The New Ordering and BPA Rules Under Schedule Contracts Get Ready for More Competition and More Transparency
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1 The New Ordering and BPA Rules Under Schedule Contracts Get Ready for More Competition and More Transparency James (Jim) Phillips, Esq. Centre Consulting, Inc All Rights Reserved Centre Consulting, Inc Gallows Road, Suite 650 Vienna, VA (703)
2 Centre Capabilities Contractor Services Need Expert GSA Legal Consultants? The Federal Contracting Institute Need Top-Ranked Training by Our Legal Experts? Government Services Need Professional Help with Your Acquisition? GSA & VA Schedule Proposals GSA & VA Schedule Renewals GSA & VA Schedule Audits Contract Administration Boot Camp for GSA/VA Contracting Federal Contracting Basics GSA & VA Schedule Audit Issues COR/COTR Essentials Acquisition Consulting to Avoid Protests Program Management Training ADR, Facilitation, and Mediation CON & COTR Certification Proposal Preparation CSCM Certification Acquisition Support 2
3 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 , 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; New rules for BPAs were put in place; and Additional rules were imposed. 3
4 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. 4
5 5 Ordering Process for Products FAR
6 Competition Level #1: Orders Not Exceeding the Micro- Purchase Threshold ($3,000) No Competition or Best Value Determination is Required. No change to old buying rules. 6
7 Competition Level #2: Orders > Micro-Purchase Threshold But < Simplified Acquisition Threshold ($150,000) 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. 7
8 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. 8
9 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 quotes. 9
10 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 reasonable efforts to identify additional sources. 10
11 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. Content of justifications: See FAR (c). 11
12 12 Ordering Process for Services FAR
13 Ordering Process for Services FAR 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. 13
14 Content of Statements of Work The Work to Be Performed Location of the Work Period of Performance Deliverable Schedule Applicable Standards Special Requirements 14
15 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. 15
16 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. 16
17 Transmittal of Statements of Work For orders > simplified acquisition threshold, the Ordering Agency shall 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. Again, the use of the simplified acquisition threshold and presumption for 3 quotes are new requirements. 17
18 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. Again, place orders on a best value basis. Preference for FFP awards. 18
19 19 Establishing Schedule-Based BPAs
20 Federal Supply Schedule Changes: BPAs Procedures for Establishing a Schedule BPA - FAR (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). 20
21 Federal Supply Schedule Changes: BPAs Procedures for Establishing a Schedule BPA - FAR (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 for BPAs for products or FAR for BPAs for services. 21
22 Federal Supply Schedule Changes: BPAs Procedures for Establishing a Schedule BPA - FAR (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 Only FFP orders with prices established in the BPA Only one source Public interest 22
23 Federal Supply Schedule Changes: BPAs Procedures for Establishing a Schedule BPA - FAR (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. Comply with minimum documentation requirements in FAR (a)(7). 23
24 Federal Supply Schedule Changes: BPA Duration of Schedule BPAs: FAR (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 (e) Procedures for exercising option years. 24
25 Federal Supply Schedule Changes: BPA Order Placement under FSS BPAs: FAR (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. 25
26 26 Requirements for Restricted Source Justifications
27 Requirements for Restricted Source Justifications FAR 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 specialized product or service; or Requirement is a logical follow-on to previously competed schedule order & in the interest of economy & efficiency to limit to incumbent. 27
28 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. Requiring personnel must certify as to the accuracy of any technical data used as the basis of the justification. 28
29 Requirements for Restricted Source Justifications New approval requirements for high value Schedule orders and BPAs FAR (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 designee (designee must be general or flag officer or > GS-15 grade). For orders/bpa > $62.5M, justification must be approved by the senior procurement executive. 29
30 30 Likely Impact of New Rules
31 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. Services: competition for new requirements should be much greater; however, remember that followons can be restricted. 31
32 Effective Date of Changes The above new ordering rules apply to orders and BPAs issued after May 16, Note: New ordering rules under BPAs do not apply to BPAs established prior to effective date; however, buying agencies are encouraged to voluntarily apply new rules to existing BPAs. 32
33 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 , Nov. 2, 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 ; B , Oct. 11, Protests are currently pending at GAO seeking to impose FAR 19 requirements on FSS orders. Stay tuned for further developments at 33
34 Changes to GSA Schedules Ordering in 2011 Questions and Answers 34
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