Washington Management Group

Buying Open Market Items using the GSA Schedule

Practical Advice on GSA Schedule Contracting
By: Carolyn Alston, General Counsel, Washington Management Group

April 2011

A contractor can, in some circumstances, add non-contract items to orders that agencies place against the GSA schedule contract. But, heed these cautions:

  • Identify open market items in proposals and invoices
  • Document your files
  • Retain documents in contract files in anticipation of audit
  • Be knowledgeable of the “applicable regulations” applicable to open market purchases

The Regulations

A GSA customer agency can add items not on the Schedule (open market items) to an order or blanket purchase agreement (BPA) if the agency:

  1. Follows applicable regulations pertaining to the purchase of the open market items;
  2. Determines the price for the open market items fair and reasonable;
  3. Clearly labels items on the order that are not on the Federal Supply Schedule; and
  4. Includes clauses applicable to non-schedule items in the Schedule order—See FAR 8.402(f)

Here’s the Challenge

FAR directs the ordering agency to label any non-schedule item that is on the order. We know that doesn’t always happen. As a Schedule contractor you may receive a purchase order with items not identified as open market. More often than that, you may want to add an incidental item or service when responding to an RFQ to make a particular solution work. So what’s an eager, but reasonably cautious, contractor to do? Be transparent and document your files!

Contractor Response

Identify all non-schedule items included in any proposal that you submit. If you don’t take this fundamental step, both you and the ordering agency will be out of compliance with the FAR. You will be selling items beyond the scope of the contract. The ordering agency will be denied the opportunity to follow “all applicable regulations” as required by FAR. Our advice - add a statement to your proposal substantially as follows:

"This proposal contains open market items which are identified herein. Open market items are allowed under circumstances set forth in FAR 8.402(f)".

You should put a similar statement on invoices that include open market items. One more admonition: Think like an auditor. GSA may show up to audit your files years after a transaction has been completed. Your GSA Schedule contract files should retain any documents that demonstrate that you did notify the agency of any open market items sold as a part of a schedule buy.

What regulations are applicable?

Have you ever wondered what those “applicable regulations” are that agencies must follow when buying non schedule items? The chart below identifies some of the major requirements.


Non-Contract Items on GSA Schedule Purchase Orders
Guidelines for Contractors and Buyers


Dollar Threshold

Applicable Regulations

Up to the Micro-purchase Threshold $3,000
  1. $2,000 For acquisitions of construction subject to the Davis-Bacon Act
  2. $2,500 for acquisitions of services subject to the Service Contract Act
  3. For acquisitions of supplies or services used to support a contingency operation or to facilitate defense against or recovery from nuclear, biological, chemical, or radiological attack
    • $15,000 for contract awarded and performed, in the US; and
    • $30,000 for contract to be awarded and performed outside the US
Competition not required if price reasonable
Between $3,000- $15,000
  • Consider three sources
  • Demonstrate attempt to solicit small business
  • Buy American Act applies
$15,000 – $25,000
  • Consider three sources
  • Demonstrate attempt to solicit small business
  • Buy American Act applies
  • Publicize proposed action by displaying a notice or copy of the solicitation in a public place, or by any appropriate electronic means. The notice must state that all responsible sources may submit a response that, if timely received, must be considered by the agency
$25,000-$150,000 (Up to $6.5 million for commercial items; $12 million for acquisitions of supplies or services used to support a contingency operation or to facilitate defense against or recovery from nuclear, biological, chemical, or radiological attack)
  • Consider three sources
  • Demonstrate attempt to solicit small business
  • Buy American Act applies
  • Publicize proposed action by synopsizing in FedBizOps
$150,000+
  • Full and Open Competition
  • Buy American Act applies
  • Publicize proposed action by synopsizing in FedBizOps

Do you have a government contracting question? Please email it to me at CarolynsCorner@washmg.com.

About Carolyn:

Carolyn Alston is General Counsel of Washington Management Group. She provides legal counsel to WMG's federal acquisition consulting operation, focusing on Multiple Award Schedule contract award, compliance, and audit procedures.

Prior to joining WMG, Carolyn had a distinguished career with the U.S. General Services Administration. Her experience as a senior attorney in the GSA's Office of General Counsel led to her role as the lead in developing and writing GSA's Multiple Award Schedule policy. Her GSA career culminated in running the agency's successful GSA Schedule program as Assistant Commissioner for Acquisition at GSA.

Carolyn holds a BA from Cornell University and a JD from Georgetown Law Center. Carolyn is a member of the bar in Maryland and the District of Columbia.



DISCLAIMER

WMG offers the information provided on this web site for informational purposes only.

WMG is a well recognized expert in GSA Schedule contracting, with more than 30 years of corporate experience. The information provided on this site is based on our substantial acquisition expertise, particularly with respect to commercial item contracting. Nothing on this site should be interpreted as legal advice.

As you recognize, most decisions regarding your GSA Schedule contract are highly dependent upon the facts of your particular circumstances. You should not rely on this site to make specific decisions about your contract. If you are considering taking specific actions on a matter affecting your GSA Schedule contract, we highly recommend that you contact WMG regarding a proposal for individual acquisition consulting services or that you seek advice from legal counsel with expertise in GSA Schedule contracting.

   

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