Is Small Business Coordination (DD Form 2579) required for establishing a Blanket Purchase Agreement (BPA), when all BPA calls will be under the Micro-purchase Threshold (MPT) Limit? 
 

My opinion is "yes," if the estimated value of all the calls together (or appropriated funds) are over the micro-purchase threshold at the time the BPA is established. That to me is most consistent with the FAR definition of an acquisition:
Acquisition means the acquiring by contract with appropriated funds of supplies or services (including construction) by and for the use of the Federal Government through purchase or lease, whether the supplies or services are already in existence or must be created, developed, demonstrated, and evaluated. Acquisition begins at the point when agency needs are established and includes the description of requirements to satisfy agency needs, solicitation and selection of sources, award of contracts, contract financing, contract performance, contract administration, and those technical and management functions directly related to the process of fulfilling agency needs by contract.

16 hours ago, Neil Roberts said:

My opinion is "yes," if the estimated value of all the calls together (or appropriated funds) are over the micro-purchase threshold at the time the BPA is established. That to me is most consistent with the FAR definition of an acquisition:
Acquisition means the acquiring by contract with appropriated funds of supplies or services (including construction) by and for the use of the Federal Government through purchase or lease, whether the supplies or services are already in existence or must be created, developed, demonstrated, and evaluated. Acquisition begins at the point when agency needs are established and includes the description of requirements to satisfy agency needs, solicitation and selection of sources, award of contracts, contract financing, contract performance, contract administration, and those technical and management functions directly related to the process of fulfilling agency needs by contract.

I disagree.  A BPA is not a contract, and does not require appropriated funds to establish.

 

I'm with Carl.  A Part 13 BPA contains clauses and follows rules based on the maximum individual purchase limit, not the cumulative possible total.  No requisition or purchase request is needed.

On 10/13/2023 at 5:29 AM, Christal said:

Is Small Business Coordination (DD Form 2579) required for establishing a Blanket Purchase Agreement (BPA), when all BPA calls will be under the Micro-purchase Threshold (MPT) Limit? 
 

@Christal, more information is needed. 

1. Is the BPA a FAR Part 13 BPA

2. Are the written terms of the BPA such that Seller is required to fulfill each call with the price and delivery schedule (and with other terms )that were pre-determined by the BPA at the time it was initially established, or 

3. Are the written terms of the BPA such that each call price and delivery schedule must be individually negotiated and accepted by Seller and Government at the time Seller is notified there is a call.

4. How else would you describe it?

I wonder if the question arose from the Small Business Specialist pushing that the coordination form is needed?

5 hours ago, formerfed said:

I wonder if the question arose from the Small Business Specialist pushing that the coordination form is needed?

Discretion!  While I disagree with Neil's manipulation of the regs to justify the form bureaucrats can ask or even demand it.  Overreaction to FAR part 19 in my view.  But of course facts might sway me but the facts must be very convincing.

 I’m just speculating as to whether a small business specialist might be taking that position.  

The shorter answer may be to read the Department of Defense instructions for filling in the form, and then make up your own mind about it. See https://www.acquisition.gov/dfarspgi/pgi-253.219-70-dd-form-2579small-business-coordination-record.

On 10/13/2023 at 7:29 AM, Christal said:

Is Small Business Coordination (DD Form 2579) required for establishing a Blanket Purchase Agreement (BPA), when all BPA calls will be under the Micro-purchase Threshold (MPT) Limit? 
 

Thank you very much for your insight. Here's some additional information.  It's actually a CO & SBP collectively trying to find a solid answer.  This subject has been debated quite a bit in our organization.  There was an Air Force PGI that set the standard for Acquisition Planning thresholds and other reviews/approvals for a BPA as the maximum order limit, not the individual call limit.  That guidance no longer exists.  There is also a squadron SOP which states that when it comes to Committe reviews, the total estimated value of a BPA is the estimated value of all future calls or the BPA limit. SB guidance is pretty clear on when a review is required (i.e., over the MPT).  The issue is not so much where SB stands, but rather when it comes to a BPA, what determines the review/coordination/approval thresholds (i.e., legal, SB, RAA, committee, etc.)...the master BPA limit or the call limit.  Both points have been argued.  Some do not have the same “BPAs are not contracts” understanding when it comes to reviews and approvals.  The question posed was based on a BPA that will be established under FAR Part 13.  Although all calls will be below the MPT, the BPA Master Limit will be over $1M. The BPAs have not been established yet; as such, I can't speak on the instructions just yet.  

