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Published Oct 02, 21
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HORAN. GSA Search Engine Ranker Software. Well, the method I would like then to figure it out is if it in fact produces a much better value, finest worth to the federal government, thinking about the expense to the professionals. I do not believe they can do that based upon the manner in which the proposed rule is carried out here.

Small businesses are understood for the added worth they can supply companies with benefits such as client service - GSA SER. Mr. GSA Search Engine Ranker. Horan, you mentioned in your testament that the brand-new rule does not account for such added value. Once again, that it might be-- the procurement could be driven to low rate only, and as a result of that, the professionals who provide some of these other terms and services that provide best value will lose sales at a minimum, maybe be driven out of the market.

Mr. TAKAI. Because they are out of the business or they are just not bidding any longer? Mr. HORAN. Because they run out business. I imply, there are other concerns. Since there is such pressure on contracting officers to look at only low rate that often they will leave out factor to consider of finest value however eventually, I believe they could be out of the service.

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TAKAI. Okay, thank you (GSA SER). The quotient for federal government procurement survey in its study, small companies suggest that it would take on average 232 hours to adhere to the GSA's proposed rule. Mr. Stanford, has your organization done its own price 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 precise than GSA's own analysis? Mr.

We have not. And while we have actually taken a look at their study and the ABA work, we are also encouraged in accepting their conclusion due to the fact that also SBA Office of Advocacy and GSA's own inspector basic identified that those expenses seem understated. Mr. TAKAI. Their, meaning the union, not GSA's? Mr. STANFORD.

Other than our spin on compliance, can you go over some other expenses that business like yours will have to face since of this guideline? I will not speak to our business separately, however speaking to the companies we work with as they enter the federal market, the expenses beyond compliance are-- for small businesses are preliminary expenses up front.

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Pointing out the expense of updating its data systems, GSA is proposing to ask suppliers to report to GSA the information of what was bought through GSA. This resembles asking merchants selling through Amazon to report to Amazon what it offered, through Amazon. To take this example one step further, Amazon would then utilize that information to market rates to other consumers, on Amazon.

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While not a best comparison, GSA in numerous ways operates as an Amazon-like part of the acquisition process. The intent behind this rule is looking for to make a best-in-class contracting market. GSA has decided to pass on investing in an information collection system that could collect this info instantly.

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II. The Rule Imposes a Significant, Underestimated, and Unnecessary Burden GSA estimates that it will take 6 hours for a contractor to achieve all jobs required to comprehend the reporting requirements, prepare its systems and personnel, and establish the treatments required for developing the required reports, and a typical 31 minutes per month for continuous reporting. 2 GSA does not supply sufficient information to examine how these quotes are flawed, but practically every informed celebration who has actually weighed in on these estimates thinks they are inaccurate.

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Reg. 11625.

Otherwise, the contractor will run the risk of an accusation of scams under the False Claims Act, as has been the case with basically every other kind of price or expense reports submitted by a contractor to the federal government. Significantly for this hearing, little services will bear the largest part of this problem-- GSA estimated that out of 15,738 suppliers holding contracts that would go through this Guideline, 12,590 are little businesses (GSA SER Software).

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Reg. 8 GSA likewise acknowledges a point really important to market-- that cost paid is only of many "info points"in identifying the best value to the government. 10 We can also add consumer service, item assistance services, guarantee, and other terms to this list.

So, according to GSA's own analysis, this concern troubled specialists will offer the federal government with only one of the needed info points-- transactional cost-- with no ways to obtain the other information points needed to evaluate price. Without access to, and factor to consider of, this other important details, the cost info is of little worth at best and can be very misleading at worst.

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In my view, the failure of the Guideline to record these other non-price elements could be particularly hazardous to small companies. Small companies frequently operate as value-added resellers or otherwise distinguish themselves in the competitive market based upon the value they contribute to a transaction, such as client and item service ability, that is not caught by transaction rate.

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