FSS fee reduction proposal due

The General Services Administration will issue a proposed rule within the next 30 days for lowering the fee on the Federal Supply Service schedules, said Patricia Mead, deputy assistant commissioner of the FSS Office of Acquisition.

GSA in November announced it would lower the 1 percent industrial funding fee on its multiple awards schedules to 0.75 percent, effective Jan. 31, 2004. The decision came after urging from vendors, a report from the General Accounting Office, and a recommendation from consultants hired by GSA to help the agency function more efficiently.

Primarily because of the increasing revenues of the information technology and other professional services schedules, FSS is making millions of dollars in profit from the fee, according to the September GAO report.

This is a big concern for vendors, who would like to know where those profits are going, said Patrick Neven, president and chief executive officer of reseller iGov.com.

Mead and Neven were speaking Dec. 3 at a conference sponsored by the Computing Technology Industry Association.

The fee has not been lowered before because of concerns that the price changes would be too burdensome for GSA, vendors and agencies, Mead said. It will still be hard because lowering the fee will require price changes and changes in GSA and vendors' systems, but that is why agency officials gave themselves until January 2004, she said.

During the comment period on the proposed rule, GSA is looking for ideas on how to put in place a standard process for changing the fee so that it will be easier to do so in the future as revenues from the fee go up and down, Mead said.

Officials also want to develop a review process, because the GSA inspector general will likely "be following right behind us to make sure the change in price is passed on to the customer," Mead said.