Purchase Orders vs C-Type Contracts

[cdhames]

Seems like there's a trend to just award any kind of commercial service requirement as a Purchase Order nowadays, as long as it meets the threshold prescribed in FAR 13.5.  I'm currently at a location now that's executed all of their primary base service contracts as P types.  Grounds, Custodial, every standard service contract that a traditional contracting office might normally execute as a c-type, is now a 5-year purchase order (with 1 year options).  When I ask why, I generally receive the same answer:  because it's easier.  Why do FAR 15, when you can go 13.5?

I can't honestly say i've been able to find anything in the FAR that says they can't do it that way either.  It's a little weird, (i personally feel its lazy) but i can't really find fault with it in terms of anything specific in the FAR that says, no, you must do a C-Type contract when contemplating x, y, z.    

In the end, I guess if you do an RFP under 13, or a solicitation under 15, the end result is the same:  a contract.  And whether it's P, or C, is just a meaningless designation.

As a forum of last resort, I wanted to ask here.  Am I missing something in the FAR that can clearly delineate when to use what type?

If there is already a clear topic on this subject, please post the reference and i'd be happy to read through, thanks.

[bosgood]

I do not see anything wrong with this approach, provided it meets all of the criteria of 13.5.  I also don't know of anything that says "use this v. that" in this case, nor do I know why you would want that.  As 13.5 provides:  "The purpose of these simplified procedures is to vest contracting officers with additional procedural discretion and flexibility, so that commercial acquisitions in this dollar range may be solicited, offered, evaluated, and awarded in a simplified manner that maximizes efficiency and economy and minimizes burden and administrative costs for both the Government and industry."  

Why not do things easier and more efficiently when everyone complains about how bloated the system is?

[C Culham]

11 hours ago, cdhames said:

As a forum of last resort, I wanted to ask here.

 

11 hours ago, cdhames said:

And whether it's P, or C, is just a meaningless designation.

I agree in the current times and the sloppiness of offices but I do believe the designation has meaning in the context of the FAR.   It would seem that properly under the rules of the FAR a commercial item acquisition where the SF-1449 is used that is a RFQ versus that of a RFP or IFB should be the "P" and that is that.

I hang my hat on FAR part 2 and FAR Part 13.   While under the definition of "contract" purchase order is mentioned the specific definition for purchase order in Part 2 is  -  "when issued by the Government, means an offer by the Government to buy supplies or services, including construction and research and development, upon specified terms and conditions, using simplified acquisition procedures."

 Married with with FAR subpart 13.004 at (a) regarding legal effect of quotations adds to my conclusion - " ...The order is an offer by the Government to the supplier to buy certain supplies or services upon specified terms and conditions. A contract is established when the supplier accepts the offer...."

   

 Properly used the designator helps with regard to data mining in determining how many quotes the government has awarded against versus that of RFP, IFB.  Important or  meaningless you be the judge.   

[formerfed]

@cdhames If you’re asking this question, I’m guessing your office isn’t fully taking advantage of FAR 13.5 procedures.  You issue a simple request for pricing and other basic information, evaluate responses, select an awardee, and issue an order with the required commercial clauses.  Quick and easy and should be much quicker.

Quote

In the end, I guess if you do an RFP under 13, or a solicitation under 15, the end result is the same:  a contract.  And whether it's P, or C, is just a meaningless designation.

No, you should be getting quotes using a simple RFQ, not an RFP, and the end result is an order and not a contract.  If your office requires an RFP and a contract for some reason, you might as well call it FAR 15

[Vern Edwards]

@cdhames

If a procurement is for commercial products or services and is to be conducted pursuant to FAR Subpart 13.5, see FAR 13.003(g)(2):

Quote

(g) Authorized individuals shall make purchases in the simplified manner that is most suitable, efficient, and economical based on the circumstances of each acquisition. For acquisitions not expected to exceed-

***

           (2) $7.5 million ($15 million for acquisitions as described in 13.500(c)), for commercial products or commercial services, use any appropriate combination of the procedures in parts 12, 13, 14, and 15 (see paragraph (d) of this section).

(Paragraph (d) concerns the acquisition of personal services.)

In short, if the people in your office think that because they are using SAP pursuant to FAR 13.5 to acquire long-term commercial services they must use issue an RFQ "Q" and a purchase order "P" instead of an RFP "R" and a "C" contract (see FAR 4.1603(a)(3)), then they just don't understand sound professional practice.

