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GSA to Reduce the .75% Industrial Funding Fee?

IFF The General Services Administration’s is considering reducing the industrial funding fee (IFF) surcharge it applies to some contract purchases, potentially providing a boost to  Barack Obama administration’s push for strategic sourcing.

The industrial funding fee is expressed as a percentage of the dollar value of orders placed. On Multiple Award Schedule (MAS) contracts, the industrial funding fee has been 0.75 percent since fiscal 2004. GSA can use the money to fund the Schedules program or another agency program.

“We think there’s already an opportunity for us to reduce fees,” Dan Tangherlini, acting GSA administrator, told Homeland Security and Governmental Reform Committee Chairman Sen. Joe Lieberman (I-Conn.) at a hearing held Sept. 12. The reduction of fee comes at a time where growing concerns arrive for the strategic sourcing of MAS contracts. Tangherlini further expressed his concern that the industrial funding fee was discouraging many MAS holders from taking the right course of action. Tangherlini believed that a possible reduction in the IFF would encourage agencies to adopt strategic sourcing contracts at a faster rate, and also save MAS holders money. Sen. Lieberman refuted Tangherlini’s comments by stating that “this is clearly a time in our federal government where every dollar counts” and GSA fees including the IFF were helping boost the reserve’s revolving fund.

Despite Sen. Lieberman’s comments, with a surplus on hand in the GSA Schedules program, the time may be ripe for restructuring the industrial funding fee, according to GSA’s leader, Read more about this possible change in GSA may lower some contract surcharges for agencies.

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