1. Using Multiple Award Instruments
Acquiring Services
Using Multiple Award Instruments
Under Section 803
Oct 25, 2002

2. Abbreviations Defined
FASA- Federal Acquisition Streamlining Act of 1993
FSS – Federal Supply Schedule
MAS – Multiple Award Schedules
MAC – Multi-Agency Contract
GWAC – Government-Wide Acquisition Contract
IDIQ – Indefinite Delivery/Indefinite Quantity
BPA – Blanket Purchasing Agreement
BOA – Basic Ordering Agreement
Here are the acronyms I will use in this briefing. (Voice all of them)
FASA- the Federal Acquisition Streamlining Act of 1993
FSS – Federal Supply Schedule
MAS – Multiple Award Schedules
MAC – Multi-Agency Contract
GWAC – Government-Wide Acquisition Contract
IDIQ – Indefinite Delivery/Indefinite Quantity
BPA – Blanket Purchasing Agreement
BOA – Basic Ordering Agreement

3. THE PROBLEM
Congress believes that the Department of Defense is not maintaining a competitive environment throughout the life of multiple award contracting vehicles.
This was Congress’ intent when it included multiple award IDIQ contracts in FASA.
Beginning with FASA (where multiple award task and delivery contracts were first authorized), Congress’ intent has been for competitive pressures to prevail throughout the life of such contracts.
The competitive forces would create a free market where the Government will get good prices for high quality supplies or services and excellent contractor performance.
They have examined agencies’ experiences in implementing multiple ward task and delivery order contracts through this lens.

4. Background Since FASA
FASA permitted task orders using multiple award instruments
Law requires all multiple award contractors be given “Fair Opportunity” to compete for orders
Only 4 specific exceptions to “Fair Opportunity”
The history of this problem begins in 1993 with the enactment of the Federal Acquisition Streamlining Act (FASA)/Sections 1004 and 1504 of Public Law
It established the authority for awarding multiple award task order contracts for services and delivery order contracts for supplies.
The law requires that all contractors awarded multi award contracts shall be provided a “fair opportunity” to be considered for each task or delivery order over $2,500.
While the law says that ordering procedures should be tailored to each contract, the law permitted only 4 specific exceptions to what it described as fair opportunity to be considered (or competitive procedures).
Congress has repeatedly emphasized its intent that those are the ONLY exceptions in several authorization acts since FASA was passed.
We will discuss the exception later in this briefing.

5. Section 803 of P.L
DoD issued DFARS policy requiring competition in the purchase of services under multiple award contracts on October 25, 2002.
Exceptions to fair opportunity in FASA apply to orders under FSS Schedule contracts.
Adds a new exception for FSS– orders from a source specified in a statute
Now, let’s get to the reason why you are all here– what are we going to do about the new restrictions on buys of services over $100,000?
Section 803 is part of Public Law The Bob Stump National Defense Authorization Act for Fiscal Year 2002.
DoD issued the final rule implementing Section 803 on October 25, 2002.
It was effective for all orders for services over $100,000 issued on or after that date– no matter when the basic contract was awarded.
In an nutshell, this is what Section 803 required—
Exceptions to fair opportunity in FASA apply to orders under FSS Schedule contracts.
The statute states that the FASA exceptions to fair opportunity also apply to orders under FSS contracts and adds a new exception for FSS orders– when a source is authorized or required by statute.
Let’s examine the exceptions in depth---

6. FAIR OPPORTUNITY EXCEPTIONS
Agency's need is of such unusual urgency that providing an opportunity to all awardees would result in unacceptable delays.
Only one source is capable of responding due to the unique or specialized nature of the work.
The four statutory exceptions in FASA to the fair opportunity process begin here and lap over to the next slide. They are in FAR (b)(2).
The first exception is unusual urgency.
Agency's need is of such unusual urgency that providing an opportunity to all awardees would result in unacceptable delays
This is very similar to the Part 6 exception to full and open competition.
There need to be unacceptable mission delays.
This exception cannot be used for administrative convenience.
The second exception is also very similar to a Part 6 exception.
Only one source is capable of responding due to the unique or specialized nature of the work
It can only be used when a contactor is the only source for a supply or service.
Consider whether the contractor controls limited rights in data, patent rights, copyrights, or secret processes or controls basic raw material.
The fact that a contractor has been a long-standing incumbent is not a rationale for using this exception.

