0704-0519 Supporting Statement 2024-06-27

SUPPORTING STATEMENT – PART A

Defense Federal Acquisition Regulation Supplement (DFARS) Subpart 204.17, Service Contracts Inventory and Associated Clause (OMB Control No. 0704-0519)

Summary of Changes from Previously Approved Collection

• Decrease in the number of respondents and an increase in the number of responses due to the use of current data.

• Increase in the annual number of hours due to the increase in the number of responses.

• Estimated costs revised downward due to using the standard overhead rate of 36.25 percent in lieu of the 100 percent rate used when the collection was initially established.

1. Need For the Information Collection

This information collection covers the burden hours related to the requirement at DFARS subpart 204.17, Service Contracts Inventory, and its associated clause, 252.204-7023, Reporting Requirements for Contracted Services. DFARS subpart 204.17 and the clause at 252.204-7023 implement 10 U.S.C. 4505 (formerly 10 U.S.C. 2330a), as amended by section 812 of National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2017, which requires the Department of Defense (DoD) to establish a data collection system to provide certain management information with regard to each purchase of services by a military department or agency that exceeds $3 million for services in the following service acquisition portfolio groups: logistics management services, equipment-related services, knowledge-based services, and electronics and communications services.

The basic DFARS clause 252.204-7023 and an alternate I clause advise applicable contractors of the requirements for reporting data in the System for Award Management (SAM). The basic clause is used in solicitations and contracts, except solicitations and resultant awards of indefinite-delivery contracts, and task orders placed under a non-DoD contract. The alternate I clause is used in solicitations and resultant awards of indefinite-delivery contracts, basic ordering agreements, and blanket purchase agreements that meet the service contract reporting thresholds and criteria.

The basic clause and its alternate I require a contractor to report annually, in SAM, on the services performed under the contract or order, during the preceding Government fiscal year. Specifically, the contractor is required to report the following: the total dollar amount invoiced for services performed during the preceding fiscal year; and the number of direct labor hours, including subcontractor hours (when applicable), expended on services performed during the previous Government fiscal year.

2. Use of the Information

The information collection will provide DoD with the ability to identify and report annually to Congress, in accordance with 10 U.S.C. 4505, on the inventory of contractor service contract actions. As an adjunct, the information will support DoD’s total force management and in making strategic workforce planning and budget decisions pursuant to 10 U.S.C. 129a.

3. Use of Information Technology

Information technology is used to collect the covered information to the maximum extent (100%). DoD uses the Federal Procurement Data System (FPDS), an existing source of contract information for the Federal Government, to provide a majority of the information required by 10 U.S.C. 4505. The data that is not available in FPDS is entered by the contractor in SAM, which is an information system used Governmentwide to collect contractor information and also used to gather service contract data for the rest of the Federal Government under a similar, but not identical, statute (approved under OMB Control Number 9000-0097, Federal Acquisition Regulation Part 4 Requirements).

4. Non-duplication

As a matter of policy, DoD reviews the Federal Acquisition Regulation to determine if adequate language already exists. This request for information applies solely to DoD, in accordance with the requirements of 10 U.S.C. 4505.

5. Burden on Small Business

The burden applied to small businesses is the minimum consistent with applicable laws, Executive orders, regulations, and prudent business practices. The information collection requirement has been narrowly tailored to maximize the use of existing records already maintained by contractors and by the Government. To further minimize the impact, DoD is adopting the existing system and process used by the rest of the Government to obtain the requisite information from contractors, which maintains a familiar and consistent reporting requirement for contractors. The information is collected electronically once a year. Help-desk support and user guides are available for SAM; and reporting requirements will be limited to a small number of data elements to facilitate ease of reporting and minimize contractor burden. In addition, the NDAA for FY 2017 limits the application of the data reporting to contracts and orders that exceed a specified dollar threshold and are predominately for specific services.

6. Less Frequent Collection

Without collecting this information on an annual basis, DoD will be unable to ensure proper reporting of contract data to permit compliance with the statutory annual reporting requirements contained in 10 U.S.C. 4505, as amended.

7. Paperwork Reduction Act Guidelines

This information collection is conducted in a manner that is consistent with the guidelines in 5 CFR 1320.5(d)(2).

8. Consultation and Public comments

a. Public Notice

i. A 60-day notice for the collection was published in the Federal Register on March 22, 2024, at 89 FR 20458. No comments were received during the 60-day comment period.

ii. A 30-day notice for the collection was published in the Federal Register on June 27, 2024, at 89 FR 53593.

b. Consultation

DoD subject matter experts associated with service contract policy were consulted regarding the renewal of this information collection for the purpose of calculating respondent burden.

