Federal Register / Vol. 83, No. 16 / Wednesday, January 24, 2018 / Rules and Regulations 3275 

collection that will be modified by these 

rules, OMB review is not necessary. 

Thus, these rules may become effective 

immediately. 

Federal Communications Commission. 

Marlene H. Dortch, 

Secretary. 

[FR Doc. 2018–01213 Filed 1–23–18; 8:45 am] 

BILLING CODE 6712–01–P 

GENERAL SERVICES 

ADMINISTRATION 

48 CFR Parts 515, 538, and 552 

[GSAR Case 2016–G506; Docket No. 2016– 

0016; Sequence No. 1] 

RIN 3090–AJ75 

General Services Administration 

Acquisition Regulation (GSAR); 

Federal Supply Schedule, Order-Level 

Materials 

AGENCY: Office of Acquisition Policy, 

General Services Administration. 

ACTION: Final rule. 

SUMMARY: The General Services 

Administration (GSA) is amending the 

General Services Administration 

Acquisition Regulation (GSAR) to 

clarify the authority to acquire orderlevel materials (OLMs) when placing an 

individual task or delivery order against 

a Federal Supply Schedule (FSS) 

contract or FSS blanket purchase 

agreement (BPA). OLMs are supplies 

and/or services acquired in direct 

support of an individual task or delivery 

order placed against an FSS contract or 

BPA, when the supplies and/or services 

are not known at the time of contract or 

BPA award. 

DATES: Effective: January 24, 2018. 

FOR FURTHER INFORMATION CONTACT: Ms. 

Leah Price, GSA Acquisition Policy 

Division, Senior Policy Advisor, at 

leah.price@gsa.gov. For information 

pertaining to status or publication 

schedules, contact the Regulatory 

Secretariat at 202–501–4755. Please cite 

GSAR Case 2016–G506. 

SUPPLEMENTARY INFORMATION: 

I. Background 

GSA’s Federal Supply Schedule (FSS) 

program, commonly known as the GSA 

Schedules program or Multiple Award 

Schedule (MAS) program is the 

Government’s most used commercialitem purchasing channel, accounting for 

approximately $33 billion of Federal 

contract awards in fiscal year 2016 (not 

including the VA Schedules). 

GSA Schedules provide a convenient 

and effective option for both ordering 

activities and Schedule contractors. 

Ordering activities enjoy simplified 

ordering procedures and reduced prices, 

while Schedule contractors connect 

with federal business quickly and 

easily. Additional features of the 

Schedules program, including Blanket 

Purchase Agreements (BPAs) and 

Contractor Team Arrangements (CTAs), 

greatly enhance the flexibility of the 

program. 

These features offer: 

• Additional price discounts for 

ordering activities; 

• Expanded opportunities for 

contractors; 

• Elimination of redundant effort, 

with a single contracting vehicle 

fulfilling complex or ongoing needs; 

• Reductions in administrative time 

and paperwork; 

• Expanded business opportunities 

for socioeconomic groups; and 

• Help for ordering activities wishing 

to reach socioeconomic goals. 

The Schedules Program supports 

Federal Agencies’ missions by providing 

access from simple commodities such as 

pens and pencils to complex services 

such as IT Modernization. 

Authority for This Rulemaking 

41 U.S.C. 152(3)(B) deemed FSS 

procedures to meet the Competition in 

Contracting Act (CICA) requirement of 

full and open competition as long as 

participation has been open to all 

responsible sources; and orders and 

contracts under those procedures result 

in the lowest overall cost alternative to 

meet the needs of the Federal 

Government. 

GSA has long recognized the lowest 

overall cost alternative does not just 

include the actual price paid to the 

contractor, but also the administrative 

cost of conducting the acquisition. For 

example, GSA charges a low 

transactional fee for orders to be placed 

against a Schedule and the efficiency of 

the simplified acquisition process 

translates to time and cost savings. The 

administrative cost to acquire similar 

goods or services combined with 

possible fees on a new contract 

duplicates efforts resulting in a less 

efficient way to acquire those goods or 

services. 

This is also consistent with the 

Federal Acquisition System and its 

principle to minimize administrative 

operating costs (FAR 1.102(b)(2)). The 

Federal Acquisition System is designed 

to deliver the best value product or 

service to the customer in terms of cost, 

quality, and timeliness. By lowering the 

cost to conduct the acquisition, and 

simplifying the acquisition process, 

administrative savings can be achieved. 

II. Discussion of the Proposed Rule 

The proposed rule published in the 

Federal Register at 81 FR 62445 on 

September 9, 2016 and addressed the 

importance of providing the same 

flexibility for the FSS program that is 

currently authorized for other indefinite 

delivery, indefinite quantity (IDIQ) 

vehicles, which will help reduce 

contract duplication and the associated 

administrative costs and inefficiencies. 

GSA also discussed how the proposed 

changes would also reduce transaction 

costs by eliminating the need for 

additional contracts for ancillary work. 

The rule aimed at achieving parity 

between the FSS programs and other 

IDIQs, in terms of acquiring OLMs. 

The rule presented two price 

protections found in all IDIQ contracts 

which authorized OLMs plus three 

additional price protections not 

generally found in such contracts. 

All IDIQ contracts authorizing OLMs 

include two key government 

protections: 

1. The contracting officer must 

determine the prices are fair and 

reasonable. 

2. FAR Clause 52.212–4 Alternate 1 

paragraph (i)(1)(ii) which addresses: 

a. Paying for commercial items at prices 

not to exceed established catalog or 

market price 

b. Conditions for reimbursing 

contractors for actual cost 

c. Procedures for handling indirect cost 

reimbursement 

The three unique protections GSA 

included in the proposed rule were: 

1. The requirement to submit three 

quotes; 

2. Limitation of percentage of order 

which can be OLM; and 

3. Establishment of an OLM SIN, 

which requires reporting of OLM. 

Commenters noted that due to these 

three unique GSA protections, the 

proposed rule did not fully meet the 

parity objective. In the final rule, GSA 

maintained these three unique 

protections while simplifying and 

narrowing the three quote requirement. 

