GSA Schedule Holders: Get Ready for Big Acquisition Changes Thanks to NDAA Section 863

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NOTE: Updated June 20th to include instructions on how to track this FAR Case and receive email notifications when the final rule is issued.

An Interim Rule (FAR Case 2007-012) that modifies FAR 8.4 to incorporate the requirements of Section 863 of the National Defense Authorization Act (FY09) went into effect May 16th and the final rule is expected by end of year. So why does this matter? It matters because the new rule greatly affects the way that GSA task orders and (especially) Blanket Purchase Agreements (BPA) are competed and awarded.

Department of Defense (DOD) buyers will be very familiar with these regulations because they were the first to incorporate them into their procedures several years ago through DFARS 208.405-70 . For civilian agencies, however, this represents a major change in how they must compete and award GSA orders. One of the most dramatic changes is the reduction of the threshold at which Contracting Officers are required to seek additional discounts. This has lowered significantly from the Maximum Order Threshold (MOT), which can be as much as $1M for most Schedules, to the Simplified Acquisition Threshold (currently $150,000) for both task orders and BPAs. The MOT has not become completely obsolete, however, as it still applies to the price reductions clause (GSAR 552.238-75).

Along with the reduction to the Simplified Acquisition Threshold (SAT), Contracting Officers are now required to give fair notice and actually receive three quotes for each RFP above the SAT. Contracting Officers meet this requirement automatically if they post the RFP to eBuy, so contractors should expect to see a lot more RFPs coming out that way. The DOD inclusion of this rule is a major reason that they are the #1 user of eBuy, that eBuy transactions are increasing by 14.5% annually, and that eBuy had awards exceeding $6.3B in FY10.

Section 863 creates a strong preference for FFP orders and multiple-award BPAs as focused on in several Presidential Memorandums. In fact, if a proposed single-award BPA has an estimated value exceeding $103M, then the Head of the Agency (you read that right) must document in writing that one of several conditions exists that compels the limited sourcing. In addition, a single-award BPA can only be a base year plus four option years; multiple-award BPAs may extend beyond five years if it is necessary to meet program requirements.

For more details about this sea change in GSA ordering procedures, you can download an excellent GSA presentation at www.gsa.gov/masnews. An audio recording of the accompanying webinar is available on GSA Interact (http://interact.gsa.gov/interact).

***If you want to be alerted when the final rule comes out, you can track the FAR case at www.regulations.gov. On the homepage, enter the FAR Case number (2007-012) into the “Enter Keyword or ID” search field. Once you have the search results, downselect by choosing “Rule” under Document Type. For the entry with the ID FAR-2011-0081-0001 (should be the first listing), click on the “Open Docket Folder” in the Actions column. At the top of the Docket Folder Summary page, you will see an option to receive email alerts. Once you subscribe, you will receive email notices when anything is added or modified to Docket FAR-2011-0081.***

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