The New Ordering and BPA Rules Under
Schedule Contracts – Get Ready for More
Competition and More Transparency
James (Jim) Phillips, Esq. [email protected]
Centre Capabilities
Contractor Services The Federal Contracting Institute
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Overview of Presentation
Effective May 16, 2011, an interim FAR rule extensively revised FAR Subpart 8.4 governing order placement and Blanket Purchase Agreements (BPAs) under Federal Supply Schedule (FSS) contracts. See 76 Fed. Reg. 14548, March 16, 2011
As a result of the new interim rule:
FAR 8.4 was extensively restructured;
Competition requirements for placing Orders against Schedules were enhanced;
Presentation Objectives
Demonstrate the new rules governing placing orders against the Schedules (both products and services).
Review the new requirements for BPAs under FSS contracts.
Review the possible impact of the new rules and what they mean for doing business in the federal market place.
Competition Level #1: Orders Not Exceeding the Micro- Purchase Threshold ($3,000)
No Competition or Best Value Determination is Required.
Survey available pricing information of at least three (3) Schedule vendors.
Select the Best Value – No Formal RFQ is required.
If RFQ is used, no specific competition threshold in terms of offers received.
Change: “Simplified Acquisition Threshold”
replaces “Maximum Order Threshold.”
Competition Level #2: Orders > Micro-Purchase Threshold But < Simplified Acquisition Threshold ($150,000)
Competition Level #3: Orders Exceeding the Simplified Acquisition Threshold ($150,000)
Create an RFQ that describes requirements for the
supplies to be procured & evaluation criteria for order placement.
Post the RFQ on e-Buy to all available Schedule
holders to enable them to submit a quote or provide directly to as many vendors as practicable based on market research to reasonably ensure receiving at least three quotes.
Place the order that provides the best value after fairly considering all offers received.
Competition Level #3: Orders Exceeding the Simplified Acquisition Threshold
Change #1: RFQ is now required. Buyer may
not simply search GSA Advantage catalogs and
place unilateral orders.
Change #2: “Old” competition standard was to
“solicit” at least three schedule vendors.
“New” standard is to solicit a sufficient number
of Schedule holders to receive at least three
Competition Level #3: Orders Exceeding the Simplified Acquisition Threshold
New Transparency Requirement: If less than 3
offers are received, the CO must prepare a written determination that no additional contractors
capable of performing the requirements could be identified despite reasonable efforts to do so.
This determination must clearly explain the
Competition Level #3: Orders Exceeding the Simplified Acquisition Threshold
New Requirement for RFQs using Brand Name
Specs: shall only be used where the particular
brand name, product or feature is essential to the Government’s requirements.
A written justification must be prepared detailing the basis for utilizing a brand name specification. This determination must be posted on e-Buy with original RFQ.
Ordering Process for Services – FAR 8.405-2
Procuring agency must prepare both an RFQ and a SOW stating its requirements for the services and the basis on which offers will be evaluated for a best value award.
Content of Statements of Work
The Work to Be Performed
Location of the Work
Period of Performance
Deliverable Schedule
Applicable Standards
Preference for Performance-Based SOWs
Describe the requirement in terms of results rather than the methods of performance;
Rely on measurable performance standards and financial incentives; and
Rely on a quality assurance surveillance plan that will be used to monitor performance.
Transmittal of Statements of Work
As with products, no competition is required for orders not exceeding the micro-purchase threshold.
For orders > the micro-purchase threshold but not < simplified acquisition threshold, the Ordering Agency shall transmit the RFQ and SOW and the contractor selection criteria to at least three schedule contractors and request that they provide firm, fixed prices.
If additional vendors request an RFQ, the Ordering
Agency shall provide both the RFQ and SOW and fairly consider their offer.
Transmittal of Statements of Work
For orders > simplified acquisition threshold, the Ordering Agency shall post t
he RFQ on e-Buy to
all available Schedule holders to enable them to
submit a quote or provide directly to as many
vendors as practicable based on market
research to reasonably ensure receiving at least
three quotes.
Orders Exceeding the Simplified Acquisition Threshold
New requirement if less than 3 offers are received:
The CO must prepare a written determination that no additional contractors capable of performing the requirements could be identified despite
reasonable efforts to do so.
Again, determination must clearly explain the
reasonable efforts to identify additional sources.
