FAR 51.1 Creates Secondary Market for GSA Schedule Contractors

Posted by Zach Bohm on May 20, 2011 8:18:00 AM

Subpart 51.1 of the Federal Acquisition Regulation (FAR), Contractor Use of Government Supply Sources, prescribes the policies and procedures under which federal contractors can use government supply sources, like GSA Schedule Contracts, to facilitate the completion of their contract.  Traditionally, this allowance only enabled Prime contractors to purchase certain supplies and services not requiring a statement of work if they were on a Cost Reimbursement Contract.  In 2009, GSA established a deviation to FAR 51.1 that allowed contractors to purchase from other contractors under both Cost Reimbursement and Time & Materials Contracts.

This expansion to Time & Materials contracts has, in effect, created a secondary market for GSA Schedule Contract holders.  In addition to directly selling their products and services to the federal government’s departments and agencies, many scheduled firms are now receiving orders from primes on their federal contracts. 

In order for one contractor to make a purchase from another using federal supply channels, the purchase must be for products or services ancillary to the original contract, and be approved by the GSA.  When GSA deems such a contractor-to-contractor purchase to be in the government’s best interest, they grant approval to the Prime to make the purchase through existing GSA Schedule Contracts.  This speeds the completion of the contract and increases the overall efficiency of the contracting process, which are two of the GSA’s primary objectives.

The following GSA process map outlines the steps necessary for a FAR 51.1 or FAR 51.1 Deviation purchase to be made:

FAR 51.1 Process Map resized 600

As we have discussed in the past, one of the best ways to get a successful start in government contracting is to subcontract for Primes and slowly build your federal contracting network.  Increasingly, a GSA Schedule Contract is an ideal tool for doing just that.  As contracting officers continue to seek the most efficient means of obtaining the goods and services required to run the country, they are expanding FAR 51.1 program and approving an increasing number these purchases.  In other words, GSA Schedule Contract holders are enjoying increased success in selling to Primes and securing sub-contracts.  Therefore, in an indirect way, a GSA Schedule Contract can increase your sales opportunities in both the public sector and the private sector. 

As I am sure you noticed from the flow chart above, the FAR 51.1 acquisition process is less than simple and straightforward.  Like most forms of government contracting there are a few key steps on a timely and accurate basis to ensure success on either side of the contracting engagement.  If you have any questions about GSA Schedule Contracts in general, please check out our GSA FAQ, or contact us directly.

Topics: GSA Contract, Maximizing Federal Sales, GSA Schedules

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