7. Other FASA Exceptions
The new work is a logical follow-on to an existing task order under the same contract and contractors were given a fair opportunity to be considered on the original order.
The order must be placed with a particular contractor in order to satisfy a minimum guarantee.
The next exception is the one that has been the most misused.
The new work is a logical follow-on to an existing task order under the same contract and contractors were given a fair opportunity to be considered on the original order
To qualify for the logical follow-on exception, the initial order must have been competed.
If the original order was placed before the implementation of Section 803, the original order followed whatever competition rules were in place at the time.
The underlying basic contract must have been in place at the time of the original order and still be in effect.
The contractors that competed for the original order should have been aware of the general scope of the effort and the instant extension remains within that general scope.
How has this exception been misused? (We are asking the audience NOT to do these things!!!!)
The logical follow-on exception cannot be used to bridge among underlying basic contracts.
It cannot be used to extend a sole source initial order.
It cannot be used to tack on work that is an order of magnitude greater than the original order.
It cannot be used to clarify a very broad statement of work for a study by tacking on installation work.
The final exception in FASA is the exception for orders to meet a minimum guarantee
The order must be placed with a particular contractor in order to satisfy a minimum guarantee.
While this seems rather simple, it, too has been misused.
This exception does not mean, as some have misconstrued, that the first order “in the gate” no matter how large can use this exception!
The order needs to be related to the minimum guarantee in the contract.
Orders that are orders of magnitude greater than the contractual minimum that stretch across the entire life of the underlying contract simply do not pass the “straight face” test!

8. The New Exception
Section 803 added a new exception– if a statute expressly authorizes or requires that the purchase be made from a specified source, the 803 procedures may be waived
An example of this type of situation would be that there is a single award mandatory FSS contract
The new exception from Section 803 is used when a statute expressly authorizes or requires orders from a particular source.
An example of this type of situation would be that there is a single award mandatory FSS contract
This exception best fits the FSS scenario because if there was a mandatory source for a particular good or service, one would not establish a multiple award portfolio in the non-FSS scenario.
Instead, there would be a single award IDIQ contract established to fill the requirement.

9. Applicability
The new rules apply to all orders for services over $100,000 under multiple award vehicles.
There are 2 scenarios
Orders under FSS contracts
All other orders, including those under multiple award BPAs
The new rules apply to all orders for services over $100,00 under any type of multiple award contract vehicle that use DoD money.
This includes FSS contracts, BPAs established under those contracts, multiple award IDIQ contract portfolios established under open market competition, BPA portfolios for similar services, and any other situation where more than one contractor has been set up to perform the same or similar services.
The term “portfolio” is used in this briefing to describe any group of contract vehicles established to obtain the same or similar services.
Section 803 applies to all buys for DoD, no matter who ultimately spends the money.
If it is DoD money, the restrictions follow it.
Section 803 applies to all individual purchases over $100,000 for services.
The only statutory exception we could identify is A&E services that are purchased following Brooks Act procedures.
No other statute requires more specific acquisition processes than those in Section 803.
Before we explore the scenarios in depth, let’s discuss the exceptions to fair opportunity--
The 803 rules fall into 2 categories– rules for ordering direct from FSS contracts, and rules for ordering from all other contract vehicles.

