Government Contracts Monitor

FSS: Items Not on Your Schedule? No Problem – Just Add Them!

October 26, 2015

It has long been the rule that all items quoted and ordered in a Federal Supply Schedule (FSS) task order competition under FAR Part 8.4 must be on the vendor’s schedule contract at the time the order is awarded. However, a recent Government Accountability Office (GAO) decision clarifies that the critical moment is literally the task order award date, and not the offer or any other date. Thus, it is okay for an offeror to propose or quote an item that is not on its schedule as of the quote or offer date, so long as the item is added to the schedule as of the award date. AmeriGuard Security Services, Inc., B-411513, Oct. 3, 2015. This is an important clarification, and affords potential offerors the opportunity to compete even if every item is not presently on their schedules, so long as they can get GSA to supplement their schedules by the order issuance date.

AmeriGuard involved a FSS task order competition for security guard services at various Health and Human Services (HHS) facilities. One of the potential offerors, and ultimate awardee, was a company called Paragon Systems, Inc. (Paragon). However, Paragon did not have all of the required services and locations on its existing FSS schedule either when the RFQ was issued or at the closing date for either initial or revised quotations. Paragon therefore asked GSA to modify its FSS schedule to add certain services and locations being procured, effective March 22, 2015, and then to add one additional position and location, effective April 30, 2015. GSA approved the requested additions as of the requested effective dates, although the actual contract modification for the latter addition was not actually signed until May 8, 2015.

Seven quotations were received by the initial March 19, 2015 closing date, including from the incumbent AmeriGuard and Paragon. After conducting discussions, the agency requested revised quotations by April 15, 2015. Based upon its review of the revised quotations, the agency determined that Paragon’s quotation offered the best value, and issued the task order to Paragon on April 30, 2015.

AmeriGuard protested this award on several grounds, including that not all of the quoted services were on Paragon’s FSS schedule at the required time. The agency advised GAO that it was taking corrective action, including verifying with GSA that Paragon had prices on its schedule for all job classifications and locations by the required time. The agency subsequently concluded, after reviewing Paragon’s above-discussed FSS schedule modifications effective March 22 and April 30, 2015 respectively, that all items were timely on Paragon’s schedule. The agency therefore reaffirmed the award to Paragon.

AmeriGuard timely protested this reaffirmed award asserting that Paragon was ineligible for award because all of the items were not on Paragon’s schedule as of the March 19, 2015 initial closing date. AmeriGuard specifically argued that the March 22^nd and April 30^th modifications to Paragon’s schedule contract were irrelevant and should have been ignored by the agency since, coming after the closing date, they simply were too late.

GAO disagreed and supported the agency’s view that the key date is the task order issuance date. The GAO stated that “we have previously recognized that when an agency conducts a procurement under the FSS program, all items ordered must be on the vendor’s FSS contract at the time an order is issued” (emphasis added), and there was nothing in the instant procurement requiring application of a different rule.

Two unique factual circumstances of the AmeriGuard case make GAO’s decision particularly compelling, and emphasize the certainty of GAO’s clarified rule and its application. First, the awarded task order actually was dated April 28, 2015 – two days before Paragon achieved the full required FSS schedule compliance on April 30^th. However, GAO noted that the order was not executed by the HHS contracting officer, and thus “issued,” until April 30^th, by which the required compliance had been achieved. Second, the modification implementing the final needed changes to Paragon’s FSS schedule was not actually signed until May 8^th – eight days after the task order issuance. GAO again simply shrugged this off, noting that the stated effective date of the modification was April 30^th, and that, per GSA’s applicable regulations, “[t]je effective date for any modification is the date specified in the modification, except as otherwise provided ….” 48 C.F.R. § 552.238-81(c). It would appear that GAO could have used either of these circumstances to reach a different result here. However, GAO rejected such, opting for a bright line cut-off.

While GAO’s holding technically is consistent with prior decisions, the decision goes beyond prior decisions in making clear that the critical date literally is the order issuance date. In this regard, the rule here is different than that in many other circumstances, such as those involving size and other certifications that focus strictly on the circumstances at the time of offer submission. From an agency viewpoint, this clarified rule poses a number of implementation issues, as it may be difficult to know at the time of order issuance whether an offeror is compliant. Indeed, in AmeriGuard the actual final modification was not issued until eight days after the task order issuance. Under such circumstances there is no way the agency could have known when it issued the order that Paragon was, or would be, compliant. This raises the possibility that agencies may have to later revoke an award where an expected modification does not come through, or bears a later effective date. Conversely, an agency that awarded to another offeror might have to cancel the same and make a new award if a company initially thought to be non-compliant receives a modification, as here, that has a retroactive effective date.

However, this ruling is important in enhancing competition, and is beneficial for potential offerors who may not have every item called for on their applicable FSS schedule(s) at the time of RFQ issuance. Those companies now can compete and qualify for award if they can get the required items added to their schedule(s) by the task order issuance date. In deciding to proceed in this manner, offerors need to be familiar with the applicable FSS schedule modification procedures, and promptly submit a complete modification request, with all required information necessary to permit timely GSA processing thereof. Offerors also should specify the needed effective date of the requested item additions.