New GSA Contractors often ask about selling items that are not listed in their GSA Schedule contract. These are known as Open Market items. You can sell such products or services to agencies under a GSA Contract order, but you must clearly inform the customer that the items to be sold are open market. This is an important concept to understand and new contractors often have problems with the GSA reviewers/auditors if they do not handle this correctly.
What are Open Market Items
Again, "open market items" is simply a contract term for anything that is not formally approved and listed on your GSA contract. Open-Market items are also known as:
- Incidental Items
- Ancillary items
- Non-Contract Items
- Non-Schedule Items
- Other Direct Costs (ODCs)
Be Clear When You Add Open Market Items to Orders
An agency (customer) may add open market items to a GSA order. However, contractors must ensure that the customer is made aware of these items prior to the sale.
This is extremely important due to Federal Acquisition Regulations for Federal Supply Schedule procurement versus open market procurement.
You must document that you provided this information to the customer prior to the sale in:
- a written quote (simply put the term "Open Market Item" at the end of each open market line item) or email correspondence
- Do the same on the actual invoice
This is not hard to do and it's essential to do so in quotes or proposals and invoices. Simply state "Open Market Item in parentheses after each item.
You could also call attention to this by inserting a statement on these documents: "This quote/invoice contains open market items which we have identified on specified line items. Open market items are allowed under as stated in FAR 8.402(f)"
Are Travel and Living Costs Open Market Items?
Please note that travel and living costs, while technically speaking are not listed on your GSA contract, are a special class. You will negotiate travel and living costs with the buying agency on a task order basis, and you do not need to identify these as open market items nor do you need to consider these fees when calculating your IFF.
Can I Quote Open Market Items on eBuy Quotes?
eBuy quotes present different rules on open market items. Contractors may NOT quote open market items on eBuy orders; only Schedule contract items may be quoted.
This is a major area of non-compliance, so never quote open market items through eBuy. But don't give up on the opportunity. You can still email the point of contact for that opportunity and tell them that some of the items are open market and send the person a quote via email instead. If you have a great deal, then you may still be awarded the contract.
Do I report Open Market Sales in my Quarterly Sales Report?
Schedule contractors should NOT include the value of open market sales when reporting the quarterly 72a sales, only the total sales of contract items. This is due to requirements outlined in Federal Acquisition Regulation (FAR) Subpart 8.404(a) that states that ordering activities “shall not” seek competition outside of the Schedules program.
Related Issue - Quoting other Contractor's Pricing:
To get around this eBuy limitation, some contractors have quoted items that are on another contractor's schedule contract. This is not permissible without an authorized dealer agreement in place. If you have such an agreement, and that contractor has identified you on its GSA contract as an authorized dealer, then you may submit the agreement or other proof that you are authorized under their GSA contract with your eBuy quote.
Another method is if you have a contractor teaming agreement in place, then you may submit a quote with that contractor's items, but remember to attach the signed teaming agreement with your quote.