BPAs and the Law

Once again, Blanket Purchase Agreements (BPAs) are simplified contract vehicles allowing agencies to fill repetitive orders for commercial, off-the-shelf goods and services. BPAs have become a very popular procurement vehicle, especially GSA BPAs, which are BPAs placed under a vendor’s GSA Schedule Contract. This is because there is no limit on the dollar value of individual task or delivery orders or requirement to publicize orders placed under a GSA Schedule BPA.

So what is the law governing BPAs? What regulations govern an agency awarding a BPA or multiple BPAs? What policies apply to an agency placing an order under a GSA Schedule BPA?

Establishing BPAs: Federal Acquisition Regulation (FAR) § 13.303-1 says that an agency may establish a BPA with a single company for repetitive orders, or with multiple companies to provide maximum practicable competition, or with GSA Schedule contractors. However, the FAR does not state exactly how an agency should go about selecting BPA contractors. It is simply a matter of identifying vendors and negotiating with them.

When it comes to awarding a GSA Schedule BPA, GSA has stated that any agency must follow FAR 8.404 before awarding a GSA Schedule BPA. That regulation requires an agency to review the pricelists of three or more GSA Schedule contractors before making a best value selection.

The Air Force takes a more formal approach and recommends that an ordering activity publicize in the Commerce Business Daily or on its electronic bulletin board its intent to award one or more GSA Schedule BPAs. (http://safaq.hq.af.mil/contracting/affars/98-c-07.htm). The Air Force also recommends that the ordering activity outline the evaluation/selection criteria and provide instructions on how to respond to the invitation.

The General Accounting Office’s decisions on the establishment of BPAs are unclear. For plain vanilla BPAs awarded under FAR Part 13, Simplified Acquisition Procedures, the GAO has stated that agencies are not required to request proposals or to conduct a competition when establishing a single BPA or multiple BPAs. Information Systems Technology Corp., B-280013, Aug. 6, 1998, 98-2 CPD ¶ 36. That rule, however, would appear to apply only to plain vanilla BPAs awarded under FAR Part 13, Simplified Acquisition Procedures, and would not apply to GSA Schedule BPAs awarded under FAR 8.404. The Information Systems Technology case, however, clearly involved GSA Schedule BPAs, making the GAO’s holding inconsistent.

The GAO is clear that if an agency conducts a competition, then the agency must treat all contractors fairly and equally. In the Information Systems Technology case, a contractor complained that the agency had incorrectly evaluated the technical merit of its offer submitted in response to the agency’s notice that it wanted to establish multiple BPAs. The GAO reviewed the agency’s technical evaluation to confirm that it rationally supported the agency’s finding that the protester’s offer was technically inferior.

The Information Systems Technology case also shows that an agency can award BPAs based on the technical merit of contractors, even if higher priced than other vendors. At the opposite end of the best value spectrum, the GAO has also sustained an agency action that awarded BPAs on the basis of best price where the agency found the offerors’ products essentially equivalent. Pfizer, Inc., B-276362, June 6, 1997, 97-1 CPD ¶ 205.

Awarding Orders Under BPAs: FAR § 13.303-5(d) states that if there are an insufficient number of BPAs to insure maximum practicable competition for BPA orders over the $2,500 micro-purchase threshold, then the agency should either solicit from other sources or seek to establish additional BPAs.

GSA’s approach to placing orders under GSA Schedule BPAs is much less restrictive than the FAR. GSA’s Multiple Award Schedule Virtual Campus (http://pub.fss.gsa.gov/schedules/building3.cfm) specifically states that once a BPA has been awarded, purchase orders can be placed without further competition, documentation, or justification. The reasoning behind GSA’s position is that the agency was required to follow the competition requirements of FAR § 8.404 when establishing the GSA Schedule BPA.

In my opinion, GSA’s interpretation of FAR § 13.303-5(d) is wrong. Even after a GSA Schedule BPA is awarded, an agency should still comply with the requirements of FAR § 8.404 before awarding orders. This is consistent with a footnote in the GAO’s Information Systems Technology decision, in which the GAO noted that applicable competition requirements still apply to all purchases under a BPA after it is awarded.

The Air Force takes a narrower course more in keeping with FAR § 13.303-5(d) and the Information Systems Technology case by requiring its ordering activities to comply with FAR § 8.404 when placing orders (http://safaq.hq.af.mil/contracting/affars/98-c-07.htm). The Air Force goes on to recommend a structured evaluation process requiring the submission of the information the activity needs to make a proper best value award.

The GAO, while giving agencies wide latitude when placing BPA orders, still requires agencies to treat contractors fairly. In Comark Federal Systems, B-278343, Jan. 20, 1998, 98-1 CPD ¶ 34, the agency issued a Request for Quotations (RFQ) to several GSA IT Schedule BPA contractors. The RFQ called on the Schedule vendors to select, from among the numerous possible configurations of the items on their Schedules, a particular configuration on which to submit a quotation. The agency conducted a detailed technical evaluation and cost/technical trade-off determination on the vendors responses to the RFQ.

The GAO ruled that the RFQ went beyond the bounds of a simple best buy into the realm of a negotiated procurement. The agency’s RFQ, as drafted, shifted the responsibility for selecting items from the agency to the vendors. The agency’s detailed technical evaluation and cost/technical trade-off determination also amounted to a negotiated procurement under FAR Part 15.

So there you have it. As much as we would all like clear cut, indisputable rules to follow, the law governing the establishment of BPAs and placement of orders under both plain and GSA Schedule BPAs is unsettled. Considering the increasing popularity of these procurement vehicles, the rules will continue to be refined over the next several years.