Bill Overview
Title: Fair Pricing with Cost Transparency Act of 2022
Description: This bill revises requirements for government contractors to submit cost or pricing data and information supporting commercial product determinations. Specifically, in the event the contracting officer is unable to determine that proposed prices are fair and reasonable by any other means, an offeror who fails to make a good faith effort to comply with a reasonable request to submit data shall be ineligible for award unless the head of the contracting activity determines that it is in the best interest of the government to make the award based on specified factors. The senior procurement executive must submit an annual report to the Office of Federal Procurement Policy identifying offerors that have denied multiple requests for submission of uncertified cost or pricing data over the preceding three-year period but nevertheless received an award. The bill requires offerors of products proposed or determined to be commercial to identify the comparable commercial product that is used by the general public or nongovernmental entities and provide related information. Commercial product determinations must be periodically reviewed, at least every five years, to ensure that the initial decision was appropriate and that market conditions continue to support the designation. The Government Accountability Office must conduct a review of the prevalence and trends of contractors of executive agencies using distributors or other intermediaries as a means of avoiding legal or regulatory requirements.
Sponsors: Rep. Maloney, Carolyn B. [D-NY-12]
Target Audience
Population: Entities and individuals engaged in government contracting
Estimated Size: 250000
- The bill affects government contractors, who are entities that enter into contracts with the government to provide goods or services.
- Entities involved with commercial products that are being sold to government agencies will also be impacted, especially since they need to justify and provide data on the fairness and reasonableness of their pricing.
- Procurement officers and contracting officials within government agencies are impacted due to increased requirements to review and validate cost or pricing data.
- The requirement to submit an annual report increases the administrative burden on the senior procurement executives.
- NGOs and other bodies supplying government will need compliance structures for cost transparency.
Reasoning
- The distribution of the simulated interviews reflects a blend of individuals who work within the government contracting ecosystem but vary by their roles and perspectives. Contractors, procurement officers, small business owners, compliance officers, and manufacturing managers are all part of the group that might affect or be affected by the new policy.
- Considering the budgetary constraints and the broad reach of the policy, many contractors who are smaller or just beginning to engage with government contracts might find this impact substantial. At the same time, larger corporations with more robust compliance structures may find the policy's impact to be lower given their existing capabilities.
- The policy's requirement for transparency and fair pricing is likely to create higher administrative workloads, particularly for compliance officers and procurement officials, influencing their wellbeing negatively if not coupled with added support.
- The wellbeing scores provided allow for an evaluation of the differential impact over time, representing a long-term viewpoint beyond immediate administrative changes. The scores reflect both direct effects of compliance burdens and indirect effects, such as market competitiveness and economic stability as seen in individuals working with these products.
Simulated Interviews
Government Procurement Officer (Washington, D.C.)
Age: 45 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 20.0 years
Commonness: 15/20
Statement of Opinion:
- This policy is crucial for ensuring taxpayer money is spent wisely.
- It will increase my workload, which is quite demanding already, but the transparency benefits are worth the effort.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 6 |
| Year 2 | 5 | 6 |
| Year 3 | 6 | 6 |
| Year 5 | 6 | 6 |
| Year 10 | 7 | 6 |
| Year 20 | 8 | 6 |
Small Business Owner (California)
Age: 37 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 10.0 years
Commonness: 10/20
Statement of Opinion:
- The extra need for pricing transparency is a burden, but it levels the playing field.
- I worry about the administrative costs involved, though hopeful it will enhance competition.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 7 |
| Year 2 | 6 | 7 |
| Year 3 | 7 | 7 |
| Year 5 | 7 | 7 |
| Year 10 | 8 | 7 |
| Year 20 | 9 | 7 |
Compliance Officer for a large defense contractor (Texas)
Age: 50 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 20.0 years
Commonness: 8/20
Statement of Opinion:
- More documentation and proof for pricing is required, which means more work for my team.
- I believe we've always priced fairly, but compliance is becoming more time-consuming.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 7 |
| Year 3 | 8 | 7 |
| Year 5 | 8 | 7 |
| Year 10 | 8 | 7 |
| Year 20 | 8 | 7 |
Legal Advisor (New York)
Age: 42 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 10.0 years
Commonness: 7/20
Statement of Opinion:
- There will be an increased demand for legal services as companies adjust to these requirements.
