Recommendation: We believe the guidance concerning competitive quotes and sole source awards for services should be incorporated into the FAR before resolving other issues. More importantly, we believe that this would provide a foundation for immediate improvements in the use of FSS contracts.

Agency Affected: Executive Office of the President: Office of Management and Budget: Office of Federal Procurement Policy

Status: Closed - Implemented

Comments: Effective July 19, 2004, the Federal Acquisition Regulation (FAR) for the Federal Supply Schedule incorporates policies for buying services that should maximize competition in acquiring information technology and all other services, and when competition is not possible, require proper justification and higher-level approval of sole-source orders. Specifically, FAR 8.405-2 (ordering procedures for services requiring a statement of work) includes requirements to outreach and obtain competitive quotes when ordering services valued over $2,500. For example, for orders that do not exceed the applicable "maximum order threshold", the ordering agency must provide the Request for Quote (RFQ) to at least three schedule contractors. For larger dollar orders, the ordering agency must provide the RFQ to more than three schedule contractors. Also, FAR 8.405-6 (sole source justification and approval) provides instructions on what steps contracting officers should follow to buy services through sole source orders only if the the need to do so (e.g., urgency, exclusive licensing agreement, industrial mobilization) is justified in writing and reviewed and approved in advance at levels specified by dollar threshold.