Social Security Administration Procurement Procedures with Regard to a Multiple Award Contract and its Maximum Order Limitation

Concerns were expressed about Social Security Administration (SSA) practices in the procurement of standard forms. An examination was conducted to determine whether regulations were being circumvented and whether the concept of Maximum Order Limitation (MOL) was being properly used. MOL allows Federal agencies to purchase supply items under contract up to a specific dollar amount after which competitive bids would have to be submitted through the General Services Administration (GSA).

The complainant alleged that he was called by an SSA employee who requested pricing information on two items, including 450,000 sheets of form 1292. He provided this information and believed that his company had the lowest price for form 1292. He was told that this item would not be procured through competitive bids because of time limitations, although the price was over the MOL. Subsequently, 284,375 sheets of this item were purchased from a competing vendor after it had reduced its prices. When the complainant inquired about orders on form 1292, he was told that there would be no orders and that the pricing request was for information only. The Associate Commissioner of SSA stated that his procurement people did not solicit bids to compare prices, a practice forbidden by regulations. Since this point could not be proven and steps were being taken to improve procurement procedures, further pursuance of the matter was not warranted. There is nothing in the regulations to prevent the agency from reducing quantities to fall within the MOL.