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Barry McVay's FEDERAL CONTRACTS DISPATCH

DATE: December 19, 2000

FROM: Barry McVay, CPCM

SUBJECT: Federal Acquisition Regulation (FAR); Federal Supply Schedule Order Disputes and Incidental Items

SOURCE: Federal Register, December 19, 2000, Vol. 65, No. 244, page 79701

AGENCIES: Department of Defense (DOD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA)

ACTION: Proposed Rule

SYNOPSIS: It is proposed that the FAR be amended to add policies on disputes and incidental items under Federal Supply Schedule (FSS) contracts and to remove the requirement that contracting officers notify GSA when a schedule contractor refuses to honor an order placed by a government contractor.

DATES: Comments should be submitted on or before February 20, 2001.

ADDRESSES: Submit comments to General Services Administration, FAR Secretariat (MVR), 1800 F Street, NW, Room 4035, ATTN: Laurie Duarte, Washington, DC 20405; e-mail: farcase.1999-614@gsa.gov. Cite FAR case 1999-614 in all correspondence related to this proposed rule.

FOR FURTHER INFORMATION CONTACT: Linda Nelson, Procurement Analyst, 202-501-1900.

SUPPLEMENTAL INFORMATION: To bring FAR policy on FSS orders up-to-date, the following changes are being proposed:

• It had been common practice to add "incidental" non-FSS items to FSS orders for administrative convenience. However, on July 15, 1999, the General Accounting Office (GAO) ruled in a protest that agencies "may no longer rely on the 'incidentals' test to justify the purchase of non-FSS items in connection with an FSS buy; where an agency buys non-FSS items, it must follow applicable acquisition regulations" (Pyxis Corporation, B-282469; B-282469.2). Therefore, it is proposed that a paragraph (d) be added to FAR 8.401, General, which would permit the addition of "open market (noncontract)" items to a FSS blanket purchase agreement or task or delivery order only it "(1) all applicable acquisition regulations have been followed (e.g., publicizing ([FAR] Part 5), competition requirements ([FAR] Part 6), acquisition of commercial items ([FAR] Part 12), and contracting methods ([FAR] Parts 13, 14, and 15)); (2) the ordering office contracting officer has determined the price for the open market items is reasonable; and (3) the items are clearly labeled as open market (noncontract) items on the order."
  
  
• FAR 8.405-7, Disputes, currently states that ordering offices "shall refer all unresolved disputes under orders to the schedule contracting office for action under the Disputes clause of the contract." Under the proposed rule, FAR 8.405-7 would be revised to permit the ordering office contracting officer to "issue final decisions on disputes arising from performance of the order..." However, disputes pertaining to the terms and conditions of schedule contracts would still have to be referred to the schedule contracting officer for resolution.
  
  
• FAR 51.103, Ordering from Government Supply Sources, provides procedures for contractors that are authorized to place orders under FSS contracts. The proposed rule would delete paragraph (b) of FAR 51.103, which requires the contracting officer to report to GSA any refusal by an FSS contractor to fulfill an order from an authorized contractor, because agencies are no longer required to notify GSA under those circumstances.

FOR FURTHER INFORMATION CONTACT: Barry McVay at 703-451-5953 or by e-mail to BarryMcVay@FedGovContracts.com.

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