Jump to content
The Wifcon Forums and Blogs

Recommended Posts

We may have a requirement coming up for the purchase of rapid covid-19 tests, up to 1,000 of them max. We don't know how many exactly we'll need or exactly when they'll need to be used. Once it's determined that a test is needed we need to get the person tested within 12 hours.

 

The issue we're running into is how do we structure the contact so that we can execute in that small timeframe. Our contracting personnel can't/won't execute an option that fast and we don't want 1,000 CLINs. FFP doesn't seem appropriate since we don't know exactly how much we need or when (and we don't want to pay for $1,000 tests if we only end up using half). It seems like it's a commercial requirement so a CR CLIN is out of the question. Do we use T&M and just say that they'll provide tests not to exceed X dollars?  Or am I over complicating the whole thing?

 

Thanks!

Link to post
Share on other sites

Why not Unit priced FFP commercial contract for individual tests? Estimated quantity not to exceed 1000. Determine a period over which tests to be available. I’m assuming you will send the subjects to the test site. 

Link to post
Share on other sites

Make an announcement and seek sources to contact. If nobody has the total capacity, make more than one contract award.

Use BPA with GPC for payment? 

Link to post
Share on other sites
3 hours ago, joel hoffman said:

Why not Unit priced FFP commercial contract for individual tests? Estimated quantity not to exceed 1000. Determine a period over which tests to be available. I’m assuming you will send the subjects to the test site. 

Isn't the whole concept of FFP that it's a fixed amount that doesn't change? Wouldn't we be required to pay them for the firm fixed price regardless of if we actually used what they actually provided?

 

As far as the BPA idea, how would that work with GPC? We really don't use GPC for anything other than micro purchases and we'd very likely need to exceed the MPT with this. 

Link to post
Share on other sites
2 hours ago, Freyr said:

Isn't the whole concept of FFP that it's a fixed amount that doesn't change? Wouldn't we be required to pay them for the firm fixed price regardless of if we actually used what they actually provided?

No -- but don't feel badly, as your misconception is all too common -- but it is still error.

Look at the column headings for a bid schedule:

  • .ITEM..   ..SUPPLIES/SERVICES..   ..QTY..   ..UNIT..   ..UNIT PRICE...   .AMOUNT.

The price is the next-to-last column, not the last column -- the last column is amount, not price.  And look at block 26 on the SF-1449 -- does it say price? No!  It says amount.

So, set up a purchase order with an estimated quantity such as this:

  • .001...   .COVID TEST.   ...1,000 (est)..   ..EA...   .$75..   ..$75,000
    .The quantity shown is an estimated quantity -- the Government will make payment only for tests actually ordered.

The unit price will not vary with the contractor's cost experience -- it is a firm-fixed-price.  No, no no, this is not IDIQ -- please don't go there.  

Or, do like Joel suggested and establish one or two Part 13 BPAs with FFP per test and pay with GPC (each test is a separate purchase under the BPA -- make payment for each purchase, or make a single payment once a month for all tests performed during the preceding month).  You can have the BPAs established before your lunch break on Monday.  You don't need a requisition or purchase request to establish the BPAs.

This really is EASY -- FAR Part 13 really is EASY, and tremendously FLEXIBLE -- too many among us make it entirely too hard.

 

Link to post
Share on other sites

And you don't need a pre-solicitation synopsis under FAR subpart 5.2 to establish the BPAs.  That's right -- no requisition, no synopsis.  And no written solicitation, either.  Just do it.  If you don't believe me, please read the BPA section in FAR part 13.

Link to post
Share on other sites
11 minutes ago, ji20874 said:

And you don't need a pre-solicitation synopsis under FAR subpart 5.2 to establish the BPAs.  That's right -- no requisition, no synopsis.  And no written solicitation, either.  Just do it.  If you don't believe me, please read the BPA section in FAR part 13.

But do not forget the guiding principles of FAR 13.303-5(d) where further competition (not synopsis) might be required.