This is more fully discussed in the 

Analysis of Public Comments section. 

GSA agrees that this leaves the final rule 

close to, but not at full parity. However, 

the requirements are currently the best 

available means to ensure price 

reasonableness and provide confidence 

to customers when using the new OLM 

authority on Federal Supply Schedules. 

This is more fully discussed in the 

Analysis of Public Comments section. 

These price protections, when 

combined with the current design of the 

FSS program, are sufficient to ensure 

the Federal Supply Schedules continue 


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1See GSAR Case 2016–G506; Docket 2016–0016; 

Sequence 1 [81 FR 62445 (Sep. 9, 2016)]. 

2See Section II.A, Summary of Changes Made at 

the Final Rule Stage. 

3See e.g., CGP and ITAPS Letter and DM Letter. 

4See CGP and ITAPS Letter. 

5See DM Letter. 

6See e.g., CGP and ITAPS Letter and Jalad Letter. 

7See CGP and ITAPS Letter. 

8See Jalad Letter. 

to offer the lowest overall cost 

alternative. Other key features of the 

FSS program include ordering 

procedures designed to promote 

competition, and, at certain dollar levels 

to increase competition, an existing 

deviation to FAR 51 (which authorizes 

GSA contractors, performing on a timeand-material or labor-hour basis, to 

purchase ancillary supplies and services 

from Schedule contractors or process 

requisitions through the GSA Global 

Supply Program) the Acquisition 

Gateway, (a logical home for a future 

GSA effort to publicize OLM best 

practices), and ongoing category 

management work to improve the 

acquisition of services and IT, all work 

together, with this final rule, to ensure 

Federal Supply Schedules remain open 

to all and are the lowest overall cost 

alternative. 

A. Summary of Significant Changes 

Four respondents submitted 

comments on the proposed rule. The 

General Services Administration has 

reviewed the comments in the 

development of the final rule. A 

discussion of the comments and the 

changes made to the rule as a result of 

those comments are provided as 

follows: 

This final rule makes the following 

significant changes from the proposed 

rule: 

Eligible Schedules: GSAR 538.7201 

has been revised to reference a website 

that lists the Federal Supply Schedules 

authorized to include OLMs. 

Indirect Costs: The instructions to 

contracting officers in GSAR 538.7204 

subparagraph (a)(3) have been revised to 

allow for indirect costs, consistent with 

the procedures in FAR clause 52.212–4 

Alternate I(i)(1)(ii)(D)(2). 

Clause Text: GSAR clause 552.238– 

82, Special Ordering Procedures for the 

Acquisition of Order-Level Materials, 

has been revised as follows: 

• Vendors must obtain three quotes 

for each order-level material above the 

simplified acquisition threshold, for the 

ordering activity contracting officer to 

determine OLM prices fair and 

reasonable. Contractors with an 

approved purchasing system per FAR 

44.3 are exempt from the three quote 

requirement. 

• Provides procedures for the 

ordering activity contracting officer to 

make a determination that all indirect 

costs associated with OLMs are fair and 

reasonable. 

• Clarifies travel costs are governed 

by FAR 31.205–46 and exempts travel 

OLMs from certain requirements, 

including the 1⁄3 of the order threshold, 

price reasonableness determination 

requirement, and GSAR clause 552.238– 

74 Industrial Funding Fee and Sales 

Reporting. 

• Clarifies the ordering activity 

contracting officer is required to follow 

the procedures found at FAR 

8.404(h)(3)(iv) prior to an increase in the 

ceiling price of OLMs. 

B. Analysis of Public Comments 

GSA received four comment letters in 

response to the proposed rule.1 All 

comments filed were considered, many 

of which led to the changes described in 

the previous section.2 Public comments 

are grouped into categories in order to 

provide clarification and to better 

respond to the issues raised. 

1. Three Quote Requirement 

Comment: Two commenters 

recommended GSA eliminate the 

proposed requirement for contractors to 

submit three quotes to the ordering 

activity contracting officer to determine 

price reasonableness.3 One commenter 

stated the requirement would be 

burdensome and unnecessary; that 

commenter also asked if the lowest 

priced quote would be the basis for the 

price evaluation.4 The other commenter 

asked if the same three quotes could be 

used for multiple orders.5

Response: GSA partially agreed with 

two of the commenter’s recommended 

alternatives and revised and narrowed 

the three quote requirement for each 

OLM. First, the special ordering 

procedures at GSAR 552.238–82(d)(7)(i) 

has been revised to instruct contractors 

to obtain three quotes for each OLM 

above the simplified acquisition 

threshold. The three quotes are not 

submitted with the offer, but should be 

maintained in the contractor’s file and 

are still subject to audit. The threshold 

has been increased from the micropurchase threshold to the simplified 

acquisition threshold to be consistent 

with ordering procedures at FAR 

Subpart 8.4. Second, paragraph (d)(7)(i) 

has been revised to exempt contractors 

that have an approved purchasing 

system determined by a Contractor 

Purchasing System Review (CPSR) per 

FAR 44.3 from the three quote 

requirement. The contractor shall follow 

its purchasing system requirement 

instead of the three quote requirement 

identified in paragraphs (d)(7)(i)(A)–(C). 

The ordering activity contracting officer 

will make the determination that prices 

for all OLMs are fair and reasonable and 

may make this determination based on 

relevant pricing available, including the 

direct competition of offers received in 

response to their solicitation. Lastly, the 

addition of the OLM authority to the 

authorized Schedules provides an 

added flexibility through which 

industry can provide complete 

procurement solutions through the FSS 

program, reducing the need for 

contractors to prepare solutions for 

separate contracts. The reduction results 

in managing fewer open market 

contracts and decreasing proposal costs. 

