The word “incidental” comes from the Latin “in
cadere,” meaning to fall into. And for many years, “incidental”
items fell into GSA Schedule orders without a hitch. Then came
the ATA Defense Industries and Pyxis cases (discussed in the previous
section), which held that there was no statutory authority for
“incidental” items.
So what are the regulations governing the procurement of non-Schedule,
open market items incidental to a GSA Schedule order? The only
guidance that GSA gives is to require a statement in its standard
Schedule pricelist that “incidental” items must be purchased
in accordance with applicable law. That doesn’t say a lot.
It boils down to this: Since there is no separate legal authority
for including incidental, open market items on a GSA Schedule
order, an agency must comply with whatever provisions of the Federal
Acquisition Regulations (FAR) that apply to procure the dollar
amount value of the open market, non-Schedule products. This runs
from almost nothing for “micropurchases” under $2,500
to a full blown Request for Proposals for products over $5,000,000.
Simply stated, the application of the FAR depends on the dollar
amount of the incidental items.
Here, in brief, are the dollar amount thresholds for the purchase
of open market items:
Publication Thresholds: Agencies are required to synopsize
in the Commerce Business Daily (CBD) all proposed contract actions
expected to exceed $25,000. FAR 5.101(a)(1). For proposed contract
actions expected to exceed $10,000 but not expected to exceed
$25,000, a contracting officer may post the action in a public
place or on an electronic bulletin board. FAR 5.101(a)(2). In
addition, a contracting officer does not have to synopsize a contract
action in the CBD if FACNET is used.
Competition Thresholds: There several important dollar
amount thresholds governing competition procedures:
Under $2,500: The micropurchase threshold is $2,500.
Micropurchases may be awarded without soliciting competitive quotations
if the contracting officer considers the price to be reasonable.
FAR 13.202(a)(2). Accordingly, the placement of non-Schedule items
under $2,500 on a Schedule order complies with the applicable
law.
Amounts Under the Simplified Acquisition Threshold: The
simplified acquisition threshold is $100,000. Contracting action
at or under $100,000 can be done under the Simplified Acquisition
Procedures. The contracting officer is required, among other things,
to solicit three quotes, evaluate the offers, and document the
basis for award. Also, per the FAR, the purchase of goods or services
with an anticipated dollar value of more than $2,500 but not exceeding
$100,000 is reserved exclusively for small business concerns and
must be set aside, with some exceptions. FAR 13.003(b)(1). When
combined with the Publication thresholds, the Simplified Acquisition
Procedures, present three important dollar amount thresholds:
(1) Over $2,500 but under $10,000; (2) Over $10,000 but under
$25,000; and (3) Over $25,000 but under $100,000.
1. Over $2,500 but under $10,000: Non-Schedule items
exceeding $2,500 but less than $10,000 require the agency to solicit
and evaluate three sources, but do not require publication. As
long as the agency can document its solicitation and evaluation
of three sources, the purchase of non-Schedule items applies with
applicable law. The contract file should also show the agency’s
attempt to solicit small business sources.
2. Over $10,000 but under $25,000: Non-Schedule items
exceeding $10,000 but less than $25,000 require the agency to
solicit and evaluate three sources and require informal publication.
To comply with applicable law, the agency must be able to document
its posting of the procurement and solicitation and evaluation
of three sources. The contract file should also show the agency’s
attempt to solicit small business sources.
3. Over $25,000 but under $100,000: Non-Schedule items
exceeding $25,000 but less than $100,000 require the agency to
solicit and evaluate three sources and require formal publication
in the CBD or FACNET. To comply with applicable law, the agency
must be able to document its publication of the procurement in
the CBD or FACNET and solicitation and evaluation of three sources.
The contract file should also show the agency’s attempt to
solicit small business sources.
Theoretically, there is no dollar limit to the open market,
non Schedule items included on a Schedule order, as long as the
FAR provisions applicable to the dollar amount of the open market
items are followed. Under FAR 13.5, contracting officers may use
streamlined acquisition procedures for the acquisition of supplies
and services in amounts greater than the simplified acquisition
threshold but not exceeding $5,000,000. The offers are to include
only commercial items, and there are special documentation requirements.
Given these requirements, however, it would be highly irregular
to tack a large open market order requiring formal notice and
evaluation of offers to a GSA Schedule order.
Importantly, it doesn’t matter what percentage of the total
order the incidental items comprise. It only matters how much
the incidental items cost and what threshold is triggered.
For your reading pleasure, and convenience, set forth below
is a table of the various triggers applicable to the inclusion
of open market items on GSA Schedule orders. Enjoy!!
OPEN MARKET ITEMS ON GSA SCHEDULE PURCHASE ORDERS
| Dollar amount of incidental item |
Justification |
| Very minimal, a toner cartridge, some cables, etc. |
De minimis items are allowed on a Schedule Order. |
| Under $2,500 |
The placement of incidental items under the micro-purchase
threshold on a Schedule order complies with applicable law. |
| Between $2,500 and $10,000 |
The agency must solicit and evaluate three sources for
the non-Schedule items, but
need not publish its requirement. If the agency can document
this process and show
an attempt to solicit small businesses, its purchase complies
with law.
|
| Between $10,000 and $25,000 |
Non-schedule items over $10,000 require the agency to solicit
three offers and require informal publication. The agency
must be able to document its posting and evaluation actions.
An attempt should also be made to buy from small businesses.
|
| Between $25,000 and $100,000 |
Agencies must follow the procedures outlined above; in addition,
a formal notice of the procurement must be published either
in the CBD or on FACNET. |
