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jonmjohnson

FAR 51 Deviation Authority

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When developing my program I starting thinking about, and looking at, FAR 51 Deviation authority as a potential acquisition approach. The deviation is posted by GSA and can be found here: http://www.gsa.gov/portal/category/100975?utm_source=FAS&utm_medium=print-radio&utm_term=far51deviation&utm_campaign=shortcuts

I don't advocate the use of this as a cure all for complex IT actions, but do clearly see it as a potential option in the procurement toolchest that could be leveraged if the conditions fit. It largely hinges on the definition of ancillary and integral, and the guidance that is available does not put a quantitative amount (dollars or level of effort) on how to define it. They just state that a $1,000,000 procurement with $990,000 would not be applicable or justifiable. There is ample wiggle here in the terminology that is being used.

While meeting with an agency yesterday I ended up getting some pushback in terms of the overall legitimacy of this deviation. They stated that despite GSA providing this on their website they could not find supporting documentation in FAR or in FACs that allow GSA to issue this deviation. My interpretation was that IAW FAR 51 an agency CO must secure permission from the government supply source for a vendor to procure on behalf of the agency. I viewed the FAR 51 deviation as applying that permission in a blanket format for agencies to leverage FSS under FAR 8.4. I understand how it may not fit with their particular requirements, but that doesn't mean that it is not a legitimate approach generally.

What is your take on this? If GSA publishes a deviation on their website would corresponding information in a FAC be required? This doesn't make sense to me. What am I missing here? I was accused of being a cowboy and playing loose with regulations, which is the equivalent of calling a CO a know-nothing s.o.b. (I take exception to the former).

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The problem is that any agency's deviation applies only to its own contracting officers. But GSA is using the deviation process to provide processes for all federal agency contracting officers.

To me, it would be better for GSA to modify all of its FSS contracts and to put the text in the FSS contracts. Then, another federal agency contracting oifficer simply follows the rules of the schedule contract when placing an order.

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Here you go....not saying it is in all but one could easliy look it up for individual contractors contracts as I did.....might even be the answer to jon's naysayers, "it is in the contract".

CI-FSS-056 FEDERAL ACQUISITION REGULATION (FAR) PART

51 DEVIATION AUTHORITY (FEDERAL SUPPLY SCHEDULES)

(JAN 2010)

(a) General Background.

On October 8, 2009, a class deviation to FAR Part 51 was granted by GSA’s Senior Procurement

Executive in accordance with FAR Subpart 1.404, Class deviations. The deviation permits federal

contracting officers to authorize GSA contractors, who are performing an order on a time-and-material

or labor-hour basis, to purchase supplies and services from schedule contractors or to process

requisitions through the Global Supply Program.

(B)Orders.

Orders placed using the FAR Part 51 deviation shall be:

(1) Placed on a time-and-materials (T&M)/labor-hour (LH) basis—an order placed by the Federal

Government to the buying contractor can be partially fixed price, but the portion of the order for

the items to be procured using the FAR Part 51 deviation shall be T&M/LH;

(2) For ancillary supplies/services that are in support of the overall order such that the items are

not the primary purpose of the work ordered, but are an integral part of the total solution offered;

(3) Issued in accordance with the procedures in FAR 8.405-1, Ordering Procedures for supplies,

and services not requiring a statement of work;

(4) Placed by the Federal Government. The authorization is NOT available to state and local

governments.

© For comprehensive guidance on the proper use the FAR Part 51 authority granted by the deviation,

please refer to the Ordering Guide at www.gsa.gov/far51deviation.

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Mr. Cullam....thank you. I feel a little foolish that I had not picked up on that and am thankful that you had. Thank you sir.

And so ji20874...it applies, then, to an agency's own contracts....not its own contracting officers. So if it is a clause that is in the IDIQ schedule contracts, and has been agreed upon by the schedule holder during the refresh period if after June 2010, then whoever uses that contract (or schedules contracts) can leverage the deviation. And because it is in the government-wide contracts, there is defacto government-wide ability to leverage the deviation through those contracts. That sound about right?

