Acting Administrator Dan Tangherlini often refers to GSA as the government’s savings agency.  He is “right on the money” regarding GSA’s central role in the federal procurement system.  GSA’s Federal Acquisition Service and Public Building Service provide a government-wide infrastructure of contracts, acquisition management and logistics support for customer agencies that leverages resources and saves taxpayer money.  Given the current fiscal challenges we face, GSA’s role is more vital than ever before and there are significant opportunities for greater program efficiencies and procurement savings for customer agencies and contractors.

In particular, the GSA Multiple Award Schedule (MAS) has unfulfilled potential to deliver best value solutions to customer agencies and drive down the cost of government.   And what one fundamental issue is limiting the ability to deliver best value solutions in a cost effective manner?

“Other Direct Costs”

MAS customers and contractors have repeatedly indicated that the inability to include ODCs, materials and indirect costs as part of MAS task orders limits the flexibility and efficiency and effectiveness of the program.

The failure to address ODCs increases procurement transactional costs across government.  It leads to contract duplication as customer agencies create their own contract vehicles that fully utilize the flexibilities provided by FAR 52.212-4, Alternate I in order to deliver complete, best value solutions.   GSA and Administrator Tangherlini have a wonderful opportunity to reduce contract duplication, increase efficiency, and save taxpayer money.  The time for addressing ODCs is now.  We are concerned that if GSA does not act quickly to correct this issue, agencies will increasingly turn to creating duplicative open market contracts particularly when they require complex services and solutions.

Fortunately there is an obvious and readily available solution that goes along ways towards allowing ODCs to be acquired as a part of GSA Schedule contracts.  The Federal Acquisition Regulations includes a clause that provides an accountable, transparent, flexible and efficient mechanism for the inclusion of materials and ODCs at the task orders level.  In fact some GSA Schedule contracts already include the clause; GSA need only make the provision operational by internal instructions to its contracting staff and potentially some guidance to customers to encourage optimum utilization of the FAR provisions.

Federal Acquisition Regulation (FAR) clause 52.212-4, Alternate I, provides for the inclusion of materials and ODCs in task orders issued under indefinite quality, indefinite delivery (IDIQ) contracts.  FAR 52.212-4, Alternate I, provides that ODCs identified/listed in the contract clause itself (at the underlying MAS contract level) be reimbursed at actual cost.  The clause further instructs contracting officers that “Each order must list separately the elements of other direct charge(s) for the order, or, if no reimbursement for other direct costs will be provided, insert “None”.   This approach ensures that ODCs are considered within the scope of the underlying MAS contract and may be included in subsequent task order competitions in accordance with FAR 8.4.

Some may argue that each element of materials and/or ODCs must be specifically listed and priced at the contract level per FAR 8.4.  This is an overly restrictive, reading of the scope of MAS contracts.   The underlying MAS contracts, incorporating FAR 52.212-4 Alternate I, establish the scope of the contract which allows for the general listing of the elements of ODCs.  Nothing in the clause requires that each element of ODCs be a separately priced line item at the contract level.  Rather, the FAR 52.121-4, Alternate I, provides that each element of ODCs listed in the clause be reimbursed at actual cost.  Actual cost will ultimately be determined on the results of a task order competition and subsequent performance of the work—not some arbitrary price plugged in at the contract level.  As such, FAR 52.212-4, Alternate I provides a flexible, accountable approach to ODCs that will save customer agencies, GSA and contractors transactional and administrative costs.

FAR 52.212-4, Alternate I, has already gone through the public ruling making process. FAR 52.212-4, Alternate I, is a commercial clause.  FAR 52.212-4, Alternate I, is applicable to commercial item IDIQ contracts.  MAS contracts are commercial IDIQ contracts.  Accordingly, FAR 52.212-4, Alternate I, is applicable and appropriate for use in MAS contracts.  In fact, GSA already includes FAR 52.212-4, Alternate I in most of its MAS contracts.  To more effectively and efficiently address customer agency needs, GSA must fully embrace and utilize the FAR clause flexibilities it has already included in its contracts!

GSA is working on an agenda to modernize the Multiple Award Schedule.  GSA should make addressing the ODC issue the top priority on that agenda.