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What Is the Industrial Funding Fee (IFF)?

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The Industrial Funding Fee (IFF) is a 0.75% fee applied to sales under General Services Administration (GSA) Schedule contracts. It’s built into the final price federal agencies pay and is used to fund GSA operations without taxpayer money. Contractors are responsible for collecting and remitting the fee quarterly through the FAS Sales Reporting Portal. Missing deadlines can lead to penalties or contract termination.

Key Facts About the IFF:

  • Purpose: Funds GSA’s contract management and compliance programs.
  • Rate: 0.75% of total sales.
  • Calculation: Divide the discounted GSA price by 0.9925 to include the fee.
  • Payment Deadlines: Quarterly payments are due 30 days after each quarter ends.
  • Payment Method: Submit through pay.gov using ACH, credit card, or PayPal.

Understanding and managing the IFF is essential for compliance and maintaining profitability in federal contracting.

How the IFF Works

How the IFF Is Calculated

The Industrial Funding Fee (IFF) is built directly into the final price. To calculate it, divide the discounted GSA price by 0.9925. This ensures the 0.75% fee is included in the final amount.

Current IFF Rate

The IFF rate is currently set at 0.75% of total reported sales under GSA Schedule contracts. This rate applies to all GSA Schedule contracts unless stated otherwise in the solicitation. The fee is designed to support GSA’s operations without being overly burdensome.

IFF Pricing Example

Here’s a quick example to show how the IFF works:

Stage Calculation Amount
Base Price Base price $10,000.00
Discounted Price $10,000 – (10% × $10,000) $9,000.00
IFF Amount $9,000 × 0.0075 $67.50
Final Price $9,000 + $67.50 $9,067.50

This example illustrates how the IFF is transparently added to the pricing structure.

"The IFF is used to offset the costs of the GSA’s administration and management of the MAS program, which includes the development and maintenance of the program, the negotiation of the MAS contracts, and other administrative expenses" [1][2].

Contractors need to account for the IFF in their pricing to stay compliant and ensure profitability. Beyond calculation, accurate reporting and timely payments are just as important.

Managing IFF Reporting and Payments

Sales Reporting Requirements

Contractors are required to submit quarterly sales reports through the FAS Sales Reporting Portal within 30 days after the end of each quarter. This portal helps track sales, calculate the IFF (Industrial Funding Fee), and submit payments. For small businesses, precise reporting is critical to avoid mistakes that could lead to penalties and compliance issues.

IFF Payment Deadlines

Quarter Reporting Period Payment Deadline
Q1 Oct 1 – Dec 31 Jan 30
Q2 Jan 1 – Mar 31 Apr 30
Q3 Apr 1 – Jun 30 Jul 30
Q4 Jul 1 – Sep 30 Oct 30

Missing these deadlines can lead to serious consequences, including potential contract termination. While monthly payments are allowed, the total quarterly payment must still be made by the specified deadline.

How to Remit the IFF

IFF payments must now be submitted through pay.gov, which ensures both efficiency and security. Here’s how to make your payment:

  • Log into pay.gov.
  • Calculate your IFF by multiplying total sales by 0.0075.
  • Choose a payment method – options include ACH, credit card, PayPal, or other digital methods.
  • Submit the payment and save the confirmation for your records.

"The IFF is used to offset the costs of the GSA’s administration and management of the MAS program, which includes the development and maintenance of the program, the negotiation of the MAS contracts, and other administrative expenses" [1][2].

Staying on top of your IFF reporting and payments is key to avoiding penalties and maintaining compliance, particularly for small businesses working with GSA contracts.

Impact of the IFF on Small Businesses

Adjusting Pricing for the IFF

Small businesses need to account for the 0.75% Industrial Funding Fee (IFF) in their pricing to stay profitable and competitive. To calculate this, divide the GSA discounted price by 0.9925 to arrive at the final price, which includes the IFF. This approach ensures businesses meet GSA requirements without sacrificing their market position.

Why IFF Compliance Matters

Following IFF regulations is critical for small businesses with GSA Schedule contracts. Failing to comply can lead to severe consequences like contract termination, hefty fines, and a tarnished reputation, potentially limiting future federal contracting opportunities.

To stay on track, businesses should use the Federal Acquisition Service (FAS) Sales Reporting Portal. This tool helps accurately track and report IFF-eligible sales, making the quarterly reporting process more manageable and ensuring compliance.

