How to Understand GSA Order Level Materials (OLMs) Final Rule in 5 Easy Steps
Big news coming to the schedules program! The US General Services Administration (GSA) has issued a final rule that opens up for procurement of Order-Level Materials on FSS contracts or BPAs.
1. What are Order-Level Materials (OLMs)?
OLMs are supplies and/or services acquired in direct support of an individual task or delivery order placed against an FSS contract or BPA when the supplies and or services are not known at the time of the Schedule contract or BPA award. Prices are established and acquired at the order level, and the ordering activity contracting officer is responsible for making the determination that prices for all OLMs are fair and reasonable.
2. Why is this change implemented?
Previously, the schedules program has not been able to effectively add supplies or services to a task or delivery order that were unknown at the time of the contract award. The purpose of the final General Services Acquisition Regulation (GSAR) rule to incorporate OLMs is to increase the flexibility on the task order or BPAs for both seller and buyer. This will make the procurement smoother and the GSA schedule a more competitive contract vehicle.
3. How does this apply to our schedule(s)?
Depends on the schedule. If you hold any of the following schedules: 03FAC, 56, 70, 71, 84 OOCORP or 738X, an OPTIONAL mass mod will be issued. By accepting this mass mod, the authority to use OLMs along with the OLM Special Item Number (SIN) will be automatically incorporated into your contract.
If you are applying for any of the Schedules authorized to allow for OLMs per above, the new OLM SIN will be available once the Schedule solicitation is updated. Since the nature of the OLM is unknown at this time, the pricing and technical requirement that we typically see in the solicitation will be waived for this SIN. Note, the OLM SIN cannot be the only SIN on a FSS contract or a FSS BPA.
4. What happens after the OLM Rule has been incorporated?
After acceptance of the mass mod, the new OLM SIN will be visible under the contractor’s eLibrary page. Since the supplies and services are to be determined depending on the actual task order, this will be the only SIN that does not have any specified line items, supplies or services listed underneath it. Remember, TAA still applies to OLMs. If non TAA compliant, these services and supplies may instead be offered as Open Market items under applicable clause.
5. How do we quote and subsequently report OLMs?
First, you need ensure that you have the authority to use the OLM rule per steps above. You must also ensure that the accumulative value of OLM contract items does not exceed 33.33% of the total order value. Also, OLMs should be offered as separate line items or CLINs.
You also need to obtain quotes from 3 suppliers for each OLM above the simplified acquisition threshold. The three quotes are not submitted with the offer, but should be maintained in the contractor's file and are still subject to audit. Contractors with an approved purchasing system per FAR 44.3 are exempt from the three quote requirement.
Once you have the OLM SIN, the sales reporting system (per TDR or 72a) will be updated to allow IFF reporting. The IFF is applied to OLMs reported under the OLM SINs, except for travel.
About Carina Linder
Carina Linder is an Engagement Manager with more than five years of experience in GSA contract proposal writing and contract negotiations. Her expertise is in contract compliance consulting, Federal Acquisition Regulations (FAR) and procurement procedures.