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BPA's vs. IDIQ's: What's the difference???

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Thanks again, Vern.

Your response to my previous suggestion that the government can, but rarely does, exercise some but not all of the options on a MATOC, was (essentially):

Yes, agencies have exercised some but not all of the options on a MATOC (Government Technical Services, Inc. v. U.S.). I don't know how rare it is and if it is rare, so what?

This may be getting off topic a bit, but my answer to your (perhaps rhetorical) "So What?" question is that there is a certain amount of inertia within Contracting, perhaps more than any other functional area of expertise within federal procurement. This "inertia" encourages PCOs and buyers to do what has worked in the past. So without precedent (or even few precedents), I have observed that PCOs are less likely to take certain actions. And I would submit that exercising some but not all options on a MATOC is one of these actions.

More to the point, I think an action "being rare" matters a lot in Contracting in 2010. I'll grant you that it shouldn?t, but I think it does. I think with more training and curtailing of redundant contracts, our PCOs will become less task-saturated and will be more able to do what makes sense in a particular case and less likely to do whatever worked last time.

Your thoughts?

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In general, the textbook answer is that a Blanket Purchase Agreement is not a contract and an Idefinite-Delivery Indefinite-Quanity contract is a contract. However, it is a little more complicated than that.

There are two kinds of BPAs.

First, there is the BPA used for simplified acquisitions, which is described in FAR 13.303. As described therein, a BPA is like a charge account. You should read that FAR section. This kind of BPA is definitely not a contract.

Second, there is the BPA written against a GSA Federal Supply Schedule contract, which is explained in FAR 8.405-3. You should read that FAR subsection. GSA FSS contracts are IDIQ contracts. A BPA awarded against one of them is an ordering agreement under a contract. I maintain that since it is an agreement against a contract it is effectively contractual in nature, but there are many who would disagree with me.

The best way to begin to understand BPAs is to read the FAR references I have given you and to come back here if you still have questions.

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I have no idea, but allow me to speculate.

Might pricing account for some of the persistence of this approach? If in a competitive acquisition, if I allow offerors to propose different prices for each period of performance, is there a chance that the contractor might include a smaller premium for price risk in the initial periods? Obviously there are lots of alternatives available that help mitigate this concern (e.g., fixed price with economic price adjustment), but might there be some resistance to these alternatives? What if the likelihood of awarding for the latest years is only 51%? Do I want to pay a premium today for the possibility of a (potentially unused) lower price tomorrow?

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