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Federal Procurement

What is a Federal Procurement?

A Federal Procurement is a purchase of products or services through the federal government’s cooperative purchasing program managed by the General Services Administration (GSA). The GSA Schedules Program manages multiple award schedules for various products and services and is available for use by federal, state, local government, and other entities.

The benefits of using cooperative purchasing contracts and agreements include reduction of staff time and cost savings through volume price discounts. The GSA Schedules Program provides access to purchase information technology (IT) products and services (Schedule 70), as well as law enforcement, security, first responder, and marine craft equipment, alarm and signal systems, and special purpose clothing (Schedule 84).

In addition to cooperative purchasing, the following programs provide eligible federal supply schedules (refer to GSA Order of 2000, currently ADM 4800.2I):
  • Disaster Recovery to facilitate recovery from major disasters declared by the president under the Robert T. Stafford Disaster Relief and Emergency Assistance Act or to facilitate recovery from terrorism or nuclear, biological, chemical, or radiological attack.
  • 1122 Program, which allows for the purchase of
equipment suitable for counter-drug, homeland security and emergency response activities through the Department of Defense.
  • Public Health Emergencies, which enables public agencies granted federal funds to use federal supply schedules when responding to public health emergencies.

When to Use Federal Procurements

Agencies must make their Buy Decision in the priority order specified in administrative rule (OAR 125-247-0200). If an agency determines that its procurement need cannot be met through a Buy Decision priority source it can then consider the use of an eligible federal program.

Agencies’ participation in GSA’s cooperative purchasing program is voluntary. Prior to initiating a purchase through the program, an agency must determine that:
  • The agency’s procurement need cannot be met by the Buy Decision.
  • The agency has the authority to use an eligible federal program.
  • The product or service on the federal supply schedule meets all state requirements and is in the agency’s best interest.

How to Process Federal Procurements

The GSA cooperative purchasing program instructs procuring agencies to follow the ordering and competitive procedures that meet their local procurement regulations.

Federal Acquisition Regulation (FAR) Subpart 8.4, Federal Supply Schedule, prescribes procedures for federal agencies’ use in acquiring products and services within the GSA Schedules Program. GSA recommends, but does not require, that state agencies use these procedures to receive the best value from contractors.

Refer to FAR 8.405-1 for ordering products and services not requiring a statement of work or FAR 8.405-2 for ordering services requiring a statement of work. Agencies must be aware of federal program provisions and must adhere to those provisions, including:
  • Voluntary and direct contract. Agency and contractor participation is voluntary and contractors coordinate direct delivery with the agency. Contractors retain the right to decline orders on a case-by-case basis, for any reason, within a five-day period of receipt of that order.
  • Funding fee. The price of a federal program contract includes a GSA industrial funding fee to cover GSA administrative costs to operate the federal program.
  • New contract. When a contractor accepts an order from an agency, a new contract is formed. The contract's terms and conditions are incorporated by reference.
  • Additional terms and conditions. An agency may include additional state-specific terms and conditions as a part of the statement of work or the statement of objectives. Additional terms and conditions must not conflict with the terms and conditions of the federal program’s contract. Examples of some of the additional terms and conditions an agency should consider include:
    • Prompt payment. An agency may apply the terms and conditions of Oregon's prompt payment law to its contracts. If not specified, the agency may be subject to the Federal Prompt Payment Act.
    • Commercial terms. Patent indemnity and other commercial terms and conditions may be added if they do not conflict with the federal program's terms and conditions.
    • Conflict resolution. An agency may revise the contract's dispute resolution provision to use Alternative Dispute Resolution to the extent authorized by law.

Refer to GSA State and Local Government Customers for more information on federal program provisions.

If an agency wishes to purchase through a federal program that is not provided in statute (refer to ORS 279A.180) or a GSA Order, it must request a written determination from the DAS Director or the Director's designee. An agency that requests a written determination must document that the federal government has authorized states, including the agency, to purchase through the proposed federal program.

The following table describes the process to conduct a Federal Procurement. If the procurement exceeds $150,000, DAS State Procurement Services on behalf of an agency, or an agency with delegated procurement authority, collectively termed, a procuring agency, must manage the process. In considering this procurement method, a procuring agency should be aware that GSA Schedule prices are ceiling prices and agency should negotiate price reductions at the order level.