Infotech and the law: Time may tick against you when adding to FSS contracts

Richard Rector

Contractors sometimes need to add supplies or services to their Federal Supply Schedule (FSS) contracts to respond to an agency's request for quote. But when must these additions be done: By the time quotes are submitted or by the time the blanket purchase agreement or FSS order is issued?

The need to add items to an FSS contract often stems from the rule that the supplies and services included in these orders must reside on the FSS contract of either the contractor or a team member.

Previous law let companies quote items both FSS and non-FSS, or "open-market items," in response to a request for quote if the non-FSS items were incidental to the order. For example, an agency could order ancillary non-FSS items, such as interface boards or cables, if it were ordering computers from a vendor's FSS contract.

The law changed in the late 1990s when the U.S. Court of Federal Claims and the General Accounting Office decided that buying open-market items violated competition laws.

FAR 8.401 now lets an agency purchase open-market items in very limited circumstances and only if applicable competition requirements have been satisfied. Now when responding to a request for quote, a contractor may need to add supplies or services, such as labor categories or equipment, to fully meet an agency's requirements.

To properly add items to an FSS schedule, a vendor needs formal modification of its FSS contract from the General Services Administration's contracting officer. While this process is typically time-consuming, it can be expedited if the vendor is diligent and convinces the contracting officer of its urgency.

But the question of when the modification must be done is up in the air. The regulations are silent on the issue, which means the answer may vary from procurement to procurement. The most important factor in answering the question likely lies in the particular terms of the request for quote.

If the request makes clear that items must be on the vendor's FSS contract at the time quotes are submitted -- and quotes not following this rule will be rejected -- then vendors must be intent on adding items before the closing date. If the request is less clear on these points, there may be flexibility in the deadline for FSS contract modifications.

In one reported case on the issue, Sales Resources Consultants Inc., GAO upheld an agency's action where it accepted a quote for software that was added to the vendor's FSS contract after the closing date for quotes, but before the order was issued. GAO stated: "We fail to see any violation of FSS program requirements given that, at the time of the orders, the software was in fact on [the vendor's] schedule contract."

Contractors should take heed: Be earnest when adding items to an FSS contract to meet its requirements. Work closely with the GSA contracting officer. The terms of the request for quote likely will determine when the modification must be done.

Richard Rector is a partner in the Government Contracts practice of Piper Rudnick LLP in Washington, D.C. His e-mail address is richard.rector@piperrudnick.com.

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