FAR 8.404—Use of Federal Supply Schedules.
Plain-English Summary
FAR 8.404 explains the core rules for using Federal Supply Schedules (including MAS) and placing BPAs and orders against schedule contracts. It covers which FAR parts generally do not apply, how schedule orders are treated as full and open competition, when ordering activities may not seek competition outside the schedules or synopsize the requirement, and the need to follow any agency-specific statutory and regulatory requirements. It also addresses acquisition planning, including the continued need for acquisition plans, IT acquisition strategies, and compliance with consolidation or bundling rules when applicable. The section further explains pricing treatment for schedule supplies and services, the limited circumstances requiring additional price evaluation, the ability to seek extra discounts, protest procedures, RFQ distribution, and special publicizing rules for Recovery Act actions and limited-source justifications. Finally, it sets out the type-of-order preference for services, including the strong preference for fixed-price orders and the conditions, approvals, and D&F requirements for time-and-materials or labor-hour orders.
Key Rules
Most FAR Parts Do Not Apply
When placing BPAs or orders against Federal Supply Schedules using Subpart 8.405 procedures, FAR Parts 13, 14, 15, and 19 generally do not apply, with limited exceptions stated in the rule. This means schedule buying is a streamlined process, but it still has specific exceptions and cross-references that must be checked.
Schedule Orders Are Full and Open
Orders and BPAs placed under MAS using the proper schedule procedures are treated as issued using full and open competition. As a result, ordering activities do not seek competition outside the schedules and do not synopsize the requirement, except where paragraph (g) requires publicizing certain actions.
Agency Rules Still Apply
The contracting officer must apply the regulatory and statutory requirements of the agency for which the order or BPA is being placed. The requiring agency must provide the applicable requirements, and interagency acquisitions over $750,000 must also comply with Subpart 17.5.
Acquisition Planning Still Required
Schedule orders are not exempt from acquisition planning requirements, including FAR Subpart 7.1 and IT acquisition strategy requirements in Part 39. If the order meets the definition of consolidation or bundling, the ordering activity must comply with all related FAR requirements.
Schedule Pricing Is Pre-Determined
GSA has already determined schedule prices, fixed-price service rates, and hourly rates to be fair and reasonable, so ordering activities generally do not make a separate fair-and-reasonable determination. A price evaluation is still required where 8.405-2(d) applies, and ordering activities may seek additional discounts before award.
Protests and RFQ Sharing Apply
The procedures in FAR Subpart 33.1 apply to orders and BPAs under schedule contracts. If an ordering activity issues an RFQ, it must provide a copy to any schedule contractor that requests one.
Special Publicizing Rules Apply in Limited Cases
Actions funded in whole or in part by the American Recovery and Reinvestment Act must be publicized under the specific posting rules in FAR 5.704 and 5.705. In addition, orders or BPAs over the simplified acquisition threshold that rely on a limited-source justification under 8.405-6(a) must be publicized and the justification posted.
Fixed-Price Is Preferred for Services
For services priced at hourly rates on the schedule, the ordering activity must specify the order type, and agencies must use fixed-price orders for commercial services to the maximum extent practicable. Time-and-materials or labor-hour orders are allowed only when the work cannot be accurately estimated and require a D&F, a ceiling price, and higher-level approval for longer performance periods.
Responsibilities
Contracting Officer
Apply the ordering agency’s statutory and regulatory requirements; ensure acquisition planning and IT strategy requirements are met; determine the order type for services; evaluate pricing as required by 8.405-2(d); seek additional discounts when appropriate; follow protest procedures; provide RFQs to requesting schedule contractors; publicize required actions; prepare and approve D&Fs for time-and-materials or labor-hour orders; and include a ceiling price in those orders.
Requiring Agency
Provide the contracting officer with the applicable regulatory and statutory requirements for the acquisition; ensure the requirement is consistent with its own legal and regulatory obligations; and support acquisition planning, including any consolidation or bundling analysis.
Ordering Activity
Use only the schedule procedures in Subpart 8.405 for schedule orders and BPAs; avoid seeking competition outside the schedules or synopsizing except where required; comply with publicizing rules for covered actions; and use fixed-price orders for commercial services to the maximum extent practicable.
Head of the Contracting Activity
Approve the D&F for a time-and-materials or labor-hour order when the total performance period, including options, exceeds three years, before execution of the base period.
GSA
Maintain the schedule program and establish schedule prices and rates as fair and reasonable for supplies and services offered under the schedule contracts.
Schedule Contractors
Respond to RFQs and provide requested information as part of the schedule ordering process; they may also be offered additional discounts before award.
Practical Implications
Schedule buying is faster than a full FAR Part 15 competition, but it is not paperwork-free; agencies still need planning, documentation, and the right order type.
A common mistake is assuming schedule orders ignore agency-specific statutes or interagency acquisition rules; the ordering CO must still follow those requirements.
Another frequent pitfall is using time-and-materials or labor-hour orders too casually; the CO must document why fixed-price is not suitable and set a ceiling price.
Contracting officers should remember that GSA’s fair-and-reasonable determination does not eliminate the need for any required price evaluation under the schedule ordering procedures.
If an RFQ is issued, contractors on the schedule can request a copy, and certain actions—especially Recovery Act-funded actions and limited-source justifications—must be publicized and posted properly.
