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Schedule BPAs versus Open Market BPAs

The Federal Acquisition Service (FAS) offers multiple acquisition vehicles that provide efficient and cost effective solutions.  Many of these tools are contracts; however, FAS also establishes Blanket Purchase Agreements (BPAs) as well.  There can be several misunderstandings about BPAs so the goal of this article is to clarify this acquisition tool and the difference between Schedule BPAs and Open Market BPAs.   

FAR section 8.405-3, Blanket purchase agreements (BPAs), discusses the establishment and use of BPAs created against a Federal Supply Schedule.  These are BPAs that “ordering activities may establish… under any schedule contract to fill repetitive needs for supplies or services.  Ordering activities shall establish the BPA with the schedule contractor(s) that can provide the supply or service that represents the best value.”  Schedule BPAs offer value to customers in the form of an opportunity for streamlined and oftentimes cost savings contract creation and, importantly, in the fact that they are supported by GSA’s Schedule contracts.  This is significant because the Schedule underlying this type of BPA is already a negotiated and established contract.  It is the backbone of the BPA, and has associated contract terms and conditions, and appropriate clauses, which are refreshed at least every six months.   Thus, a Schedule BPA  is predictable, stable instrument that lines up with, at a minimum, the offerings on Schedule, and hopefully offer even better value. 

One example of effective use of the BPA tool established against a Schedule is the Federal Strategic Sourcing Initiative (FSSI) suite of Office Supplies BPAs.  This suite of BPAs provides additional discounts to the negotiated prices already available on GSA’s Schedule 75 for office supplies and provides the federal government with a fast and effective way to order while ensuring prompt, cost-effective delivery and quality customer service (http://www.gsa.gov/portal/content/141857).  It works to consolidate purchasing across the federal government to provide additional savings due to economies of scale.  So far in its first year, sales under these BPAs are at $102.9 million and savings are about $8 million.  For more information on other government-wide BPAs that GSA has put into place, see GSA Advantage.    

It is important to note that when establishing BPAs against a Schedule, it is important to try to create multiple-award BPAs whenever possible, instead of single-award BPAs.  The above is an example of a multiple-award BPA.  This allows for more competition among contractors and the opportunity for achieving a better value procurement.  When ordering under a BPA, notice the new ordering procedures that have been established for Schedule BPAs created after May 16, 2011.  See 8.405-3(c) Ordering from BPAs for the new rules.

In contrast, FAR Subpart 13.3, Simplified Acquisition Methods, offers another type of BPA vehicle.  In 13.303-1, it describes a BPA as a “simplified method of filling anticipated repetitive needs for supplies or services by establishing ‘charge accounts’ with qualified sources of supply.”  In this case, the BPA is established against the open market.  There are several reasons to create this type of BPA: there is a wide variety of items in a broad class of supplies or services that are generally purchased, but the exact items, quantities, and delivery requirements are not known in advance and may vary considerably; there is a need to provide commercial sources of supply for one or more offices or projects in a given area that do not have or need authority to purchase otherwise; the use of this procedure would avoid the writing of numerous purchase orders; and there is no existing requirements contract for the same supply or service that the contracting activity is required to use (13.303-2 (a) (1) – (4)).  Notably, however, this type of BPA does not offer the same stability that a Schedules BPA does.  Because it is established against the open market, there are not baseline terms, pricing, or updates.  This naturally leads to a less stable BPA.  Nevertheless, an open market BPA is not bound by Schedule offerings, and can cover supplies and services beyond those.

For all Blanket purchase agreements it is essential to remember that there is no actual contract.  Instead, it is an agreement that has been created to ease the process of setting up a future orders.  

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Comments

Nell
<p>We awarded a BPA against a GSA Schedule contract. Are we required to prepare a best procurement D&amp;F</p>
MAS Blogger
<p>As of now, the FAR only requires that the Contracting Officer &quot;document&quot; the rationale for using other than a firm-fixed price order (FAR 8.405-2(e)(7)(i)). &nbsp;As a matter of best practice, we recommend that this documentation occur in a determination and findings (D&amp;F) -- but currently, neither FAR 12.207 nor FAR subpart 8.4 explicitly mentions the requirement for the Contracting Officer to execute a determination and findings when placing orders against Schedules under FAR subpart 8.4.</p>
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