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Vendor Improperly Used Continuous FSS Contracts

by | Jan 8, 2020 | Government Contracts

Contractors holding “continuous” GSA Federal Supply Schedule (“FSS”) contracts must be careful they bid under the correct FSS contract.  

Starting in February 2016, the General Services Administration (“GSA”) Federal Acquisition Service (“FAS”) allowed contractors to hold two continuous FSS contracts. The revised policies and procedures allow contractors to keep their expiring FSS contract to continue performance under existing BPAs and orders, while obtaining a second FSS contract under the same schedule to compete for new business opportunities. In doing so, contractors must agree not to use their existing FSS contract in competing for new business opportunities. 

Last month, GAO sustained a protest challenging the establishment of a blanket purchase agreement (“BPA”) to a vendor holding continuous FSS contracts because the vendor submitted a quotation that leveraged both of its FSS contracts. The awardee submitted a quotation that listed its current FSS contract with a period of performance until 2023 and asserted that it was in the process of obtaining a second FSS contract. The period of performance for the BPA, including the exercise of all options, was until 2025. By the time the awardee submitted its final revised quotation, it had obtained its second FSS contract with a period of performance until 2039. However, the awardee did not amend its final quote to identify the new FSS contract and still relied on its first FSS contract, ending in 2023, for the award. 

GAO found that the award of the BPA was improper for a few reasons. First, the awardee’s first FSS contract did not have sufficient duration to cover the entire period of performance of the BPA. The award was inconsistent with FAR § 8.405-3(d)(3), which requires a vendor’s FSS contract to have sufficient duration to coincide with the entire potential period of performance of the BPA. Second, a vendor with overlapping, continuous FSS contracts must rely only on the second FSS contract to fulfill a period of performance requirement to compete for a new BPA. Because the awardee’s quotation relied on the first FSS contract, the award was improper.

Had the awardee revised its quotation and only relied on its second FSS contract, it could have avoided this situation. If you are a vendor with continuous FSS contracts, be sure to only rely on the second FSS contract for new business.

NCS Technologies, Inc., B-417956, B-417956.2, Dec. 13, 2019.

Daniel Alvarado is an Associate in the Government Contracts practice at Berenzweig Leonard. Daniel can be reached [email protected].