Official Regulatory Text
(a) General . parts 13 (except 13.303-2 (c)(3)), 14 , 15 , and 19 (except for the requirements at 19.102 (b)(3) and 19.202-1 (e)(1)(iii)) do not apply to BPAs or orders placed against Federal Supply Schedules contracts (but see 8.405-5 ). BPAs and orders placed against a MAS, using the procedures in this subpart, are considered to be issued using full and open competition (see 6.102 (d)(3)). Therefore, when establishing a BPA (as authorized by 13.303-2 (c)(3)), or placing orders under Federal Supply Schedule contracts using the procedures of 8.405 , ordering activities shall not seek competition outside of the Federal Supply Schedules or synopsize the requirement; but see paragraph (g) of this section. (b) (1) The contracting officer, when placing an order or establishing a BPA, is responsible for applying the regulatory and statutory requirements applicable to the agency for which the order is placed or the BPA is established. The requiring agency shall provide the information on the applicable regulatory and statutory requirements to the contracting officer responsible for placing the order. (2) For orders over $750,000, see subpart 17.5 for additional requirements for interagency acquisitions. (c) Acquisition planning. Orders placed under a Federal Supply Schedule contract- (1) Are not exempt from the development of acquisition plans (see subpart 7.1 ), and an information technology acquisition strategy (see part 39 ); (2) Shall comply with all FAR requirements for a consolidated or bundled contract when the order meets the definition at 2.101 of "consolidation" or "bundling"; and (3) Must, whether placed by the requiring agency, or on behalf of the requiring agency, be consistent with the requiring agency’s statutory and regulatory requirements applicable to the acquisition of the supply or service. (d) Pricing . Supplies offered on the schedule are listed at fixed prices. Services offered on the schedule are priced either at hourly rates, or at a fixed price for performance of a specific task ( e.g., installation, maintenance, and repair). GSA has already determined the prices of supplies and fixed-price services, and rates for services offered at hourly rates, under schedule contracts to be fair and reasonable. Therefore, ordering activities are not required to make a separate determination of fair and reasonable pricing, except for a price evaluation as required by 8.405-2 (d). By placing an order against a schedule contract using the procedures in 8.405 , the ordering activity has concluded that the order represents the best value (as defined in FAR 2.101 ) and results in the lowest overall cost alternative (considering price, special features, administrative costs, etc.) to meet the Government’s needs. Although GSA has already negotiated fair and reasonable pricing, ordering activities may seek additional discounts before placing an order (see 8.405-4 ). (e) The procedures under subpart 33.1 are applicable to the issuance of an order or the establishment of a BPA against a schedule contract. (f) If the ordering activity issues an RFQ, the ordering activity shall provide the RFQ to any schedule contractor that requests a copy of it. (g) (1) Ordering activities shall publicize contract actions funded in whole or in part by the American Recovery and Reinvestment Act of 2009 (Pub. L. 111-5): (i) Notices of proposed MAS orders (including orders issued under BPAs) that are for "informational purposes only" exceeding $25,000 shall follow the procedures in 5.704 for posting orders. (ii) Award notices for MAS orders (including orders issued under BPAs) shall follow the procedures in 5.705 . (2) When an order is awarded or a Blanket Purchase Agreement is established with an estimated value greater than the simplified acquisition threshold and supported by a limited-source justification at 8.405-6 (a), the ordering activity contracting officer must- (i) Publicize the action (see 5.301 ); and (ii) Post the justification in accordance with 8.405-6 (a)(2). (h) Type-of-order preference for services. (1) The ordering activity shall specify the order type ( i.e. , firm-fixed price, time-and-materials, or labor-hour) for the services offered on the schedule priced at hourly rates. (2) Agencies shall use fixed-price orders for the acquisition of commercial services to the maximum extent practicable. (3) (i) A time-and-materials or labor-hour order may be used for the acquisition of commercial services only when it is not possible at the time of placing the order to estimate accurately the extent or duration of the work or to anticipate costs with any reasonable degree of confidence. (ii) Prior to the issuance of a time-and-materials or labor-hour order, the contracting officer shall- (A) Execute a determination and findings (D&F) for the order, in accordance with paragraph (h)(3)(iii) of this section that a fixed-price order is not suitable; (B) Include a ceiling price in the order that the contractor exceeds at its own risk; and (C) When the total performance period, including options, is more than three years, the D&F prepared in accordance with this paragraph shall be signed by the contracting officer and approved by the head of the contracting activity prior to the execution of the base period. (iii) The D&F required by paragraph (h)(3)(ii)(A) of this section shall contain sufficient facts and rationale to justify that a fixed-price order is not suitable. At a minimum, the D&F shall- (A) Include a description of the market research conducted (see 8.404 (c) and 10.002 (e)); (B) Establish that it is not possible at the time of placing the order to accurately estimate the extent or duration of the work or anticipate costs with any reasonable degree of confidence; (C) Establish that the current requirement has been structured to maximize the use of fixed-price orders ( e.g. , by limiting the value or length of the time-and-materials/labor-hour order; or, establishing fixed prices for portions of the requirement) on future acquisitions for the same or similar requirements; and (D) Describe actions to maximize the use of fixed-price orders on future acquisitions for the same requirements. (iv) Prior to an increase in the ceiling price of a time-and-materials or labor-hour order, the ordering activity shall- (A) Conduct an analysis of pricing and other relevant factors to determine if the action is in the best interest of the Government and document the order file; (B) Follow the procedures at 8.405-6 for a change that modifies the general scope of the order; and (C) Comply with the requirements at 8.402 (f) when modifying an order to add open market items. (i) Ensure that service contractor reporting requirements are met in accordance with subpart 4.17 , Service Contracts Inventory. (j) Line items. When placing orders or establishing BPAs, ordering activities shall reference the special item number and the corresponding line or subline item awarded (established per 4.1005 ) in the schedule. If an ordering activity contracting officer adds an item not on the Federal Supply Schedule in accordance with 8.402 (f), establish a new line item in accordance with subpart 4.10 .