Understanding GSA Order Level Materials (OLM): What it Is, How it Works, Who Qualifies
GSA OLMs are products and services purchased outside of a contractor’s primary scope of work but are necessary to fulfill a government contract. This system allows federal agencies to order materials or services that are not already included in the original contract.
In this guide, we’ll dive into what GSA OLMs are, how they work, the benefits they provide, and how both vendors and agencies can take full advantage of them.
What Are GSA Order Level Materials (OLM)?
Ever wonder how federal agencies buy things that aren’t quite on their original shopping list? That’s where Order Level Materials come in.
Think about it this way: you’ve got a contract to provide consulting services. But during the project, your client needs some specialized software. Or maybe training materials. Or even equipment that directly supports your main service.
That’s what GSA OLM handles.
Order Level Materials, or OLM, are products and services that federal agencies can buy alongside your main contract. They’re extras that support the primary work.
Why Were OLMs Introduced?
The GSA introduced OLM to make contracting simpler. Before OLM existed, agencies had to create separate contracts for every little add-on. That meant more paperwork. More time. More headaches for everyone involved.
Now? Agencies can bundle these items into existing orders. Contractors can offer more complete solutions. Everyone saves time.
Common Examples of OLM
Here’s the key: OLM items must directly support your main contract work. They can’t be random purchases that happen to occur at the same time. There has to be a clear connection.
For IT services, you might include software licenses or computer equipment. Professional services often need training materials or reference guides. Engineering contracts could require testing equipment or specialized tools.
For example, imagine a contractor working on a government project to build a new office building. The primary contract may focus on the construction of the building itself, but the contractor may need to purchase specific materials, such as furniture or specialized equipment, to complete the project. If the contractor orders ergonomic office chairs and desks to outfit the building, these items would qualify as OLMs because they are directly related to the completion of the building and essential for its intended purpose. However, if the contractor buys office supplies like pens or paper that are not needed for the construction work itself, those would not qualify as OLMs.
How GSA OLM Works
The structure is straightforward. You maintain your regular GSA Multiple Award Schedule contract. Within that contract, you have the ability to offer OLM alongside your main services.
When an agency places an order, they identify which parts are your core services. Then they specify what OLM items they need. Everything flows through one purchase order.
Who Can Use OLMs?
Not every GSA schedule holder can offer Order Level Materials. Currently, 61 GSA MAS subcategories have OLM authorization.
Your subcategory needs explicit permission to include OLM. Check the GSA’s official list to see if yours qualifies.
Even if your category is authorized, you need to follow specific rules:
- Your OLM offerings must relate to your main contract.
- They must stay within reasonable pricing guidelines.
- And you must maintain accurate documentation.
Agencies buying OLM also have responsibilities:
- They need to justify why the OLM items are necessary.
- They must ensure prices are fair and reasonable.
- And they have to show how everything connects to the primary contract purpose.
It’s a shared accountability system. Both sides keep things legitimate and well-documented.
How to Order OLM Under GSA Schedules
Let’s break this down for both sides of the transaction:
For Federal Agencies
You’ve identified a need for Order Level Materials. Great. Here’s your path forward:
- Step 1: Confirm the contractor’s schedule includes OLM authorization. Not all contracts allow it. Don’t assume.
- Step 2: Determine exactly what OLM items you need. Be specific. Vague requests create confusion and slow everything down.
- Step 3: Verify the OLM directly supports your main contract purpose. Document this connection. Your contracting officer will need it.
- Step 4: Review pricing to ensure it’s fair and reasonable. Compare against market rates if necessary.
- Step 5: Include the OLM requirements in your task order or delivery order. Separate them clearly from your main service requirements.
- Step 6: Maintain thorough records. Track what you bought, why you bought it, and how it supported the mission.
For Contractors
Want to add OLM capability to your GSA schedule? Here’s what that looks like:
- First: Verify your subcategory allows OLM. If it doesn’t, this whole process stops here. No amount of wanting it makes it possible.
- Assuming you’re eligible: Prepare your OLM offerings. List what you can provide. Describe how these items support your main services. Include pricing information.
- Submit a modification to your GSA schedule: This isn’t a new contract. It’s an update to your existing one. The paperwork is less intensive than the original application, but it still requires attention to detail.
- Provide clear justification for your OLM items: Explain the connection to your core services. Show why agencies would logically need these items alongside your main offerings.
- Once approved: Update your GSA Advantage listings. Make sure agencies can see your OLM capabilities. Don’t hide this service. Market it.
Documentation Is Your Friend
Both agencies and contractors need solid records. What was ordered? When? Why? How much did it cost?
These records protect everyone. Think of documentation as your insurance policy. You hope you never need it. But when questions arise, you’ll be really glad it exists.
OLM vs ODC: What’s the Difference?
People often confuse Order Level Materials with Other Direct Costs. They’re not the same thing. Let’s clear this up.
| Aspect | OLM (Order Level Materials) | ODC (Other Direct Costs) |
|---|---|---|
| Definition | Products or services bought under GSA schedules that support the main contract | Additional costs directly tied to contract performance but not in the base price |
| Examples | Software licenses, equipment, training materials | Travel expenses, printing costs, shipping fees |
| Pricing | Must follow GSA pricing guidelines and be pre-approved | Reimbursed at actual cost or pre-negotiated rates |
| Authorization | Requires OLM authorization in your GSA schedule subcategory | Typically negotiated in individual task orders |
| Purchase Process | Ordered through GSA schedule as part of a delivery order | Billed separately, often with receipts and documentation |
| Purpose | Provides tangible items that enhance service delivery | Covers incidental expenses necessary for contract completion |
The key distinction? OLM involves actual products or services you’re selling. ODC covers expenses you incur while performing the work.
If you buy something to resell as part of your solution, that’s OLM. If you spend money to get the work done, that’s ODC.
OLM vs Open Market Items: What’s the Difference?
Here’s another comparison that trips people up. OLM and Open Market Items sound similar. They’re actually quite different:
| Aspect | OLM (Order Level Materials) | Open Market Items |
|---|---|---|
| Contract Vehicle | Must be purchased through GSA schedules | Can be bought from any vendor, with or without a contract |
| Authorization | Requires specific authorization in GSA subcategory | No special authorization needed |
| Relationship to Main Contract | Must directly support the primary GSA contract work | May or may not relate to any existing contract |
| Pricing Controls | Subject to GSA pricing rules and documentation | Subject to open market competition and price reasonableness |
| Documentation | Must be documented within the GSA order | Follows standard procurement documentation |
| Restrictions | Limited to approved OLM categories and items | Generally unrestricted based on availability |
| Vendor Requirements | Must be offered by a GSA schedule holder | Any qualified vendor can participate |
Think of it this way: OLM is the controlled, structured option within the GSA framework. Open Market Items are the wild west of federal procurement. Not chaotic, just less structured.
Agencies choose OLM when they want the convenience and oversight of GSA schedules. They go open market when they need something not available through GSA, or when competition suggests better value exists elsewhere.
Need Help Navigating GSA Order Level Materials?
GSA contracting has layers. Order Level Materials add another dimension to consider. And yes, it can get complicated.
That’s where Road Map Consulting comes in.
We’ve spent years helping businesses understand and maximize their GSA schedules. OLM is just one piece of that puzzle, but it’s an important piece. We help you determine if OLM makes sense for your business. We guide you through the modification process to add OLM capabilities. And we make sure you’re using OLM correctly once it’s part of your schedule.
Our services include:
