Order-Level Materials, often abbreviated as OLM, are a specific category of supplies or services that can be acquired at the individual task or delivery order level under the General Services Administration (GSA) Schedule. This concept was introduced to provide federal buyers and contractors with greater flexibility when fulfilling the requirements of a specific order. The key idea is that certain ancillary products or services, which are not pre-priced on the contractor’s GSA Schedule contract, can still be included and billed within the scope of a particular order.
In practical terms, an OLM allows a contracting officer to include additional items that are necessary for the successful completion of a specific order but were not originally part of the awarded schedule pricing. These materials are purchased using the Special Item Number (SIN) OLM, which serves as the mechanism for adding them to the order in a compliant manner.
The Purpose of OLM in Federal Contracting
The introduction of the OLM SIN addressed a long-standing limitation in the GSA Schedule procurement process. Previously, if a project required a combination of pre-priced services and additional, order-specific materials, the buyer often had to resort to an open-market purchase or issue a separate contract. This could cause delays, add administrative burdens, and reduce efficiency.
With the OLM mechanism in place, contracting officers can:
- Include incidental supplies or services necessary for the completion of the primary order.
- Consolidate all requirements into a single GSA Schedule order.
- Ensure compliance with Federal Acquisition Regulation (FAR) rules for schedule orders.
This approach streamlines procurement, reduces administrative overhead, and increases the overall flexibility of the GSA Schedule program.
How OLM Works in Practice
When a federal agency issues an order under a GSA Schedule that requires both core services and some incidental materials, the contracting officer can add the necessary OLM items directly to the order. These materials are not pre-priced in the base contract but are priced at the time of the order based on competition among qualified schedule contractors.
The process typically follows these steps:
- The agency defines the core requirement and identifies any additional materials or services needed to fulfill it.
- The contracting officer determines that these additional items meet the definition of OLM under the applicable SIN.
- Pricing for the OLM items is established at the order level, ensuring it is fair and reasonable.
- The OLM items are included in the awarded task or delivery order alongside pre-priced schedule items.
Key Characteristics of OLM
OLM items must meet several important criteria to be eligible for inclusion under a GSA Schedule order. These include:
- They must be incidental to the primary order and necessary for successful completion.
- They cannot be the primary purpose of the order.
- They must be purchased under the SIN OLM and comply with all relevant regulations.
- Pricing must be determined fair and reasonable at the order level.
This ensures that the OLM mechanism is used for its intended purpose rather than as a way to bypass standard schedule pricing rules.
Benefits of Using OLM
The use of Order-Level Materials provides measurable advantages for both federal buyers and GSA Schedule contractors.
For agencies, OLM means fewer procurement actions, reduced administrative workload, and the ability to get everything needed for a project from a single schedule source. This also promotes faster project execution, since there is no need to seek additional open-market quotes or contracts for incidental items.
For contractors, OLM opens the door to offering a more complete solution to the customer. It allows them to bundle incidental materials and services that would otherwise require separate agreements. This can increase competitiveness in bidding and enhance customer satisfaction.
The Role of SIN OLM
The Special Item Number (SIN) OLM is the contractual mechanism that allows contractors to provide these materials at the order level. Contractors must have SIN OLM awarded on their schedule contract to offer OLM items. Once awarded, they can include OLM items on quotes and invoices as long as the requirements for eligibility are met.
SIN OLM also provides a framework for ensuring transparency and compliance. It includes guidelines for how OLM pricing is to be documented, how competition requirements are to be met, and how contracting officers are to review and approve such items.
Compliance Considerations
Even though OLM increases flexibility, it still comes with compliance responsibilities. Contractors and contracting officers must follow established procedures to ensure the proper use of OLM. This includes:
- Confirming that OLM items are truly ancillary to the main order.
- Documenting the necessity and reasonableness of the items.
- Ensuring pricing transparency and competitiveness.
- Following all applicable FAR clauses related to the GSA Schedule.
Failure to comply can lead to audit findings, order modifications, or even contract disputes.
Practical Examples of OLM in Use
Imagine a federal agency awarding a task order for IT system integration services under a GSA Schedule. The core services may be pre-priced labor categories on the contractor’s schedule, but the project also requires specialized hardware components unique to the client’s environment. Rather than issuing a separate purchase for the hardware, the contracting officer can include those items as OLM in the same order. The contractor then sources the hardware, invoices it under SIN OLM, and delivers the complete solution to the client.
Another example could involve a facilities maintenance contract where the core service is building upkeep. If a specific repair requires unique replacement parts that are not on the contractor’s schedule, these can be procured as OLM and included in the task order.
Best Practices for Managing OLM
To maximize the benefits and avoid compliance pitfalls, agencies and contractors should adopt best practices when dealing with OLM. These include:
- Planning early to identify potential OLM needs.
- Maintaining thorough documentation for all OLM items.
- Ensuring that contractors with SIN OLM are pre-qualified for competition.
- Reviewing invoices carefully to confirm OLM charges are justified.
By integrating these practices into the procurement process, both sides can ensure the OLM tool is used effectively and within regulations.
The Future of OLM in Federal Procurement
Since its introduction, OLM has been well-received by the federal procurement community, and its use is expected to grow. As more agencies recognize the efficiency gains and more contractors secure SIN OLM, it is likely to become a standard feature in many complex schedule orders.
Continued training for contracting officers, combined with clear guidance from GSA, will be key to ensuring the proper and beneficial use of OLM in the long term.
