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thomas.rutherford

Basic Agreement in lieu of IDIQ

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I recently joined a new command and the assumptions here seem to be blocking a clean implementation of an IDIQ or requirements Contract.

1. I must have a minimum guaranteed quantity for each item and/or each vendor if multi-award.

2. I must have a current TDP even if there is no immediate quantity for an item.

3. I must have 5 year pricing even if I can't get good estimates.

4. I must use a C contract (not D) with Options to implement and IDIQ and create new CLINS with a P mod for each Ordering Period.

5. Bureau of Labor Statistics Industry Indexes are not accurate enough to adjust IDIQ's.

5. We can't include any items unless there is high probablility of a need.

6. Only established producers are part of the "industrial base" and only current producers can safely produce "main product lines".

There are several items in the same FSC. The intent is to create a Contractual vehicle for low volume, sporadic demand across several items that might be difficult to buy alone. This also could provide an opportunity to give some work to the Small Cal suppliers that want into Medium Cal work but are considered too "high risk" for our main product lines. I don't want to do a Requirements Contract and end up with a "sole source" supplier for several years.

I have been trying to create an out of the box solution that is still FAR compliant. My solution is to create a Solicitation for a Basic Agreement (BA or BOA) (FAR 16.7) and to compete future requirements among BA holders. My PCO has given me a little rope to explore other options. My legal rep has said using a BA is an "interesting" approach but that it might be interpreted as a IDIQ, which could cause GAO problems since I am calling it someting else (see language below). Legal has suggested using Wifcon Forums. My experience two other commands with BPA's and BOA pools is what brought this to mind since it seemed to allow the flexibility to get stuff done quick, but still have somewhat recent past performance and other criteria to evaluate.

Methodology:

I am considering a BPA/BOA type instrument with Multiple Awards. And including as many items as possible to be "representative of the group" but that would allow competition of individual requirements among BPA/BOA/Basic Agreement holders. However, the logistics community is concerned that we cannot require performance of small quantities like we can with an IDIQ. I have proposed language for the solicitation that would require performance and allow annual addition of vendors and re-evaluation of Past Performance, so that I don't end up locking vendors out of a BPA pool for 5 years.

In Addition to clauses that would be required for production of my items, I propose language to create manditory performance and cover issues such and how to price, how to include past performance, how to let new vendors in, etc.

- Begin propose language-

Past performance evaluations will be conducted annually in any year that orders will be placed and input for past performance may be solicited with the first order of any period under the BOA. Past performance will be used to trade off each order under this BOA based on the last annual evaluation. If there has been interest expressed by new vendors in the preceding year, the solicitation may be re-opened for addition of additional vendors during any solicitation for Annual Past Performance Data. Past Performance evaluations will be conducted in accordance with the criteria found in section L. Initial BOA Pricing submitted under the initial solicitation will be used for placing orders within the 60 days of solicitation close. Pricing for subsequent deliveries will be made on the basis of competition among all vendors receiving a BOA as a result of this solicitation. Vendors will have a minimum of 15 days to respond to any solicitation for price of individual orders and 30 days if past performance is included.

When no offers are received on a solicitation to compete an individual order, the government may issue a unilateral order to a vendor in the BOA pool determined by the Contracting Officer to represent the best value to the Government. The unilateral order will be issued for an Interim Adjusted Price equal to Initial BOA price x the index rate for the Industry NAICS + 5% and funds obligated for 10% over the Adjusted Interim Price. For purposes of calculating this Index Rate the data for NAICS Code 332992 "Small Arms Ammunition Manufacturing (i.e. 30mm or less)" contained in the Bureau of Labor Statistics (BLS) website http://www.bls.gov/data/ The product index to be used will be that of 3329923329920 for Small Arms Ammunition or if that is discontinued the index for the entire industry 332992332992- Small Arms Ammunition Manufacturing. The index rate shall be calculated by dividing the current proposed index value (or final index value if calculating the final price below) by the index value for the month of BOA award and rounding up to the nearest three decimal places.

The BLS Proposed index for the month most closely matching the date of order will be used, and a Final Adjusted Price will be established 8 months after the unilateral order to reflect the final BLS index value for the month the order was placed. The vendor who receives the unilateral order may submit a price proposal that, if determined reasonable, will become the new price with no further need to adjust the price based on index data. After Adjustment to the Final Adjusted Price, the Governments final obligation will equal BOA Price x NAICS Index Rate + 5%. The remaining 10% in the above paragraph is to cover variations in the BLS index from the time the unilateral order is placed until the final BLS index data for the month the order is placed becomes available. If funds remain available, these may be de-obligated by unilateral modification by the Government or used to increase the quantity ordered based on a bilateral agreement between the Government and Contractor."

