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Industrial Funding Fee Reports

What was the challenge?

Transactions with the government often involve self-reporting. Individuals and businesses report things like income, sales figures, and use of services. What is reported on such forms impacts how much individuals and businesses owe in taxes and fees; and it can impact eligibility for government benefits. If the reporting is truthful and accurate, self-reporting can be more cost-effective than more burdensome audits or independent checks.

What was the insight?

Experiments have shown that requiring a signature at the beginning of a form, rather than the end, can reduce self-report errors. Yet most forms require signatures at the bottom, meaning that individuals are prompted to provide their signature only after the work is done. Reversing this process—drawing attention to the request that individuals provide a good-faith report before they begin an exercise—can prompt more vigilance against error from the onset.

What was the pilot?

Federal vendors making sales through the Federal Supply Schedules are required to pay a fee—the industrial funding fee (IFF)—that covers the cost of operating the program. The size of the IFF payment owed is a fraction of the total sales made. To know how much vendors sold, the government uses an online website where vendors self-report the quantity of total sales. To promote vigilant self-reporting of sales, GSA piloted an electronic signature box at the beginning of its online reporting portal.

What was the impact?

The median self-reported sales amount was $445 higher for vendors signing at the top of the form. This translated into an extra $1.59 million in IFF paid to the government in a single quarter.

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