An agency cannot buy “Open Market” items from a Federal Supply Schedule vendor when the same items are readily available under another vendor’s FSS contract–even if the vendor selling Open Market items offers them as a discounted bundle and the FSS vendor does not.
In a recent decision, GAO held that it was improper for an agency to buy bundled software packages as Open Market items when another vendor sold the same licenses on its FSS contract as four separate items.
Earlier this year, the United States Supreme Court issued its decision in Kingdomware Technologies v. United States. As we’ve noted, this case was a monumental win for veteran-owned small businesses—it requires the Department of Veterans Affairs to set-aside solicitations for SDVOSBs or VOSBs where two or more such offerors will submit a proposal at a fair and reasonable price, even if that solicitation is issued under the Federal Supply Schedule.
A recent GAO decision suggests, however, that Kingdomware’s impact could be felt beyond the world of VA procurements. Indeed, the Supreme Court’s rationale in Kingdomware might compel every agency to set aside any FSS order (or any other order, for that matter) valued between $3,000 and $150,000.
Agencies are not required to investigate the availability of small business offerors when ordering goods and services off the Federal Supply Schedule, even if multiple small business concerns would be able to compete for the contract.
As the GAO recently held in Walker Development & Trading Group, B-411357 (July 8, 2015), the small business preferences found in the Small Business Act do not apply when an agency uses the FSS.