End Proposed Language

Does any one see any contractual or legal problems with this approach?

Thanks, Thomas

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I have proposed language for the solicitation that would require performance.... I propose language to create manditory performance....

How do you "require" performance or make it "mandatory" under a blanket purchase agreement, basic ordering agreement, or basic agreement? They're not contracts and not contractually enforceable. If you write language that requires performance, then you have some kind of contract, like, uh, an IDIQ contract.

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I didn't see the need to have mandatory performance since I have several suppliers interested. Attempting to create a mandatory performance option was a way to answer problems that some of the other fingers in the pie seemed to see with a BA. If I get rid of mandatory performance, I could then dispense with most of the narative I created and just have a provision for renewing the BOA annually and collect more Past Performance data.

I agree than a multi-award IDIQ is probably the ideal, but that approach seems to get bogged down in details like having the new Technical Data revisions done on every item, even though we don't plan on ordering it right now. I keep insisting that since we are doing multi-award, any changes to TDP can be done when we compete individual orders. I think I can reslove that if I push hard enough.

Where I think I will get jammed up on the Multi-Award IDIQ is that for the first DO, I don't have a way to guarantee each vendor a minimum quantity without making the quantity so small that the unit price becomes less economical. If I am not giving a minimum quantity then that would be a Requirements contract, so I would then have a Multi-award Requirements Contract, not exactly right either.

How do you "require" performance or make it "mandatory" under a blanket purchase agreement, basic ordering agreement, or basic agreement? They're not contracts and not contractually enforceable. If you write language that requires performance, then you have some kind of contract, like, uh, an IDIQ contract.

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I have a question related to this original thread on "Basic Agreement in lieu of IDIQ".

My office has a practice of issuing single award multiple year BPAs after a competition for the BPA, for commercial items. There are always multiple vendors who can provide for the item, and there are multiple vendors who offer on the BPAs. We solicit for and include prices in the BPA.

I don't find anything to expressly prohibit this, or any GAO cases that speak to this specifically, but it seems we are circumventing the intent of the FAR, by narrowing to one BPA award. The call orders are usually placed without negotiation. It makes placing call orders easy, but it feels like we are circumventing real competition. Since a BPA is not binding and either party can end it without cause, doesn't that eliminate the effect of a competitive environment?

I'd appreciate feedback on whether anyone knows of regulations or GAO rulings make this acceptable or unacceptable.

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I have a question related to this original thread on "Basic Agreement in lieu of IDIQ".

My office has a practice of issuing single award multiple year BPAs after a competition for the BPA, for commercial items. There are always multiple vendors who can provide for the item, and there are multiple vendors who offer on the BPAs. We solicit for and include prices in the BPA.

I don't find anything to expressly prohibit this, or any GAO cases that speak to this specifically, but it seems we are circumventing the intent of the FAR, by narrowing to one BPA award. The call orders are usually placed without negotiation. It makes placing call orders easy, but it feels like we are circumventing real competition. Since a BPA is not binding and either party can end it without cause, doesn't that eliminate the effect of a competitive environment?

I'd appreciate feedback on whether anyone knows of regulations or GAO rulings make this acceptable or unacceptable.

If you did the BPAs under FAR Part 13, take a look at paragraphs ( c ) and (d) of FAR 13.303-5.

Quote

13.303-5 -- Purchases Under BPAs.

(a) Use a BPA only for purchases that are otherwise authorized by law or regulation.

(B) Individual purchases shall not exceed the simplified acquisition threshold. However, agency regulations may establish a higher threshold consistent with the following:

(1) The simplified acquisition threshold and the $6.5 million limitation for individual purchases ($12 million for purchases entered into under the authority of 12.102(f)(1)) do not apply to BPAs established in accordance with 13.303-2( c )(3).

(2) The limitation for individual purchases for commercial item acquisitions conducted under Subpart 13.5 is $6.5 million ($12 million for acquisitions as described in 13.500(e)).

( c ) The existence of a BPA does not justify purchasing from only one source or avoiding small business set-asides. The requirements of 13.003(B) and subpart 19.5 also apply to each order.

(d) If, for a particular purchase greater than the micro-purchase threshold, there is an insufficient number of BPAs to ensure maximum practicable competition, the contracting officer shall --

(1) Solicit quotations from other sources (see 13.105) and make the purchase as appropriate; and

Unquote

If you did them under FAR Part 8, you are OK unless your agency FAR supplement dictates otherwise (e.g. DFARS 208.405-70 Additional ordering procedures).

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