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The proposed rule might indicate that small companies would require to have one staff member invest 3 months a year just entering data. Keep in mind, this is information the federal government currently has but does not gather centrally. While I am all in favor of creating tasks, I do not believe forcing small companies to hire staff members to supply information a second time is a worthwhile usage of their dollars or tax dollars, since someone has actually got to spend for this.

Information is not complimentary. Businesses will decide it is better to offer independently of GSA, which will enhance the federal government's expense to purchase, or the small companies will drop out of the federal market completely, reducing competitors. In reality, we have actually already lost over 100 little contractors in the past two years.

I look forward to speaking with our witnesses today about the results of GSA's proposed guideline and any alternative they would suggest to improve how the federal government purchases whatever it purchases. I now yield to the ranking member for his opening declaration. Mr. TAKAI. Thank you, Mr. Chairman, and great morning.

The GSA schedules have a variety of advantages for both suppliers and acquiring companies. Most significantly, it creates a simpler system that allows contracting officers direct access to the items and services of various firms without the need of releasing numerous solicitations for every single requirement. For little services with restricted resources, relative inexperience navigating the procurement procedure, landing on a GSA schedule can be an essential primary step towards securing the federal government as a client.

The rule needs that companies that hold schedule agreements while other government-wide acquisition agreements report transactional information through an electronic system. While it appears that much of this data is currently offered to the GSA, the new guideline increases the frequency of reporting and expands what information companies are required to supply. GSA SER Services.

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With that, I thank the witnesses for affirming 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 know, you have 5 minutes. We wish to hear what you state, so we will be a bit-- I will be a bit versatile on that, or try to be.

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What the guideline needs is monthly reports from a variety of GSA professionals. This consists of both the schedule specialists, along with those who hold IDIQ, indefinite shipment, indefinite quantity professionals, and what we call GWACs, Government-wide Acquisition Agreements, to prepare these regular monthly reports of all federal sales made throughout the previous month.

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For those contractors who get involved in the pilot program, they will be eased from a concern, what we call the cost reductions stipulation, which is another compliance provision that remains in GSA agreements. In the public meeting that GSA held on April 17th, I attended practically. My perception of that meeting is that everybody in the room had concerns about the guideline, consisting of GSA's own inspector general.

The proposed rule raises a range of issues (GSA Search Engine Ranker Services). The first, which I am sure you will hear from all our panel members about, is the cost of application and compliance.



I would suggest that for some contractors, it will take six hours for them to determine which of their IT systems hold the various information components that GSA has actually needed for this guideline. That does not permit any time for developing a report, ensuring that the report is precise, and training its workers on how they will send that report on a regular monthly basis.

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This might not perhaps permit whenever for the professionals to really review the reports to make sure that the information is correct. There is nothing in the proposed rule that suggests what would happen if the professionals submit incorrect data or if they just get rid of data since it is obviously incorrect.

The second problematic location is the potential growth of what we call commercial sales practice requirements. GSA specialists are needed to submit commercial sales practices prior to contract award and during agreement performance when particular things take place, like if they go to add items to a specialist's increased costs. The proposed rule permits GSA to ask for CSPs at any time (GSA SER).

This needs specialists to enter into their data systems and look at real discounts on transactions. I suggest, we see press release after news release from the Department of Justice mentioning that specialists have actually fraudulently provided this info when in reality they simply have not checked. This is a big issue.

We understand it is going to cost a lot to gather the information, however what is unclear is what advantage GSA is going to receive from the details. And then lastly, is the personal and exclusive nature of the details. Transactional information pricing has always been safeguarded by the courts under FOIA, and GSA does not appear to value based upon comments made at the meeting that this is the case.

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As composed, small companies would face increased expenses under the proposed guideline. GSA recognizes the additional reporting requirement will undoubtedly have a cost for affected organizations. SBA's Office of Advocacy and GSA's own inspector general noted that quotes in the proposed rule appear drastically understated. I know others here today have actually finished more thorough measurements of this cost, and I will accept them on offering those details.

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Or as I frequently hear from business owners, am I going to require to hire someone for this? While GSA contents its reporting solution will be user- friendly, our experience is that federal government information systems are anything.

Frequently, however, little services offer customized and innovative options that in combination with competitive rates produce best value in procurement rather of lowest rate. While GSA suggests that rates will just be one aspect in figuring out best worth, it provides significant weight. The words "price" or "rates" appear 165 times in the guideline, while "best worth" only appears seven.

This is like asking retailers offering on Amazon to report to Amazon what it sold on Amazon. This appears to be an inefficient method to collect information. And speaking to the chauffeur behind this guideline, we continue to be worried about a vision of federal government procurement that seeks to classify personalized services into narrow categories (GSA Search Engine Ranker Services).

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

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