DOD Class Deviation Further Complicates FSS Ordering

On March 13, 2014, the Director of Defense Procurement and Acquisition Policy issued a Class Deviation that alters the way DOD will utilize Federal Supply Schedule contracts.  Effective immediately, prior to awarding an order against an FSS contract, DOD ordering activity contracting officers must independently make a determination that the Federal Supply Schedule order price is fair and reasonable.  This requirement applies regardless of whether the order is for supplies, fixed-price services, or services requiring a statement of work.  One might read the class deviation to signal DOD’s lack of confidence that GSA is securing fair and reasonable pricing when negotiating and awarding schedule contracts.The class deviation comes on the heels of other changes to the FSS ordering requirements in FAR 8.4.  Specifically, a final rule issued on March 2, 2012, increased competition requirements for certain schedule orders.  Those changes were reminiscent of the DOD specific changes required by the 2002 NDAA (Pub. L. 107-107 § 803).  Thus, it is possible that the DOD deviation is a harbinger of broader changes to FSS ordering requirements in the FAR.  The class deviation certainly further complicates FSS ordering for DOD COs and, so, runs contrary to one of the FSS Program’s fundamental tenets.  Namely, that the schedules are to provide federal agencies with a simplified process of acquiring commonly used supplies and services.

As a result, contractors that sell to DOD through FSS contracts should be prepared to repeatedly justify their FSS order prices as fair and reasonable.  For example, FSS contractors frequently may be asked to respond to requests for other than cost or pricing data, all to support the CO’s price analysis under FAR 15.404-1.  Time will tell how this class deviation, which may ultimately be issued as a change to the DFARS, will impact FSS contractors.  As a practical matter, this deviation is likely to increase the administrative costs of holding a schedule contract and those with substantial DOD sales should be considering strategies to minimize the likely increased administrative burden.

By Phillip Seckman

Related Post

Understanding Cultural Competence in 2024

Understanding Cultural Competence in 2024

Key Takeaways Aspect Details Importance of Cultural Competence Essential in international government contracting for effective communication and relationship building. Trends in 2024 Focus on interdisciplinary research, global leadership, and the impact of cultural...

Season 11: Episode 5: FAR Facts

Hello and thank you for joining us for Episode 5 of Fun with the FAR Season 11! In our next session, we will cover FAR Parts 8 (Required Sources of Supplies and Services), 38 (Federal Supply Schedule Contracting), 39 (Acquisition of Information Technology), and 51(Use...

Season 11: Episode 4: FAR Facts

Hello and thank you for joining us for Episode 4 of Fun with the FAR Season 11! In our next session, we will cover FAR Part 7 (Acquisition Planning), Part 10 (Market Research), and Part 11 (Describing Agency Needs)! As we prepare for our next episode of Season 11,...