As you all know, the Coalition is developing a list of best practices for the effective and efficient use of Blanket Purchase Agreements (BPAs) under the Federal Supply Schedule (FSS) program. Once completed, the “best practices” list, with supporting explanations, will be shared with the federal procurement community. The week’s “Comment” provides a sneak peak of some of the key practices that we have identified. These practices can improve efficiency and enhance real competition while providing best value to the government. In addition, the list below includes some practices that should be avoided.
- Focus on requirements. BPAs should be structured with a focused set of requirements to enhance effective competition and pricing.
- Include real economic incentives for competition. BPAs should include sound estimates of volume and corresponding commitments to use on the part of the government. Including a guaranteed minimum or volume purchase commitment would further enhance price competition.
- Pay attention to BPA management. Major BPAs should have a program manager assigned to ensure effective execution, implementation and administration. Too often BPAs are established without a focused management plan for effective use.
- Conduct periodic reviews of BPAs to ensure continued best value. (This is already reflected in the FAR but is worth repeating!)
- Identify agency specific requirements to the maximum extent practicable. BPAs reflecting specific agency requirements should be preferred over generic BPAs (BPAs that do not include specific requirements and/or volume commitments). Real requirements lead to real price competition in the FSS ordering process.
- Eliminate “generic BPAs” to the maximum extent practicable. Generic multiple award BPAs that rely on subsequent task order competitions add an extra level to the FSS ordering process that is unnecessary and should be avoided. These BPAs represent vertical contract duplication and increase costs for both government and industry. Moreover, any price competition when establishing these BPAs is illusory. Subsequent BPA task order competitions for specific requirements establish the real price paid by the government—it is more efficient to compete these requirements directly against the FSS contracts.
This list represents our initial thoughts as well as feedback we have gotten from the procurement community regarding BPA best practices. The theme is clear. Sound requirements development is vital (true of any government procurement). Specific requirements, volume commitments and/or guaranteed minimums for BPAs will lead to enhanced competition and better pricing. Generic BPAs that rely on subsequent task order competitions introduce a level of complexity and cost that is counterproductive. This is especially true of service requirements. Think of it in three levels:
Level 1 – FSS contract prices negotiated based on each contractor’s commercial pricing practices and policies.
Level 2 – Generic multiple award BPAs seek price reductions without articulating specific requirements, sample tasks or volume commitments.
Level 3 – Task order competitions under generic BPAs seeking additional price reductions and technical solutions based on specific agency requirements.
In this scenario the intermediate step of establishing a BPA results in additional bid and proposal costs to government and contractors. Bid and proposal costs that will likely be repeated at the task order level. It seems more cost effective to compete specific requirements (whether as a task order or a BPA) directly against the FSS contracts.
When we issue the “best practices” list we will also include a discussion of the “Top 3 Pricing Influences” that when considered in the acquisition cycle will enhance the Government and industry’s ability to provide best value to the taxpayer.
We are very much interested in your reaction to our BPA “best practices” approach and are looking for your feedback, thoughts and contributions—please do not hesitate to contact me.