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New opportunities for GSA schedule contractors.

Under an interim rule printed in the Federal Register on February 1, the General Services Administration The General Services Administration (GSA) was established by section 101 of the Federal Property and Administrative Services Act of 1949 (40 U.S.C.A. § 751). The GSA sets policy for and manages government property and records.  granted state and local government the right to use Federal Supply Schedules to purchase products and services to aid in recovery from major disasters and from terrorism, nuclear, biological, chemical or radiological radiological

pertaining to radiology.

radiological diagnosis
see radiological diagnosis.

mobile radiological apparatus
x-ray machines that can be moved but are not portable because of their weight.
 attacks. The rule is intended to implement Section 833 of the John Warner National Defense Authorization Act The National Defense Authorization Act is the name of a United States federal law that is enacted each fiscal year to specify the budget and expenditures of the United States Department of Defense.  for fiscal year 2007.

Importantly for government contractors A government contractor is a private company that produces goods or services under contract for the government. Often the terms of the contract specify cost plus – i.e., the contractor gets paid for its costs, plus a specified profit margin. , the interim rule allows sales in advance of disasters or attacks because of the likelihood that after the disaster or attack, the state or local government's systems may be disrupted. This allows government contractors to market and sell goods and services In economics, economic output is divided into physical goods and intangible services. Consumption of goods and services is assumed to produce utility (unless the "good" is a "bad"). It is often used when referring to a Goods and Services Tax.  to state and local governments at any time, provided the goods or services could be used in a disaster or attack recovery. It is up to the state or local government to ensure that the goods or services purchased in advance are actually used for disaster or attack recovery.

Although technically state and local governments may begin purchasing recovery goods and services from Schedules immediately, existing Schedule contracts must be modified, as agreed to by the Schedule contractor and GSA (1) (Global mobile Suppliers Association, Sawbridgeworth, U.K., A membership organization of suppliers of GSM products and services. Its goal is to promote GSM as the worldwide mobile communications standard. See GSM Association and GSM. , to allow for disaster recovery purchasing. After an existing contract is modified or a new contract awarded, a Schedule contractor will retain the right to decline orders from state or local governments. Schedule contractors may decline an order, for any reason within a five-day period after receipt of the order; however, credit card orders must be declined within 24 hours.

In general, the rules for sales from Federal Supply Schedules to state and local governments are similar to sales to the federal government. State and local governments are encouraged to follow the ordering procedures set forth in FAR Subpart 8.4 when placing orders against the Schedules. Contracts between state and local governments and schedule contractors will be governed by the terms and conditions of the schedule contract. However, state and local entities are permitted to include terms and conditions required by their statute, ordinance A law, statute, or regulation enacted by a Municipal Corporation.

An ordinance is a law passed by a municipal government. A municipality, such as a city, town, village, or borough, is a political subdivision of a state within which a municipal corporation has been
, regulation or order, provided the terms and conditions do not conflict with the terms and conditions of the Schedule contract. As with sales to the federal government, Schedule contractors are required to pay industrial funding fees for sales to state and local governments. Payments by State and local governments are subject to the Federal Prompt Payment Act, unless a state prompt payment law applies to the purchase.

The interim rule defines state and local governments as: "The States of the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. , counties, municipalities, cities, towns, townships, tribal governments, public authorities (including public or Indian housing agencies under the United States Housing Act of 1937), school districts, colleges, and other institutions of higher education higher education

Study beyond the level of secondary education. Institutions of higher education include not only colleges and universities but also professional schools in such fields as law, theology, medicine, business, music, and art.
, council of governments (incorporated or not), regional or interstate government entities, or any agency or instrumentality Instrumentality

Notes issued by a federal agency whose obligations are guaranteed by the full-faith-and-credit of the government, even though the agency's responsibilities are not necessarily those of the US government.
 of the preceding entities (including any local educational agency or institution of higher education), and including legislative and judicial departments." The term "State and local governments" does not include contractors or grantees of state or local government.

Any performance problems encountered when purchasing goods and services from a. Schedule contractor are the problem of the State or local government. The federal government is not liable for the contractor's performance, or nonperformance.

State and local government entities may, however, notify the GSA of performance problems and this information may be used by GSA to evaluate the contractor's overall performance under the GSA Schedule contract. Disputes may be litigated in any state or federal court with jurisdiction. Resolution of such disputes shall be governed by the principles of federal procurement law and the uniform commercial code, as applicable and appropriate.

The interim rule opens up significant opportunities for sales to state and local governments. Previously, state and local governments were only permitted to make purchases from the IT schedule, Schedule 70. The secretary of Homeland Security Noun 1. Homeland Security - the federal department that administers all matters relating to homeland security
Department of Homeland Security

executive department - a federal department in the executive branch of the government of the United States
, who is responsible for identifying Schedules to facilitate recovery, has determined that all of the products and services available under the GSA Schedules could potentially be used for recovery from a disaster or a terrorist attack.

Comments to the interim rule are due April 2. Additional information about the interim may be found at under the disaster recovery purchasing link.

Philip M. Dearborn is a partner in the Washington law firm PilieroMazza PLLC PLLC Professional Limited Liability Company
PLLC Polk Life and Learning Center (Bartow, FL)
PLLC Partners of Limited Liability Corporation
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Author:Dearborn, Philip M.
Publication:Set-Aside Alert
Date:Feb 23, 2007
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