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The proposed guideline could suggest that small companies would require to have one employee invest 3 months a year just going into information. Remember, this is data the government already has but does not gather centrally. While I am all in favor of developing jobs, I do not think forcing small companies to employ employees to provide data a 2nd time is a rewarding use of their dollars or tax dollars, since somebody has actually got to pay for this.

Data is not free. Services will decide it is better to sell separately of GSA, which will improve the government's expense to buy, or the small companies will leave of the federal market altogether, decreasing competitors. We have actually already lost over 100 little professionals in the past two years.

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

The GSA schedules have a variety of advantages for both vendors and acquiring companies. Most especially, it creates a simpler system that allows contracting officers direct access to the products and services of numerous firms without the requirement of releasing several solicitations for every requirement. For small organizations with limited resources, relative lack of experience navigating the procurement process, landing on a GSA schedule can be an essential initial step towards securing the federal government as a customer.

The rule needs that firms that hold schedule agreements while other government-wide acquisition contracts report transactional data through an electronic system. While it appears that much of this data is already available to the GSA, the brand-new rule increases the frequency of reporting and expands what details companies are needed to offer. GSA SER.

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With that, I thank the witnesses for testifying today, and I yield back. Chairman HANNA. Thank you. If Committee members have an opening statement, I ask that they be submitted for the record. And as you know, you have five minutes. We wish to hear what you state, so we will be a bit-- I will be a little bit versatile on that, or attempt to be.

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What the rule needs is regular monthly reports from a range of GSA specialists. This includes both the schedule professionals, along with those who hold IDIQ, indefinite shipment, indefinite amount contractors, and what we call GWACs, Government-wide Acquisition Agreements, to prepare these regular monthly reports of all federal sales made during the prior month.

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For those contractors who participate in the pilot program, they will be eased from a burden, what we call the cost reductions stipulation, which is another compliance stipulation that is in GSA contracts. In the general public conference that GSA hung on April 17th, I participated in practically. My perception of that conference is that everybody in the space had concerns about the rule, consisting of GSA's own inspector general.

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



I would recommend that for some contractors, it will take 6 hours for them to determine which of their IT systems hold the different data elements that GSA has actually required for this guideline. That does not enable any time for establishing a report, making sure that the report is accurate, and training its workers on how they will submit that report on a month-to-month basis.

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This might not potentially permit any time for the contractors to really review the reports to guarantee that the information is right. There is nothing in the proposed rule that suggests what would take place if the specialists submit inaccurate data or if they simply get rid of data due to the fact that it is clearly inaccurate.

The second bothersome location is the prospective growth of what we call business sales practice requirements. GSA specialists are required to send industrial sales practices prior to contract award and during agreement performance when specific things happen, like if they go to add products to a contractor's increased rates. The proposed rule allows GSA to request for CSPs at any time (GSA SER Services).

This needs contractors to enter into their data systems and take a look at actual discount rates on transactions. I mean, we see press release after press release from the Department of Justice specifying that professionals have fraudulently offered this details when in truth they just have not checked. So this is a huge issue.

We understand it is going to cost a lot to collect the information, however what is unclear is what benefit GSA is going to receive from the info. And after that finally, is the personal and exclusive nature of the info. Transactional data pricing has actually constantly been secured by the courts under FOIA, and GSA does not appear to appreciate based upon remarks made at the meeting that this holds true.

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As written, small companies would deal with increased expenses under the proposed guideline. GSA recognizes the additional reporting requirement will unquestionably have an expense for affected companies. SBA's Workplace of Advocacy and GSA's own inspector basic kept in mind that quotes in the proposed guideline appear drastically understated. I know others here today have actually completed more detailed measurements of this expense, and I will delay to them on providing those information.

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Intricacy, on the other hand, steps if a policy modification will make selling to the government harder or easier. Basically, will the federal market be more or less hard to understand? Or as I typically hear from service owners, am I going to need to employ someone for this? While GSA contents its reporting option will be user- friendly, our experience is that federal government data systems are anything.

Typically, however, small companies use tailored and innovative services that in combination with competitive rates produce best value in procurement rather of lowest cost. While GSA recommends that prices will just be one element in determining best worth, it provides substantial weight. The words "cost" or "pricing" appear 165 times in the guideline, while "best worth" only appears seven.

This is like asking sellers offering on Amazon to report to Amazon what it sold on Amazon. This appears to be an ineffective method to gather information. And speaking to the chauffeur behind this regulation, we continue to be worried about a vision of federal government procurement that seeks to categorize customized services into narrow categories (Asia Virtual Solutions).

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

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