SIA opposes proposed changes in GSA pricing policy

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Monday, July 20, 2015

WASHINGTON—A proposed fundamental change in GSA’s pricing policy would adversely impact the security industry, especially its small businesses, according to Jake Parker, SIA’s director of government relations.

The proposed GSA Transactional Data Reporting Rule, the biggest change of its kind in 30 years, Parker said, would affect all GSA contract holders, he told Security Systems News.

It’s all about horizontal price comparison, and SIA is opposing this proposal in its current form, he said.

Instituting such pricing models would be problematic for a number of reasons, Parker said, including item-level price data.

“It would discourage small businesses from participating in GSA contracts,” Parker said, adding that congressional witnesses have said that “estimates of the [new] compliance version are extremely out of touch with the real world.”

Under the GSA proposal, contractors would have to report in on a monthly basis with line-item data on transactions regarding any GSA contract. That would include blanket purchase agreements, government-wide acquisition contracts, delivery and federal supply schedules, he said.

Contractors, under the proposed rules, would be required to “implement a new data collection and reporting system with a significant cost,” Parker said.

“The overall concern is that it would drive down prices to an unreasonably low level without regard to terms and conditions,” he said.

“There’s more information in the price than just the item, there are maintenance agreements and warranties. Loyal customers who buy a lot and may get special discounts in some cases could artificially drive down the price,” he said, adding that confidential pricing information is at stake.

In its official statement to the GSA, SIA noted that the association is comprised of more than 550 physical security companies, and that small businesses represent more than 80 percent of its membership.

“We appreciate that GSA has actively sought input from industry as the agency seeks to improve procurement policies, and we share the agency’s goal of providing products and services at the best value possible for government customers and the American people,” SIA wrote.

A congressional small business committee is concerned about this as well, Parker said, and that could bode well for congressional action even though Congress doesn’t usually get involved in such rule-making.

Meanwhile, SIA also recently lobbied for the partnership between the Department of Homeland Security’s Science and Technology Directorate and the private sector. Parker recently testified before a House subcommittee on cybersecurity, infrastructure protection and security technologies. The hearing was called to seek perspectives on how the DHS S&T’s directorate collaborates with academia and private companies on relevant research topics and how it partners with industry on the development and acquisition of products for DHS agencies.

“For the past few years, the Security Industry Association has fostered a strong partnership with the DHS science and technology directorate to serve as the voice of the security industry into federal homeland security research and development processes,” Parker said at the hearing.

“SIA members highly value the receptiveness of DHS S&T to collaborate with industry, and we have some perspectives from our members as to how that collaboration can continue to improve and evolve. SIA looks forward to a constructive conversation with the agency and with Congress on the mutual benefits of utilizing private sector expertise to enhance homeland security.”

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