Order Level Material (OLMs): understanding GSA’s latest tool to optimizing schedule purchases

In June, GSA began the rollout of one of the most important regulatory changes in recent memory for Federal Supply Schedule (FSS) contractors.  Seven GSA Schedule contracts were updated to incorporate the Order Level Materials (OLMs) authority, allowing FSS contractors to offer incidental products or services at the order level through the schedules program.

Previously, FSS contractors found themselves left with few options if they did not have the required incidental items for a particular procurement already awarded on their GSA Schedule contracts.  In some cases, contractor teaming arrangements (CTAs) could be used, though they came with their own set of challenges, and added time and expense for contractors as they worked through the process of setting up a CTA with one or more partners.  Other contractors would resort to work-arounds utilizing open market ordering procedures, which often slowed the acquisition process or were met with resistance from government procurement officials, or they simply directed the Federal buyer to a different contract vehicle.  The implementation of the OLM rule is intended to avoid some of these issues by harmonizing the schedules program with other major IDIQ contract vehicles that have long had the advantage of allowing vendors to scope OLMs at the task order level. 

What exactly are Order Level Materials (OLMs)?

OLMs are a type of Other Direct Cost (ODC) for incidental supplies and services that are unknown at the time of FSS contract or BPA award.  Since these kinds of incidental items are not routinely offered, vendors are required to specify and price them at the task order level in order to meet a specific customer’s unique requirements. 

While the schedules program currently has Special Item Numbers (SINs) dedicated to offering agencies Ancillary Supplies and Services, contractors are only able to price the most commonly offered ODCs at the FSS contract level.  The additional OLM authority gives FSS contractors maximum flexibility over agency opportunities requiring an ODC not typically offered by the vendor.  This means ordering activity contracting officers will be responsible for evaluating the offered OLMs and determining whether prices are fair and reasonable.

How the OLM rule is being implemented