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We had an all day GSA FSS training class at our Agency a couple of weeks ago and the instructors clearly pointed out that a GSA FSS contractor could procure any supplies/services he needed from other GSA FSS holders and thus avoid our having to deal with Open Market Items being on the order. They said the clause about the FAR 51 deviation autority allowed them to do this. I am sure we will be using it often on many of our Calls against GSA FSS BPAs. It made us very happy to add it to our toolkit.

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Boof. Be sure to read the situations where the deviation applies. Mr. Culham stated them very well. The biggest being number 1 on his list. It can only be on a T&M/LH basis, and not FFP. This alone has caused this deviation to be less successful than GSA had anticipated/hoped.

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Actually, Desparado, I don't mean to disagree but it doesn't say that. It says "Placed on a time-and-materials (T&M)/labor-hour (LH) basis—a contract awarded or an order placed by the Federal Government to the buying contractor can be partially fixed price, but the portion of the contract/order for the items to be procured using the FAR 51 deviation must be T&M/LH"

In other words, your task order can be fixed price, but you would have to indicate the CLINS that are applicable to the component to be procured by the vendor and indicate in the solicitation that you consider them to be of a T&M nature. These CLINS are merely identified and not completed by the respondent to the RFQ. This is only to document in the solicitation that these are the CLINS that will be addressed with your letter of agency to the integrator. They go into more detail in 2.1 and state "The overall contract/order can be fixed price, but the items to be purchased under the FAR Part 51 authority must be structured on a T&M/LH basis." The underline is in the guidance which highlights the main point.

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jonmjohson nailed it. To add, when using the Deviation the contractor can only buy items/fixed priced services (e.g., oil change at $X). In other words, they can only issue FAR 8.405-1 orders, NOT FAR 8.405-2 orders. This is where everyone gets confused. To turn on the deviation, the CLIN must be T&M/LH, but the contractor using the deviation can only place FAR 8.405-1 orders. They cannot place an order for hourly rate services (FAR 8.405-2).

I can tell you that contractors do not like the FAR 51 deviation. Why? because they cannot charge ONE RED CENT for managing the order as the procedures state "The contractor passes through the purchase price of items procured under FAR Part 51 with no fee or markup" . This restriction does not exist in a GSA Contractor Teaming Arrangement as a Services FSS holder who Teams with a Products FSS Holder can charge hours to manage the coordination of supplies needed. No can do on FAR 51 Deviation process as it must be a straight pass through. At least that is how I have heard it is being enforced. Here is a copy of the actual signed deviation: http://www.gsa.gov/portal/mediaId/170991/fileName/Part_51_Deviation__II.action

There is another challenge. If your order can be accomplished as an FFP order, but you need FAR 51 Deviation ability to achieve a Total FSS Solution (the whole purpose of why the Deviation was created in the first place), then the only way to do so is make part of your order T&M/LH. The T&M/LH determination required in FAR 8.404(h) does not include in its rationale "because that is the only way I can use the FAR 51 Deviation" now does it. Additionally, you would be limited to an order lasting no more than 3 years unless you get HCA approval. While I applaud GSA for getting the deviation through (which expires, in October this year BTW (but I am sure it will be extended)) GSA should have gone the extra mile and made it applicable to ALL order types and not require them to have a T&M/LH CLIN (which mandates the D&F in FAR 8.404(h). However, I am sure I am just being a semantic FAR Curmudgeon as I doubt that many are following FAR 8.404(h) properly and just stating a sentence or two that "T&M/LH must be used for FAR 51 Deviation Authority" as their rationale for the T&M/LH D&F.

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jonmjohnson - I agree and I guess I should have been more clear. I was referring strictly to the T&M/LH portion in my post. Many agencies restrict the use of T&M/LH, even if in just certain CLINs, which is one reason why agencies do not like this approach.

GSA has been struggling with "other direct costs" for years and this deviation was one attempt to mitigate this issue.

Shikakenin - I agree and disagree. I agree in that a contractor cannot charge the Government a markup on the items purchased using the deviation. However, some contractors have become inventive and have proposed a labor rate to manage the handing of the supplies but not charge a markup for the actual purchase of the supplies themselves. GSA has yet to weigh in officially on this practice, but in concept I don't see anything wrong with it. The difference is that instead of charging an percentage on the price of the items, they charge a labor rate for the person managing the supplies. The same approach under a teaming arrangement, because even on a teaming arrangement, only the FSS prices can be charged for the items themselves.

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