I\'ve been thinking about this for the past thirteen years and have
suggested it many different times to many different senior managers,
maybe this is fundamental change the MAS panel might want to consider:

\- **Report the IFF as a Separate Line Item on Customer Invoices**

Thirteen years ago, when the MAS IFF was first introduced, the legacy
FSS managers did not consider pricing the IFF as a separate line item
because the administration at that time believed that a separate line
item IFF had the look and feel of a GSA \"tax\" appearing on contractor
invoices to federal customers. The Clinton administration wanted nothing
to do with anything that looked like it was levying a tax. History has
proved that concept false since many other competing schedule-like
acquisitions list the \"contract access fee\" as a separate line item on
invoices including our own FAS Assisted Acquisition Service.

The fee was a new concept to federal MAS customers thirteen years ago;
however, today it\'s understood as a way of conducting business across
various competing acquisition vehicles. I suggest that it is time to
consider [listing the fee]{.underline} [directly on contractor invoices
as a separate line item]{.underline}, because doing so has two important
advantages:

1\) Building the fee into the MAS price becomes an overwhelming issue
when FAS decides to either raise or lower the fee. Presently, building a
fee into a base price and then trying to change the fee is a complicated
and tedious process for industry because it requires them to change
every accounting record, every individual item on every price list, and
every marketing publication if GSA decides to change its fee.

I suggest that GSA requires its contractors to list the fee on invoices
as its own separate line item, thus no individual prices (for all 15
million products sold under schedule) would ever have to be individually
changed. The marketing publications would all still valid, price lists
would still be still valid, and the only thing that changes (resulting
from an IFF change) is the bottom line fee on individual invoices.

I do not believe that you were working at GSA when we last changed the
fee from one to three quarters of one percent - it took us years for GSA
to get it right and even today, we still find the occasional vendor that
didn\'t lower the fee against his prices. It\'s no wonder that industry
objects so strongly to any IFF percentage changes - their administrative
efforts equal a total nightmare.

2\) In 1995 my strongest objection to our singular fee structure was the
notion that GSA did nothing to [reward]{.underline} its best and most
favored federal customers. If a GSA MAS customer were to place an order
for a million dollars, the fee is 3/4 of 1 percent, whereas if another
GSA MAS customer places orders for \$1,000 - guess what - the fee is
still 3/4 of 1 percent.

What is the general message that we are sending to our customers with
our fee pricing structure? You heard it first-hand during your panel
meeting, and that is: GSA really isn\'t that interested in its customers
receiving the very best prices. Our simple but uncreative fee structure
sets the tone for this very argument. Acquisition professionals in GSA
probably believe that contractors would price the million dollar order
quite a bit differently from the one-thousand dollar order (and that may
happen). Notwithstanding, the larger question still looms: what is GSA
doing to facilitate and encourage that best-value pricing process and
show industry and our customers exactly where we stand on this matter?
The message should be loud and clear: the largest orders from our most
favored agency customers [using our schedule as their acquisition
vehicle of choice]{.underline} lead to a sliding fee based on volume.
The smartest way to meet and accomplish this objective requires
fundamental change to our fee disclosure (directly on invoices versus
built into prices) methods.

In summary, as smart as it was thirteen years ago to build the fee
directly into the contractor-charged prices, it was probably
fundamentally flawed to do such a thing. Pricing the industrial funding
fee as a separate line item would be widely accepted by industry as an
acknowledgment of their challenges they must face if GSA were to ever
again raise or lower the IFF. Our customers would widely accept the
line-item IFF and any sliding fee associated with large customer
invoices as an acknowledgement by GSA that pricing associated with loyal
and returning customer has its rewards, rewards [given by
GSA]{.underline} directly to its customers rather than relying solely on
contractor-based price reductions that we now promote (and hope that our
customers receive).

The possibilities are endless if GSA were to list the MAS IFF as its own
separate line item on contractor invoices and may even help the GSA with
arguments from customers that we are not doing enough to guarantee that
customers receive the very best prices when they choose the Multiple
Award Schedules as their preferred acquisition vehicle.