Interim Rule Increases Competition Requirements for GSA Schedule Task Orders

March 24, 2011

The less stringent requirements for competitively awarding GSA Schedule task orders have occasionally allowed agencies to “steer” work to certain contractors without the formality of an approved sole source justification.  Effective March 16, 2011 the Federal Acquisition Regulation (FAR) was modified by interim rule to substantially increase the competition requirements for orders issued against multiple-award Indefinite Delivery, Indefinite Quantity (IDIQ) contracts awarded on or after May 16, 2011. Orders placed against multiple award contracts that exceed the simplified acquisition threshold (currently $150,000) will be subject to the following requirements:

  1. Fair notice of the intent to make a purchase, to include a description of the work to be performed and the basis on which the selection will be made, must be provided to all multiple award contract holders who offer such products or services.
  2. All contractors must be given a “fair” opportunity to make an offer and all offers must be “fairly” evaluated.

These relatively straightforward requirements can be easily applied to most multiple award contract vehicles.  However, there are literally thousands of GSA Schedule holders, making the feasibility of fair notice more complicated.  For that reason, the FAR Council agreed that posting an RFQ on GSA e-Buy satisfies the requirements for fair notice when placing an order or establishing a BPA under FAR subpart 8.4.

For Schedule procurements that do not use e-Buy, the agency must provide the solicitation to as many Schedule contractors as is “practical”. It is not clear how many Schedule holders constitute “practical”; however, if the notice not provided to all Schedule holders, the agency cannot award the task or delivery order unless three proposals that can fulfill the requirement are received from qualified firms. If  less than three firms bid, the contracting officer must document in writing that no additional qualified firms could be located. This is tantamount to a sole or limited source justification.

The new regulations also establish a strong preference for multi-award Blanket Purchase Agreements (BPA) and impose additional competition requirements on orders issued against BPAs.

Please review FAR Case 2007-012 for a more detailed explanation of these changes. Though this is an interim rule, the FAR Council will accept comments through May 16, 2011.  It will be interesting to see if the renewed emphasis on competition drive agencies away from multiple award vehicles in general and the GSA schedules in particular.