I am working with a program office that has identified an item that is needed. The item is available under the GSA/FSS schedule. A requisition was forwarded to procurement. The total of the requirement exceeds $100,000.

Now I've been told that Market Research is required. We looked at FAR Part 10, and there is no exception to this requirement that we can see for GSA/FSS.

Is it really required and does it make sense to do Market Research for items under GSA/FSS?

FAR Part 10 states that "If ...the Government's need may be met by a type of item or service customarily available in the commercial marketplace that would meet the definition of a commercial item at Subpart 2.1, the contracting officer shall solicit and award any resultant contract using the policies and procedures in Part 12."

So, does the program office do the research, verify that what what is needed is a commercial item, but procurement can't use the GSA/FSS? Procurement must follow Part 12?

Help me, please, to understand.

By Anon-1 on Wednesday, July 11, 2001 - 10:40 am:

You have already done some market research if you know it is on a GSA schedule. It is my opinion everyone in the acquisition process is responsible for some part of market research. Even your personal knowledge of an item contributes to market research. I think DoD prefers we (the govt. employee spending taxpayers dollars make sure those items on GSA schedules really are the best price. Of course, all of this depends on the dollar amount, whether complex or noncomplex, commercial or not. You wouldn't buy a new TV without maybe looking in the newspapers and seeing which stores have what you want, what it will cost, who has a special going on. Right? It's really no different than that. It isn't meant to be a paperwork drill, just a way to get the best deal. But remember, if you were going to buy something small, like oil for your car, you wouldn't spend a lot of time doing research, most likely, you already know Walmart or K-mart are the best price for oil. (I really don't know that, just assuming it).

By Anonymous on Wednesday, July 11, 2001 - 11:26 am:

"I really don't know that, just assuming it" - By that assumption you would almost certainly pay more for the oil, at least in the area where I shop. One of the tricks of the trade is to get a reputation for low prices and then use the assumption. It is sort of like the trick on volume. For a time after unit pricing on labels became popular some were surprised the "Large Economy Size" was not. Gottcha! Helps make up the difference.

Finding these manipulations is part of market research.

By John Ford on Wednesday, July 11, 2001 - 03:20 pm:

New-Be: To answer your question the answer is "no." Far Part 12 is a way to acquire commercial items on the open market. If a commercial item is on the GSA schedule, you can use the schedule to acquire that item without resort to the procedures of FAR part 12. The GSA schedules are contracts for commercial items which are available for use by all agencies. See FAR 8.401.

By Anonymous on Wednesday, July 11, 2001 - 11:01 pm:

GSA FSS are MANDATORY SOURCES! If it available on GSA it must come from GSA unless there is a source higher on the mandatory list.

I have always heard that extra research only raises the administrative costs. GSA already expended the cost to contract these items for you. It is expected that you will compete the GSA sources against each other via GSA Advantage or mini competitions.

That said, I know that GSA is not always cheapest. If I had an order for a very large amount such as a million or $100M, I would definitely look further, a half percent would mean a lot.

By bob antonio on Thursday, July 12, 2001 - 05:15 am:

John:

I have not looked at the multiple award schedule program for years, however your reference back to Federal Acquisition Regulation 8.401 made me smile when i read it. Here is what I found amusing.

"prices associated with volume buying."

By susan paolini on Thursday, July 12, 2001 - 08:48 am:

I do not believe that GSA Federal Supply Schedules are always mandatory sources for DOD users. (DFARS 208.404)

By formerfed on Thursday, July 12, 2001 - 09:14 am:

I believe what Anon is referring to is the order of precedence in the FPMR. That contains a pecking order for acquiring products and services starting with excess property and going on down through mandatory and non-mandatory FFS schedules before you finally reach open market. In actuality, I think there are very few mandatory schedules remaining.

By Anonymous on Thursday, July 12, 2001 - 10:16 pm:

Formerfed,

You are correct, that is what I meant. Non-mandatory FSS are still a mandatory source before you go open market. If the schedule is a multiple schedule, not a mandatory schedule, you must compete the requirement between GSA Vendors. If this is not true, then someone better change all the training curriculums because I have been taught this at three different schools in multiple classes all in the last two years.

By Anonymous on Thursday, July 12, 2001 - 10:19 pm:

This is a bit off topic, but comes up in connection with GSA and administrative costs. Exactly how does the Industrial Funding Fee (IFF) work?

GSA describes it as "This is a fee that is added to the cost of an awarded contract item. It is how GSA pays for its programs. The IFF is 1% of the purchase price of an item." Is it collected by the contractor essentially as a sales tax to be returned to GSA? Has any work been done to see how cost effective this method is in itself?

By Anonymous on Thursday, July 12, 2001 - 10:43 pm:

Susan,

I looked up the DFARS and I see what you mean. It appears the DFARs is disregarding the "shall" in the FAR and saying it is really a business decision of the contracting officer.

I am in a civilian agency and I looked at what was in Part 8 of our Supplement and there is nothing addressing this.

By new-be on Friday, July 13, 2001 - 07:40 am:

Thanks to all for your insight - I continue to learn from this great community discussion arena.

By Anonymous on Tuesday, July 17, 2001 - 11:51 am:

I guess my question is what is the threshold for purchasing off of the GSA/FSS schedule. Small purchase and micro-purchase I know can be purchased off of the GSA/FSS schedule without confusion. Is it SAT, because new-be did say the requirement was $100,000 and that is the SAT isn't it? From others I am told that GSA/FSS prices are not always the best prices even in volume buying. FAR Part 10 is rather confusing to me (new in the arena) because it states that if the Government's need is classified as commercial the CO shall solicit -- what about the GSA/FSS schedule?

By Anonymous on Tuesday, July 17, 2001 - 01:48 pm:

There no longer is a limit but additional discounts should be requested above the Maximum Order Quantity. FAR Part 8. You must compete GSA vendors against each other if over $2,500. Yes, sometimes GSA prices are not the best but you must consider procurement cost when comparing GSA and non-GSA procurements.