Link to post
Share on other sites
On 11/14/2020 at 4:44 PM, Freyr said:

Isn't the whole concept of FFP that it's a fixed amount that doesn't change? Wouldn't we be required to pay them for the firm fixed price regardless of if we actually used what they actually provided?

Freyr, hope you understood ji’s explanation of how a unit-priced contract with estimated quantities can fit the definition of a “firm fixed-price” contract. Part 16 isn’t entirely clear.  It is intended, I think, to  emphasize the basic differences between Fixed price and cost reimbursement pricing arrangements.

Unit priced contracts have been commonly used in construction for decades if not centuries, when quantities of an individual item of work either can’t be accurately estimated and/or when the quantity might vary based upon actual conditions.

I’m sure that there are supply contracts that allow the government to purchase estimated quantities or individual items at fixed unit prices (such as the civil engineer supply stores on each Air Base) just like an account at a hardware store.

Unit priced contracts are common in commercial commerce when the basic price of an item or service  doesn’t change based upon the quantity purchased, except for stepped pricing (e.g.,  prices for individual orders of 1-20, 21-50, over 50 , etc. as hypothetical examples). 

A basic concept for appropriateness of including or using unit prices is to use it for items or services where the price of an item or service is not subject to adjustment on the basis of the contractor's cost experience in performing or providing the work.

Dont get hung up thinking that the overall contract amount for a firm-fixed price contract cannot vary and that a fixed contract price is the only alternative to time and materials, labor-hours or cost reimbursement contracts.

Since COVID-testing definitely Is a commercial service, you can develop a contract to pay for individual tests using Part 12/13 simplified acquisition methods.

Link to post
Share on other sites

BPAs with government purchase card looks to be a simple way to do it. GPC could be used with purchase orders and other simplified methods, too. Im with ji here. 

Link to post
Share on other sites
1 hour ago, Lionel Hutz said:

Freyr, to follow up on what Joel and Ji said, check out FAR 36.207, which describes "unit-price" contracts as a type of fixed-price contract.  It is in the context of construction contracting, but there is no reason it cannot also be used for supplies or services.  

Thanks, Lionel. I forgot to include the reference. 

Link to post
Share on other sites

Thank you all! Per usual your responses have been incredibly useful and has helped open up my thinking on the use of FFP contracts. Firm-Fixed-Price, not Firm-Fixed-Amount! I'm still not clear on the use of a BPA with GPC for each test (or the lump sum at the end of the month). Would are customer (who is the cardholder) be "swiping the card" or would we need the CO to do it because it may exceed the MPT for services? What about creating a CAR in FPDS if the number of tests needed does exceed the MPT (and what if it doesn't)? Since my organization doesn't really seem to use BPAs like this I'm betting there's going to be a lot of pushback for this idea (leadership doesn't like new ideas). 

Link to post
Share on other sites
23 minutes ago, Freyr said:

Thank you all! Per usual your responses have been incredibly useful and has helped open up my thinking on the use of FFP contracts. Firm-Fixed-Price, not Firm-Fixed-Amount! I'm still not clear on the use of a BPA with GPC for each test (or the lump sum at the end of the month). Would are customer (who is the cardholder) be "swiping the card" or would we need the CO to do it because it may exceed the MPT for services? What about creating a CAR in FPDS if the number of tests needed does exceed the MPT (and what if it doesn't)? Since my organization doesn't really seem to use BPAs like this I'm betting there's going to be a lot of pushback for this idea (leadership doesn't like new ideas). 

I’ll let ji handle the procedural details here. 

Link to post
Share on other sites

With a BPA, each purchase under the BPA stands alone.  So, if a BPA has One thousand $75 purchases over its life, each purchase is a micropurchase ($75) -- it is not a $75,000 contract.  Do not treat it like a $75,000 contract.  Do not use clauses appropriate for $75,000.  Use clauses appropriate for a micropurchase (that's none, right?), because it is one thousand $75 micropurchases (not a $75,000 contract).

It's your choice regarding payment -- you can let each purchase be supported by its own GPC payment.  Or, you can let all of the purchases be billed in a single monthly invoice.

