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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 better value, best worth to the government, thinking about the cost to the contractors. I do not think they can do that based on the manner in which the proposed rule is implemented here.

Small companies are understood for the added value they can offer companies with advantages such as consumer service. Big corporations or big companies can refrain from doing that. Mr. Horan, you stated in your statement that the brand-new rule does not represent such included value. GSA Search Engine Ranker. What could this omission imply not just to little vendors however likewise to the firms that purchase their products and services? Mr.

I believe those other terms that lead to best worth might be lost. Once again, that it might be-- the procurement might be driven to low rate only, and as a result of that, the professionals who use some of these other terms and services that offer best worth will lose sales at a minimum, possibly be driven out of the marketplace.

Mr. TAKAI. Since they run out the organization or they are just not bidding anymore? Mr. HORAN. Because they are out of the service. I indicate, there are other problems too. Because there is such pressure on contracting officers to take a look at only low rate that sometimes they will omit factor to consider of best value but eventually, I believe they could be out of the organization.

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The quotient for government procurement study in its survey, little companies show that it would take on typical 232 hours to comply with the GSA's proposed guideline. Mr. Stanford, has your business done its own quote on the hours it will take to comply with the new requirement, and do you find the outcomes of the survey to be more accurate than GSA's own analysis? And while we have looked at their study and the ABA work, we are also motivated in accepting their conclusion since also SBA Office of Advocacy and GSA's own inspector general figured out that those expenses seem understated.

Mr. TAKAI. Okay. Other than our spin on compliance, can you discuss some other expenses that business like yours will need to deal with because of this rule? Mr. STANFORD. I will not talk to our business individually, but speaking with the companies we work with as they go into the federal market, the expenses beyond compliance are-- for small companies are initial costs in advance.

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Citing the expense of upgrading its information systems, GSA is proposing to ask suppliers to report to GSA the details of what was purchased through GSA. This resembles asking merchants offering through Amazon to report to Amazon what it offered, through Amazon. To take this example one step further, Amazon would then use that information to promote rates to other consumers, on Amazon.

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While not a best contrast, GSA in many methods operates as an Amazon-like part of the acquisition procedure. The intent behind this rule is seeking to make a best-in-class contracting marketplace. Yet, GSA has actually decided to hand down buying a data collection system that could collect this information automatically.



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II. The Rule Imposes a Considerable, Underestimated, and Unnecessary Burden GSA estimates that it will take 6 hours for a specialist to achieve all tasks needed to understand the reporting requirements, prepare its systems and personnel, and establish the procedures essential for producing the needed reports, and an average 31 minutes per month for ongoing reporting. 2 GSA does not provide sufficient detail to examine how these estimates are flawed, but essentially every notified celebration who has actually weighed in on these price quotes thinks they are unreliable.

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Reg. 11625.

Otherwise, the contractor will run the risk of a claims of scams under the False Claims Act, as has been the case with essentially every other kind of rate or expense reports submitted by a professional to the government. Notably for this hearing, small companies will bear the largest part of this burden-- GSA estimated that out of 15,738 vendors holding contracts that would be subject to this Guideline, 12,590 are small companies (GSA Search Engine Ranker Services).

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Reg. 8 GSA likewise recognizes a point very crucial to market-- that rate paid is only of numerous "details points"in determining the finest value to the federal government. 10 We can likewise include consumer service, item assistance services, service warranty, and other terms to this list.

So, according to GSA's own analysis, this problem troubled professionals will provide the federal government with only one of the needed info points-- transactional rate-- with no ways to acquire the other details points needed to evaluate rate. Without access to, and consideration of, this other crucial information, the rate information is of little value at finest and can be extremely deceptive at worst.

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In my view, the failure of the Rule to record these other non-price factors might be especially hazardous to small companies. Small companies frequently run as value-added resellers or otherwise differentiate themselves in the competitive market based on the worth they contribute to a transaction, such as client and product service capability, that is not caught by transaction cost.

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