On March 16, 2011, an interim rule was issued implementing Section 863 of the Duncan Hunter National Defense Authorization Act of FY 2009. Section 863 extends the competition requirements of Section 803 of the National Defense Authorization Act of 2002 (2002 NDAA) government wide. The new rule may represent the final step in a fundamental shift in the Multiple Award Schedule (MAS) program whereby enhanced competition at the task/ delivery order level is the driving force behind the program.

The new rule requires that for all orders exceeding the simplified acquisition threshold ($150,000), the ordering activity contracting office must post a Request for Quotes (RFQ) on e-Buy in order to afford all schedule contractors offering the required products or services under the appropriate schedules an opportunity to submit a quote. E-Buy is GSA’s electronic quote system and it is specifically identified in the new rule as one method to provide notice to all schedule contractors offering the required products or services. See FAR 8.402(d)(1). Alternatively, the contracting office may provide the RFQ to as many schedule contractors as practicable, consistent with market research appropriate to the circumstances, to reasonably ensure receipt of at least three quotes. If three quotes are not received, the contracting officer must prepare a written determination explaining that no additional contractors capable of fulfilling the requirement could be identified despite reasonable efforts to do so. See generally FAR 8.405-1 and 8.405-2.

Consistent with the new competition requirements, FAR 8.405-4, Price Reductions, has been revised to require the contracting officer to seek a price reduction for orders or Blanket Purchase Agreements exceeding $150,000. In essence, the new FAR 8.405-4 lowers the current Maximum Order Threshold (MOT) in each contract to $150,000. Under the old FAR 8.405-4, FAR 8.405-1(d) and FAR 8.405-2(c)(3)(ii), contracting officers were required to seek price reductions for orders exceeding the MOT. The MOT is identified in each schedule contract and can vary. For example, some MAS contracts currently have a MOT of $500,000 while other contracts currently have a MOT of $1 million. As such, since the new rule establishes enhanced competition requirements while lowering the threshold for seeking price reductions, MAS contracts should be modified to provide that the MOT is the simplified acquisition threshold of $150,000. This step would maintain the necessary consistency between FAR 8.4 and the MAS contracts. The Coalition urges GSA to act quickly to ensure consistency between the FAR and the MAS contract terms and conditions.