10. Orders under FSS Contracts
The CO must EITHER
Issue the notice to as many schedule holders as practicable, consistent with market research appropriate to the circumstances, to reasonably ensure that proposals will be received from at least 3 sources that offer the required work; OR
Contact all schedule holders that offer the required work by informing them of the opportunity for award.
The first scenario we will discuss is orders directly under FSS contracts.
The guidance for this scenario is in DFARS
When task orders for over $100,00 are placed directly under Federal Supply Schedule contracts, the contracting officer must issue the notice to as many schedule holders as practicable that will reasonably ensure at least proposals are received from at least 3 schedule holders who are capable of doing the work.
Market research should be conducted to verify how many schedule holders are interested in the opportunity and how many are likely to respond.
The CO must at least review the schedule contracts to determine which schedule holders can perform the required work.
If the CO cannot determine which schedule contractors are capable of performing the work, or cannot reasonably determine what the response rate probably will be, the CO must provide notice to all schedule holders.
The contracting officer must forward all schedule holders a notice of intent to make a purchase--
By informing them of the opportunity for award, for example, by “pushing” a message out to inform them of the opportunity or posting the opportunity on a central Federal website, e-Buy, that is run by GSA.
Of course, all those that submit a timely proposal must be considered for award!

11. Orders Under FSS Market research is key.
CO has discretion, but it is linked to good market research.
CO must understand which schedule contractors can do the work.
Market research is key and we expect the program office or other requiring activity to help determine which contractors are capable of performing the required work.
The GSA schedules e-library provides links to keywords associated with contractor qualifications and links to contractor websites that provide more details about qualifications, when they are available.
Many schedules are broken up into SINs that group contractor with similar skill sets together.
This helps to limit the search!
What you must end up with is a list of contractor that are capable of doing the required work.
The number of contractors that must be contacted depends upon historic response rate for similar requirements.
The goal is to receive at least 3 proposals/quotes.
For example, if you have a historic response rate of 30%, you must contact at least 10 qualified contractors.
If a contract has indicated that it is not interested in the requirement, do not put it on the list.
The CO has discretion in developing the source list, but it must be supported by the market research.

12. Orders Under FSS
If less than 3 proposals are received, the CO must document why reasonable efforts would not result in more offers.
The only exceptions to “fair opportunity” are the 4 exceptions specified under FASA and the new 803 exception for statutorily required/permitted source.
If the contracting officer receives less than 3 proposals, the CO must document, in the contract file, why reasonable efforts would not result in more offers.
The contracting officer may make an award at this point (if they have a good explanation for example, that proper market research was conducted).
The “straight face” rule applies here!!!
Exceptions to the fair opportunity rule must be documented in the contract file, with supporting rationale.
To repeat the exceptions:
The agency need for the supplies or services is so urgent that providing a fair opportunity would result in unacceptable delays; OR
Only one awardee is capable of providing the supplies or services required at the level of quality required because the supplies or services ordered are unique or highly specialized; OR
The order must be issued on a sole-source basis in the interest of economy and efficiency as a logical follow-on to an order already issued under the contract, provided that all awardees were given a fair opportunity to be considered for the original order; OR
It is necessary to place an order to satisfy a minimum guarantee; OR
5 There is a statute that authorizes or requires purchase from a particular source.

13. All non-FSS orders
The CO must compete among all awardees/BPA holders within the portfolio of contract vehicles established for the same requirement.
No set-asides or segmentation.
All awardees that offer the required work must be given the opportunity to submit a proposal .
Provide a copy of the SOW/SOO and the selection criteria.
If the order is for services over $100,000 on other kinds of contracting vehicles, the contracting officer must contact all awardees that are capable of doing the work.
This is yet another reason to cull the field when awarding multiple award task or delivery order contracts.
Once you have an understanding of which awardees or BPA holders are capable of performing the requirement, you must offer all of that group a chance to receive the order.
Set asides or other segmentations within this universe may not be used to deny a contractor that is capable of performing the work a chance to receive the order.
You must provide every contractor within this group a copy of the Statement of Work or Statement of Objectives and a copy of the selection criteria.
Provide a reasonable time for all to respond.
All proposals or quotes received must be fairly evaluated.
Please note that there is no “get 3” process for non-FSS orders!
This is an incentive to create reasonably sized portfolios of contractors that complement each other under the initial contract award.
Use market research to determine which awardees can perform the required work (for instance, by reading the contracts to determine what each awardee has offered to perform).
You should have developed a general understanding of contractor capabilities when the contract or BPA was established.
Also keep in mind how well the contractor has performed under the contract– poor performance is an indication that the contractor is not really capable of performing the required work!

