[Federal Register Volume 68, Number 52 (Tuesday, March 18, 2003)]
[Proposed Rules]
[Pages 13212-13214]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-6458]
[[Page 13211]]
-----------------------------------------------------------------------
Part V
General Services Administration
-----------------------------------------------------------------------
48 CFR Parts 501, 538, and 552
General Services Administration Acquisition Regulation; Consolidation
of Industrial Funding Fee and Sales Reporting Clauses; Reduction in
Amount of Industrial Funding Fee; Proposed Rule
Federal Register / Vol. 68, No. 52 / Tuesday, March 18, 2003 /
Proposed Rules
[[Page 13212]]
-----------------------------------------------------------------------
GENERAL SERVICES ADMINISTRATION
48 CFR Parts 501, 538, and 552
[GSAR Case 2002-G507]
RIN 3090-AH79
General Services Administration Acquisition Regulation;
Consolidation of Industrial Funding Fee and Sales Reporting Clauses;
Reduction in Amount of Industrial Funding Fee
AGENCY: Office of Acquisition Policy, General Services Administration
(GSA).
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: The General Services Administration (GSA) is proposing to
amend the General Services Administration Acquisition Regulation (GSAR)
to give GSA the unilateral right to change the percentage rate of the
Industrial Funding Fee (IFF) in Multiple Award Schedule (MAS)
contracts. The proposed rule also sets forth GSA's intent to modify and
combine two existing General Services Administration (GSA) clauses that
implement collection of the IFF by the Federal Supply Service (FSS) on
sales from all Federal Supply Schedule contracts. These clauses are
Industrial Funding Fee and Contractor's Report of Sales. Additionally,
the proposed rule provides notice of the method FSS intends to utilize
to modify each contract subject to the IFF. While the GSAR does not
specify the percentage rate of the IFF, GSA intends to lower the
current IFF rate from 1.0 percent to 0.75 percent of reported sales,
effective January 1, 2004. The Administrator of GSA has the authority
to change the IFF; GSA will consult with OMB prior to effecting any
future changes to the IFF.
DATES: Interested parties should submit comments in writing on or
before April 17, 2003, to be considered in the formulation of a final
rule.
ADDRESSES: Submit written comments to--General Services Administration,
Regulatory Secretariat (MVA), 1800 F Street, NW., Room 4035, Attn: Ms.
Laurie Duarte, Washington, DC 20405.
Submit electronic comments via the Internet to--gsarcase.2002-
[email protected].
Please submit comments only and cite GSAR case 2002-G507 in all
correspondence related to this issue.
FOR FURTHER INFORMATION CONTACT: The Regulatory Secretariat, Room 4035,
GS Building, Washington, DC 20405, (202) 501-4755, for information
pertaining to status or publication schedules. For clarification of
content, contact Vonda J. Sines, Procurement Analyst, at (703) 305-
7542, or Linda Nelson, Procurement Analyst, at (202) 501-1900. Please
cite GSAR Case 2002-G507. The TTY Federal Relay Number for further
information is 1-800-877-8973.
SUPPLEMENTARY INFORMATION:
A. Background
On April 18, 1995, GSA implemented an Industrial Funding Fee (IFF)
for Federal Supply Schedules. Two clauses, 552.238-76, Industrial
Funding Fee, and 552.238-74, Contractor's Report of Sales, are included
in the solicitation for each Federal Supply Schedule contract and
provide instructions for the submission of quarterly sales reported by
contractors.
GSA utilizes the IFF to fund the cost of providing supplies and
services through the Federal Supply Schedule program, eliminating
operating expenses formerly funded with appropriated monies.
Fees are included in the Schedule prices charged to ordering
activities; all contract award prices include the total amounts
charged. Federal Supply Schedule contractors remit fees to GSA based on
quarterly contract sales. GSA recoups its costs from the ordering
activities through the contractor's quarterly remittance to FSS. The
GSAR does not specify the percentage rate of the IFF. Rather, the
initial 1 percent IFF rate was set via Acquisition Letter and has not
changed since its inception.
GSA proposes to change the GSAR to provide that effective January
1, 2004, GSA will have the unilateral right to change the IFF rate.
The agency also proposes consolidation of the two foregoing clauses
into a single clause, Industrial Funding Fee and Sales Reporting, under
the number 552.238-74. The number 552.238-76 will become ``reserved.''
The new clause eliminates duplicative information in the two current
clauses, clarifies sales reporting procedures, and describes the
procedures FSS will utilize to unilaterally effect future IFF rate
changes.
