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My agency is setting up options on BPA calls awarded under subpart 8.4.  When I asked why this was being done, I was given the following answer, "it's no different than what we do on task orders; we set up options on those."  If we are to use this as a basis of comparison, then we can say that the task order is one tier down off the main contract, as the blanket purchase agreement is in relation to the schedule contract in this case.  However, the BPA call is two tiers down off the schedule contract.  I personally would not award a BPA call with options.  Aside from everything else, it is messy and not good practice.  Why not just place another call?  I suppose contracting shops can get creative when the FAR does not otherwise forbid an action, but I certainly would not advise making a habit of it. 

The other consideration is this.  One might make the argument that because there is no legal consideration on the BPA itself, i.e., it is just that, an agreement, not a contract, that a CO should not be building in what otherwise becomes a unilateral Governmental right (which is to say the exercise of an option).  With respect to the call itself, my understanding has always been that the call becomes contractual upon acceptance through the BPA holder's commencement of performance.  Whereas there is no legal obligation for the BPA holder to accept the call upon issuance, if and when they do begin to perform, they thereby accept all the binding conditions of the action as therein stated.  Is the BPA holder then obligated to accept any options the Government thereafter elects to exercise? 

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We use options on our BPA orders all the time.  If the work is the same, and it's a known need, and the work can be priced out as an option, then why not take advantage of that instead of going through a longer process (and more expense) to request a quote/proposal, evaluate, document, and award?

What is your concern about the options?  That the vendor will not perform?  How would issuing a separate order to the same vendor for the same work overcome your concerns?

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15 hours ago, styrene said:

We use options on our BPA orders all the time.  If the work is the same, and it's a known need, and the work can be priced out as an option, then why not take advantage of that instead of going through a longer process (and more expense) to request a quote/proposal, evaluate, document, and award? 

I do not disagree with you that issuing a new call order would make for a longer process.  Point taken.  But how would it be more expensive?  More expensive in what way?  I am a sunk cost.  The other employees that work alongside me on acquisitions are sunk costs as well.  What exactly would be more expensive about issuing a new order?

 

15 hours ago, styrene said:

What is your concern about the options? 

As I stated above, I question whether it is best practice.  GSA FSS contracts have options.  Let's say we award a single award BPA off the schedule contract.  In that case it is likely we will have options on that BPA.  Then, you suggest we incorporate options onto the call order itself.  Again, I never said we were prohibited from doing so.  But there are a lot of moving parts here and it becomes perhaps a bit unwieldy. Also, if we examine the purpose of orders off subpart 8.4 BPAs (which the FAR does not address in any great depth), should we be turning them into full fledged contracts.  I understand the options (in my case) were all competed up front under a multiple award BPA scenario.  However, I think we can mostly agree that circumstances and a contractor's ability to offer discounts at any given time depending on a number of factors, e.g., how many contracts they have in the cooker, staffing, financial resources at the moment, whether they've made it over the hump to that additional year in business, etc.  Subpart 8.4 never mentions options on BPA orders.  However, it does discuss in detail the concept of fair opportunity.  Is the practice of regularly incorporating options in BPA orders in the spirit of CICA and fair opportunity?

 

15 hours ago, styrene said:

That the vendor will not perform?

Well, I might actually feel more confident that the schedule contract holder would perform under a scenario in which I have options built into my order.  No one ever answered my question above, "Whereas there is no legal obligation for the BPA holder to accept the call upon issuance, if and when they do begin to perform, they thereby accept all the binding conditions of the action as therein stated.  Is the BPA holder then obligated to accept any options the Government thereafter elects to exercise?"  If the option creates a unilateral right on the part of the Government after the schedule contract holder has begun performance, then I would actually have less confidence that they might perform when I issue separate orders without options.  If the option becomes a unilateral Governmental right, what legal consideration might give the Government that specific right?

Also, I think the point is, that there are other considerations aside from having confidence that the schedule contract holder will perform.

15 hours ago, styrene said:

How would issuing a separate order to the same vendor for the same work overcome your concerns?

For one, it would give me greater confidence that I provided true fair opportunity to all BPA awardees and solicited for the most current pricing, terms and conditions.  There might be some satisfaction that I had not effectively guaranteed a schedule contract holder three to five years of performance based on an initial competition several years back, given the reasonable consideration that the current market might offer something better.

