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LPTA for Multiple Award BPA


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Hi All:

I am looking to award a Multiple award BPA against the schedules.  We have determined that there will be no tradeoff and that best value is expected to result from the selection of the technically acceptable proposal with the lowest evaluated price.  We are anticipating an award to at least two vendors.  I heard that one cannot use LPTA for multiple award BPAs because there is more than one awardees and therefore you are not awarding to the lowest.  

My thoughts are that we can award to the two lowest using LPTA.  I have been looking and didnt see anything in FAR Part 8 prohibiting LPTA for multiple award BPA.  Thoughts?

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1 hour ago, ContractSpecialistTJohn said:

Multiple award BPA AGAINST THE SCHEDULES

I have added emphasis to your statement  ContractSpecialistTJohn as   FAR 8.405-3 is your reference.   I might add that it makes no mention of LPTA or any such process but provides the underpinnings for the process to be used.   I suggest you re-read, think and apply the principles expressed in the FAR.  I do not question Vern's summary view of what FAR 8.405-3 says but there is a little more to it depending on the anticipated use of the multiple award.

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1 hour ago, Vern Edwards said:

Just say that you’ll enter into a BPA with the lowest and the second lowest.

But if price is the foremost consideration, when would you ever place an order with the second lowest? Why are you entering into multiple-award BPAs?

Hi Vern,

Thanks for the thoughtful response.  The dollar value is the main reason for the Multiple award approach in addition to the preference for multiple award bpa over single award.  We are looking at a commercial commodity with large volumes.  Therefore, the BPA will have a tiered pricing structure.  At the order level depending on the quantities the vendors will compete and we anticipate they will have different prices at each tier.  The lowest overall cost objective will be based on historical estimates * quantity for each tier to determine the first and second lowest price.

Thoughts?

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32 minutes ago, ContractSpecialistTJohn said:

At the order level depending on the quantities the vendors will compete

Interesting.  So understanding that price reductions on GSA-BPA pricing can not be sought at the order level  (FAR 8.405-4) the tiered pricing agreed to at BPA award will dictate.  So Vendor A's tiered pricing may make their overall price for an order better than B in one scenario of a combination of commodities but not in another.  And I suppose one of the vendors may not want to quote in certain instances as well (doesn't have the amount of commodities at a certain time to meet the need).   

I am probably making it too simple but if the anticipated need is not over $100M (and considering this  - "depending on quantities the vendors will compete" it would seem there might be a pretty good case to just award one BPA -

As scope and complexity do not seem over the top (commodities  and orders at less that the SAT seem to be indicated otherwise orders  must be competed among A & B).

The comparison of ongoing prices may not out weigh the administrative costs of managing and utilizing two BPA's and it would seem technical qualifications of the vendors is not in the mix.

Your call but my thoughts as I continue to read the thread.

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36 minutes ago, C Culham said:

Interesting.  So understanding that price reductions on GSA-BPA pricing can not be sought at the order level  (FAR 8.405-4) the tiered pricing agreed to at BPA award will dictate.  So Vendor A's tiered pricing may make their overall price for an order better than B in one scenario of a combination of commodities but not in another.  And I suppose one of the vendors may not want to quote in certain instances as well (doesn't have the amount of commodities at a certain time to meet the need).   

I am probably making it too simple but if the anticipated need is not over $100M (and considering this  - "depending on quantities the vendors will compete" it would seem there might be a pretty good case to just award one BPA -

As scope and complexity do not seem over the top (commodities  and orders at less that the SAT seem to be indicated otherwise orders  must be competed among A & B).

The comparison of ongoing prices may not out weigh the administrative costs of managing and utilizing two BPA's and it would seem technical qualifications of the vendors is not in the mix.

Your call but my thoughts as I continue to read the thread.

Yes the award is well over the 112m threshold for single award.  Can you elaborate further on the price reductions?  Discount are always to be requested at the order level is my reading of part 8

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8 hours ago, ContractSpecialistTJohn said:

Discount are always to be requested at the order level is my reading of part 8

No no NO.  The BPA serves little purpose if it doesn’t negotiate a quantity discount on the GSA rates.  Don’t count on getting any discounts for each measly order.  That’s just playing hot potato among COs.  You must do it all at once, for the order COs.

