GSA will cut fees charged to buyers on GSA schedules effective Oct. 1, Administrator Stephen Perry said.

The fee will be reduced to 0.75% of each purchase, from 1%, he told an agency conference Feb. 5. A General Accounting Office study last year showed GSA is pocketing huge profits. GAO said revenue from the fees, known as industrial funding fees, exceeds the cost of operating the schedules by 53%. (SAA, 9/6)

A GSA official said the fees will be adjusted from time to time because of fluctuating revenues.

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Thirty-five Democratic senators expressed “deep reservations” about President Bush’s competitive sourcing plan.

In a letter to OMB Director Mitch Daniels Jr., the senators, led by Ted Kennedy (D-MA) said the administration needs to develop ways to track the cost and quality of work performed by contractors. They also urged that federal employees be given a chance to compete for work currently done by contractors.

Final revisions to OMB Circular A-76 are expected within a few weeks.

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The Internal Revenue Service’s taxpayer advocate is urging Congress to simplify tax rules for married couples who jointly own an unincorporated business.

At a Feb. 13 hearing of the House Ways and Means Subcommittee on Oversight, Advocate Nina Olson testified, “Under today’s law, a husband and wife jointly owning and operating an unincorporated business – say a dairy farm or small shop or even pet-sitting businesses – should file a partnership return.  In practice, most couples merely report the business’s income as a sole proprietorship, with only one member of the couple receiving credit for Social Security and Medicare purposes.  This can lead to disastrous consequences if the uncovered spouse becomes disabled or dies.”

She said the proposed change would give taxpayers a choice of whether to file individually or as a partnership, so no one would be required to pay the extra Social Security and Medicare taxes.

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The two senior members of the Senate Small Business Committee are backing legislation to make federal disaster loans available to small businesses that are hurt by drought. Only farm-related businesses now are eligible for those loans.

“From our ski resorts to marinas, small businesses who rely on water are facing tough times without any financial safety net,” said Massachusetts Sen. John Kerry, the committee’s ranking Democrat. Committee Chair Olympia Snowe (R-ME) also supports the bill.

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The Defense Department has issued an interim rule allowing the use of contract security guards at military installations to handle increased security requirements as a result of the war on terrorism. The rule implements a provision of the 2003 Defense Authorization Act. Contractors may not be hired to replace military security personnel who were on the job before Sept. 11, 2001.