG issued a report on Friday finding that GSA’s FAS price analyses “cannot give customer agencies assurance that GSA Multiple Award Schedule (MAS) contract pricing will result in the lowest overall cost alternative to meet the government’s needs.”
MAS, a key contracting program for GSA run by FAS, is designed to leverage the federal government’s buying power to provide agencies with competitive pricing. In 2016, GSA created the TDR rule and pilot program, requiring certain MAS contractors to report transactional data for products and services sold under their MAS contracts. As a result, contractors were not required to provide commercial pricing information or track other information for pricing, like they were previously required to do. According to OIG, under TDR, the “pricing objective has changed from obtaining the vendor’s most favored customer pricing to ensuring prices are ‘relatively competitive’ with other government contract prices.” OIG stated that GSA’s pricing on MAS contracts is important because, according to federal regulation, customer agencies “rely on GSA’s price reasonableness determination to ensure orders result in the lowest overall cost alternative.”
For the report, OIG examined eight contracts with a total estimated value of $2.5 billion in the TDR pilot program and 12 contracts that required commercial pricing disclosures valued at approximately $1.8 billion. The inspector general found that FAS’s pricing methods for MAS contracts in the TDR program were insufficient.
“I remain deeply concerned by GSA’s failure to remedy the grave problems plaguing the TDR pilot project and its pricing methodologies. GSA should address these problems before expanding the TDR pilot across the $39 billion MAS program, or cancel it,” GSA Inspector General Carol Ochoa said.
For example, OIG found that many FAS contracting personnel did not have access to TDR data to use for pricing decisions on TDR contracts or did not understand the data and how to use it; therefore, they primarily compared proposed pricing to other MAS and government contracts, in addition to using pricing tools. However, OIG noted that this does not guarantee that this is the offerors’ best price and that agencies are getting the lowest overall cost alternative. Additionally, seven out of 11 FAS contracting personnel interviewed for the report shared concerns about the value of TDR to MAS, adding that it should be canceled. A 2021 OIG report looking into TDR and plans to expand the rule to all MAS contracts by Nov. 1, 2022, also concluded that TDR data is “inaccurate and unreliable,” though FAS disagreed.