 

Christal, What do you say?  Do you use the individual purchase limit for clauses and reviews, or what you call the master BPA limit?

I’m aware of three instances of similar situations.  In one the agency initially agreed to do a small business set aside.  In the other two, the small business office escalated the situation.  Agency management ultimately agreed to do set-asides for small business.  The written policy is unclear so in the absence of clear direction, the small business advocates seems to prevail - why not restrict it to small business?

I really don’t know the correct answer.  But I do know the small business policies and the specialists influence.  If there is any doubt, why not reserve it for small?  

10 hours ago, formerfed said:

If there is any doubt, why not reserve it for small?  

Especially since “all BPA calls will be under the Micro-purchase Threshold (MPT) Limit” (Original post). What’s the problem with reserving the BPA for small business?

Seems to be consistent with Part 19 government policies encouraging and maximizing opportunities for small business participation, including using set-asides under 19.5.

See also 13.303-5 Purchases under BPAs:

…”(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.”

Please, let's be careful of creep.  There is ZERO requirement that micro-purchases be set-aside for small businesses.  Citing FAR 13.003(b) as requiring set-asides for micro-purchases is error -- indeed, the very text of 13.003(b) militates against this creep -- here is the text: "Acquisitions of supplies or services that have an anticipated dollar value above the micro-purchase threshold . . . shall be set aside for small business concerns."

This creep is all too common among 1102 practitioners -- please, let's avoid it. 

6 minutes ago, ji20874 said:

Please, let's be careful of creep. 

I agree.  Let me pull in another reference - FAR part 19 - where I find no reference that the Small Business Act applies to procurements at or below the micro-purchase level.   

 

16 hours ago, Christal said:

I can't speak on the instructions just yet.  

With regard to limits I did not do exhaustive research as I kept coming back to a BPA is not a contract which seems to be a well founded conclusion of case law.  

All in all if it were me and I was developing the instructions I would hold to the plain meaning of the FAR that if the need is for the establishment of a BPA where no call under the BPA shall exceed the micro-purchase level a 2579 is not required of the BPA(s) nor the call issued pursuant to the BPA(s).

For what it is worth here are some references that may help you (Christal) decide what to do.....

FAR 19.201(c)(15) - Ensures agency purchases using the Governmentwide purchase card that are greater than the micro-purchase threshold and less than the simplified acquisition threshold were made in compliance with the Small Business Act...

 41 USC 1902: Procedures applicable to purchases below micro-purchase threshold especially paragraph (c)

15 USC Chapter 14A, Section 631, paragraph (j).  

15 USC Chapter 14A, Section 644, paragraph (j)

https://www.moore.army.mil/tenant/micc/content/pdf/MICC Desk Book.pdf?12JUN2020  See Page 133

https://www.acquisition.gov/afars/5119.201-general-policy.  I see nothing regarding FAR part 13 BPA's as exception to the micro-purchase threshold.

https://www.gao.gov/products/b-401988.2 Distinction of a BPA to a IDIQ.

https://www.gao.gov/assets/b-417500,b-417500.2.pdf Just an interesting read that in my personal view has some relationship to the matter your are wrestling with.  

Good luck!

 

The practical point is arguing against small business can be meaningless. The regulations and stated policies aren’t completely clear on the point.  The small business office sees a $1 million acquisition as an example and they don’t want to miss it not going to a small business.  So if it comes down to a stalemate with contracting, management will likely agree with the small business office.  It’s often a battle not worth fighting.

A FAR 13 BPA with an individual purchase limit at the micro-purchase threshold is not a $1 Million acquisition, even if the BPA has an aggregate limit of $1 Million.  Handling such a BPA as a $1 Million procurement is error.

I have no problem establishing a FAR 13 BPA with a small business concern; indeed, I encourage it when the conditions for a BPA are present -- but such an action is not a set-aside.