14. All non-FSS orders The CO must consider all proposals submitted.
The only exceptions to “fair opportunity” are the 4 exceptions specified under FASA.
Reminders on required business practices for placing orders under this type of contract—
Individual orders must clearly describe all services to be performed or supplies to be delivered.
Orders must be within the scope, performance period, and maximum value of the contract.
Performance-based work statements must be used to the maximum extent practicable, if the contract is for services.
Orders may be placed (and contractors notified of opportunities) by using any medium specified in the contract.
Although competition requirements for orders is not like that used for the solicitation and award, the contracting officer must follow placement procedures and provide each awardee a fair opportunity to be considered for each order.
This procedure should consider price or cost under each order as one of the factors in the order placement decision.
Additionally, the Contracting Officer should consider past performance on earlier orders, including quality, timeliness and cost control.
Use FAR Subpart 15.4 pricing procedures to evaluate proposed prices.
The Government team must evaluate the types and quantities of labor categories proposed, as well as the final price to the Government.
The CO must determine that the award price is fair and reasonable.
Document any exceptions to fair opportunity and the award decision rationale in the file.
The only exceptions to fair opportunity to be considered are those in FASA—
The agency need for the supplies or services is so urgent that providing a fair opportunity would result in unacceptable delays;
(2) Only one awardee is capable of providing the supplies or services required at the level of quality required because the supplies or services ordered are unique or highly specialized;
(3) The order must be issued on a sole-source basis in the interest of economy and efficiency as a logical follow-on to an order already issued under the contract, provided that all awardees were given a fair opportunity to be considered for the original order; or
(4) It is necessary to place an order to satisfy a minimum guarantee.
(A word on minimum guarantee– orders placed using this exception must be priced close to the minimum cited in the contract– remember the straight face rule!)

15. Frequently Asked Questions
Here are some frequently asked questions that Defense Procurement and Acquisition Policy has received since the rule was implemented on October 25,

16. Do Section 803 procedures apply to my order?
Section 803 applies to ALL orders for services over $100K placed on or after October 25, 2002 by DoD or that use DoD appropriations.
Section 803 does not apply to orders for supplies or to orders for services at or under $100K.
The first question is– Do Section 803 procedures apply to my order?
Section 803 applies to ALL orders for services over $100K placed on or after October 25, 2002 by DoD or that use DoD appropriations.
Section 803 does not apply to orders for supplies or to orders for services at or under $100K.

17. What do I use if 803 does not apply?
Orders against FSS schedule contracts
Task orders $100K or less --Use FSS special procedures for services.
Delivery orders-- Use “go to 3 capable contractors” rule.
(Continued)
The second question is What do I use if 803 does not apply?
If 803 does not apply, follow the procedures that were in place before October 25, 2002.
To review those procedures–
For orders against FSS schedule contracts—
For Task orders $100K or less --Use the FSS special procedures for services.
For delivery orders-- Use the “go to 3 capable contractors” rule.

18. …803 does not apply? Orders under BPAs
Follow GSA procedures for those based on FSS contracts.
Follow Part rules for all other BPAs.
Delivery orders or task orders less than $100K against other multiple award vehicles
Use FAR Part procedures and exceptions.
For orders under BPAs--
Follow GSA procedures for those based on FSS contracts. AND
Follow Part rules for all other BPAs.
For delivery orders or task orders less than $100K against other multiple award vehicles, use FAR Part procedures and exceptions.

