The Small Business Jobs Act of 2010 (SBJA), Federal Acquisition Regulation (FAR) 8.405-5, and the setting aside of General Services Administration (GSA) Blanket Purchase Agreement (BPA) Schedule Orders ?
How does the Act provide for the setting-aside of BPA Orders? Taking this into consideration, as well as the volume of GSA Federal Supply Schedule (FSS) contracts and thereby source competition afforded the federal acquisition community, it’s quite interesting how the FAR prescribes “order set-asides.”
Federal Register Final Rule—Small Business Administration (SBA) Rules and Regulations
In accordance with the Federal Register, Vol. 78, No. 191, October 2, 2013 final ruling on the “Acquisition Process: Task and Delivery Order Process Contracts, Bundling Consolidation,” the SBJA “was designed to protect the interest of small businesses and boost their opportunities in the federal marketplace.” The rule goes on to mention the federal government’s increased use of multiple-award contracts, including GSA Multiple Award Schedule (MAS) contracts, governmentwide acquisition contracts (GWACs), agency-specific indefinite delivery vehicles (IDVs), and how the use of these vehicles consolidates procurement contract efforts and achieves cost savings though the “reduction of administrative costs” and the combining of government “buying power”—i.e., appropriately influenced economies of scale. The challenge, however, is the appropriate use of small business benefits to taxpayers: “creativity, economic expansion, job growth, cost-effective technical expertise, and prime and subcontractor” positioning to achieve small business goals.
SBJA, Section 1331
The final rule also provides that the interim rule “further makes clear that order set-asides may be used in connection with the placement of orders and blanket purchase agreements under Multiple Award Schedule contracts.”
Section 1331 of the SBJA examines “multiple-award contracts,” and provides that “agencies may, at their discretion”—
- “Set aside part or parts of a multiple award contract for small business concerns…”;
- ”Notwithstanding the fair opportunity requirements under section 2304c(b) of title 10, United States Code, and section 303J(b) of the Federal Property and Administrative Services Act of 1949 (41 USC 253j(b)), set aside orders placed against multiple award contracts for small business concerns…”; and
- “Reserve [one] or more contract awards for small business concerns under full and open multiple award procurements….”
FAR 8.405-5, “Small Business”
Here, the FAR prescribes that contracting officers may, at their discretion—
- Set aside “orders”—that is, Schedule stand-alone orders—for small businesses, and
- Set aside “BPAs” for small businesses.
More specifically, agencies may, at their discretion, establish these vehicles as small business set-aside actions.
There is no mention of “BPA orders.” Neither is there mention of BPA orders within the SBJA or within the Federal Register final rule— both refer to and prescribe the setting-aside of multiple-award contracts, stand-alone orders, and FAR specifically refers to the actual established BPA.
Categorically, the FAR goes on to provide that when setting aside “BPAs,” the procedures at 8.405-3 should be followed. To adhere to this prescribed course of action, the contracting officer, when “ordering from multiple-award BPAs,” can select any BPA holder if the total dollar value of the action doesn’t exceed the micro-purchase threshold, and shall afford all BPA holders an opportunity to be considered for award of the BPA order, if the total dollar value of the action exceeds the micro-purchase threshold. More specifically, each BPA holder shall be provided a specific request for quote (RFQ) for procurement requirements of an anticipated total dollar value exceeding the simplified acquisition threshold. Schedule contracts provide for an extensive volume of competitive cost/price offerings.
To be “fairly considered,” the FAR makes no provision in Subpart 8.4 for ordering separate/different classes or types of supplies/services under multiple-award BPAs. BPA holders both large and small are to be provided the opportunity for consideration. The FAR already establishes the “notwithstanding” requirement at 8.405-5 and 16.505(b)(2)(i)(F) and (ii).
Noteworthy is that this holds true pursuant to the terminology of the SBJA, which addresses the “fair opportunity requirements” of 10 USC 2304c(b) and section 303J(b) of 41 USC 253j(b). How so?
The FAR already establishes the “notwithstanding” requirement at 8.405-5 and correspondingly at FAR 16.505 (b)(2)(i)(F) and (ii), additionally, the contracting officer is not required to “justify” an order set-aside. However, FAR 8.405 limits set-asides to the establishment of stand-alone FSS orders and BPAs.
Moreover, if the actual BPA is set-aside, then all corresponding order requirements will be satisfied through the use of the existing BPA holders.
FAR Part 19, “Small Business Programs,” and 8.4, “Federal Supply Schedules”
Encouraging the participation of small businesses in procurement contract requirements, as deemed applicable, is government policy.
