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Is a Schedule BPA a "Contract?"

Not usually.


A Blanket Purchase Agreement is Usually Not a “Contract” for Most Federal Procurement Purposes

Summary: A BPA (whether a Part 13 BPA or a SubPart 8.4 BPA) is not a contract because it neither obligates funds not requires placement of any orders against it.  Instead, it is an understanding (sometimes referred to as a “vehicle” or “agreement” in regulations, court, and review board cases) between an ordering agency and a contractor that allows the agency to place future orders more quickly by identifying terms and conditions applying to those orders, a description of the supplies or services to be provided, and methods for issuing and pricing each order. The government is not obligated to place any orders.  Either party may cancel a BPA at any time.  The award of a BPA lacks mutuality of consideration. However, circumstances may transform a BPA into a binding obligation, that is, an enforceable contract. An enforceable contract exists when the ordering agency places an order against the BPA and the contractor accepts it (either by signature or by commencing performance). When an order is issued under the BPA and the BPA-holder agrees to provide the service, then that individual order becomes a binding contract between the parties and both parties are then bound to all the terms and conditions in the BPA for that order.  The result is that a BPA is a flexible simplified method of procurement for filling anticipated repetitive requirements that is itself somewhat protest-resistant - - at least until that first order is placed.

[for the purpose of business size] 13 C.F.R. §121.404 (g) (vi): “A Blanket Purchase Agreement (BPA) is not a contract. Goods and services are acquired under a BPA when an order is issued. Thus, a concern's size may not be determined based on its size at the time of a response to a solicitation for a BPA.”

[for the purpose of the requirement to be registered in CCR: “Prospective contractors shall be registered in the CCR database prior to award of a contract or agreement...”] 48 C.F.R. § 4.1101 defines “agreement” as “basic agreement, basic ordering agreement, or blanket purchase agreement.”

The Federal Acquisitions Regulations (FAR) System "prescribes policies and procedures for establishing and using basic agreements and basic ordering agreements." 48 C.F.R. § 16.701. Both "basic agreements" and "basic ordering agreements" contain "contract clauses applying to future contracts between the parties during [the] term [of the contract]." 48 C.F.R. §§ 16.702(a), 16.703(a).


Almar Indus., Inc. v. United States, 16 Cl.Ct. 243 (1989).

Fay Zhengxing v. United States, 71 Cl.Ct. 732 (2006).

Labat-Anderson, Inc v. United States & JHM Research and Development Inc., __Cl.Ct.___ (2001), No. 01-350C, Wilson, J.

Modern Systems Technology Corp v. United States, 24 Cl.Ct. 360 (1991) aff’d 979 F.2d 200 (1992).

Boehringer Mannheim Corp., B-279238, May 21, 1998.

Canon USA, Inc., B-311254.2, June 10, 2008.

Logan LLC, B-294974.6, December 1, 2006.

 

[Original content developed by Dave Clemens.  Edited by Brad Powers 1/12/2011.]

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