Cooperative purchasing rule published

Proposed Rule

A new interim cooperative purchasing rule, which tries to address the strongest criticisms leveled at an earlier proposal, has been published and is effective immediately.

Under the rule, state and local governments can use the General Services Administration's schedule contracts for information technology acquisitions.

Public comment on the interim rule is due by July 7, after which GSA will begin to work on a final rule.

Congress authorized such cooperative purchasing as part of the E-Government Act of 2002. Rep. Tom Davis (R-Va.), chairman of the House Government Reform Committee, has championed the idea.

Turning the law into practice has proved to be difficult. The first proposed rule, which appeared in late January, elicited some strong criticism. It forbade state and local governments from adding terms and conditions to a GSA schedule contract, a provision that procurement analysts said would prevent many government organizations from using the provision altogether.

The interim rule softens that restriction. Now, authorized state and local governments using the GSA schedule can add terms and conditions required by state or local laws and regulations, but only if they do not conflict with the schedule contract's terms.

The first proposed rule required that disputes arising from state and local use of a GSA contract should be settled in court, rather than through the GSA Board of Contract Appeals. Attorney Jonathan Aronie, who specializes in procurement, said that could lead to inconsistent decisions. The new proposed rule does not allow the GSA board to hear disputes because the federal government is not a party to the contracts. However, it does encourage the use of arbitration rather than litigation when possible.

The new rule also removes language that would have required contractors to lower their prices if a dealer sold their product at a discount.

Use of the cooperative buying provision is voluntary for contractors, who have to determine which of their offerings, if any, they want to make available to nonfederal buyers.

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