Using Support Items on GSA Schedule Orders

At a glance:

• The main takeaway: Improper use of support items on GSA task orders may result in noncompliance with the GSA Schedule contract for Multiple Award Schedule (MAS) contractors.
• The impact on your business: Understanding the intricacies of including support items on GSA orders can prevent penalties and improve flexibility at the order level.
• Next steps: Absorb the insights shared in this piece, then contact Aprio’s GSA Schedule consulting team for help with complying with MAS contract requirements and avoiding penalties associated with noncompliance.

Schedule a consultation with Aprio’s GSA Schedule consulting practice for help understanding and mitigating the compliance risks associated with usage of support items on GSA Schedule task orders.

The Full Story:

GSA Schedule contractors often utilize other direct costs (ODCs) or support products and services to provide a total solution to customers. Contractors can use standalone Special Item Numbers (SINs), along with a combination of complementary support SINs, OLMs and/or open market items to fulfill their customer’s requirements. Items awarded under support SINs, OLMs and open market items must not be the primary purpose of the solicitated work and instead must directly support the task order. While these various support items are similar, it is important to understand their differences and proper usage.

Complementary Support SINs:

Complementary support SINs must be awarded on a contractor’s GSA Schedule contract and include commonly used commercial products or services. Support SINs include 541810ODC, ANCILLARY, ANCRA and 238910. Pricing for these products or services can be established up front and awarded at the GSA Schedule contract level. Any markups applied to third-party supplies must be incorporated in GSA Schedule contract. All items awarded under these SINs are subject to the Industrial Funding Fee (IFF).

Order-Level Materials:

The OLM SIN allows contractors to provide incidental products and services that are not awarded and priced at the MAS contract level on GSA orders and Blanket Purchase Agreements (BPAs). This may include materials, subcontracts for supplies or incidental services. Contractors also have the ability to apply indirect costs as a fixed dollar amount. OLMs are defined and priced at the order or BPA level and are classified as GSA Schedule contract items for sales reporting purposes. OLMs can only be sold on time and materials (T&M) or labor hour contracts or Contract Line Item Numbers (CLINs). The value of OLMs is limited to 33.33% of the total order or BPA value. All items proposed under SIN OLM are subject to the IFF. Items awarded under complementary support SINs are not considered OLMs.

Open Market Items:

Open market items are commercial products or services not awarded on the GSA Schedule contract or identified as OLMs but proposed or required by the customer at the order level for administrative convenience. These items are commonly referred to as non-schedule or non-contract items and are not subject to the IFF. Some customers may disallow or limit the use of open market items on GSA Schedule orders, which is one of the reasons GSA introduced the OLM SIN.

The chart below shows a summary of the distinctions between complementary support SINs, order-level materials and open market items.

Feature	Complementary Support SINs	Order-Level Material SIN	Open Market Items
Allowable Order/CLIN Types	All	Limited to Time & Material, Labor Hour	All
GSA Schedule Item	Yes	Yes	No
Industrial Funding Fee (IFF) Applies	Yes	Yes	No
Pricing Determination	GSA Contract Level	Order Level	Order Level
Authorized MAS Subcategories	Specific Sub-Categories	Specific Sub-Categories	All
Evaluation Procedure	FAR 8.405	GSAR 552.238-115	FAR 8.402(f)

Utilization at the Order Level:

Understanding the complexities of complementary support SINs, OLMs and open market items is crucial for compliance. In all cases, these products or services can only be ordered in conjunction with or in support of supplies or services purchased under another standalone SIN. There may be situations where all three options are necessary for a total solution. For example, a contractor needs to utilize products awarded under SIN 541810ODC and proposes OLMs at the maximum limit. If there are additional support items requested, a contractor may need to propose the remaining items as open market.

When proposing items on complementary support SINs, the product or service must be awarded on your contract and the order pricing cannot exceed the negotiated GSA ceiling price. It may be a contractor’s standard commercial practice to apply a fee or markup on third-party supplies. Since pricing is established at the GSA contract level, any markup must be awarded on the contract before it can be applied to the order.

Order pricing that exceeds the GSA ceiling price or includes an unapproved markup is considered an overcharge, resulting in a financial liability. For example, third-party supplies under SIN 541810ODC were awarded on contract at a 0% discount (at cost). The supplies were billed below the negotiated GSA ceiling prices and included a 10% markup. In this case the markup is an overcharge resulting in a refund due to the government in the amount of the total markup billed.

When proposing OLMs, contractors should follow GSAR clause 552.238-115 Special Ordering Procedures for the Acquisition of Order-Level Materials. The ordering contracting officer is responsible for making a fair and reasonable price determination in accordance with FAR 15.404; however, contractors should obtain three quotes for each OLM that exceeds the simplified acquisition threshold (SAT), unless the contractor has an approved purchasing system. Contractors should ensure the value of OLMs does not exceed 33.33% of the total order or BPA value. In addition, the Trade Agreements Act (TAA), environmental attributes clauses and AbilityOne Program Essentially the Same (ETS) compliance apply to the OLM SIN.

When proposing open market items, contractors must clearly identify them as non-contract items on their proposal and invoices. The ordering agency is required to ensure all applicable acquisition regulations pertaining to the purchase of open market items were followed, determine the price is fair and reasonable, clearly identify non-contract items and ensure all applicable clauses are included in the order.

Contractors not properly utilizing support items on their GSA task orders risk noncompliance with the terms of their GSA Schedule contract which may result in penalties. Understanding the intricacies of including support items on GSA orders can improve flexibility at the order level.

Contact Aprio’s GSA Schedule consulting team for help navigating the complexities of using support items on GSA Schedule orders.

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