E6-10579. Establishment of a Transaction Fee for Transportation Services Provided for the GSA, Office of Global Supply

AGENCY:

Federal Supply Service, GSA.

ACTION:

Notice in response to comments on proposed rule.

SUMMARY:

GSA published a notice in the Federal Register at 70 FR 73248 on December 9, 2005, and an extension to that notice at 70 FR 76455 on December 27, 2005, soliciting comments on the establishment of a 4% transaction fee for transportation services provided for the GSA, Office of Global Supply. Subsequent meetings were held with transportation service provider industries and the GSA, Office of Global Supply. This notice is in response to the comments GSA received.

FOR FURTHER INFORMATION CONTACT

Ms. Mary Anne Sykes, Transportation Programs Branch, by telephone at 703-605-2889 or via email at [e-mail].

SUPPLEMENTARY INFORMATION:

The proposed rule is applicable to the Freight Management Program (FMP), Standard Tender of Service (STOS), for transportation services provided to the Eastern Distribution Center (EDC), Burlington, NJ; Western Distribution Center (WDC), French Camp, CA; and the National Industries for the Blind (NIB) and National Industries for the Severely Handicapped (NISH). It applies to all transportation service providers (TSPs) transporting these shipments.

Comments were received from the following individual transportation service providers, their representatives, and various industry associations:

Associations

American Trucking Associations

National Motor Freight Traffic Association

Transportation Intermediaries Association

NYP, Inc.

Fiore Associates

Transportation Service Providers

Crossroad Carriers

Economy Transport, Inc.

Landstar System, Inc.

Tucker Company

General comments and issues raised were centered on the following topics:

• Economic justification/value proposition
• Fee is too high
• Oppose fee
• Overall increase to Government Cost
• Increase in TSP fees and administrative burden
• Fee must not apply to existing tenders
• TSP must be given time to adjust rates
• Fee must apply universally to all TSPs
• TSPs shouldn't collect and pay transaction fees

The following responses take into consideration the comments on the potential impact of the proposed rule on both GSA and the transportation industry.

GSA must fund its programs to remain viable and cover the cost of the services provided by the freight program. GSA's Federal Supply Service (FSS) has assessed an industrial funding fee for essentially all of its programs since Congress authorized GSA to charge fees for its services in 1987. The proposed 4% transaction fee aligns the Global Supply transportation services with GSA's funding mechanism for its other programs.

TSPs will realize additional savings through reduction in administrative requirements to process invoices. TSPs that provide transportation services for GSA, Global Supply will benefit from TMSS electronic billing, electronic rate submission, automated prepayment audit, faster payments, online transaction tracking, automated reports, and complete audit history trails.

After careful deliberations GSA decided to delay assessment of the 4% transaction fee until the TMSS pre-payment audit and payment modules are complete. TSPs will be required to remit the 4% fee for paid invoices directly to GSA quarterly instead of deducting the 4% fee from each invoice via TMSS prior to payment. The Final Rule outlining the collection method and implementation plan will be published in the Federal Register once the TMSS modules are complete. The proposed changes will be highlighted in a Request for Offers that will be issued for a special rate filing window that will be opened prior to implementation. GSA will monitor the shipment volume to determine if the 4% fee needs future adjustments. GSA wants to ensure that the appropriate percentage is being applied.

Dated: June 29, 2006.

Susan T. May,

Acting Director, Travel and Transportation Management Division (FBL), GSA.