Achieving best value success also through the use of competitive pricing is also government policy and practice. To that end, GSA Schedule resources provide a plentiful and great magnitude of competitive pricing and best-value considerations versus those provided in comparison with the volume afforded by FAR Subpart 16.5 agency-specific vehicles—IDVs, GWACs, etc. The federal government is able to enhance its purview of best-value considerations when “ordering from multiple-award BPAs” (GSA Schedule) as prescribed in the FAR since all BPA holders are afforded award opportunities.
Best Value and the Purpose and “Benefits” of GSA Schedule BPAs
The BPA arrangement contains some similarities to the IDV arrangement. However, the purposes and benefits of these arrangements are conclusively different. Other than the provision of more competitive pricing provided through use of GSA Schedule BPAs, some notable considerations follow.
BPA Fundamental
Purpose and Benefit: “Simplified method of filling anticipated repetitive needs for supplies or services by establishing ‘charge accounts’ with qualified sources of supply.”
Repetitive/Recurring Needs
The filling of the government’s repetitive/recurring needs (without the use of a purchase requisition document to first establish the BPA) under this arrangement is more appropriately accomplished not only when, but more specifically “if,” there are needs. Thereby, accommodatingly, the appropriate “method”/vehicle/charge account (BPA) is available for use as needs arise. Moreover, another factor for consideration: Would consistent ordering or the provision and receipt of deliverables during the validity of the charge account or the “effective period” for performance be deemed necessarily critical (i.e., possible undue injury to the government) to fulfill or bring about the purpose of the BPA arrangement? If so, based on the nature of the BPA arrangement, from the outset or during the planning strategies, the establishment of another procurement vehicle may be deemed more appropriate.
IDVs are not established as “charge accounts.” We note the FAR’s prescribed application for “requirements” IDVs; however, the need for establishing IDVs is necessarily mission-critical as ordering is primarily required to fulfill a mission-critical need and to diligently bring about and realize the purpose for establishing the IDV.
Maximum, Volume Discounts, Price reductions
BPAs are also used as economies of scale boosters. The government and contractors alike are encouraged to establish discounts and price reductions. The nature of the BPA is ideal for these discounted supplies and services. However, it is a must for the contracting officer to request price reductions.
Notwithstanding, a notable consideration is whether or not routine price reductions and maximum discounts are generally attractive contractor incentives for the provision of professional services and or high-end/definition/complex equipment/products? Would the IDV be a more appropriate arrangement?
Maximum and Minimum Quantities
Fundamentally, like “charge accounts,” there are no maximum and minimum ordering requirements in the GSA Schedule BPA arrangement. The government’s estimated/monetary value of a BPA is indicated by the prescribed competitive procedures used for establishing the BPA. Pointedly, per the FAR, “thresholds” particularly come into play when “ordering.” However, the GSA Schedule BPA arrangement includes the provision of “order frequencies” and “delivery terms,” and these terms may be categorized as terms of coverage (expiration date or period of performance, as applicable), and, historically, BPA delivery terms have been limited to each individual order. Additionally, order agency Schedule BPA “expiration dates” are also established and stipulated.
Authorized Users/Callers
The BPA authorized user/caller (other than the contracting officer) characteristic is unique to this arrangement in accord with the purpose and benefits of the arrangement. The purpose, benefits, and criteria for the establishment and use of the BPA arrangement complement and support the requirement to afford all FAR Subpart 8.4 BPA holders “opportunity” for “order” consideration since these criteria are specific to BPAs and have been made to determine the achievement of best value amongst the plentiful, qualified, and responsible lot of responsive BPA-holder candidates and actual BPA holders.
Plainly stated, BPAs are not IDVs, and the notable purpose and benefits of multiple-awarded Schedule BPAs warrant the fair award consideration of all BPA holders, as determined practicable and necessary.
GSA Website Category “Help with MAS Buying:”
Interestingly, GSA provides in this website category the following extended statement under the subtopic “Placing Orders”:
“In some cases, you may want to set aside an order for a small business concern as a multiple-award BPA that wasn’t established with set-asides. As long as proper notice was given at the time of the BPA award that this was possible, you can do this.”
However, these stipulations are not provided in the FAR. Procurement dollar values under and over the micro-purchase threshold and below the Simplified Acquisition Threshold (SAT) are already prescribed for small business reservation (FAR 13.003 and 19.5 – Also considering the “simplified” procedures prescribed in 13.5 for dollar values up $7.5 million and $15 million respectively). Purchases among BPA holders are normally rotated between all BPA holders large and small for repetitive needs. So, the key terminology in the Act and FAR prescription for set-asides is agencies/contracting officers “may, at their discretion” make advantageous and reasonable determinations to set-aside or not set-aside, because that is the question.
