Placing GSA Schedule Orders

GSA Schedule contracts have become an extremely important federal procurement vehicle. While orders placed under a GSA Schedule were until recently restricted to a Maximum Order Limitation of somewhere between $100,000 and $500,000, depending on the particular Schedule, orders now placed under GSA Schedules are limitless. Multi-million dollar GSA Schedule orders for supplies are now common.

The importance of GSA Schedules is their relative ease of use. An agency can issue a multi-million dollar order under a vendor’s GSA Schedule through a one or two page award document. There is no requirement to publicize the GSA Schedule procurement or announce its award. The simplified acquisition procedures do not apply to orders placed under GSA Schedule contracts. Agencies are not required to provide losing vendors with post-award debriefings.

Considering the important role that GSA Schedules now play in the federal procurement process, what exactly are the rules for placing a GSA Schedule procurement? How does an agency decide which GSA Schedule contractor to use? What can an agency do, and what can’t it do, in deciding which GSA Schedule contractor will best meet its needs?

The rules governing the purchase of goods and services under GSA Schedule contracts are set forth in the Federal Acquisition Regulations (“FAR”) Subpart 8.4. The rules start out by stating that orders placed under GSA Schedule contracts are considered to be issued using full and open competition in compliance with the Competition in Contracting Act. As a result, agencies placing GSA Schedule orders are not required to seek further competition, synopsize the requirement, make a separate determination of fair and reasonable pricing, or consider small business set-asides.

The fundamental rule governing an agency’s placement of a GSA Schedule order is that the order result in the best value and lowest overall cost. Very importantly, the regulations do not require an agency to place its order with the low-priced supplier. To the contrary, the regulations stress that the placement of a GSA Schedule order is a “best value” procurement. In addition to price, the agency may consider its administrative costs, and other variables, in determining which GSA Schedule vendor’s products will result in the best value—lowest overall cost to the government. FAR § 8.404 (b)(2) lists the following non-price determinants that may be considered in a best value decision:

• Special features. This permits the agency to consider whether the goods or services have specials features, functions, or design characteristics that the agency needs to perform its mission effectively and that may not be offered by GSA Schedule contractors offering comparable products.
• Trade-in considerations. This allows the agency to recoup the value of equipment currently on hand but is either worn out or obsolete.
• System life. This directs the agency to consider the probable life of an item in comparison with otherwise equivalent items offered by other GSA Schedule vendors.
• Warranty. A three-year warranty, on-site warranty, or a hot-swap warranty (as opposed to a repair warranty) can be important to an agency's best value determination.
• Maintenance availability. Differences among on-site maintenance, response time, principal period of maintenance, and telephone support, among other variables, can be factored into an agency's best value calculation.
• Past performance. The agency's past experience with the GSA Schedule contractor can influence its best value determination.
• Environmental and energy efficiency. A product that requires a less expensive electrical supply may result in a lower overall cost to an agency.

To make a best value determination, the agency should consider reasonably available information about the comparable products or services offered by several Schedule contractors. An agency should review at least three hard copy GSA Schedule Pricelists of vendors offering comparable products or services, or instead can peruse comparable offerings by using GSA Advantage!, GSA’s online Web site service at www.fss.gsa.gov. If the agency awards to a GSA Schedule contractor that did not offer the lowest price, then the agency should document its reasons justifying the best value award to the higher priced vendor.

For orders that exceed the maximum order of the Schedule, agencies are required to seek additional spot price reductions from the GSA Schedule contractor. The contractor is not required to pass on the spot price reduction to other agencies placing orders under the vendor’s GSA Schedule. However, the agency may still place an order with a GSA Schedule contractor even if the vendor does not offer a spot price reduction if the placement of the order with that vendor will result in the lowest overall cost alternative.