What is the Industrial Funding Fee (IFF)?

The Industrial Funding Fee is a fee the GSA applies to all reported sales, in order to cover its operating costs. In this article we will take a closer look at what the IFF is, how to calculate it, and what permissible ways there are, to pay this fee to the GSA.

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So, what is the IFF?

The General Services Administration is a large and sophisticated government machine, and evidently, it needs to be funded. And where does the money come from? Taxes? No. In fact, the GSA is one of few self-funding governmental agencies. It covers its own costs of operating the Federal Acquisition Service (FAS), thanks to the Industrial Funding Fee (IFF). The fee is a fixed percentage (currently – 0.75%) applied to the final price of an MAS contract.

Needless to say, the Industrial Funding Fee is obligatory for all GSA Schedule contract holders.

How to calculate the IFF?

Here is how the Industrial Funding Fee is calculated: let’s suppose you have a GSA Schedule contract that costs $10,000. As your Most Favored Customer (MFC), the government always wants the best prices, so a GSA’s procurement officer negotiates a 10% discount, and now the contract costs $9,000. Then, the GSA applies the Industrial Funding Fee of 0.75%. This adds to $9,067.50 – this is the final price of the contract that you will ask from federal agencies.

At the date of reporting (once per quarter) you report your no-IFF sales of $9,000 and keep them. The remainder of $67.50 goes to the GSA – that’s their IFF. Essentially, this means that GSA’s costs are covered by other federal agencies, not you or taxpayers.

A simple rule to calculate your IFF-included GSA Schedule pricing is to take your discounted price and divide it by 0.9925 (which is 1 minus 0.0075).

Is every product and service a subject to IFF?

No. You only need to report contract sales and pay the IFF on them. You should neither report Open Market item sales, nor should you pay the IFF on such. Also, sales conducted pursuant to a separate contracting authority are not reportable, either. Examples of such authorities are GWAC, separately-awarded FAR contracts, and non-FAR contracts.

How and when to pay the Industrial Funding Fee?

According to FAR 552.238-80 Industrial Funding Fee and Sales Reporting, GSA contractors must report the dollar value of sales quarterly. The reported value of sales per quarter must already include the IFF.

Where to report sales:

  • The main reporting resource every GSA contractor should use to report sales is the Federal Acquisition Service (FAS) Sales Reporting Portal.

When to report sales:

  • Within 30 calendar days, following the corresponding quarterly period.

How to report sales:

  • Upon receipt of order
  • Upon shipment of the product or delivery of services
  • Upon issuance of invoice
  • Upon payment

When to pay the IFF:

  • Within 30 calendar days of the end of the reporting quarter.
  • Or monthly, but you are still obliged to remit the full amount of the IFF within 30 days following the reporting quarter.

How to pay the IFF:

The only way federal contractors can make payments to the government is using the pay.gov portal. The supported payment methods are:

  • Bank account
  • PayPal account
  • Amazon account
  • Credit card


  • “Zero” sales must be reported too.

Why are reporting sales and paying Industrial Funding Fee important?

The IFF is an obligatory fee, and this fee is based on the reported sales, so you have no other choice, other than to both do the reporting and pay the fee. However, it would be a mistake to think about the IFF as a “kickback” of a sort that the GSA forces you to pay. In fact, the entire Industrial Funding Fee amount is paid by your clients, federal agencies, not you.

Think of the IFF as a fee for a membership in the exclusive club where you can get access to the most fruitful contracts and opportunities. And that fee is a mere 0.75%.

Anyway, failure to remit the IFF to the GSA may result in termination of your GSA contract. That is why it is so important to retain IFF compliance all the way through the period of validity of your GSA contract.

Obviously, managing monthly or quarterly reporting, and remitting the IFF are an additional burden on your company’s accounting. That is why many businesses look for GSA contract help from professionals, like Price Reporter. We can guide you through the entire process of sales reporting, and can even do it for you completely. Thanks to our assistance, your business remains an IFF-compliant GSA vendor, and avoids potential problems, caused by failure to remit the Industrial Funding Fee on time.


As I write this, it is January, the end of the reporting quarter. By this time you should already have prepared your next sales report to the GSA. Also, make sure you calculate the Industrial Funding Fee (IFF) correctly, to remit the IFF to the GSA, and remain IFF compliant. And if you either have questions about the IFF calculation, or have hard times creating a sales report correctly, please don’t hesitate to contact Price Reporter. Armed with over a decade of experience and the best practices tested on real GSA contracts, our specialists are ready to help you with any federal contracting issue you may face.

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