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Your use of “best value” and “LPTA” terms tell me you may be attempting to use FAR Part 15 procedures.  Don’t count on competition driving down the rates - it doesn’t always work out as planned for those of us forced to use Part 15 for noncommercial competitions.  Embrace the fact your Subpart 8.4 acquisition will not need to follow “discussions” protocol here, and secure those discounts with your considerable leverage.

See FAR 8.404(a): "General. Parts 13 (except 13.303-2(c)(3)), 14, 15, and 19 (except for the requirements at 19.102(b)(3) and 19.202-1(e)(1)(iii))do not apply to BPAs or orders placed against Federal Supply Schedules contracts (but see 8.405-5)."  If you solicit you will use FAR Part 15 source selection procedures though, case law has shown you will have to enter into "discussions".

Edited by Voyager
Added second paragraph to elaborate for OP
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43 minutes ago, ContractSpecialistTJohn said:

Yes the award is well over the 112m threshold for single award.  Can you elaborate further on the price reductions?  Discount are always to be requested at the order level is my reading of part 8

Again read FAR 8.405-4

Edit - If your agency supplement is silent the FAR applies.

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5 hours ago, ContractSpecialistTJohn said:

Hi Vern,

Thanks for the thoughtful response.  The dollar value is the main reason for the Multiple award approach in addition to the preference for multiple award bpa over single award.  We are looking at a commercial commodity with large volumes.  Therefore, the BPA will have a tiered pricing structure.  At the order level depending on the quantities the vendors will compete and we anticipate they will have different prices at each tier.  The lowest overall cost objective will be based on historical estimates * quantity for each tier to determine the first and second lowest price.

Thoughts?

No. Thanks for answering my question.

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5 hours ago, Voyager said:

No no NO.  The BPA serves little purpose of it doesn’t negotiate a quantity discount on the GSA rates.  Don’t count on getting any discounts for each measly order.  That’s just playing hot potato among COs.  You must do it all at once, for the order COs.

No reason both can’t be done - discount off GSA Schedule contract rates at the BPA award level and the ability to seek further discounts at the order level.  

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43 minutes ago, formerfed said:

No reason both can’t be done - discount off GSA Schedule contract rates at the BPA award level and the ability to seek further discounts at the order level.  

Agree, the gold standard here would be negotiated, multiple-award BPA.  Negotiate the BPA awards with oral presentations seeking quantity discounts off the GSA rates, and then issue the orders via SOW competitions for FFP lump sums.  What’s the best example of an agency out there doing this, or something like it?

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32 minutes ago, formerfed said:

No reason both can’t be done - discount off GSA Schedule contract rates at the BPA award level and the ability to seek further discounts at the order level.  

Hmmm -  The order is the BPA is it not?   I guess it is how you read it.  I will not argue but my read was that an order was different than a BPA but I would agree that probably in reality entities probably seek not only a discount when the award the order for the BPA but when they place an order under the BPA.

8.405-4 Price reductions.

Ordering activities may request a price reduction at any time before placing an order, establishing a BPA, or in conjunction with the annual BPA review. However, the ordering activity shall seek a price reduction when the order or BPA exceeds the simplified acquisition threshold. Schedule contractors are not required to pass on to all schedule users a price reduction extended only to an individual ordering activity for a specific order or BPA.

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1 hour ago, C Culham said:

Hmmm -  The order is the BPA is it not? 