In my opinion, any contracting officer who would use a purchase order to acquire a long-term service is rather foolish. A purchase order "P" is a Government offer to buy, which the contractor can accept or reject. Purchase orders are unilateral contracts. The issuance of a purchase order is generally appropriate for simple, short-term, transactional procurements. They are fine for buying "off-the-shelf" type stuff.

But when buying more custom, long-term commercial services, the issuance of a purchase order instead of a bilateral "C" type contract is generally not sound professional practice. Better professional practice is to negotiate a bilateral contract.

The main advantages of using SAP under FAR 13.5 to buy commercial products and services valued in excess of the simplified acquisition threshold are that you don't have to follow the rules in FAR Part 6 and FAR Subpart 15.3. Especially important is that you are not bound by FAR 15.304 and 15.306.

[C Culham]

1 hour ago, Vern Edwards said:

Purchase orders are unilateral contracts.

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[Vern Edwards]

54 minutes ago, C Culham said:

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If you have a question for me, ask it.

[formerfed]

But we can make purchase order agreements bilateral through contractor written acceptance as well.

[C Culham]

15 hours ago, formerfed said:

But we can make purchase order agreements bilateral through contractor written acceptance as well.

Yes especially to form a binding contract before performance is begun.

[Vern Edwards]

18 hours ago, formerfed said:

But we can make purchase order agreements bilateral through contractor written acceptance as well.

@formerfedYes. And where does FAR provide guidance about doing that when a CO issues a purchase order, other than the brief mention at 13.302-3? Where do 1102s learn about the distinction between unilateral and bilateral contracts and the significance of the distinction? Where is it discussed in FAR?

[C Culham]

21 hours ago, Vern Edwards said:

And where does FAR provide guidance about doing that when a CO issues a purchase order,

 FAR 13.004 also.   I no longer have but suspect through experiencing the training myself that specific references of a multitude of FAC-C training documents make the distinction.  To become a CO an individual is required to learn the distinction via such documents.   Obviously they do not retain the acquired knowledge through FAC-C training.  

[Vern Edwards]

54 minutes ago, C Culham said:

I no longer have but suspect through experiencing the training myself that specific references of a multitude of FAC-C training documents make the distinction.

I know of no such "multitude." And FAR does not explain the distinction.

But there are a multitude of 1102s who issue purchase orders every day and who do not know of and cannot explain the distinction between a unilateral contract and a bilateral contract and the significance of that distinction.

54 minutes ago, C Culham said:

To become a CO an individual is required to learn the distinction via such documents. 

I know of no such "requirement." Of course, a CO should know of and understand the distinction, but COs should know and understand a lot of things that they don't.

 

[C Culham]

1 hour ago, Vern Edwards said:

2 hours ago, C Culham said:

 

I know of no such "multitude."

Sorry but required FAC-C covers extensively.  So are you saying that other trainings of which there are many such as the FAR Boot Camp doesnot?

1 hour ago, Vern Edwards said:

And FAR does not explain the distinction.

I hope you didn't misunderstand my post?  To be clear I did not say the FAR made the distinction only that it covered getting acceptance of a PO in writing in another subpart.

2 hours ago, Vern Edwards said:

there are a multitude of 1102s

Yes

 

2 hours ago, Vern Edwards said:

I know of no such "requirement."

So a 1102 can be designated a CO without FAC-C certification?  Yes probably but extremely rare.  The requirement is therefore prescribed.  Again whether the 1102 retains the learning as you note on this topic and much much more that is another matter.

[Vern Edwards]

Take a nap, Carl.

[C Culham]

12 minutes ago, Vern Edwards said:

Take a nap, Carl.

Thanks for the affirmation!

Oh and remember FAC-C certification retention requires CLPs of which a multitudes of off the shelf trainings qualify in achieving.

Suggest you might need a nap too!

[Vern Edwards]

I do! You are boring me. 

[C Culham]

7 minutes ago, Vern Edwards said:

I do! You are boring me. 

And you are boorish!  Relax enjoy that others have reasonable thoughts and facts too!

[GABE]

On 7/19/2022 at 10:49 AM, formerfed said:

@cdhames If you’re asking this question, I’m guessing your office isn’t fully taking advantage of FAR 13.5 procedures.  You issue a simple request for pricing and other basic information, evaluate responses, select an awardee, and issue an order with the required commercial clauses.  Quick and easy and should be much quicker.

No, you should be getting quotes using a simple RFQ, not an RFP, and the end result is an order and not a contract.  If your office requires an RFP and a contract for some reason, you might as well call it FAR 15

RFP or RFQ are both appropriate when working within FAR 13.