Last week the Comment of the Week focused on the opportunities for GSA leadership as customer agencies increasingly look to the agency for procurement solutions. The Comment further observed that “GSA’s commercial item contracting leadership through the MAS program can be the lynchpin in providing savings and value for customer agencies.” GSA has a wonderful opportunity to provide a robust, flexible and sound framework for commercial item service solutions that provides best value to customer agencies and the taxpayer. This week, I write again about addressing “Other Direct Costs” (ODCs) on MAS service contracts and task orders.
We are at an interesting point in the federal market. With the challenges associated with the budget, the stakes for the procurement system couldn’t be higher. Agencies are under pressure to meet mission requirements with less or, in the case of DoD, to do “more without more.” As a result, agencies want comprehensive solutions that efficiently and effectively meet their requirements. Solutions based on commercial services offered via GSA’s MAS program can be the best value option in meeting customer agency needs. In fact, agencies want to use the GSA MAS program for service solutions and MAS contractors want to offer, compete for and deliver solutions.
Unfortunately ODCs are holding both parties back. Service requirements, by their very nature, typically include ODCs (e.g. materials, travel and other costs) associated with providing a solution. As such, agencies want contract vehicles that allow competition for complete service solutions inclusive of ODCs. The Federal Acquisition Regulation (FAR) has addressed this issue. The FAR includes commercial item clauses that allow for ODCs on commercial service contracts and task orders. The FAR clauses provide flexibility and accountability for ODCs while the MAS ordering procedures provide a robust competitive framework for task orders. The flexibility and accountability in the FAR clauses recognizes the need for sound, comprehensive solutions to service requirements. ODCs can assist agencies in acquiring the latest technologies to support service work, including green technologies. ODCs can be win for government, a win for contractors and ultimately a win for the taxpayer.
In the absence of an ODC mechanism (i.e. the FAR clauses) in MAS contracts and task orders, instead of looking to the MAS program for solutions, agencies will use other contract vehicles that are not as transparent or competitive as the MAS program. Worse, agencies will create their own service contracts, resulting in duplicative contract vehicles that unnecessarily increase contract transactional and administration costs for government and industry. ODCs can be addressed in the MAS program in a sound, accountable and competitive manner. GSA has the authority and the tools. In the interests of economy and efficiency we look forward to working with GSA in resolving this issue.
A GSA website page (http://www.gsa.gov/portal/content/200369#otherdirectcosts) discusses ordering procedures under GSA Schedules. ODC’s are charges in direct support of a service — they are commercial items and must not be the primary purpose of the task order.
It’s interesting to note that the Solicitation Document for IT Schedule 70 (https://www.fbo.gov/index?s=opportunity&mode=form&id=cf1a797cc0fa2686f49d24e63b8b854f&tab=core&_cview=1) does contain the FAR Commercial Items clause (52.212-4 — Deviation) that defines “Material” as Other direct costs (e.g., incidental services for which there is not a labor category specified in the contract, travel, computer usage charges, etc.).
I have not seen any other guidance with regards to any dollar limit to ODCs — only that they can’t be the primary purpose of the order.
Hi Ron, you may find my FAR and Beyond post from last February interesting. The topic was MAS Policy on Other Direct Costs http://thecgp.org/mas-policy-on-other-direct-costs.html