Where Competition Is Limited to FSS Contractors, The RFQ Cannot Be Awarded For Items Not Included Within The FSS Schedule

When an RFQ (Request for Quotation) is issued and competition is limited to only those contractors holding FSS (Federal Supply Schedule) Contracts, an award cannot be made for items not listed on the FSS Schedule.

The FSS program provides federal agencies a simplified process for obtaining commonly used commercial supplies and services.  By statute, FSS procedures satisfy the statutory requirement for full and open competition.  Generally, non-FSS products and services may not be purchased using FSS procedures.  Instead, the purchase of those items  requires compliance with all the normal procurement laws and regulations, including those that require full and open competition.  Thus, when an agency announces its intention to order from an existing FSS contractor, all items quoted and ordered are required to be within the scope of the vendor’s FSS contract.  The only exception to this requirement is for items that do not exceed the micro-purchase threshold of $3,000, because such items, by separate statutory authority, may be purchased outside the normal competition requirements.

The protester argued that there were three areas where the awarded order exceeded the scope of the FSS contract, but the GAO focused only on one item — i.e. “freight” — because that was dispositive of the protest.  The awardee showed a price of $0 for freight, but this price was illusory because the awardee had simply included freight in the total overall price of the order.  And because the awardee had originally set forth freight as a separate item in an earlier quotation, and at that time freight was priced at $6,832, it was clear that the $3,000 micro-purchase exception did not apply.

Because freight was not included in the awardee’s FSS Schedule, the FSS procedures could not be used to award a contract to that offeror.  The GAO sustained the protest, and recommended that the award be canceled and that a new award be made to the vendor next in line for award under the terms of the RFQ.  Furthermore, the GAO recommended that the protester be reimbursed for the costs of filing and pursuing its protest, including reasonable attorneys fees.

Rapiscan Systems, Inc., B-401733.2; B-401773.3, March 15, 2010.