Federal Supply Schedule Changes: BPAs
Procedures for Establishing a Schedule BPA - FAR 8.405-3(a)
Considerations for establishing Single-Award vs. Multiple-Award BPAS:
• Scope and complexity of requirement(s).
• Need to periodically compare multiple technical approaches or prices.
• Administrative cost of BPAs.
• Technical qualifications of schedule contractor(s).
Federal Supply Schedule Changes: BPAs
Procedures for Establishing a Schedule BPA - FAR 8.405-3(a)
New standard for establishing Single-Award vs. Multiple-Award:
• To the maximum extent practicable give preference to multiple-award BPAs.
• Follow ordering procedures of FAR 8.405-1 for BPAs for products or FAR 8.405-2 for BPAs for
Federal Supply Schedule Changes: BPAs
Procedures for Establishing a Schedule BPA - FAR 8.405-3(a)
Additional Restrictions on Single-Award BPAs:
• If estimated value is over $103M, must follow procedures for limiting sources & agency head must determine, in writing, that one of the
conditions applies-
• Orders so integrally related to one source
Federal Supply Schedule Changes: BPAs
Procedures for Establishing a Schedule BPA - FAR 8.405-3(a)
Restrictions on Single-Award BPAs (cont.):
• Limits period of performance to one year with four one-year options.
• Annual reviews require approvals by the contracting agency competition advocate.
Federal Supply Schedule Changes: BPA
Duration of Schedule BPAs: FAR 8.405-3(c)
Old:
• BPAs should not exceed five years, but may do so to meet program requirements.
New:
• Single-Award BPAs shall not exceed one year (base). It may have four one-year options.
• See 8.405-3(e) Procedures for exercising option years.
Federal Supply Schedule Changes: BPA
Order Placement under FSS BPAs: FAR 8.405-3(c)
Single-Award: Place orders to BPA holder as need arises at BPA rates/prices.
Multiple-Award:
• Orders < Micro-Purchase Threshold: Award orders without competition; Agency should attempt to distribute such orders among BPA holders.
• Orders < SAT: Provide all BPA holders a fair opportunity to be considered for award.
• Orders > SAT: Create RFQ and provide to all BPA holders; afford all BPA holders an opportunity to compete for order.
Requirements for Restricted Source Justifications
FAR 8.405-6 substantially re-written to address new justification, approval and transparency
requirements:
Justifications required whenever sources are intentionally restricted. Required content:
• Urgent and compelling need exists; or • Only one source is capable of providing a
Requirements for Restricted Source Justifications
Justifications cont’d:
New FBO Posting Requirement – Post justification to FedBizOps within 14 days of placing restricted order or BPA exceeding the Simplified Acquisition Threshold unless the notice will compromise national security.
• Contracting Officers must ensure that notices contain or release no information proprietary to the awarded
vendor.
• Contracting Officers must certify as to the accuracy of justification content.
Requirements for Restricted Source Justifications
New approval requirements for high value
Schedule orders and BPAs – FAR 8.405-6(d):
For orders/BPAs > $650K but < $12.5M, justification must be approved by agency competitive advocate.
For orders/BPAs >$12.5M < $62.5M, justification must be approved by agency head or his/her
Likely Impact of New Rules
Fewer “Quick Turn-Around” RFQs.
Fewer Single-Award BPAs.
Far greater transparency in the placement of orders under BPAs.
Products: increases the value of resellers; diminishes value of participating dealers.
Effective Date of Changes
The above new ordering rules apply to orders and BPAs issued after May 16, 2011.
Note: New ordering rules under BPAs do not
apply to BPAs established prior to effective date; however, buying agencies are encouraged to
A Side Note – The Re-Emergence of Small Biz Set-Asides A new interim FAR Rule authorizes buying agencies to invoke
“non-mandatory” set-asides under FSS procurements. See
76 Fed. Reg. 68032, Nov. 2, 2011.
GAO recently ruled that the VA, which is subject to special legislation regarding contracting with SDVOSBs, must prefer SDVOSB firms in all procurements, including their FSS orders.
See Aldevra B-405271; B-405524, Oct. 11, 2011.
Protests are currently pending at GAO seeking to impose FAR 19 requirements on FSS orders.
Changes to GSA Schedules Ordering in 2011