2. OLM Threshold of 33 Percent 

Comment: Two commenters 

recommended GSA remove the 

requirement that OLMs be limited to 33 

percent of the order per the special 

ordering procedures at GSAR 552.238– 

82(d)(4).6 One commenter stated the 33 

percent threshold was arbitrary and may 

be difficult to maintain over time, 

noting that other direct cost (ODC) 

Special Item Numbers (SINs) currently 

used in the Schedules program have no 

such limits.7 The second commenter 

also stated the threshold was arbitrary 

and will invoke unnecessary 

consequences, citing examples where 

travel costs may exceed the OLM 

threshold.8

Response: GSA agrees that travel 

should not be included in the limitation 

and made this change in the final rule. 

However, GSA does not agree that the 

33 percent cap on OLMs is arbitrary, 

although to make it easier to understand 

and remember, it is revising the 

threshold to 33.33 percent or 1⁄3 of the 

order. 41 U.S.C. 152(3)(B) deemed FSS 

procedures to meet the Competition in 

Contracting Act (CICA) requirement of 

full and open competition as long as 

participation has been open to all 

responsible sources; and orders and 

contracts under those procedures result 

in the lowest overall cost alternative. 

This statutory language is not found in 

other IDIQ contracts. 

GSA determined that to meet the 

statutory requirement, additional levels 

of protection were required, one of 

which was a cap on order level 

materials. 

Having determined there must be a 

cap, GSA’s next consideration is around 

the appropriate level. In large scale 

Engineering Services and IT buys, GSA 

is aware of customer agencies adding 

additional controls once materials top 

10 percent. On the other hand, in 

advertising services, media time, a 


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9See e.g., CGP and ITAPS Letter and Jalad Letter. 

10See CGP and ITAPS Letter. 

11See Jalad Letter. 

12See CGP Letter. 

13Public Law 104–13, 109 Stat. 163. 

14See CGP and ITAPS Letter. 

15See GSAR Case 2016–G506; Docket 2016–0016; 

Sequence 1 [81 FR 62445 (Sep. 9, 2016)]. 

16See CGP and ITAPS Letter. 

single OLM, can easily exceed 25 

percent of the cost of an order. To 

provide a reverse example, as a result of 

industry feedback associated with the 

Maximum Order Threshold in 

installation services for systems 

furniture, GSA learned that installation 

services often top 25 percent of the cost 

of the furniture. 

Thus, GSA concluded: (1) There has 

to be a cap, (2) the cap should be above 

25 percent, and (3) the cap has to be 

below 50 percent, to ensure the 

principle purpose of the order was to 

acquire a service or product off of the 

Federal Supply Schedule. While any 

number between 26 percent and 49 

percent would fit, GSA also concluded 

that to be consistent the Federal Supply 

Schedules program, the cap has to be 

clear, has to be easy to explain to 

customer agencies, has to be easy for 

contractors to understand and follow, 

has to be easy for GSA to conduct 

needed training, and has to be easy for 

everyone to remember. There is only 

one number between 1⁄4 and 1⁄2 which 

meets all these criteria: 1⁄3. Thus, GSA 

set the OLM cap at 1⁄3, or 33.33 percent. 

3. Travel Costs 

Comment: Two parties submitted 

comments relating to the application of 

certain OLM requirements and 

procedures to travel costs.9 One 

commenter asked if the OLM ordering 

procedures would contain the same 

flexibility as Schedule clause C–FSS– 

370 Contractor Tasks/Special 

Requirements.10 The other commenter 

stated applying the proposed OLM 

procedures to travel costs would be 

burdensome on ordering agencies.11

Response: The special ordering 

procedures at GSAR clause 552.238–82 

have been revised to allow the same 

flexibility as Schedules clause C–FSS– 

370 Contractor Tasks/Special 

Requirements. For the authorized 

Schedules allowing for OLMs, the GSAR 

clause 552.238–82 Special Ordering 

Procedures for the Acquisition of OrderLevel Materials will replace the travel 

portion (b) of the Schedules clause 

C–FSS–370 Contractor Tasks/Special 

Requirements. Specifically, the final 

rule clarifies travel OLMs will continue 

to be handled in accordance with FAR 

Part 31.205–46 and exempts travel 

OLMs from the requirements in clause 

552.238–74 Industrial Funding Fee and 

Sales Reporting, the 33.33 percent 

threshold, and the price reasonableness 

determination in subparagraph (d)(7) of 

GSAR clause 552.238–82. However, if 

an order includes both travel and nontravel OLMs, the non-travel OLMs in the 

order must comply with all OLM 

requirements in GSAR clause 552.238– 

82. 

4. Applicability of GSAR Clause 

552.238–74 Industrial Funding Fee and 

Sales Reporting 

Comment: One party provided 

comments relating to the applicability of 

GSAR clause 552.238–74 Industrial 

Funding Fee and Sales Reporting on 

OLMs.12

The basic version of the clause 

requires contractors to report Schedule 

sales within 30 days after the end of 

each quarter. Alternate I of the clause 

requires contractors to report 

transactional data within 30 days after 

the end of each month. Both versions of 

the clause require contractors to remit 

IFF payments within 30 days after the 

end of each quarter. The IFF, currently 

set at 0.75 percent, is charged to 

ordering activities for the use of the 

Schedules program but is remitted by 

the contractor; the amount of IFF due 

each quarter is based upon the amount 

of reported sales. The proposed rule 

treated all OLMs as reportable sales in 

regards to GSAR clause 552.238–74. 

The commenter stated reporting 

OLMs is an information collection 

burden that should be borne by the 

Government. The commenter also 

submitted three questions: 

• Is the IFF applicable to OLMs 

reported under the OLM SIN? 

• How will GSA use lump sum sales 

reported through the 72A Reporting 

System to evaluate appropriate OLM 

usage? 

• Do transactional data reporting 

requirements apply for OLMs under 

contracts that include Alternate I of 

clause 552.238.74? 

Response: Task or delivery orders line 

items that include OLMs are subject to 

the reporting and IFF remittance 

requirements of GSAR clause 552.238– 

74, with the exception of travel costs. 

The information collection burden for 

both versions of that clause is already 

addressed by existing information 

collections that are approved by the 

Office of Management and Budget’s 

Office of Information and Regulatory 

Affairs, in accordance with the 

Paperwork Reduction Act; 13 those 

estimates are updated every three years 

to account for changes in the program 

over time. 

As to the questions regarding OLM 

and sales reporting, GSA offers the 

following responses: 

• The IFF is applied to OLMs 

reported under the OLM SINs, except 

for travel. 

• Including OLMs (other than travel) 

in these information collections 

provides GSA a control mechanism to 

ensure that the Federal Supply 

Schedules continue to ensure the lowest 

overall cost alternative. 

• OLMs (other than travel) are subject 

to the transactional data reporting 

requirements of GSAR clause 552.238– 

74 Alternate I. 

5. Parity With Other Government 

Contract Vehicles 

Comment: One commenter stated the 

proposed rule fails to meet its objective 

of establishing parity with other 

Government contract vehicles.14

The proposed rule noted, ‘‘Currently, 

[IDIQ] contracts provide the flexibility 

to easily acquire order-level materials; 

however the FSS program does not. This 

proposed rule aims to create parity 

between the FSS program and other 

commercial IDIQs . . .’’ 15 However, the 

commenter stated the proposed rule 

failed to provide parity with other 

programs because other programs do not 

have requirements to send three quotes 

or report OLMs, but do allow 

contractors to recover indirect costs. 

Response: As noted in the proposed 

rule and acknowledged by the 

commenter, other commercial-item IDIQ 

contracts allow for OLMs. Accordingly, 

this rule provides parity in that regard. 

However, this final rule requires OLMs 

(other than travel costs) to be reported 

in accordance with GSAR clause 

552.238–74 to provide GSA insight into 

their use and to facilitate IFF collection. 

6. Requirements of FAR Clause 52.212– 

4 Alternate I 

Comment: One commenter stated the 

FAR does not require the procedures 

proposed by this rule and the existing 

FAR clause 52.212–4 Alternate I 

provides a mechanism to obtain OLMs 

that ensures the integrity of the 

Schedules program.16

Response: Several changes have been 

made to the GSAR text as a result of 

comments received in response to the 

proposed rule. The intent of these 

changes, and the rule in general, is to 

align OLM ordering procedures with 

existing authorities, including the FAR, 

to the maximum extent possible. 

However, GSA received feedback from 

its customer agencies that special OLM 

ordering procedures would be needed in 


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17 Ibid. 

18https://www.acquisition.gov/?q=gsam_

looseleaf. 

19See CGP and ITAPS Letter. 

20See Jalad Letter. 

21See CGP and ITAPS Letter. 22See Jones Letter. 

order to ensure appropriate use of the 

authorized Schedules that allow for 

OLMs. In addition to special ordering 

procedures, customer agency feedback 

contributed to the 33.33 percent 

threshold for OLMs. GSA received 

feedback from customer agencies that a 

threshold over 50 percent would be too 

high since over half of the order would 

be comprised of order-level materials 

and not be consistent with the intent of 

the OLM authority. OLMs are to be 

placed in direct support of a task or 

delivery order (and not the primary 

purpose), therefore the 1⁄3 threshold 

struck a balance by encouraging the use 

of OLMs while enforcing a control 

mechanism at the same time. 

7. Indirect Costs 

Comment: One commenter stated the 

GSAR rule should not preclude agencies 

from allowing indirect costs. Proposed 

GSAR 538.7103(a)(3) stated, ‘‘Insert 

‘none’ in FAR clause 52.212– 

4(i)(1)(ii)(D)(2).’’ The commenter 

indicated there are costs associated with 

contractors procuring OLMs separate 

from the fully burdened labor rate 

awarded on the Schedule contract, and 

the proposed rule does not provide a 

mechanism for recovering those costs. 

Response: The GSAR text at 552.238– 

82(d)(7) has been revised to be 

consistent with the current FAR fill-in 

found at 52.212–4 Alternate 1 

(i)(1)(ii)(D)(2) to allow the flexibility for 

vendors to recover indirect costs. 

8. Existing Ancillary Products/Services 

SINs on Schedules 

Comment: One commenter inquired 

about the impact the proposed rule 

would have on SINs under existing 

Schedules for ancillary products/ 

services and other direct costs (ODCs).17

Response: GSA is implementing nonregulatory guidance for its FSS 

acquisition workforce in conjunction 

with this regulatory final rule, which 

will be viewable to the public in the 

General Services Administration 

Acquisition Manual (GSAM) posted on 

Acquisition.gov.18 The new nonregulatory GSAM guidance states items 

awarded under ancillary supplies or 

ODC SINs are not considered order-level 

materials. 

9. Special Ordering Procedures—Order 

Preference 

Comment: One commenter asked 

whether the OLM clause’s requirement 

to follow the procedures at FAR 

8.404(h) is intended to require ordering 

agencies to specify to Schedule 

contractors the type of request for 

quotations they must use in obtaining 

quotations for OLMs.19

Response: The intent of the special 

ordering procedures at 552.238–82(d)(6) 

clause is to provide guidance on the 

type of order preference for services and 

direction to the ordering activity on 

issuing time-and-materials or labor hour 

orders including OLMs. 

10. Special Ordering Procedures—OLM 

SIN 

Comment: One commenter inquired 

about the process for obtaining an OLM 

Special Item Number (SIN). 

Response: The OLM SIN will be 

added to all existing contracts for 

Schedules authorized to allow for OLMs 

by a Government-initiated bilateral 

modification. New contracts under any 

Schedule authorized to allow for OLMs 

will include the OLM SIN once the 

Schedule solicitation is updated. 

However, the OLM SIN cannot be the 

only awarded SIN on a FSS contract or 

a FSS BPA. 

11. Special Ordering Procedures— 

Ceiling Price 

Comment: One commenter 

recommended GSA delete the proposed 

procedures at GSAR 552.238–82(d)(9), 

which required ordering activities to 

follow the procedures at FAR 8.405–6(d) 

in the event the ordering activity 

increases the ceiling price of an OLM 

above the micro-purchase threshold. 

