• R.D. Lieberman,Consultant

New Rule Permits Schedule Contractors to Provide Off-Schedule Items Without Using the Previous &quot

The General Services Administration (“GSA”) issued a new rule that makes it considerably easier for GSA Schedule contractors to supply “non-schedule” materials and services, which are now referred to as “Order-Level Materials” or “OLM”. 83 Fed. Reg 3275 (Jan. 24, 2018). GSA states that this rule provides the same flexibility for the schedules (Federal Supply Schedules, or FSS) program that is currently authorized for other indefinite delivery, indefinite quantity (“IDIQ”) vehicles, which should help reduce administrative costs.

The rule modifies the GSA Acquisition Regulation (“GSAR”) by adding a new Section, GSAR 552.238-82, “Special Ordering Procedures for the Acquisition of Order-Level Materials” and by making changes in GSAR subpart 515.408 and 538.72. Prior to this regulatory change, agencies could only purchase through a Schedule contract non-schedule products and services that had a value below the micropurchase threshold. Here are the major changes:

1. Order Level Materials are defined as “supplies and/or services acquired in direct support of an individual task or delivery order placed against an FSS contract, or FSS blanket purchase agreement, when the supplies and/or services are not known at the time of Schedule contract or FSS BPA award.”

2. GSA states that OLM are “not open market items,” which are discussed in FAR 8.402(f).

3. The cumulative value of OLMs in an individual task or delivery award under an FSS contract may not exceed 1/3 (33 1/3 percent) of the total value of the individual task or delivery order. Travel costs do not count in this 1/3 amount.

4. There will be an OLM Special Item Number (“SIN”) for placement of OLM orders.

5.The schedule contractor must obtain a minimum of three quotes for each order level material above the simplified acquisition threshold.

6. OLMs are not subject to the Commercial Sales Practice disclosure requirements.

7. OLMs are exempt from the Economic Price Adjustment Clause (GSAR 552.216-70).

8. OLMs are exempt from the Price Reductions Clause (GSAR 552.238-75).

9. Travel costs will continue to be governed by FAR 31.205-46.

Takeaway: GSA’s new rule gives significant improvements in flexibility to Schedule contractors, who may now provide limited off-schedule products and services with the above safeguards. In the past, these non-schedule items or services were deemed “open market” and were subject to competition if they exceeded the micropurchase threshold.

For other helpful suggestions on government contracting, visit:

Richard D. Lieberman’s FAR Consulting at https://www.richarddlieberman.com/, and Mistakes in Government Contracting at https://richarddlieberman.wixsite.com/mistakes/.

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The website of Richard Donald Lieberman, a government contracts consultant and retired attorney who is the author of both "The 100 Worst Mistakes in Government Contracting" (with Jason Morgan) and "The 100 Worst Government Mistakes in Government Contracting." Richard Lieberman concentrates on Federal Acquisition Regulation (FAR) consulting and training, including  commercial item contracting (FAR Part 12), compliance with proposal requirements (FAR Part 15 negotiated procurement), sealed bidding (FAR Part 14), compliance with solicitation requirements, contract administration (FAR Part 42), contract modifications and changes (FAR Part 43), subcontracting and flowdown requirements (FAR Part 44), government property (FAR Part 45), quality assurance (FAR Part 46), obtaining invoiced payments owed to contractors,  and other compliance with the FAR. Mr.Lieberman is also involved in numerous community service activities.  See LinkedIn profile at https://www.linkedin.com/in/richard-d-lieberman-3a25257a/.This website and blog are for educational and information purposes only.  Nothing posted on this website constitutes legal advice, which can only be obtained from a qualified attorney. Website Owner/Consultant does not engage in the practice of law and will not provide legal advice or legal services based on competence and standing in the law. Legal filings and other aspects of a legal practice must be performed by an appropriate attorney. Using this website does not establish an attorney-client relationship. Although the author strives to present accurate information, the information provided on this site is not guaranteed to be complete, correct or up-to-date.  The views expressed on this blog are solely those of the author. FAR Consulting & Training, Bethesda, Maryland, Tel. 202-520-5780, rliebermanconsultant@gmail.com

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