- I am optimistic about the potential market growth for my services.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 8 | 6 |
| Year 5 | 8 | 6 |
| Year 10 | 8 | 6 |
| Year 20 | 8 | 6 |
Entrepreneur (Florida)
Age: 29 | Gender: male
Wellbeing Before Policy: 8
Duration of Impact: 5.0 years
Commonness: 10/20
Statement of Opinion:
- Newer businesses may struggle initially with the pricing data requirements.
- Once implemented, it may protect against underhanded practices by larger competitors.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 8 |
| Year 2 | 7 | 8 |
| Year 3 | 8 | 8 |
| Year 5 | 9 | 8 |
| Year 10 | 9 | 8 |
| Year 20 | 9 | 8 |
Senior Procurement Executive (Illinois)
Age: 55 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 20.0 years
Commonness: 5/20
Statement of Opinion:
- The additional reporting requirement will be a challenge without more resources.
- I'm concerned about potential pushback from suppliers.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 5 |
| Year 2 | 5 | 5 |
| Year 3 | 6 | 5 |
| Year 5 | 6 | 5 |
| Year 10 | 6 | 5 |
| Year 20 | 7 | 5 |
Manufacturing Manager in a multinational corporation (Ohio)
Age: 60 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 0.0 years
Commonness: 12/20
Statement of Opinion:
- The policy will have little impact on our current operations as we already comply with transparency.
- I see it'll affect smaller businesses more as they scale up to meet compliance justifications.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 6 | 6 |
| Year 3 | 6 | 6 |
| Year 5 | 6 | 6 |
| Year 10 | 6 | 6 |
| Year 20 | 6 | 6 |
Contract Manager for a tech consultancy (Virginia)
Age: 30 | Gender: other
Wellbeing Before Policy: 7
Duration of Impact: 5.0 years
Commonness: 8/20
Statement of Opinion:
- It evens the playing field but will definitely keep us on our toes relative to pricing accuracy.
- Ultimately it should lead to more fair competition.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 7 |
| Year 2 | 6 | 7 |
| Year 3 | 7 | 7 |
| Year 5 | 8 | 7 |
| Year 10 | 8 | 7 |
| Year 20 | 9 | 7 |
Supply Chain Analyst (Colorado)
Age: 40 | Gender: male
Wellbeing Before Policy: 5
Duration of Impact: 10.0 years
Commonness: 9/20
Statement of Opinion:
- Supply chain negotiations might be tense due to increased transparency needs.
- It might slow things down initially but with a good outcome for transparency over time.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 5 |
| Year 2 | 5 | 5 |
| Year 3 | 6 | 5 |
| Year 5 | 6 | 5 |
| Year 10 | 7 | 5 |
| Year 20 | 8 | 5 |
Head of Sales for a medium-sized manufacturer (Arizona)
Age: 53 | Gender: male
Wellbeing Before Policy: 8
Duration of Impact: 10.0 years
Commonness: 10/20
Statement of Opinion:
- We have structured prices fairly from the start, but more checks mean more complexities.
- In the long run, it enhances trust with our government clients.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 8 |
| Year 2 | 7 | 8 |
| Year 3 | 8 | 8 |
| Year 5 | 8 | 8 |
| Year 10 | 9 | 8 |
| Year 20 | 9 | 8 |
Cost Estimates
Year 1: $15000000 (Low: $12000000, High: $20000000)
Year 2: $15500000 (Low: $12500000, High: $20500000)
Year 3: $16000000 (Low: $13000000, High: $21000000)
Year 5: $17000000 (Low: $14500000, High: $22500000)
Year 10: $20000000 (Low: $17500000, High: $26000000)
Year 100: $100000000 (Low: $80000000, High: $120000000)
Key Considerations
- This policy would require coordination across various government departments to effectively implement and monitor compliance.
- The effectiveness of the policy in terms of cost reduction and efficiency gains will depend heavily on the quality of implementation and monitoring mechanisms.
- Initial resistance or compliance challenges from contractors could impact early cost savings and require additional government oversight resources.