The commenter indicated these 

procedures are a burdensome 

requirement that conflicts with the 

contracting officer’s independent 

judgment to determine what constitutes 

a cardinal change.20

Response: The procedures in GSAR 

clause 552.238–82 have been revised to 

be consistent with the requirements at 

FAR 8.404(h)(3)(iv). The clause 

reiterates the procedures required when 

increasing the ceiling price for OLMs. 

12. Open Market Items 

Comment: One commenter requested 

GSA define open market items in the 

GSAR rule.21

Response: Open market items are 

procured in accordance with FAR 

8.402(f) and are purchased outside the 

authority of the Schedules program 

using open market procedures (e.g., FAR 

Parts 13, 14, and 15). The difference in 

authority is addressed in the OLM 

definition and the special ordering 

procedures of the final rule. 

Accordingly, GSA chose not to define 

open market items in the new GSAR 

provisions and GSAR clause. 

13. Schedule Pricelists for OLMs 

Comment: One commenter asked 

whether contractors will be required to 

build a fixed burden into their Schedule 

pricelists for OLMS.22

Response: The nature of the specific 

OLMs will not be known at the time of 

the FSS contract or FSS BPA award. 

Consequently, any potential indirect 

costs could not be specified in advance 

and included on the Schedule pricelist. 

However, the final rule allows indirect 

costs in accordance with the procedures 

at GSAR 538.7204, which is in 

alignment with FAR clause 52.212–4 

Alternate I. 

III. Expected Cost Savings of This Final 

Rule 

Data was gathered from GSA’s Federal 

Acquisition Service (FAS) to estimate 

total annualized cost savings that will 

be achieved from the number of 

Schedule contracts that will authorize 

OLM. A 7 percent discount rate was 

used for all calculations. 

GSA reviewed active FY 2018 

contracts for contractors that hold 

Schedule and non-Schedule contracts to 

understand the duplicate contract 

landscape. The total baseline population 

is 16,450 contracts that include 

Schedule and non-Schedule contracts. 

Of the total contract population, 14,674 

were Schedule contracts and 1,776 were 

non-Schedule contracts. Small 

businesses were about 80 percent of this 

population with large businesses 

representing the remaining 20 percent of 

the total population. The data illustrated 

that 11 percent of the total contract 

population hold Schedule and nonSchedule contracts. Of the 11 percent, 

about 59 percent of those contracts are 

duplicates. From the 59 percent of 

duplicate contracts, it is estimated there 

will be a 50 percent contract reduction, 

thus resulting in contract proposal and 

contract administrations savings for 

industry. It is understood, that one 

contractor may hold more than one 

duplicate contract among their Schedule 

and non-Schedule contracts. The 

estimated 50 percent reduction in 

duplicate contracts represents 421 small 

business contracts and 105 large 

business contracts. 

Government Cost Savings 

Allowing OLMs on authorized 

Schedules will help reduce contract 

duplication and associated 

administrative costs. By reducing the 


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amount of duplicate and ancillary 

contracts, cost savings will be achieved 

by a reduction in source selection 

procedures and contract administration. 

It was estimated that two source 

selection participants require an average 

of 24 hours to execute the source 

selection process per contract. Contract 

administration savings was calculated 

by estimating four hours per contract 

per year. By combining the savings 

achieved from the reduction of source 

selection procedures and contract 

administration, the estimated 

annualized cost savings for the 

Government is $109,434. 

Public Cost Savings 

The addition of the OLMs on 

authorized Schedules will result in 

proposal preparation and contract 

administration savings for both small 

and large businesses. It was estimated 

that a senior and a journeyman level 

representative require 24 hours to 

prepare a proposal to acquire a new 

contract. Contract administration 

savings was calculated by estimating 

four hours per contract per year. By 

combining the savings achieved from 

the reduction of proposal preparation 

for new contracts and contract 

administration, the estimated 

annualized cost savings for the public is 

$164,559. 

The OLM authority adds GSAR clause 

552.238–82, Special Ordering 

Procedures, which includes a 

requirement for the contractor 

proposing OLMs as part of a solution to 

obtain three quotes for each order above 

the simplified acquisition threshold to 

support the price reasonableness of the 

OLMs consistent with existing standard 

procedures at FAR 8.405–1(d). One of 

these quotes may be furnished by the 

contractor, and if the contractor has an 

approved purchasing system per FAR 

44.3, they are exempt from the three 

quote requirement. It was estimated that 

10 percent of the total Schedule 

population (1,467 contracts) would 

require one hour to document their 

records that three quotes were obtained 

to support price reasonableness. The 

estimated annualized cost for the public 

is $35,076. The total net savings for the 

public is $121,012. 

The total annualized cost savings is 

estimated at $230,446. 

IV. Executive Order 12866 and 13563 

Executive Orders (E.O.s) 12866 and 

13563 direct agencies to assess all costs 

and benefits of available regulatory 

alternatives and, if regulation is 

necessary, to select regulatory 

approaches that maximize net benefits 

(including potential economic, 

environmental, public health and safety 

effects, distributive impacts, and 

equity). E.O. 13563 emphasizes the 

importance of quantifying both costs 

and benefits, of reducing costs, of 

harmonizing rules, and of promoting 

flexibility. This is not a significant 

regulatory action and, therefore, was not 

subject to review under section 6(b) of 

Executive Order 12866, Regulatory 

Planning and Review, dated September 

30, 1993. This rule is not a major rule 

under 5 U.S.C. 804. 

V. Executive Order 13771 

This final rule is considered an E.O. 

13771 deregulatory action. Details on 

the estimated cost savings of this 

proposed rule can be found in the rule’s 

economic analysis. Expected annualized 

cost savings are $230,446 (7 percent 

discount rate, in perpetuity). 

VI. Executive Order 13777 

This final rule was identified by 

GSA’s Regulatory Reform Task Force as 

a rule that improves efficiency by 

eliminating procedures with costs that 

exceed the benefits as described in 

section IV. 

VII. Regulatory Flexibility Act 

This final rule will not have a 

significant economic impact on a 

substantial number of small entities 

within the meaning of the Regulatory 

Flexibility Act, 5 U.S.C. 601, et seq., 

because the rule merely clarifies the 

authority to acquire OLMs when placing 

a task or delivery order against an 

authorized FSS contract or FSS BPA. 

