GSA MAKES TWO SCHEDULE CHANGES – 1 POSITIVE, 1 WE’LL HAVE TO WAIT AND SEE
GSA Schedule customers will now more easily be able to incorporate non-specifically priced items onto a Schedule purchase order thanks to the final rule issued last week on Order Level Materials (OLM) (aka “Other Direct Costs”). The change has been long-anticipated, but now puts Schedule contracts on more even footing with other IDIQ contracts. Essentially, buyers can now add up to 33% of a purchase order’s total value with OLM services and products. Contractors can price such items at the task order level. This is an overdue, but welcomed, change.
In the meantime, GSA also re-opened the only Schedule to be closed in over 25 years – Schedule 75 for office products. The agency added new, higher, fee structures for buyers and will continue to expect pricing at levels that will make it difficult for some companies to actually make money. At a time when GSA is also seeking to open commercial e-commerce portals for government use, agencies are already setting up individual agreements for e-commerce transactions, and other agencies have moved on from Schedule 75 due its lengthy closure to new contracts, it is an open question as to whether re-opening the Schedule now will resuscitate business. Anecdotal evidence suggests that companies whose previous 75 Schedule contracts have expired are eager to get back in the game. We urge caution. It’s great that 75 is open once again. We believe that it should never have been closed. Insistence on below cost pricing, hitting buyers with fees more than twice the Schedules IFF rate, and competition from other sources, though, should make companies think twice about what a Schedule 75 contract really means for their business and what other avenues are open to them to reach federal customers that may make better business sense.