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What is a FAR 51 Deviation?

redwhiteblue Far 51 DeviationAt first, it seems like an easy question. Who can purchase off the GSA schedule? But in practice, the answer is not always as simple. Previously, Andrew wrote a great blog describing which eligible entities can purchase off the GSA schedule.

Now that we’re clear on which eligible entities can purchase off the GSA schedule, there is just one more wrinkle to throw in. Occasionally, other contractors can be authorized by a government agency to purchase off the GSA schedule when deemed appropriate for agency requirements. This is called a FAR 51 Deviation, and it usually occurs for large-scale projects when a contractor needs to purchase other products and/or services in order to complete a “total solution” for an agency.

There are a few stipulations of the FAR 51 deviation. The supplies or services being purchased must be ancillary to the primary purpose of the contract with the federal agency, and the authorization is only available to the Federal government, not to state/local governments through cooperative purchasing. Additionally, the purchases made using the FAR 51 deviation authority can only be based on a “time and materials” or labor-hour method, not on a firm fixed price methodology. Items must also be invoiced at the price they were purchased from the contractor – i.e. the buying contractor cannot add any markup onto these items when billing the agency for them.

As a GSA contractor, if you receive an order from another contractor under a FAR 51 Deviation, there are a few things you need to do. First, be sure you have received a copy of the written authorization that is signed by the Federal agency contracting officer. You will want to keep this document for your files regarding this order, in case it comes up during your Contractor Assistance Visit. Next, you can offer the buying contractor GSA pricing (or better). If the buying contractor has their own GSA schedule, you will want to include their contract number on the purchase order or invoice. You will also want to include the following language on the invoice: “in care of ‘[name of government agency]’ under written authorization from ______ dated ______.”

Do not forget that this sale will count as a GSA sale. Be sure that you report it as such during 72A quarterly sales reporting. This means that the Industrial Funding Fee (IFF) applies to the sale, as it would to any GSA sale.

If you have any additional questions about FAR 51 Deviations, please feel free to contact Winvale!

 

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