The rule imposes no new reporting, 

recordkeeping, or other information 

collection requirements. 

Although this rule does not have a 

significant impact on a substantial 

number of small entities, GSA 

nonetheless opted to prepare an Initial 

Regulatory Flexibility Analysis (IRFA) 

in conjunction with the proposed rule. 

As a result, GSA has also prepared a 

Final Regulatory Flexibility Analysis 

(FRFA), consistent with 5 U.S.C. 603, 

which is summarized as follows: 

GSA does not expect this rule to have 

a significant economic impact on a 

substantial number of small entities 

within the meaning of the Regulatory 

Flexibility Act, 5 U.S.C. 601, et seq. 

GSA has prepared a Final Regulatory 

Flexibility Analysis (FRFA) consistent 

with the Regulatory Flexibility Act, 5 

U.S.C. 601, et seq. The FRFA is 

summarized as follows: 

The rule clarifies the authority to 

acquire order-level materials when 

placing a task order or delivery order 

against an authorized FSS contract or 

FSS BPA. Task or delivery order line 

times that include OLMs are subject to 

the reporting and IFF remittance 

requirements of GSAR clause 552.238– 

74, with the exception of travel costs. 

The reporting and IFF remittance 

requirements of GSAR clause 552.238– 

74 is an existing requirement to those 

contractors that currently hold a GSA 

Schedule contract. There are over 

15,000 (approximately 80 percent) small 

businesses that have GSA Schedule 

contracts, which already adhere to the 

required reporting and IFF remittance 

requirements of GSAR clause 552.238– 

74. The OLM authority will expand 

business opportunities for those small 

businesses that do not hold GSA 

Schedule contracts. Entities that do not 

hold GSA Schedule contracts, and are 

awarded task or delivery orders that 

include OLMs, are required to adhere to 

the reporting requirement at GSAR 

clause 552.238–74. There were no 

comments filed by the Chief Counsel for 

Advocacy of the Small Business 

Administration in response to the rule. 

Interested parties may obtain a copy of 

the FRFA from the Regulatory 

Secretariat. The Regulatory Secretariat 

has submitted a copy of the FRFA to the 

Chief Counsel for Advocacy of the Small 

Business Administration. 

VIII. Paperwork Reduction Act 

The final rule does not contain any 

new information collection 

requirements that require the approval 

of the Office of Management and Budget 

(OMB) under the Paperwork Reduction 

Act (44 U.S.C. chapter 35). Order-level 

materials, excluding travel, are subject 

to the reporting requirements of GSAR 

clause 552.238–74 Industrial Funding 

Fee and Sales Reporting, which is 

already approved through the 

information collection tracked under 

OMB Control Number 3090–0121. 

List of Subjects in 48 CFR Parts 515, 

538, and 552 

Government procurement. 

Dated: January 19, 2018. 

Jeffrey A. Koses, 

Senior Procurement Executive, General 

Services Administration. 

Therefore, GSA amends 48 CFR parts 

515, 538, and 552 as set forth below: 

■ 1. The authority citation for 48 CFR 

parts 515, 538, and 552 continues to 

read as follows: 

Authority: 40 U.S.C. 121(c). 

PART 515—CONTRACTING BY 

NEGOTIATION 

■ 2. Amend section 515.408 by adding 

a sentence to the end of the introductory 

text of paragraph (c) to read as follows: 


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3280 Federal Register / Vol. 83, No. 16 / Wednesday, January 24, 2018 / Rules and Regulations 

515.408 Solicitation provisions and 

contract clauses 

* * * * * 

(c) * * * Offerors are not required to 

complete the commercial sales practices 

disclosure for order-level materials (See 

subpart 538.72). 

* * * * * 

PART 538—FEDERAL SUPPLY 

SCHEDULE CONTRACTING 

■ 3. Add subpart 538.72 to read as 

follows: 

Subpart 538.72—Order-Level Materials 

Sec. 

538.7200 Definitions. 

538.7201 Applicability. 

538.7202 [Reserved] 

538.7204 Contract clauses. 

Subpart 538.72—Order-Level Materials 

538.7200 Definitions. 

As used in this subpart: 

Order-level materials means supplies 

and/or services acquired in direct 

support of an individual task or delivery 

order placed against an authorized (see 

GSAR 538.7201(b) Federal Supply 

Schedule (FSS) contract or FSS Blanket 

Purchase Agreement (BPA)), when the 

supplies and/or services are not known 

at the time of Schedule contract or FSS 

BPA award. The prices of order-level 

materials are not established in the FSS 

contract or FSS BPA. However, orderlevel materials are purchased under the 

authority of the FSS program, pursuant 

to 41 U.S.C. 152(3), and are not open 

market items, which are discussed in 

FAR 8.402(f). 

538.7201 Applicability. 

(a) The GSA Senior Procurement 

Executive authorizes the use of orderlevel materials on Federal Supply 

Schedules. 

(b) The list of Federal Supply 

Schedules authorized to allow for orderlevel materials is available at https://

www.gsa.gov/olm. 

538.7202 [Reserved] 

538.7204 Contract clauses. 

(a) Use FAR clause 52.212–4 Alternate 

I in all Federal Supply Schedules 

authorized for the acquisition of orderlevel materials (see 538.7201(b)). Use 

the following language for the clause 

fill-in: 

(1) Insert ‘‘Each order must list 

separately subcontracts for services 

excluded from the FSS Hourly Rates’’ in 

paragraph (e)(1)(iii)(D). 

(2) Insert ‘‘Each order must list 

separately the elements of other direct 

costs for that order’’ in paragraph 

(i)(1)(ii)(D)(1). 

(3) Insert ‘‘Each order must list 

separately the fixed amount for the 

indirect costs and payment schedule; if 

no indirect costs are approved, insert 

‘None’ ’’ in (i)(1)(ii)(D)(2). 

(b) Use 552.238–82, Special Ordering 

Procedures for the Acquisition of OrderLevel Materials, in all Federal Supply 

Schedules authorized for the acquisition 

of order-level materials (see 538.7201). 

