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GSA Proposes New Rule Allowing Other Direct Costs into Schedules Program

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Centre Law & Consulting


GSA has finally acted on the request from customer agencies and industry partners to allow Order Level Materials (OLMs), frequently called Other Direct Costs (ODCs), into the Multiple Award Schedule (MAS) program.

GSA is proposing to amend the General Services Administration Acquisition Regulation (GSAR) to establish special ordering procedures per FAR 8.403 (b). These new procedures will clarify the authority to acquire OLMs when placing an order or establishing a BPA against a Federal Supply Schedule contract.

As background, currently most commercial Indefinite-Delivery/Indefinite Quantity (IDIQ) contracts have the flexibility to acquire OLMs. This authority extends to contracts awarded pursuant to FAR Part 12 and orders awarded pursuant to FAR Subpart 16.5 and 8.4. However; Subpart 8.4 was never updated and as a result the ability to acquire OLMs was never fully implemented in the MAS program.

The proposed GSA rule includes some of the following amendments (a full list can be found in the proposed rule):

  • Add to GSAR 515.408 (c) that “offerors are not required to complete the commercial sales practices disclosure for order level materials”
  • Prohibiting order-level materials from being the primary basis of the order
  • Limiting the total value of order-level materials to 33 % of the overall order value
  • Require the order-level materials to be purchased under a separate Special Item Number (SIN) to allow GSA to monitor sales and evaluate use
  • Requiring the ordering activity contracting officers to determine that all prices for these materials are fair and reasonable
  • Include controls to ensure any ceiling increases have been justified and approved in accordance with FAR 8.405.6.

The final rule will only apply to the following GSA Schedules:

  1. Federal Supply Schedule 03 FAC: Facilities Maintenance and Management
  2. Federal Supply Schedule 56: Buildings and Building Materials/Industrial Services and Supplies
  3. Federal Supply Schedule 70: General Purpose Information Technology Equipment, Software, and Services
  4. Federal Supply Schedule 71: Furniture
  5. Federal Supply Schedule 84: Total Solutions for Law Enforcement, Security, Facilities Management, Fire, Rescue, Clothing, Marine Craft, and Emergency/Disaster Response
  6. Federal Supply Schedule 00CORP: All Professional Services
  7. Federal Supply Schedule 738X: Human Resources and EEO Services

The proposed GSAR rule was published September 9, 2016 and is open for a 60 day comment period.

About the Author:

Maureen Jamieson | Centre Law & Consulting Maureen Jamieson
Executive Director of Contracts and Consulting

Maureen Jamieson has more than twenty-five years of experience managing federal contracts. She is highly experienced in solving client pricing problems and implementing effective pricing strategies for placing products and services on GSA Schedule contracts.


The post GSA Proposes New Rule Allowing Other Direct Costs into Schedules Program appeared first on Centre Law & Consulting.

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