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1 hour ago, Guardian said:

I do not disagree with you that issuing a new call order would make for a longer process.  Point taken.  But how would it be more expensive?  More expensive in what way?  I am a sunk cost.  The other employees that work alongside me on acquisitions are sunk costs as well.  What exactly would be more expensive about issuing a new order?

Opportunity cost.  Surely you could be more productive for the Government in other ways.

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23 hours ago, Guardian said:

Why not just place another call? 

On your first point: Less effort for same result.

In my agency and in my field (IT Services), options need perhaps 1/20 the effort of a new Call.  I may need two months to complete a new Call, while I can do an option exercise in a day or two.  Thus, we tend load Calls with options whenever we can.

 

 

 

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2 hours ago, C Culham said:

 

 

I appreciate the posted references to these prior WIFCon discussions.  That last one is quite comprehensive, but seems to speak more so to whether you can incorporate options into a BPA.  My question only deals with call orders.  I am not sure why there is a debate about whether BPAs can have options. 8.4 seems pretty clear.  You would have to have them on any single-award BPA that you want in place for longer than a year.  I don't know what the purpose of having options on multiple award BPAs would be, as you can build in differently priced CLINs for separate periods of time and the BPA may remain in effect for up to five years.

FAR 8.405-3

(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.

[end citation]

If we look at paragraph e of the same subsection, the CO is required to review the BPA once a year, for example, at the option exercise, to make a determination that the price is still fair and reasonable.  Under a call with options scenario, the CO would look at the status of the options, contingent on a determination of price reasonableness, on the following (1) the schedule contract, (2) the BPA, and then again on (3) the call.  I think you can understand why I referred to calls with options as "creative" and potentially "unwieldy," although the latter description may be a bit hyperbolic.  It's an Erector Set design of sorts.

(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—

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

(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. 

[end citation]

Vern had an interesting insight:

While arguing about whether FSS BPAs are contracts may be fun, it is a distraction from the more interesting truth about BPAs -- they are nothing more than mechanisms to enable agencies to avoid competitive practices when ordering against schedule contracts. I don't think a BPA lets an agency do anything under the contract that it could not do without the BPA. Heck, you can do anything in an order under a schedule contract if the contractor will go along. But if an agency establishes a BPA, then it need no longer follow the pesky ordering procedures in FAR 8.405-2, unless the agency is foolish enough to establish multiple BPAs.

[end citation]

In my case, the call order is off of a BPA under a multiple award BPAs scenario.  Hence, some of my concern regarding options on a multiple year call order.  I gather that when Vern quipped "unless the agency is foolish enough to establish multiple BPAs," he was referring to the burden imposed under the rules of fair opportunity.  The same subsection of the FAR tells us that to the maximum extent practicable we should "give preference to establishing multiple-award BPAs, rather than establishing a single-award BPA."  I understand it's not an absolute requirement, but it's reinforcing Congress's wishes.

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@Guardian,

I'm confused by your use of the term "call order". "Call" is used to refer to a type of order under a FAR part 13 BPA. For FAR subpart 8.4 BPAs, the Government issues a task or delivery order against a FSS schedule. You are referring to the latter, correct?

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38 minutes ago, Don Mansfield said:

@Guardian,

I'm confused by your use of the term "call order". "Call" is used to refer to a type of order under a FAR part 13 BPA. For FAR subpart 8.4 BPAs, the Government issues a task or delivery order against a FSS schedule. You are referring to the latter, correct?

Yes, the BPAs and order to which I am referring are under the authority of 8.405-3.  You are correct that subpart 8.4 never uses the term "call order."  We use PRISM as our acquisition software and it designates every order off a BPA, be it under 13.3 or 8.4, a "call order."  I understand that per 8.4 that term is in fact a misnomer.  I have found the term "call order" ubiquitously used among practitioners.  

Socrates--I am a fan going back to my college days.  "All I know is that I know nothing at all."  Somehow, I feel like I am about to step into a Columbo moment.  "Just one more thing."

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@Guardian,

I think you're making an issue out of nothing. The one-tier and two-tier down stuff is irrelevant. You're issuing a task or delivery order, and there's no prohibition against these containing options.

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@Don Mansfield.

Perhaps you're right.

Just one more thing.  I looked under 13.303 and found no references to the term "call order."  You said that term is unique to FAR part 13 BPAs.  Where might I find it?  What is its origin?