PART 552—SOLICITATION 

PROVISIONS AND CONTRACT 

CLAUSES 

■ 4. Add section 552.238–82 to read as 

follows: 

552.238–82 Special Ordering Procedures 

for the Acquisition of Order-Level Materials 

As prescribed in 538.7204(b), insert 

the following clause: 

Special Ordering Procedures for the 

Acquisition of Order-Level Materials 

(JAN 2018) 

(a) Definitions. 

Order-level materials means supplies and/ 

or services acquired in direct support of an 

individual task or delivery order placed 

against a Federal Supply Schedule (FSS) 

contract or FSS blanket purchase agreement 

(BPA), when the supplies and/or services are 

not known at the time of Schedule contract 

or FSS BPA award. The prices of order-level 

materials are not established in the FSS 

contract or FSS BPA. Order-level materials 

acquired following the procedures in 

paragraph (d) are done so under the authority 

of the FSS program, pursuant to 41 U.S.C. 

152(3), and are not open market items, which 

are discussed in FAR 8.402(f). 

(b) FAR 8.403(b) provides that GSA may 

establish special ordering procedures for a 

particular FSS. 

(c) The procedures in FAR subpart 8.4 

apply to this contract, with the exceptions 

listed in this clause. If a requirement in this 

clause is inconsistent with FAR subpart 8.4, 

this clause takes precedence pursuant to FAR 

8.403(b). 

(d) Procedures for including order-level 

materials when placing an individual task or 

delivery order against an FSS contract or FSS 

BPA. 

(1) The procedures discussed in FAR 

8.402(f) do not apply when placing task and 

delivery orders that include order-level 

materials. 

(2) Order-level materials are included in 

the definition of the term ‘‘materials’’ in 

[FAR] clause 52.212–4 Alternate I, and 

therefore all provisions of FAR clause 

52.212–4 Alternate I that apply to 

‘‘materials’’ also apply to order-level 

materials. 

(3) Order-level materials shall only be 

acquired in direct support of an individual 

task or delivery order and not as the primary 

basis or purpose of the order. 

(4) The cumulative value of order-level 

materials in an individual task or delivery 

order awarded under a FSS contract or FSS 

BPA shall not exceed 33.33 percent of the 

total value of the individual task or delivery 

order. 

(5) All order-level materials shall be placed 

under the Order-Level Materials SIN. 

(6) Prior to the placement of an order that 

includes order-level materials, the Ordering 

Activity shall follow procedures in FAR 

8.404(h). 

(7) To support the price reasonableness of 

order-level materials, 

(i) The contractor proposing order-level 

materials as part of a solution shall obtain a 

minimum of three quotes for each order-level 

material above the simplified acquisition 

threshold. 

(A) One of these three quotes may include 

materials furnished by the contractor under 

FAR 52.212–4 Alt I (i)(1)(ii)(A). 

(B) If the contractor cannot obtain three 

quotes, the contractor shall maintain its 

documentation of why three quotes could not 

be obtained to support their determination. 

(C) A contractor with an approved 

purchasing system per FAR 44.3 shall instead 

follow its purchasing system requirement 

and is exempt from the requirements in 

552.238–82(d)(7)(i)(A)–(B). 

(ii) The Ordering Activity Contracting 

Officer must make a determination that 

prices for all order-level materials are fair 

and reasonable. The Ordering Activity 

Contracting Officer may base this 

determination on a comparison of the quotes 

received in response to the task or delivery 

order solicitation or other relevant pricing 

information available. 

(iii) If indirect costs are approved per [FAR 

52.212–4(i)(1)(ii)(D)(2) Alternate I), the 

Ordering Activity Contracting Officer must 

make a determination that all indirect costs 

approved for payment are fair and 

reasonable. Supporting data shall be 

submitted in a form acceptable to the 

Ordering Activity Contracting Officer. 

(8) Prior to an increase in the ceiling price 

of order-level materials, the Ordering 

Activity Contracting Officer shall follow the 

procedures at FAR 8.404(h)(3)(iv). 

(9) In accordance with GSAR clause 

552.215–71 Examination of Records by GSA, 

GSA has the authority to examine the 

Contractor’s records for compliance with the 

pricing provisions in FAR clause 52.212–4 

Alternate I, to include examination of any 

books, documents, papers, and records 

involving transactions related to the contract 

for overbillings, billing errors, and 

compliance with the IFF and the Sales 

Reporting clauses of the contract. 

(10) OLMs are exempt from the following 

clauses: 

(i) 552.216–70 Economic Price 

Adjustment—FSS Multiple Award Schedule 

Contracts. 

(ii) 552.238–71 Submission and 

Distribution of Authorized FSS Schedule 

Pricelists. 

(iii) 552.238–75 Price Reductions. 

(11) Exceptions for travel. 

(i) Travel costs are governed by FAR 

31.205–46 and therefore the requirements in 

paragraph (d)(7) do not apply to travel costs. 

(ii) Travel costs do not count towards the 

33.33% limitation described in paragraph 

(d)(4). 


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Federal Register / Vol. 83, No. 16 / Wednesday, January 24, 2018 / Rules and Regulations 3281 

(iii) Travel costs are exempt from clause 

552.238–74 Industrial Funding Fee and Sales 

Reporting. 

(End of Clause) 

[FR Doc. 2018–01232 Filed 1–23–18; 8:45 am] 

BILLING CODE 6820–61–P 

DEPARTMENT OF COMMERCE 

National Oceanic and Atmospheric 

Administration 

50 CFR Part 679 

[Docket No. 161020985–7181–02] 

RIN 0648–XF924 

Fisheries of the Exclusive Economic 

Zone Off Alaska; Pacific Cod by Pot 

Catcher/Processors in the Bering Sea 

and Aleutian Islands Management Area 

AGENCY: National Marine Fisheries 

Service (NMFS), National Oceanic and 

Atmospheric Administration (NOAA), 

Commerce. 

ACTION: Temporary rule; closure. 

