GSA Finalizes Rule to Allow Inclusion of Order-Level Materials on Schedule Purchases

February 26, 2018

On January 24, 2018, the General Services Administration (GSA) released the long-anticipated final rule that authorizes agencies to include order-level materials (OLMs) in purchases from some Schedules. GSA has not yet released the list of affected Schedules. OLMs are “supplies and/or services acquired in direct support of an individual task or delivery order placed against an FSS contract or BPA, when the supplies and/or services are not known at the time of contract or BPA award.”

The final rule includes several material changes from the draft version released in September 2016 that should make contractors happy. First of all, the provision now allows for contractors to apply their indirect rates to the cost of OLMs. GSA has not yet responded to questions regarding how contractors without approved indirect rates should burden their OLMs.

Additionally, the proposed requirement for vendors to provide three quotes for each OLM has been revised. Under the final rule, contractors are only required to obtain three quotes for any OLM that exceeds the Simplified Acquisition Threshold (SAT). Vendors who have passed a Contractor Purchasing System Review (CPSR) are exempt from the requirement to obtain quotes.

Giving ordering agencies the flexibility to include OLMs – analogous to Other Direct Costs (ODCs) on cost-type contracts – on GSA purchases addresses one of the biggest gripes about the Schedules. GSA will add a Special Item Number (SIN) for OLMs to each affected Schedule in an upcoming solicitation refresh. The new SIN will be added to existing contracts via a bilateral mass modification. Contractors should check GSA Interact in late March to early April for more information.

Once the new OLM SINs are awarded, contractors can include OLMs on their time and materials (T&M) and labor hour (LH) orders or CLINs. The sum total of OLMs must be 1/3 or less of the order value, exclusive of travel and living. Contractors must include OLMs in their GSA sales reporting, which means the loaded price should include the Industrial Funding Fee (IFF). Companies participating in the Transactional Data Reporting (TDR) pilot will have to include itemized unit pricing information on OLMs in their monthly sales reporting.

We will provide you with more information on OLMs as it becomes available. For any additional questions, please contact our GSA specialists at 301.231.6200.