RUN – DO NOT WALK – AWAY FROM GSA’S TDR
If Allen Federal had a “black box” warning like the FDA, we’d issue it for GSA’s TDR program. We recommend strongly that any company who can avoid it do so, for as long as possible. Recent hints from GSA that participation may be optional should be explored and pursued to the fullest extent.
While the TDR pilot is supposed to eliminate the need for contractor-supplied price and discounting information, there is widespread anecdotal evidence to show that this is not happening. From IT to Fort Worth to Kansas City, Schedule contractors are reporting that they’re being asked for CSP, or CSP-like, information. It was never realistic to expect CO’s, used to relying on contractor-supplied data for years, would easily change gears. They’re not.
In addition to obviating one of the promised benefits of TDR, this poses a potentially substantial legal risk. There is no definition of what constitutes “complete” data in these circumstances. While CSP disclosures must be “accurate, current, and complete”, there is no standard for TDR. Further, it is 100% likely that any IG auditor will disagree with a CO on that question, exposing companies to defective data False Claims Act cases.
The IG seems determined to continue Pre-Award audits, even on TDR contracts, as well. So, not much has really changed under TDR, except for onerous back-end reporting requirements that increase contractor costs for little, if any, customer benefit.
Given this, it is easy to see that it is really no leap at all to having an auditor “recommend” to a CO that they institute some sort of price tracking system to ensure that prices stay consistent. If this sounds a lot like the current Basis of Award portion of the Price Reductions Clause, it is. Keep in mind that this trigger was also supposed to be eliminated on TDR contracts. While they might not call it “Basis of Award”, it will likely operate in much the same way. If recent history is any guide, FAS leadership will go right along with the IG “recommendations”, too.
In short, TDR is not, and may not ever, work as intended. We recommend staying away from it if at all possible.