GSA also intends to reduce the IFF from its current rate of 1
percent of sales to 0.75 percent effective January 1, 2004. GSA
proposes to implement this change by means of a bilateral contract
modification to be executed electronically. As consideration to Federal
Supply Schedule contractors for any potential costs incurred as the
direct result of this change, GSA proposes to allow these vendors to
continue to include the 1 percent IFF in their contract prices until
December 31, 2003, but to forward to FSS an IFF of 0.75 percent for
reported sales for the period of October 1, 2003, through December 31,
2003. Examples of the type of costs GSA anticipates contractors could
incur include reprinting price lists and modifying accounting systems.
The Administrator of GSA has the authority to change the IFF; GSA will
consult with OMB prior to effecting any future changes to the IFF.
B. Executive Order 12866
This is not a significant regulatory action and, therefore, was not
subject to review under section 6(b) of Executive Order 12866,
Regulatory Planning and Review, dated September 30, 1993. This rule is
not a major rule under 5 U.S.C. 804.
C. Regulatory Flexibility Act
The General Services Administration does not expect this proposed
rule to have a significant economic impact on a substantial number of
small entities within the meaning of the Regulatory Flexibility Act, 5
U.S.C. 601, et seq., because the purpose of the proposed rule is to
assign to GSA the sole discretion to set the rate of the IFF and to
clarify for contractors how to handle changes in the IFF. The rule also
proposes to modify and consolidate the provisions of two existing GSAR
clauses in terms of sales reporting and procedural changes when the IFF
rate changes. While some 78 percent of the Federal Supply Schedule
contracts represent small business concerns, all contractors holding
Federal Supply Schedules are already required to report quarterly sales
and to periodically submit the Industrial Funding Fee to FSS. The
proposed rule does not change these two requirements. It does require
both small and large businesses to execute appropriate bilateral
contract modifications and to make changes to existing price lists and
accounting systems. GSA intends to mitigate the anticipated cost to
contractors for these changes via offering consideration as described
under paragraph A. An Initial Regulatory Flexibility Analysis has,
therefore, not been performed. We invite comments from small businesses
and other interested parties. GSA will consider comments from small
entities concerning the affected GSAR parts 501, 538, and 552 in
accordance with 5 U.S.C. 610. Interested parties must submit such
comments separately and should cite 5 U.S.C. 601, et seq. (GSAR 2002-
G507), in correspondence.
D. Paperwork Reduction Act
The current clause, 552.238-74, Contractor's Report of Sales,
contains an
[[Page 13213]]
information collection requirement that is subject to the Paperwork
Reduction Act (44 U.S.C. 3501 et seq.) that has been previously
approved by the Office of Management and Budget (OMB) under the
Paperwork Reduction Act and assigned control number 3090-0121. Current
clause 552.238-76, Industrial Funding Fee, also contains an information
collection requirement that is subject to the Paperwork Reduction Act
(44 U.S.C. 3501 et seq.). However, the estimated burden for this clause
has been determined to be zero, and GSA has a blanket approval under
control number 3090-0250 from OMB for information collections with a
zero burden estimate.
The consolidation of information from these two clauses into a
single clause results in no additional burden and, therefore, no
additional approval from OMB is required.
List of Subjects in 48 CFR Parts 501, 538, and 552
Government procurement.
Dated: March 12, 2003.
David A. Drabkin,
Deputy Associate Administrator, Office of Acquisition Policy.
Therefore, GSA proposes amending 48 CFR parts 501, 538, and 552 as
set forth below:
1. The authority citation for 48 CFR parts 501, 538, and 552
continues to read as follows:
Authority: 40 U.S.C. 486(c).
PART 501--GENERAL SERVICES ADMINISTRATION ACQUISITION REGULATION
SYSTEM
501.106 [Amended]
2. In section 501.106 at GSAR reference 552.238-74, remove the OMB
Control Number ``3090-0121'' and add ``3090-- 0121 & 3090-0250'' in its
place.
PART 538--FEDERAL SUPPLY SCHEDULE CONTRACTING
3. Amend section 538.273 by revising paragraph (b)(1); and by
removing paragraph (b)(3). The revised text reads as follows:
538.273 Contract clauses.
* * * * *
(b) * * *
(1) 552.238-74, Industrial Funding Fee and Sales Reporting.
* * * * *
PART 552--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
4. Amend section 552.212-71 by revising the date of the clause; and
in paragraph (b) by revising entry 552.238-74 to read as follows:
552.212-71 Contract Terms and Conditions Applicable to GSA Acquisition
of Commercial Items.
* * * * *
Contract Terms and Conditions Applicable to GSA Acquisition of
Commercial Items (Date)
(b) Clauses.