So many practitioners want to see a FAR 13 BPA as a procurement, but it isn't -- a requisition is not required, funding availability is not required, competition is not required, an acquisition plan is not required, an aggregate limit or maximum is not required, and so forth.  If a BPA has an aggregate limit, that maximum limit is irrelevant for clause selection and other purposes (for every purpose, the instant purchase amount is what matters).  Competition, acquisition plan, small business coordination, and similar matters are dealt with for each individual purchase (or not, such as for micro-purchases).  

2 hours ago, formerfed said:

if it comes down to a stalemate with contracting, management will likely agree with the small business office.  It’s often a battle not worth fighting.

But they should not.  Come on a million in micro purchases compared to what almost agency does in total procurements is nonsense.  Clearly folks are not following the money with regard to total commitment to small business.  The premise is false in my view.

 

9 minutes ago, ji20874 said:

 

6 hours ago, C Culham said:

With regard to limits I did not do exhaustive research as I kept coming back to a BPA is not a contract which seems to be a well founded conclusion of case law.  

I know of no case that stands for the proposition that any document with a header "BPA" is automatically not a contract. One must examine the language in the document to determine whether the requirements for a contract are present. FAR Part 13 BPA's might not be a contract when initially issued, depending on the language, but eventually there is a contract if used as intended. There are other Agencies and the commercial world that may issue BPA's quite different than FAR Part 13 type. For example,If a specified price and delivery schedule is called out in the initlal BPA when issued and Seller is required to sell under those terms by the initial BPA, it may be a contract when initially issued.

4 minutes ago, Neil Roberts said:

but eventually there is a contract if used as intended.

No sir not if issued pursuant to FAR part 13.  Now I might agree some uninformed agency person might confuse strict terms as used in the FAR but with this said...

"In contrast, a BPA is generally not a contract, and a BPA does not obligate the agency to enter into future contracts with the vendor. FAR sect. 13.303-1(a); see also Logan, LLC, B-294974.6, Dec. 1, 2006, 2006 CPD para. 188 at 2-3 n.2.[5]" Reference GAO Decision B-401988.2 that I referenced in a previous post.

If any language in the initial BPA is invoked in any way with a call that is agreed to by the parties, that invoked language and the call is a contract. I hope you agree?

59 minutes ago, Neil Roberts said:

but eventually there is a contract if used as intended.

I also disagree for a FAR 13 BPA.  Each purchase under the BPA stands alone.  The BPA is not a contract.

Neil, If you were doing a FAR 13 BPA with a micro-purchase limit for individual purchases and an overall aggregate limit (maximum) of $1 Million, would you use clauses prescribed for a $1 Million action?

Tricky question ji. I personally for my own company, would include those clauses that apply only to the micro-purchase amount for each purchase but I would also consider what additional clauses and risks there are at $1M and take appropriate additional steps that may include additional clauses prescribed for the $1M level that would require incorporation into each purchase. That is what large contractors do. I would have the BPA reviewed by someone with $1M in authorization. Kind of getting off track here. The DOD form says what it says and appears to focus on estimated cumulative dollar amount for the deal. 

Edited October 17, 20231 yr by Neil Roberts
added "the"

47 minutes ago, Neil Roberts said:

If any language in the initial BPA is invoked in any way with a call that is agreed to by the parties, that invoked language and the call is a contract. I hope you agree?

I do but that does not make the BPA a contract, the call is the contract that references clauses.  Heck you could put in zero references to the BPA in the call except the hoped for pricing.  Remember it is a micro purchase and as such in the strict view of a FAR BPA the vendor has the right of acceptance of offer.  If an agency makes calls a unilateral right of the government my view is they have in fact bastardized the FAR guiding principles and created a requirements or IDIQ contract.

4 hours ago, Neil Roberts said:

The DOD form says what it says and appears to focus on estimated cumulative dollar amount for the deal. 

You have gone full circle..a BPA is not an "acquisition".  I would offer that even a BPA that creates a call being a firm offer by the government doesnot make the BPA an acquisition.  It is simply the establishment of a charge account that gives rules it does not buy anything.  

As the OP has mentioned Air Force see this https://www.acquisition.gov/afars/5119.201-general-policy.  

Edited just now to add this reference that I was reminded of in reading another thread.  See discussion of Blanket Purchase Agreements in it.

https://tjaglcs.army.mil/documents/35956/202351/2023+Contract+Attorneys+Deskbook.pdf/3f1c4d3b-1c54-d3b2-523f-1c37fb063637?t=1690991215366