preplanned schedule, will help. Negotiation delays should not be used to justify adding "just one more contractor." The only acceptable justification to adding a contractor's name and products to a schedule during the time period it is effective is to include basic equipment items which were not included during the original negotiations; for example, if schedule 67IVB is negotiated and published and no "microfilmed library systems" have been included, the schedule may be modified to include microfilmed library systems. If, on the other hand, three contractors have negotiated in good faith to place their respective microfilmed library systems in the . schedule, that schedule will not be reopened to include a fourth contractor's microfilmed library system. 14. Using agencies a. General responsibilities (1) Using agencies are responsible for: (a) placing orders with contractors, making payment, and determining whether performance meets the contract terms; (b) making inspection arrangements unless the contract provides for source inspection by GSA; and (c) reporting all significant instances when nonconforming supplies or services are received. (2) Ordering offices may, with respect to nonconforming supplies: (a) reject; (b) require removal for correction or correction in place; (c) (d) purchase order; or accept with a price reduction; terminate the contractor's right to proceed under the (e) declare the contractor in default and purchase against the contractor's account. See 101-26.403. b. Use and exceptions (1). Mandatory use. The use of multiple award schedules is mandatory unless the contract or applicable regulations make nonuse otherwise permissible (a) urgent requirements when delivery schedules will not meet requirements. (b) small orders which do not exceed minimum order limitations. (c) large orders which exceed maximum order limitations. Such orders shall be forwarded to GSA for processing. (d) legislative and judicial agencies. See 101-26.401-4. C. Use of similar but not identical items or services. An agency may procure an item or service which has the same general characteristics as and is similar to the item or service on a mandatory schedule when the latter will not serve the functional needs of an agency provided a written waiver is obtained from FSS. The clause in 5A-73.205-7 is prescribed for use. d. Consolidation of orders. Using agencies shall, to the maximum extent practicable consistent with cost effective acquisition, consolidate requirements on an agency-wide basis so they can achieve economies through consolidated procurements. Requirements in excess of the maximum order limitations will be forwarded to FSS for direct buy/direct delivery. e. Placing orders Using agencies shall place orders at the lowest delivered price available for a suitable item notwithstanding the opportunity to select from a number of items. When purchases are at other than lowest delivered price available in a schedule, a justification shall be included in the using agency's delivery order file. f. Payment Agencies shall: (1) pay promptly in all cases; (2) pay contractors promptly so prompt payment discounts may be taken properly; and (3) not attempt to take prompt payment discounts when the prompt payment requirements have not been met. 8. Preference for small business and labor surplus areas When two or more items at the same delivered price will satisfy a user agency's need, selections of items furnished by suppliers shall be made in accordance with the following order of priority: (1) Small business/labor surplus area concerns. h. Application of Buy American and Balance of Payments provisions When two or more items will satisfy a user agency's need and foreign and domestic items are involved, Buy American and Balance of Payment rules shall be applied. See 5A-73.217-8 for applicable contract clause. i. Delinquent performance When a contractor fails to perform, the ordering office may either afford the contractor a further opportunity to perform or declare the contractor in default of the delivery order. See 101-26.403-3. Implementation: FSS is requested to Apply the above policies on their schedule actions. On policy items PART B SPECIFIC POLICIES REQUIRING FEDERAL SUPPLY SERVICE IMPLEMENTATION 15. Establishing prices for supplies and services under the multiple (Due to the importance and complexity of this key issue, our policy will be given in two parts. The first part is in essence a "quick fix" to cover the obvious areas where management improvements need to be made as rapidly as possible. The second part is a proposed long term reorientation of FSS's present pricing practices and is being submitted for your review and comments as we are especially concerned about its implementation within FSS and its impact on our using agencies.) a. Actions to be taken immediately (1) FSS's present pricing methodology for multiple award schedule contracts is contained in FSS Procurement Letter No. 144 "Benchmark Guidelines for Multiple Award Contracting," dated December 24, 1975, (presently being revised). (2) FSS will modify its pricing methodology to prominently emphasize the fact that final net price is more important than the size of the discount from commercial catalog price lists. (3) FSS will establish and adhere to negotiation schedules for multiple award schedule contracts and strictly control the acceptance of late proposals in accordance with the provisions of the FPR. (4) FSS will adhere to the policy of grouping offers in various marketing categories for evaluation purposes and severely limit any waivers to those categories. In addition, FSS will assure that the provisions of FSS Procurement Letter No. 144 (or its successor) are applied consistently throughout all FSS contracting activities. b. Proposed long term pricing methodology for which FSS is to provide Comments as requested (1) The preferred method for establishing the prices of the supplies and services contained within the multiple award schedule program is by price analysis, as described in FPR 1-3.807 and, especially, FPR 1-3.807.2(b), for each item contained within the program. If, however, it is not possible to use rigorous price analysis on an item-by-item basis, other methods, such as the application of statistical sampling techniques, or negotiating general discounts from a contractor's established catalog price list, may be used. (2) Regardless of the techniques used, the result should be that the multiple award schedule prices available to the Government are, at the time of negotiation, equal to or lower than the best prices available to any other customer under similar circumstances for the aggregate of supplies and services covered by a given contract schedule. (3) Therefore, contractors submitting offers in response to solicitations under the multiple award schedule program should not be segregated by marketing structure, e.g., manufacturers selling direct, manufacturers selling through dealers, etc., if that practice would tend to limit competition or result in higher than necessary prices being negotiated. Offers may be segregated only as a means of facilitating price analysis for the purpose of negotiating schedule prices. criteria: (4) Any pricing techniques developed must meet the following (a) It must be applied consistently over time. (b) It must result in the lowest possible aggregate price for the supplies and services placed on contract. Develop a Plan of Action (POA) to apply the first part of the policy on all schedules as they come due for award, with special emphasis and attention on the major schedules. This POA is to be prepared within 60 days from the date of this document. Furnish a copy of the POA approved by FSS to AP within 75 days from the date of this document. Formally monitor the implementation of the policy with interim reports furnished to AP quarterly. The first progress report will cover the period July 1979 through September 1979. This report, as well as subsequent reports, will be due to AP within 10 days of the end of the quarter. Furnish a final report to AP on the overall results of implementation of the policy on all FSS schedules within 15 months from the date of this document. Your comments on 15.b.. should be submitted as an attachment to your 16. General management improvement actions a. When making the basic decisions pertaining to whether supply support will be provided by stock, store and issue; single award or multiple award schedules; direct buy/direct delivery contracts; or local purchase authorization, economic modeling techniques will be applied. |