If all of your purchases will be below the MPT, maybe you only need one one BPA.  If any of your purchases (purchases, not payments) will exceed the MPT, maybe you want two BPAs to ensure maximum practicable competition.

These are not "new ideas" -- just read FAR 13.303.  In the old days when we had GS-1105 purchasing agents, we could make things happen under FAR part 13.  We still can, if our GS-1102 contract specialists cam forget all their 1102 part 15 baggage.

Best wishes!

Link to post
Share on other sites
1 hour ago, ji20874 said:

With a BPA, each purchase under the BPA stands alone.  So, if a BPA has One thousand $75 purchases over its life, each purchase is a micropurchase ($75) -- it is not a $75,000 contract.  Do not treat it like a $75,000 contract.  Do not use clauses appropriate for $75,000.  Use clauses appropriate for a micropurchase (that's none, right?), because it is one thousand $75 micropurchases (not a $75,000 contract).

It's your choice regarding payment -- you can let each purchase be supported by its own GPC payment.  Or, you can let all of the purchases be billed in a single monthly invoice.

If all of your purchases will be below the MPT, maybe you only need one one BPA.  If any of your purchases (purchases, not payments) will exceed the MPT, maybe you want two BPAs to ensure maximum practicable competition.

These are not "new ideas" -- just read FAR 13.303.  In the old days when we had GS-1105 purchasing agents, we could make things happen under FAR part 13.  We still can, if our GS-1102 contract specialists cam forget all their 1102 part 15 baggage.

Best wishes!

That helps a lot! So we if we know we might need 1,000 of those $75 tests we can treat the need for each test as a separate requirement as long as we're just purchasing them as the need comes in? On one hand it makes a lot of sense but on the other hand it almost seems like we'd be splitting the requirement, though the purpose wouldn't be "merely to avoid" any MPT requirements. However, like you said, if we think we'll need to get 100 of the tests at one time (the purchase being $7,500) then we should have two BPAs so we can compete it right?

Link to post
Share on other sites

Each purchase stands alone.

This is not splitting the requirement.  Think of a BPA with the local office supply store -- there, you can buy a stapler for $9, right?  Over the course of a year, you might buy a hundred staplers using a hundred individual purchases.  Each of those purchases is a discrete purchase for $9.  You did not split the requirement.  For this discussion, there is no difference between a stapler and a COVID test.

 

Link to post
Share on other sites

@Freyr        @ji20874

Sharing some thoughts.

If at any one time you need 34 tests remember that amount at the example of $75 dollars per test would exceed the $2500 and additional clause regarding Service Contract Labor Standards would need to be in the BPA..  If all needs never require a order of more than 34 tests (at the example of $75) then ji's statement "that's none right" regarding clauses is right on. 

What about co-insurance or insurance coverage all together?  Or in other words who is being tested and why won't their insurance cover them?  If they have no insurance then my quick market research indicates an out of pocket COVID test is $300 plus.  Keep this in mind with regard to number of tests requested at one time, the micro-purchase threshold and threshold for Service Contract Labor Standards.

What if the number of tests requested at one time exceed the micro-purchase threshold then further competition is required unless multiple BPA's are used or the BPA is pre-competed.  Here is a previous discussion in WIFCON that gets into the details of the competition requirements.   Pay special attention to the Vern Edwards post of October 5, 2009.  

 

Finally, I hope you are discussing the use of the GPC for the need with your GPC coordinator.   By experience many GPC programs frown on using the card for repetitive procurements below the micro-purchase threshold, something I disagree with. GPC program oversight gurus have made it so as a control mechanism so folks are not by example possibly violating the Labor Standards requirements by say getting 20 people tested in the morning and getting another 20 tested in the afternoon to split the need as opposed to testing all 40 at once.  Not saying you would do this but that is why artificial GPC controls have been place.

All this is provided to illustrate that the straight up approach of a BPA may be a good one yet there are things to consider before putting into place.     

Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

×
×
  • Create New...