19. Can I do a small business set aside?
803 does not specifically authorize use of a small business set aside, as it requires competition among “all” capable contractors.
You may not exclude participation by other than small businesses in awards of delivery orders under non-FSS vehicles
The next question is-- Can I do a small business set aside?
803 does not specifically authorize use of a small business set aside, as it requires competition among “all” capable contractors.
If your market research determines that there are enough small businesses that are capable of performing the work and would likely result in receipt of at least 3 proposals, you may restrict your source list to those potential offerors.
You may not exclude participation by other than small businesses in awards of delivery orders under non-FSS vehicles

20. What about my small business goals?
You are encouraged to offer capable small businesses an opportunity to submit a proposal as part of the “get 3” process for placing orders against FSS contracts.
You may take credit for awards to small businesses.
What about my small business goals?
You are encouraged to offer capable small businesses an opportunity to submit a proposal as part of the “get 3” process for placing orders against FSS contracts.
You may take credit for awards to small businesses.

21. What about orders against other multiple award vehicles– can I use set asides?
Section 803 does not permit the use of set asides a part of the ordering procedures under non-FSS contract vehicles.
You must allow all capable awardees within your established portfolio an opportunity to submit a proposal and have it fairly considered for award.
Just to further clarify the set-aside issue, let’s revisit the non-FSS scenario--
What about orders against other multiple award vehicles– can I use set asides?
Section 803 does not permit the use of set asides a part of the ordering procedures under non-FSS contract vehicles.
You must allow all capable awardees within your established portfolio an opportunity to submit a proposal and have it fairly considered for award.

22. How do I perform market research?
If you are ordering from an FSS schedule, use the e-schedules library to view key words associated with a contractor’s capabilities and, in most cases, link to the contractor’s website for a detailed description of its capabilities.
(Continued)
Many questions have been received about how to perform market research—
If you are ordering from an FSS schedule, use the e-schedules library to view key words associated with a contractor’s capabilities and, in most cases, link to the contractor’s website for a detailed description of its capabilities.

23. …market research?
When using an FSS schedule, SINs provide a first cut at distinguishing among contractor capabilities. They group contractors by sub-categories that closely link to many requirement descriptions.
When using an FSS schedule, SINs provide a first cut at distinguishing among contractor capabilities.
They group contractors by sub-categories that closely link to many requirement descriptions.

24. What if I am not using an FSS schedule
What if I am not using an FSS schedule? How can I tell which contractors are capable of doing the work?
The goal is to maintain competition throughout the lifetime of the contract vehicle by establishing a portfolio of contracts/BPAs that complement each other.
(Continued)
What if I am not using an FSS schedule? How can I tell which contractors are capable of doing the work?
Market research is easier for non-FSS contract vehicles because you have gained knowledge of contractor capabilities when you set up portfolios of contracting vehicles.
The goal is to maintain competition throughout the lifetime of the contract vehicle by establishing a portfolio of contracts/BPAs that complement each other.
You set up the portfolios to maintain competition throughout their lifetimes.

25. …capable of doing the work?
As part of establishing the “right” portfolio for your requirement, you must understand each contractor’s capabilities as part of the source selection process.
Use that information when placing orders throughout the life of the contract vehicles.
As part of establishing the “right” portfolio for your requirement, you must understand each contractor’s capabilities as part of the source selection process.
Use that information when placing orders throughout the life of the contract vehicles.

26. Why does the rule apply to civilian agencies when only the DFARS has been changed?
DFARS (a)(3) states the rules apply to non-DoD agencies that are spending DoD money.
Congress may establish rules that apply to a given appropriation. In this case, they want the rules to apply to all funds appropriated for DoD use.
(Continued)
Why does the rule apply to civilian agencies when only the DFARS has been changed?
This rule applies whenever DoD funds are used for task orders over $100,000.
You may get questions form civilian agencies about why they have to follow a DFARS rule. Here is why—
DFARS (a)(3) in the 803 rule states the rules apply to non-DoD agencies that are spending DoD money.
Congress may establish rules that apply to a given appropriation.
In this case, they want the rules to apply to all funds appropriated for DoD use.