Long-Term Impact of Managing the IFF

Properly managing the IFF is key to succeeding in federal contracting over time. Businesses that handle the IFF effectively often gain:

  • Steady revenue growth through federal contracts
  • Stronger partnerships with government agencies
  • Better positioning in the federal marketplace
  • Simplified compliance with GSA requirements

To achieve this, businesses should invest in reliable tracking systems and consider working with experts who specialize in compliance support. These measures can lead to more contract opportunities and reduced risk of penalties, making the investment worthwhile.

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Tips for Managing the IFF

Handling the Industrial Funding Fee (IFF) can be a challenge, but with the right approach, you can stay compliant while keeping the process manageable. Here’s how to make IFF management smoother.

Tracking IFF-Eligible Sales

Use a dedicated accounting system to separate GSA Schedule sales from other revenue. Assign specific accounting codes to GSA transactions to make quarterly reporting easier. Be sure to log key details like the Contract Number, DUNS, and SIN for every GSA transaction. Regularly cross-check these records with your internal data to avoid discrepancies.

Simplifying IFF Compliance

  • Set Quarterly Deadlines: Create internal schedules with reminders before quarterly due dates. Keep thorough documentation of all IFF-related tasks.
  • Automate Calculations: Use the IFF formula consistently and maintain detailed records to prepare for audits.
  • Delegate Tasks: Assign team members to manage portal access, approve payments, and handle backups.

If you’re struggling with IFF management, professional services can ease the workload.

GSA Focus: Support for IFF Management

GSA Focus: Support for IFF Management

If the process feels too complex, expert help can ensure compliance and reduce stress. GSA Focus, boasting a 98% success rate, offers services like document preparation, compliance monitoring, and contract support to simplify GSA Schedule contracts and IFF management.

For technical issues with the Sales Reporting Portal, reach out to the GSA Vendor Support Center at 1-877-495-4849 or email Vendor.Support@gsa.gov [2].

Conclusion: Key Points on the IFF

The Industrial Funding Fee (IFF), set at 0.75%, plays a key role in funding the GSA’s operations. In 2021 alone, it generated $293 million from $39 billion in contractor revenue. For businesses, understanding the IFF and managing it properly is crucial for staying compliant, setting accurate pricing, and thriving in federal contracting [1][2].

To manage the IFF successfully, contractors need to focus on three main areas:

  • Reporting Requirements: Quarterly reporting through the FAS Sales Reporting Portal is mandatory – even if your sales for the period are $0 [2].
  • Financial Impact: The IFF must be factored into your pricing to ensure both compliance and profitability [1][4].
  • Compliance Risks: Non-compliance can result in serious consequences. Regular monitoring and accurate reporting are critical to keeping your GSA Schedule intact [2].

Managing the IFF isn’t just about avoiding penalties – it’s a key part of building a strong, sustainable federal contracting strategy. For companies facing challenges with IFF management, professional help can make a big difference. For example, GSA Focus offers tailored services to help contractors navigate these obligations, boasting a 98% success rate in ensuring compliance [1][2].

The IFF does more than cover a fee – it supports the GSA’s self-funding model, keeping operations running smoothly. By mastering IFF management, contractors can stay compliant and concentrate on expanding their opportunities in the federal market. For additional details, check out the FAQs below.

FAQs

What is the IFF industrial funding fee?

The Industrial Funding Fee (IFF) is a charge that supports the General Services Administration’s (GSA) operations and the management of the Federal Supply Schedules Program. In 2021, this fee brought in $293 million from $39 billion in contractor revenue, highlighting its role in sustaining GSA’s self-funding model [4].

What is an IFF payment?

An IFF payment is the fee collected on orders placed under GSA Schedule contracts. While the ordering activity includes this fee in the total contract price, it’s the contractor’s responsibility to collect and send the payment to GSA. This system, required by federal law, ensures GSA operates without relying on direct taxpayer funding [1].

What is IFF in GSA?

The IFF is GSA’s main funding source for its Multiple Award Schedule (MAS) program. Contractors must report their sales and make these payments either quarterly or monthly. This system helps GSA maintain and improve its procurement services while addressing contractor requirements [2][3].

What is GSA IFF remittance?

GSA IFF remittance is the process contractors follow to submit the collected fees to GSA. This ensures the agency has the funding it needs to continue its operations [2].

Who pays the IFF fee?

GSA Schedule contractors are responsible for collecting the fee and sending it to GSA. This process, outlined under the Acquisition Services Fund (40 U.S.C. 321), simplifies how GSA’s operations are financed [1][2].

These FAQs provide a clear understanding of IFF responsibilities, helping contractors stay compliant with GSA requirements.

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