9. Gifts or Payment

No payments or gifts will be provided to respondents for participation in this information collection, other than remuneration to contractors under their contracts.

10. Confidentiality

This information is disclosed only to the extent consistent with statutory requirements, current regulations, and prudent business practices. No assurance of confidentiality is provided to respondents. A Privacy Act Statement is not required for this collection because DoD is not requesting individuals to furnish personal information for a system of records. The collection of information does not include and personally identifiable information; therefore, no Privacy Impact Assessment or System of Record Notice is required.

11. Sensitive questions

No sensitive questions are being asked in this collection.

12. Respondent Burden and its Labor Costs

1. Estimation of Respondent Burden

The estimated burden hours of the information collection and the estimated annualized cost to the public are based on data obtained from SAM for FY 2021 through FY 2023 for respondents and DoD applicable awards and responses, as well as estimates of processing times by contracting professionals familiar with the service acquisition reporting process. Reporting is required for contracts and orders awarded by DoD that have a value exceeding $3 million and that are for services in one of the following acquisition portfolio groups: logistics management services, equipment-related services, knowledge-based services, and electronics and communications services. DoD awarded approximately 5,515 contracts to 1,895 unique contractors each year that met the reporting criteria.

Contractors are required to report annually for each contract or order that is subject to the reporting requirements of 10 U.S.C. 4505. DoD subject matter experts estimate that it takes approximately 2 hours for a contractor employee at a GS-12 / step 5 level to submit a report.

Estimation of Respondent Burden Hours: 252.204-7023
Number of respondents	1,895
Responses per respondent	2.91
Number of total annual responses	5,515
Hours per response	2
Annual respondent burden hours (number of responses multiplied hours per response)	11,030

2. Labor Cost of Respondent Burden

The hourly wage was developed based on the 2024 salary table for GS-12/Step 5 salary from the Office of Personnel Management (OPM) General Schedule for Rest of the United States of $47.22, and includes an overhead rate of 36.25 percent resulting in a burdened rate of $64.34.

Labor Cost of Respondent Burden: 252.204-7023
Number of total annual responses	5,515
Hours per response	2
Cost per hour (hourly wage)	$64.34
Labor burden per response	$128.68
Annual Labor Burden (rounded)	$709,670

13. Respondent Costs Other Than Burden Hour Costs

There are no annualized costs to respondents other than the labor burden costs addressed in item 12 of this document to complete this collection.

14. Cost to the Federal Government

a. Labor Cost to the Federal Government

The following labor estimates are based on annually reviewing contractor-provided service contract data in SAM and ensuring contractor reporting compliance. The hourly wage was developed based on the 2024 salary table for GS-12/Step 5 salary from the OPM General Schedule for Rest of the United States of $47.22, and includes an overhead rate of 36.25 percent resulting in a burdened rate of $64.34.

Labor Cost to the Federal Government: 252.204-7023
Number of total annual responses	5,515
Hours per response	1.5
Cost per hour (hourly wage)	$64.34
Cost per response	$96.51
Total cost (rounded)	$532,253

b. Operational and Maintenance Costs

There are no operational and maintenance costs associated with this information collection.

c. Total Cost to the Federal Government

Total labor burden	$532,253
Total operational and maintenance costs	$0
Total cost to the Federal Government	$532,253

15. Reasons for Change in Burden

The burden has changed since the previous approval due to use of current data from SAM, which indicates a decrease in the number of respondents and an increase in the number of responses. The number of hours has increased due to the increase in the number of responses. The total cost has decreased due to use of the standard overhead rate of 36.25 percent in lieu of the 100 percent rate used when the collection was initially established.

0704-0519
Change in Burden	2021	2024	Difference
Number of respondents	1,934	1,895	-39
Total annual responses	4,384	5,515	1,131
Total Hours	8,768	11,030	2,262
Cost per hour	$83.32	$64.34	-18.98
Total Cost	$730,550	$709,670	-$20,880

16. Publication of Results

The results of this information collection will not be published.

17. Non-Display of OMB Expiration Date

DoD is not requesting approval to omit display of the expiration date of OMB approval on the collection instrument.

18. Exceptions to “Certification for Paperwork Reduction Submissions”

DoD is not requesting any exceptions to the provisions stated in 5 CFR 1320.9.

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