27. …DFARS has been changed?
The Economy Act rules in FAR (d)(2) anticipate that there may be special procurement procedures that apply to some appropriations.
The DoD requiring office must remind civilian agencies that are placing orders for us to follow 803 procedures.
The Economy Act rules in FAR (d)(2) anticipate that there may be special procurement procedures that apply to some appropriations.
The DoD requiring office must remind civilian agencies that are placing orders for us to follow 803 procedures.

28. What happens if I get less than 3 proposals?
For orders against FSS schedules, if you can document in the file that you did adequate market research to allow you to predict with reasonable certainty that you would expect to get at least 3 proposals from capable contractors, given the number that you contacted, you may press on with award of the task order.
(Continued)
Many folks are concerned that they may have to start the market research process over again if they get less than 3 proposals.
This is what you do if you receive less than 3 proposals/quotes
For orders against FSS schedules, if you can document in the file that you did adequate market research to allow you to predict with reasonable certainty that you would expect to get at least 3 proposals from capable contractors, given the number that you contacted, you may press on with award of the task order.

29. …less than 3 proposals?
The contracting officer must determine that the efforts were reasonable and document the file.
Market research on historical rates for receiving proposals for similar requirements and contractor indications of interest are examples of pertinent information that can be used to predict response rates.
The contracting officer must determine that the efforts were reasonable and document the file.
Market research on historical rates for receiving proposals for similar requirements and contractor indications of interest are examples of pertinent information that can be used to predict response rates.

30. What happens if I get less than 3 proposals on non FSS orders?
There is no requirement to get at least 3 responses on non FSS orders– you just need to contact all capable contractors within the established portfolio of contracts.
What happens if you are placing an order under an non-FSS contracting vehicle and you get less than 3 proposals?
There is no requirement to get at least 3 responses on non FSS orders– you just need to contact all capable contractors within the established portfolio of contracts.

31. Why do I have to determine the price of an order against an FSS contract is fair and reasonable? The FAR says that the prices on the schedule contracts are fair and reasonable prices!
We have also received a lot of questions about pricing. Here is the general concern—
Why do I have to determine the price of an order against an FSS contract is fair and reasonable?
The FAR says that the prices on the schedule contracts are fair and reasonable prices!
(Continued)

32. …fair and reasonable prices!
While prices have been established per labor hour, the exact mix of labor and materials that will be used for your requirement was not negotiated by the GSA contracting officer.
(Continued)
CO must determine that the price of the instant order is fair and reasonable.
While prices have been established per labor hour, the exact mix of labor and materials that will be used for your requirement was not negotiated by the GSA contracting officer.

33. …fair and reasonable prices!
It is up to the contracting officer who is placing an order to determine that the mix of labor and materials is reasonable for that requirement.
COs must determine that the labor mix and any materials, travel, and other direct costs are reasonable, given the requirement.

34. Summary Section 803 addresses task orders for services over $100,000.
Emphasis is on maintaining competition throughout the contract vehicle life.
When in doubt – provide all qualified contractors the opportunity to be considered for award.
Consider small businesses whenever possible.
To sum up what we have learned today–
Section 803 addresses task orders for services over $100,000.
Emphasis is on maintaining competition throughout the contract vehicle life.
When in doubt – provide all qualified contractors the opportunity to be considered for award.
Consider small businesses whenever possible.

35. melissa.rider@ osd.mil Questions?
If you have questions about this briefing, please contact the Defense Procurement and Acquisition Policy point of contact, Melissa Rider, at this address.
Melissa DOT Rider AT OSD DOT Mil
This and several other Section 803 related briefings, with briefer notes, have been posted to the DPAP website at