Congress' unambiguous statutory mandate in the CICA to allow a contracting officer, when purchasing products against the FSS, to include in the purchase order “incidental" products that are competitively available, unless the prices charged for these “incidental" products are the product of full and open competition.” The Court went on to state that “The authority of an agency to purchase products against the FSS does not extend to incidentals.”
The Court states that “Congress classified the procedures established by the Administrator of General Services for the multiple award schedule program as “competitive procedures” and thereby authorized agencies to purchase thereunder without the benefit of competition only if (i) participation in the program is open to all responsible sources; and (ii) orders and contracts under such program result in the lowest overall cost alternative to meet the needs of the United States”. According to the Court, “GSA apparently does not make any effort to negotiate or evaluate prices for products and services that are not listed on the FSS but could be classified as “incidental” to those listed products. This being the case, there is no basis for concluding that the price negotiated between the contracting officer and the FSS contractors for “incidentals” is the product of full and open competition.” If a product or service falls within the exception contained in Section 2304 or can be classified as “de minimus,” products and services must be purchased using competitive procedures.
The court did not define de minimus, and the Court issued the injunction.
Based on this decision, the Comptroller General issued a decision in the Matter of Pyxis Corporation9 in which the GAO reversed its prior decision in the Matter of ViON Corporation and, following the lead of the Court of Federal Claims, stated “that there is no statutory authority for the ‘incidentals’ test as enunciated in ViON.” In Pyxis, the non-FSS items were between 4% and 6% of the total contract value of the purchase orders awarded. Nevertheless, the GAO stated that “it is clear that the agency did not follow applicable acquisition regulations, as the non-FSS items orders exceeded the $2,500 micro-purchase threshold.” Therefore, an agency may not use the “incidentals” test as a justification for the purchase of non-FSS items that are included in a purchase order contract issued under a GSA Schedule contract; the acquisition of non-FSS items must be conducted under applicable competitive procedures.
V. New Standard for Incidental Items
The Comptroller General has evidently decided that incidental items with a value of less than the micro-purchase threshold can be acquired without competition. In the Matter of SMS System Maintenance Services, Inc.,10 GAO denied a protest where the protester was...
