On June 12th, the Coalition issued a “Best Practices for Federal Supply Schedule (FSS) Blanket Purchase Agreements (BPAs). It provides a framework for increasing the effectiveness of FSS BPAs for government customers, FSS contractors and ultimately taxpayers. FSS BPAs are an important tool in the procurement toolbox to support program and mission needs across government. Federal Acquisition Regulation (FAR) 8.405-3(a) provides that “ordering activities may establish BPAs 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.” The BPA best practices will assist customer agencies in maximizing best value outcomes when utilizing FSS BPAs.
The key in government and commercial contracting is requirements. As the best practices states, “commercial contractors overwhelming report that they offer their best terms and prices to customers who provide the most detailed information about their requirements and usage.” The best practices goes on to state that “BPAs should be structured with a focused set of requirements to enhance effective competition and pricing. Real requirements lead to price competition in the FSS ordering process.” To this end, the best practices further advise that “BPAs reflecting single agency requirements should be preferred over multiple agency or government-wide BPAs. Single agency BPAs allow the government to state specific realistic, authentic requirements that can be accurately priced.” This guidance is at odds with the current strategic sourcing approach that utilizes government-wide or multi-agency BPAs. However, one size does not fit all with regard to leveraged acquisitions. There may be certain products or services that lend themselves to government-wide BPAs. At the same time, unique needs at customer agencies mean that in many instances single agency BPAs may more effectively deliver best value outcomes. Establishing a single agency BPA does not mean that the agency is not creating a strategic sourcing vehicle—rather it is an opportunity to create a clearly defined, robust vehicle. Agencies could report such BPAs back to the Office of Federal Procurement Policy (OFPP) as part of OFPP’s strategic sourcing initiative.
Communicating detailed, sound requirements is also vital to reducing vertical contract duplication. Too often, agencies establish generic, undefined BPAs for products or services with no guarantee of usage—this happens in the strategic sourcing context as well. As a result, contractors first invest in negotiating and establishing their FSS contracts. FSS contractors then use more bid and proposal funds to compete for a BPA that is undefined, this is especially true when it comes to services. Finally, the real, detailed requirements are competed at the task order level under the BPA. This is vertical contract duplication. It is more efficient and effective for an agency to take its task order requirement and compete it directly among the FSS contactors and eliminate the costly competition for an undefined FSS BPA. The current Performance Management CPI/Services BPA issued under MOBIS is a prime example of vertical contract duplication. The Coalition previously addressed the issue of vertical contract duplication in a letter to the Administrator of Federal Procurement Policy which can be viewed here.
Let’s be clear. Given our nation’s current budgetary challenges, the Coalition understands the current efforts to leverage requirements and increase best value outcomes through strategic sourcing. FSS BPAs should be the central tool to accomplish these goals across government. However, the key to any best value outcome is the effective communication and competition for well-defined requirements. And with regard to requirements, one size does not fit all. In some instances government-wide FSS BPA(s) may be most effective. In many instances, single agency FSS BPA(s) will be more effective in delivering best value outcomes. In those circumstances, GSA can assist agencies in getting the most out of their FSS BPAs. In other instances, a task order competition (with no intermediary BPA) directly among FSS contractors will be the best acquisition strategy.
Please let us know what you think of our BPA best practices. We are all in this together.