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MBrown – thanks for your comment. Legal has reviewed it and it is not an issue for the Anti-Deficiency Act. Per GAO “If an agency enters into a no-cost contract that permits the vendor to provide a service for which the agency’s appropriation is not otherwise legally available, the no-cost contract would not violate the Anti-Deficiency Act’s voluntary services prohibition because the agency incurs no financial liability.” My main concern with establishing a no-cost agreement is whether or not I have to compete it. And, if I do have to compete it, since cost is not a factor, how will I evaluate if all are technically acceptable?

Thanks for the response. To give a little more detail, the no-cost agreement I am contemplating is to establish industry days – where the vendor would do all the coordination/execution of the industry day & charge a fee to keep for themselves. Please see this answer below – regarding FAR and competition – from GAO FAQs (link included). My question is in relation to a civilian agency. How do the federal procurement laws apply to an agency’s use of a no-cost contract? Statutory requirements for competition, such as the Competition in Contracting Act (CICA), apply to procurements by federal agencies for property or services. 10 U.S.C. § 2303; 41 U.S.C. § 253. Thus, as a threshold matter, to be subject to these requirements, the agency must be acquiring property or services. Determining whether competition requirements apply to a particular procurement for a no-cost contract for property or services will depend on the agency involved. CICA does not apply to no-cost contracts of military agencies, see 10 U.S.C. § 2303; Century 21—AAIM Realty, Inc., B-246760, Apr. 3, 1992, 92-1 CPD ¶ 345; Gino Morena Enterprises, B-224235, Feb. 5, 1987, 87-1 CPD ¶121, but it does apply to no-cost contracts of civilian agencies. See 41 U.S.C. § 253; Gourmet Distributors, B-259083, Mar. 6, 1995, 95-1 CPD ¶ 130. Federal Acquisition Regulation (FAR) requirements apply only to acquisitions by the government of supplies or services with appropriated funds. Fidelity and Casualty Co. of New York, B-281281, Jan. 21, 1999, 99-1 CPD ¶ 16; FAR, 48 C.F.R. §§ 1.104, 2.101. Consequently, the FAR does not apply to no-cost procurements conducted by either a defense or civilian agency. http://www.gao.gov/special.pubs/appforum2008/nocostcontracts.pdf

Hello All. Has anyone had much experience with no-cost agreements? (If so, could you please share your experience) Based on my research, the FAR does not apply to no-cost agreements; however, CICA may apply. Would I need to conduct competition or could I go directly with a vendor since there is no exchange of appropriated money? Additionally, if the FAR does not apply to no-cost agreements, how can GSA vendors allow for no-cost contracting procedures within their schedule since they are governed by the FAR? Lastly, in my research I have found that in no-cost arrangements, “agencies should ensure an open, transparent selection process before entering into no-cost contracts.” To what level of transparency is required, especially if this does not need to be competed? Any help is much appreciated!