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Reese

Supply Chain, dedicated suppliers and the FAR

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Hello All,

I am newbie working on procuring  items for my agency's supply chain.  What is the best way secure dedicated suppliers of items need for our complex infrastructure while staying in the confines of the FAR. We were thinking of requesting a deviation but not sure what part of the FAR to request the deviation to for acquiring spare parts from a hand fully of dedicated suppliers for mission critical operations. In some cases, there is truly only one supplier.  However, the issue is that under 12/13 and under the SAT, we continue to issue several PO's to acquire spare part following the guidance of soliciting from at least 3 sources and then running into FAR Part 19.502, in which some of vendors are not small businesses but the only source.  Also, I was reading over the Federal Acquisition Supply Chain Security Act of 2018.  Is this act only for Information Technology or can it be used to secure any items that are critical to one's supply chain.  I was looking for a list of covered items under this ACT but have not see a well defined list. Thanks for any clarify that you can provide.  In a nutshell, how can we create a supply chain with dedicated suppliers (some which are not small business) the most efficient and effective way.  Any thoughts?

 

Thanks,

Contracting Yellow Belt 🙂 #new 

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Have you considered other methods of procurement, like setting up multiple-award, indefinite-delivery, indefinite-quantity (IDIQ) contracts and then issuing orders (using FAR 16.505) against those IDIQ contracts? 

It sounds like you are exclusively considering stand-alone contracts under FAR Part 13 and the streamlined procedures of FAR Part 12. Perhaps you should move away from stand-alone contracts.

Perhaps you should consider setting up IDIQs or other master contracts, against which you can order task or deliver orders. Competition would be limited to "fair opportunity" among the existing IDIQ contract-holders. Does that partially fulfill the desire to have a "dedicated supply chain"? Your existing IDIQ contracts (and the contractors) would become this "dedicated supply chain," in an imperfect manner.

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On ‎5‎/‎3‎/‎2019 at 12:15 PM, Reese said:

In some cases, there is truly only one supplier.  However, the issue is that under 12/13 and under the SAT, we continue to issue several PO's to acquire spare part following the guidance of soliciting from at least 3 sources and then running into FAR Part 19.502, in which some of vendors are not small businesses but the only source

Sole source acquisitions to the actual sole sources may help you through some of this.  Someone will need to write justifications.  Say you did that alone, how much of a toothache remains?

Also, FAR 19.502 gives you an out, but some justifying is required:

Quote

. . . is automatically reserved exclusively for small business concerns and shall be set aside for small business unless the contracting officer determines there is not a reasonable expectation of obtaining offers from two or more responsible small business concerns that are competitive in terms of market prices, quality, and delivery. If the contracting officer does not proceed with the small business set-aside and purchases on an unrestricted basis, the contracting officer shall include in the contract file the reason for this unrestricted purchase . . .

Regarding the "dedicated suppliers", would competing the remaining work under some BPAs fit the bill?

These ideas require more up-front paperwork, but hopefully a payoff down the road. 

Supply chain is not my world, just trying to provide another option in addition to Pepe's above.  Folks, feel free to open fire on this trial balloon.

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OP, the reason I asked about dollar values is to see if SAP would cover your needs.

A few agencies have done remarkable jobs with supply chain management.   Without much in the federal sector to go with at the time, they did market research and adopted best practices from commercial firms.  These included Toyota, Ford, and Boeing (not a good one to quote right now).  But the idea is narrowing down the supplier best to a few proven sources and obtaining price concession from dedicated business.  Toyota does an exceptional job with just in time supplying while Ford successfully reduced their supplier base down to a few highest quality sources.

Those agencies generally started with identifying all the items as part of the supply chain.  They developed strategies and a overall acquisition plan to cover everything.  One used a very successful approach where they awarded mostly competitive IDIQ contracts with an evaluation strategy stating achieving supply chain objectives was of prime consideration.  Offerors submitted proposals describing their approach and the agency evaluated soundness, risk, and experience in selecting for award along with price.  Past performance really played in and they conducted extensive dialogue with customers, which were mostly commercial, in the evaluation.  The difficult part was getting commercial sources to provide input, which they usually don't do.  One very intriguing concept was used of award term as an incentive for long term successful performance where the base and initial option years were four plus one and potential award term periods were another ten years.

Several also used BPAs since their requirements were mostly commercial items of relatively lower dollar value.  One used a similar evaluation that is mentioned for the IDIQ contracts. 

For some needs, sole source was used especially with proprietary situations.

The secret is getting quality and proven suppliers on board with long term arrangements.  When multiple awards are made, normally no more than three sources are used.  This is need to also streamline ordering.

As far as the Federal Acquisition Supply Chain Security Act of 2018, I don't believe it ever passed.  I think its still on hold in the House.  Even if it passes, it would be months, if not a couple years, before anything comes out that would apply to your situation. 

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