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Vern wrote this in a 2009 post:

Traditionally, purchases against Part 13 BPAs have been referred to as "calls," for the very reason that most orders were made by telephone. See, e.g., Dept. of Homeland Security, U.S. Coast Guard, Simplified Acquisition Procedures Handbook, COMDTINST M-4200.13G, p. 7-17 et. seq. http://www.uscg.mil/directives/cim/4000-49...IM_4200_13G.pdf The calls are logged and the log is used to verify delivery tickets and invoices for monthly payment to the contractor.

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@Don Mansfield

That little nugget alone was worth starting this discussion--some 1102 term history and etymology.

I am a word origin guy myself.  If you haven't already, check out Bill Bryson's, Made in America.  It's chock-full of etymology for homegrown words and phrases.  I'm doing a re-read now as I recently came across it on a list entitled best books to prepare for Jeopardy, not that I'm ever going to be the next Ken Jennings or James Holzhauer.

Thanks again, Don Socrates!  

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Guardian, out of curiosity, what form does your agency use to award these "call orders"?

Assuming you required the contractor's signature to bilaterally execute the order, can their signature alone be regarded as work and thus constitute evidence of contract formation?

If such an order contained options, and the Government duly preserved/exercised its unilateral rights to the option(s), how isn't the the contractor obligated to "accept" work under the option(s)?

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3 hours ago, Sunstrider said:

Guardian, out of curiosity, what form does your agency use to award these "call orders"?

We use the Optional Form (OF) 347.  This is the form I have always used for all my delivery and task orders off GSA FSS.  Whereas there is no signature block for the contractor to sign on that form, I suppose you could create one within block 17 or the "Schedule - Continuation."  We have before.

Again, my understanding is that once the contract holder begins performance, they have thereby accepted the order and all of its terms and conditions, including any options clause. I asked a question in my initial posting.  After a dozen replies, no one has yet answered it.  But I feel I already know the answer, unless someone convinces me otherwise.  This forum is great for pedantic discourse, but not always great for getting a straightforward answer to a question.  Sometimes I feel like a guy asking a question such as, "how might I get to Missouri from here?" and the response I get is, " hey, I notice you're wearing white pants and it's after Labor day.  Do you realize that's a fashion faux pas"?  Don't get me wrong, I learn a lot and I tend to be a sucker for tangential or related-topic discussions.  However, some of these posters would drive a cross-examining attorney nuts.  I feel your question demonstrates that you read my initial question and recognize that others read over it without answering.  Thank you for that.

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Indeed, given an express power that, at the very least encourages liberal opining, it does seem far too common for COs to pontificate. To speak precisely about what we want to, instead of the primary purpose for discourse. I appreciate your attitude about it to roll with the punches.

As far as your question, namely Is the BPA holder then obligated to accept any options the Government thereafter elects to exercise? My simple answer is yes, especially since the options themselves likely induced the offeror to accept via performance/enter into a contract via such a BPA call.

I presume COs in your office consider annual BPA reviews, changes in the BPA holder's prices, as well as marketplace conditions for the requirement, in evaluating/exercising whether the BPA call option(s) result in the best value. Based on the complexity of the requirement, I know I'd gladly reprocure a BPA call should an existing option offer insufficient contract administration tools/remedies. Is this a concern you suspect is overlooked?

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@Guardian

You may enjoy Chrysti the Wordsmith's radio show. It's a quick two-minute segment on words:

"Since 1990, Chrysti the Wordsmith has been plumbing the depths of dictionaries obscure, arcane and pedestrian to craft word and phrase histories for her radio audience."

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8 hours ago, Guardian said:

Again, my understanding is that once the contract holder begins performance, they have thereby accepted the order and all of its terms and conditions, including any options clause.

 

On 7/3/2019 at 11:35 AM, Guardian said:

My question only deals with call orders. 

 

On 7/3/2019 at 6:23 PM, Don Mansfield said:

@Guardian,

I think you're making an issue out of nothing. The one-tier and two-tier down stuff is irrelevant. You're issuing a task or delivery order, and there's no prohibition against these containing options.

Actually I think the tier issue is relevant. Who cares about what the FAR says in subpart 8.4 isn't what counts is what the actual FSS contract says.......clauses like the BPA clause, Order clause, and Order Acknowledgement clause?

 

 

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