* * * * *
--552.238-74 Industrial Funding Fee and Sales Reporting
* * * * *
552.212-72 [Amended]
5. Amend section 552.212-72 by revising the date of the clause to
read ``(Date)''; and by removing from the end of paragraph (b) `` --
552.238-76 Industrial Funding Fee''.
6. Revise section 552.238-74 to read as follows:
552.238-74 Industrial Funding Fee and Sales Reporting.
As prescribed in 538.273(b)(1), insert the following clause:
Industrial Funding Fee and Sales Reporting (Date)
(a) Reporting of Federal Supply Schedule Sales. The Contractor
shall report all contract sales under this contract as follows:
(1) The Contractor shall accurately report the dollar value, in
U.S. dollars and rounded to the nearest whole dollar, of all sales
under this contract by calendar quarter (January 1--March 31, April
1--June 30, July 1--September 30, and October 1--December 31). The
dollar value of a sale is the price paid by the Schedule user for
products and services on a Schedule task or delivery order. The
reported contract sales value shall include the Industrial Funding
Fee (IFF). The Contractor shall maintain a consistent accounting
method for sales reporting, based on the Contractor's established
commercial accounting practice. The acceptable points at which sales
may be reported include--
(i) Receipt of order;
(ii) Shipment or delivery, as applicable;
(iii) Issuance of an invoice; or
(iv) Payment.
(2) Reportable sales under the contract are those resulting from
sales of contract items to authorized users unless the purchase was
conducted pursuant to a separate contracting authority such as a
Governmentwide Acquisition Contract (GWAC), or a separately awarded
FAR Part 12, FAR Part 13, or FAR Part 15 procurement.
(3) The Contractor shall electronically report the quarterly
dollar value of sales, including ``zero'' sales, by utilizing the
automated reporting system at an Internet website designated by the
Federal Supply Service (FSS). Prior to using this automated system,
the Contractor shall complete contract registration with the FSS
Vendor Support Center (VSC). The website address, as well as
registration instructions and reporting procedures, will be provided
at the time of award. The Contractor shall report sales separately
for each National Stock Number (NSN), Special Item Number (SIN), or
sub-item.
(4) The Contractor shall convert the total value of sales made
in foreign currency to U.S. dollars using the ``Treasury Reporting
Rates of Exchange'' issued by the U.S. Department of Treasury,
Financial Management Service. The Contractor shall use the issue of
the Treasury report in effect on the last day of the calendar
quarter. The report is available from--Financial Management Service,
International Funds Branch, Telephone: (202) 874-7994, Internet:
http://www.fms.treas.gov/intn.html.
(5) Contract sales shall be reported to FSS within 30 calendar
days following the completion of each reporting quarter. The
Contractor shall continue to furnish quarterly reports, including
``zero'' sales, until physical completion of the last outstanding
task order or delivery order.
(b) The Contractor shall remit the IFF at the rate set by FSS.
(1) The Contractor shall remit the IFF to FSS in U.S. dollars
within 30 calendar days after the end of the reporting quarter;
final payment shall be remitted within 30 days after physical
completion of the last outstanding task order or delivery order of
the contract.
(2) The IFF represents a percentage of the total quarterly sales
reported. This percentage is set at the discretion of the General
Services Administration (GSA). The Commissioner of GSA's Federal
Supply Service, or the Commissioner's delegated representative, has
the unilateral right to change the percentage at any time, but not
more than once per year. FSS will provide reasonable notice prior to
the effective date of the change. The statutorily based IFF
reimburses FSS for the costs of operating the Federal Supply
Schedules Program and recoups its operating costs from ordering
activities. Offerors must include the IFF in their prices. The fee
is included in the award price(s) and reflected in the total amount
charged to ordering activities. FSS will post notice of the current
IFF at http://72a.fss.gsa.gov/ or successor website as appropriate.
(c) Within 60 days of award, an FSS representative will provide
the Contractor with specific written procedural instructions on
remitting the IFF. FSS reserves the unilateral right to change such
instructions from time to time, following notification to the
Contractor.
(d) Failure to remit the full amount of the IFF within 30
calendar days after the end of the applicable reporting period
constitutes a contract debt to the United States Government under
the terms of FAR 32.6. The Government may exercise all rights under
the Debt Collection Act of 1982, including withholding or setting
off payments and interest on the debt (see FAR 52.232-17, Interest).
Should the Contractor
[[Page 13214]]
fail to submit the required sales reports, falsify them, or fail to
timely pay the IFF, this is sufficient cause for the Government to
terminate the contract for cause.
(End of clause)
552.238-76 [Reserved]
7. Remove and reserve section 552.238-76.
[FR Doc. 03-6458 Filed 3-17-03; 8:45 am]
BILLING CODE 6820-BR-P