SUMMARY: NMFS is prohibiting directed 

fishing for Pacific cod by catcher/ 

processors using pot gear in the Bering 

Sea and Aleutian Islands management 

area (BSAI). This action is necessary to 

prevent exceeding the A season 

apportionment of the 2018 Pacific cod 

total allowable catch allocated to 

catcher/processors using pot gear in the 

BSAI. 

DATES: Effective 1200 hours, Alaska 

local time (A.l.t.), January 20, 2018, 

through 1200 hours, A.l.t., September 1, 

2018. 

FOR FURTHER INFORMATION CONTACT: Josh 

Keaton, 907–586–7228. 

SUPPLEMENTARY INFORMATION: NMFS 

manages the groundfish fishery in the 

BSAI exclusive economic zone 

according to the Fishery Management 

Plan for Groundfish of the Bering Sea 

and Aleutian Islands Management Area 

(FMP) prepared by the North Pacific 

Fishery Management Council under 

authority of the Magnuson-Stevens 

Fishery Conservation and Management 

Act. Regulations governing fishing by 

U.S. vessels in accordance with the FMP 

appear at subpart H of 50 CFR part 600 

and 50 CFR part 679. 

The A season apportionment of the 

2018 Pacific cod total allowable catch 

(TAC) allocated to catcher/processors 

using pot gear in the BSAI is 1,387 

metric tons (mt) as established by the 

final 2017 and 2018 harvest 

specifications for groundfish in the 

BSAI (82 FR 11826, February 27, 2017) 

and inseason adjustment (82 FR 60329, 

December 20, 2017). 

In accordance with § 679.20(d)(1)(iii), 

the Administrator, Alaska Region, 

NMFS (Regional Administrator), has 

determined that the A season 

apportionment of the 2018 Pacific cod 

TAC allocated as a directed fishing 

allowance to catcher/processors using 

pot gear in the BSAI will soon be 

reached. Consequently, NMFS is 

prohibiting directed fishing for Pacific 

cod by pot catcher/processors in the 

BSAI. 

After the effective date of this closure 

the maximum retainable amounts at 

§ 679.20(e) and (f) apply at any time 

during a trip. 

Classification 

This action responds to the best 

available information recently obtained 

from the fishery. The Assistant 

Administrator for Fisheries, NOAA 

(AA), finds good cause to waive the 

requirement to provide prior notice and 

opportunity for public comment 

pursuant to the authority set forth at 5 

U.S.C. 553(b)(B) as such requirement is 

impracticable and contrary to the public 

interest. This requirement is 

impracticable and contrary to the public 

interest as it would prevent NMFS from 

responding to the most recent fisheries 

data in a timely fashion and would 

delay the closure of directed fishing for 

Pacific cod by pot catcher/processors in 

the BSAI. NMFS was unable to publish 

a notice providing time for public 

comment because the most recent, 

relevant data only became available as 

of January 18, 2018. 

The AA also finds good cause to 

waive the 30-day delay in the effective 

date of this action under 5 U.S.C. 

553(d)(3). This finding is based upon 

the reasons provided above for waiver of 

prior notice and opportunity for public 

comment. 

This action is required by § 679.20 

and is exempt from review under 

Executive Order 12866. 

Authority: 16 U.S.C. 1801 et seq. 

Dated: January 18, 2018. 

Emily H. Menashes, 

Acting Director, Office of Sustainable 

Fisheries, National Marine Fisheries Service. 

[FR Doc. 2018–01223 Filed 1–19–18; 4:15 pm] 

BILLING CODE 3510–22–P 

DEPARTMENT OF COMMERCE 

National Oceanic and Atmospheric 

Administration 

50 CFR Part 679 

[Docket No. 161020985–7181–02] 

RIN 0648–XF925 

Fisheries of the Exclusive Economic 

Zone Off Alaska; Pacific Cod by 

Catcher Vessels Greater Than or Equal 

to 60 Feet Length Overall Using Pot 

Gear in the Bering Sea and Aleutian 

Islands Management Area 

AGENCY: National Marine Fisheries 

Service (NMFS), National Oceanic and 

Atmospheric Administration (NOAA), 

Commerce. 

ACTION: Temporary rule; closure. 

SUMMARY: NMFS is prohibiting directed 

fishing for Pacific cod by catcher vessels 

greater than or equal to 60 feet (18.3 

meters (m)) length overall (LOA) using 

pot gear in the Bering Sea and Aleutian 

Islands management area (BSAI). This 

action is necessary to prevent exceeding 

the A season apportionment of the 2018 

Pacific cod total allowable catch 

allocated to catcher vessels greater than 

or equal to 60 feet (18.3m) LOA using 

pot gear in the BSAI. 

DATES: Effective 1200 hours, Alaska 

local time (A.l.t.), January 19, 2018, 

through 1200 hours, A.l.t., September 1, 

2018. 

FOR FURTHER INFORMATION CONTACT: Josh 

Keaton, 907–586–7228. 

SUPPLEMENTARY INFORMATION: NMFS 

manages the groundfish fishery in the 

BSAI exclusive economic zone 

according to the Fishery Management 

Plan for Groundfish of the Bering Sea 

and Aleutian Islands Management Area 

(FMP) prepared by the North Pacific 

Fishery Management Council under 

authority of the Magnuson-Stevens 

Fishery Conservation and Management 

Act. Regulations governing fishing by 

U.S. vessels in accordance with the FMP 

appear at subpart H of 50 CFR part 600 

and 50 CFR part 679. 

The A season apportionment of the 

2018 Pacific cod total allowable catch 

(TAC) allocated to catcher vessels 

greater than or equal to 60 feet (18.3m) 

LOA using pot gear in the BSAI is 7,770 

metric tons (mt) as established by the 

final 2017 and 2018 harvest 

specifications for groundfish in the 

BSAI (82 FR 11826, February 27, 2017) 

and inseason adjustment (82 FR 60329, 

December 20, 2017). 

In accordance with § 679.20(d)(1)(iii), 

the Administrator, Alaska Region, 

NMFS (Regional Administrator), has 


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