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Federal Eye
Posted at 05:22 PM ET, 09/12/2012

General Services Administration is making surplus revenue on federal contracts

The General Services Administration will look at reducing the surcharge it applies to federal agencies who make purchases from its awards schedules.

The schedules are shopping catalogues of prenegotiated contracts from which federal agencies can buy goods or services, whether staples, paper, computer networks or office cleaning crews. GSA maintains thousands of contracts on 31 separate schedules, according to the Government Accountability Office.

But the fee GSA charges when federal agencies make purchases from those schedules is generating too much money.

GSA’s multiple awards schedule made $40.2 billion in sales in fiscal year 2011. It is projected to make $41.3 billion for fiscal 2012. That amount has contributed to excess reserve balances, and GSA doesn’t know what to do with it.

The fee brings in more than $250 million per year, according to Sen. Joseph Lieberman (I-Conn.), chairman of the Senate Homeland Security and Governmental Affairs Committee, which held a hearing about the GSA on Wednesday. The fee generated excess revenue of $62 million per year between 2007 and 2010, according to the GAO.

As of September 2009, the fund has surplus reserves of $687 million, according to a February GSA inspector general report. Those funds have been used to cover other agency costs. But the IG report noted that by law the money should be handed over to the Treasury, which has not happened.

If GSA cuts the fee it will be the second time in a decade. In 2004, the Federal Acquisition Service reduced its fee from 1 percent to .75 percent of total sales after it was generating surpluses beyond operating costs.

By Timothy R. Smith  |  05:22 PM ET, 09/12/2012

Tags:  GSA

 
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