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 above), 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: Because 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 more than $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 Government Point of Entry (GPE) at www.fedbizopps.gov 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 doesn't have to synopsize a contract action at the GPE if FACNET is used.
Competition Thresholds
There several important dollar amount thresholds governing competition procedures.
Under $2,500
The micropurchase threshold is $2,500 for most procurements, although this threshold has been recently enlarged for procurements by the Department of Defense and for acquisitions of supplies or services that are used to facilitate defense against or recovery from terrorism or other such attacks.
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 in most cases, although again this threshold has been enlarged for procurements in support of contingency operations and the like. Contracting actions 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: over $2,500 but under $10,000; over $10,000 but under $25,000; and 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 don't 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 GPE or FACNET. To comply with applicable law, the agency must be able to document its publication of the procurement in the GPE 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. 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 convenience, below is a table of the various triggers applicable to the inclusion of open market items on GSA Schedule orders.
Agencies must follow the procedures outlined above; in addition, a formal notice of the procurement must be published either in the GPE or on FACNET.
