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mPhilly127

Administering BPAs, exercising "options"

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Good morning all,

This is my second go-around typing this post, as my first attempt was somehow completely deleted just before I had a chance to post? ugh! So, take 2? I?m administering a BPA for operations & maintenance (o&m) services for facilities in my agency?s (not DOD) region; I inherited the BPA earlier this year. It was awarded as a 10-year BPA, and doesn?t include options (BPA expires in 2020). Typically BPAs/contracts don?t exceed 5 years; however, in the past, my agency allowed for BPAs to extend for 10, even 15 years. I?m going to explain my little hang-up, and hopefully a few of you good folks will weigh-in.

On an annual basis, we issue 1-year call orders for basic o&m services for the facilities. The previous CO treated the process much alike exercising an option of an IDIQ contract; he issued a 60-day preliminary notice of intent to exercise the option, and cited FAR 52.217-9, Option to Extend the term of the Contract, which is included in Section I of the BPA. It?s coming time for me to begin the process of issuing next year?s call, but I?m not too crazy about sending a 60-day letter of intent to the contractor because, (a.) this isn?t a contract, it?s a BPA, and (2) this was awarded as a 10-year BPA, not 1-year w/ 9 1-year option periods, so there really isn't an option to exercise. If we wanted to cancel the BPA, we simply could elect to not issue an annual call.

I?m likely going to follow a similar procedure as the previous CO, for the sake of consistency, but I was hoping I could gain a little knowledge from you folks as to some other methods of handling similar scenarios in the future. It is necessary to provide the contractor with some kind of advanced notice that the Government does intend to issue an annual call order for basic services. After all, they have plenty of employees on their payroll whose employment depends upon issuance of that annual call; so it?s only fair/practical to give them a heads-up, and not leave them hanging and wondering if it will be issued. I just don?t believe this BPA, or other similar ones I have, should be treated like an IDIQ contract with exercising options. Is there a clause out there that anyone?s aware of that is similar to FAR 52.217-9, but specific to call orders? I?m just not very comfortable citing that clause in an instance like this. I think the previous CO may have grown too accustomed to administering IDIQ contracts, and just administered BPAs in the same manner. Again, I?d sure appreciate any insight the members of this forum can provide, thanks!

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That sounds different all right. So the intent to exercise letter tells the vendor that you intend to order all possible BPA services and the quantities? No proposal needed and cost is always at the negotiated BPA rates?

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That sounds different all right. So the intent to exercise letter tells the vendor that you intend to order all possible BPA services and the quantities? No proposal needed and cost is always at the negotiated BPA rates?

Thanks for your reply... no proposal is necessary, as all labor rates and materials costs are negotiated prior to award of the BPA, and the scope of basic services is clearly defined up-front. Additional services are necessary from time-to-time (for services such as boiler repair, window washing, etc.), and when that occurs, individual calls are issued for specific tasks. It's pretty much assumed by both parties that the call orders for basic, routine o&m services will be issued annually.

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Thanks for your reply... no proposal is necessary, as all labor rates and materials costs are negotiated prior to award of the BPA, and the scope of basic services is clearly defined up-front. Additional services are necessary from time-to-time (for services such as boiler repair, window washing, etc.), and when that occurs, individual calls are issued for specific tasks. It's pretty much assumed by both parties that the call orders for basic, routine o&m services will be issued annually.

Is this a BPA under FAR 8 or 13?

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Good question, FAR Part 8

Under FAR Part 8, you issue orders against BPAs, not calls.

If, as I assume, you have a single award BPA, you may want to take a look at FAR 8.405-3, particularly paragraphs (d) and (e):

(d) Duration of BPAs.

(1) Multiple-award BPAs generally should not exceed five years in length, but may do so to meet program requirements.

(2) A single-award BPA shall not exceed one year. It may have up to four one-year options. See paragraph (e) of this section for requirements associated with option exercise.

(3) Contractors may be awarded BPAs that extend beyond the current term of their GSA Schedule contract, so long as there are option periods in their GSA Schedule contract that, if exercised, will cover the BPA's period of performance.

(e) Review of BPAs.

(1) The ordering activity contracting officer shall review the BPA and determine in writing, at least once a year (e.g., at option exercise), whether?

(i) The schedule contract, upon which the BPA was established, is still in effect;

(ii) The BPA still represents the best value (see 8.404(d)); and

(iii) Estimated quantities/amounts have been exceeded and additional price reductions can be obtained.

(2) The determination shall be included in the BPA file documentation.

(3) If a single-award BPA is established, the ordering activity contracting officer?s annual determination must be approved by the ordering activity?s competition advocate prior to the exercise of an option to extend the term of the BPA.

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We have to keep in mind that FAR Part 8.4 was recently changed, and prior to that multiple-year single-award BPAs were permitted. Also, some agencies have issued waivers for long-term O&M BPAs (PBS is an example).

There is a requirement (and has been for as long as I can remember) for an annual review of a BPA, which must be documented. See FAR 8.405-3(e). Other than that requirement, based on what you have described, there is no requirement for a formal "option exercising" process, imho.

However, if this BPA was awarded after the re-write of FAR Part 8, I would agree with Napolik's comments.

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It is necessary to provide the contractor with some kind of advanced notice...it?s only fair/practical to give them a heads-up, and not leave them hanging and wondering if it will be issued.

If the contractor expected something more definitive then they should have negotiated a contract instead of a BPA.

Is there a clause out there that anyone?s aware of that is similar to FAR 52.217-9, but specific to call orders?

With no intent to extend the term of the BPA (unless you?re intending on extending it beyond the 10 years), what purpose would the clause serve?

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We have to keep in mind that FAR Part 8.4 was recently changed, and prior to that multiple-year single-award BPAs were permitted. Also, some agencies have issued waivers for long-term O&M BPAs (PBS is an example).

There is a requirement (and has been for as long as I can remember) for an annual review of a BPA, which must be documented. See FAR 8.405-3(e). Other than that requirement, based on what you have described, there is no requirement for a formal "option exercising" process, imho.

However, if this BPA was awarded after the re-write of FAR Part 8, I would agree with Napolik's comments.

FYI, here is the guidance on the applicability date of the FAC 2005-50 that changed FAR 8, including FAR 8.405-3:

Applicability Date: (1) The changes in this rule apply to

solicitations issued and contracts awarded on or after May 16, 2011

(see FAR 1.108(d)(1)). (2) The changes also apply to orders issued on

or after the effective date of this regulation, without regard to

whether the underlying contracts were awarded before May 16, 2011. (3)

The changes apply to Blanket Purchase Agreements (BPAs) established

under FSS contracts on or after May 16, 2011. (4) The ordering

procedures for BPAs in FAR 8.405-3© are mandatory for BPAs

established under FSS contracts on or after May 16, 2011 and

discretionary for BPAs established under FSS contracts prior to the

effective date.

May 16, 20011 is the key date.

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