It’s not.  Take a look here at establishing BPAs and placing orders under BPAs, especially those orders exceeding the SAT threshold.  https://www.acquisition.gov/far/8.405-

The advantage of doing multiple BPAs is you establish a pool of competitive sources for future needs.  Then you only solicit only BPA holders for needs as they arise.  It’s similar to multiple award IDIQ contracts

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11 hours ago, formerfed said:

It’s not.  Take a look here at establishing BPAs and placing orders under BPAs, especially those orders exceeding the SAT threshold.  https://www.acquisition.gov/far/8.405-

The advantage of doing multiple BPAs is you establish a pool of competitive sources for future needs.  Then you only solicit only BPA holders for needs as they arise.  It’s similar to multiple award IDIQ contracts

Well for a commodity which I read as a product not a service it just seems the competition in a competition is a fantasy when establishing a BPA.   The quote request for  establishing the BPA - Hey contractors give me your best discounts and I will consider awarding a BPA to you.  (After all GSA asserts their contractors are all technically acceptable and the prices are fair and reasonable so I am thinking LPTA when I make this statement.)    Now I have 2 or more BPA's and issue another quote - Hey contractors give me your best, best, best discounts and I will award an order to you.   Seems like adding an extra step.   Even if I have very occurring needs, and I am competing a commodity solely on price, couldn't I just put the need on e-buy every month or whatever and take the best price.   But I am old school and it seems GSA-FSS has gotten as confusing as IDIQs. 

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48 minutes ago, C Culham said:

But I am old school and it seems GSA-FSS has gotten as confusing as IDIQs. 

YES! I think GSA has gone off the deep end with all it’s “vehicles,” and I know some GSA folks who think the same. Now, instead of getting on with buying, people spend precious time wondering how GSA’s various “‘vehicles” work. And BPAs are one of the worst.

Too much innovation!

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1 hour ago, Vern Edwards said:

YES! I think GSA has gone off the deep end with all it’s “vehicles,” and I know some GSA folks who think the same. Now, instead of getting on with buying, people spend precious time wondering how GSA’s various “‘vehicles” work. And BPAs are one of the worst.

Too much innovation!

This BPA is for internal use and not Government wide use.  Thanks 

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2 hours ago, C Culham said:

Well for a commodity which I read as a product not a service it just seems the competition in a competition is a fantasy when establishing a BPA.   The quote request for  establishing the BPA - Hey contractors give me your best discounts and I will consider awarding a BPA to you.  (After all GSA asserts their contractors are all technically acceptable and the prices are fair and reasonable so I am thinking LPTA when I make this statement.)    Now I have 2 or more BPA's and issue another quote - Hey contractors give me your best, best, best discounts and I will award an order to you.   Seems like adding an extra step.   

Agencies sometimes do it this way when the list of potential commodity needs are extensive and difficult to forecast, involve large dollar values, cover commodities with varying degrees of availability in large quantities, and potential orders may be very significant.  The time and effort to issue RFQs at the order level can be quick - email asking for price and availability, and done in a few days.  

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@C CulhamIt sounds like you are talking about BPAs of the FAR 13.303 variety.  I suspect this because FAR 13.303-5, Purchases under BPAs, actually requires the CO "limit documentation of purchases to essential information and forms."  Hence, there would be no memorandum to document any discount at the order level.  Am I helping you recollect?  It can be confusing if one of these BPAs is established by relying on a GSA FSS's terms and conditions. 

Contrast that type of ordering to ordering from a FAR Subpart 8.4 GSA FSS BPA, which is typically for hourly rate services these days, and you will see in FAR 8.405-3(c), Ordering from BPAs, that documentation of price and technical analyses (in all but name) is required: https://www.ecfr.gov/current/title-48/chapter-1/subchapter-B/part-8/subpart-8.4/section-8.405-3#p-8.405-3(c)(3)

Oh how I wish GSA had used a different moniker for this type of award!

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1 hour ago, ContractSpecialistTJohn said:

This BPA is for internal use and not Government wide use.  Thanks 

That's great, then you will avoid the fuss about "vehicles" to which Vern is referring (which may just be symptoms of GSA's empire building IMHO).  You can look at examples of what other agencies have done successfully in the same situation below

DoD ESI

DOE Federal and Eligible Contractor Use | Department of Energy

DOE Integrated Contractor Purchasing Team Home Page (note: these are Basic Ordering Agreements under FAR Part 16, not BPAs)

I can attest from using one of these in the past that the CO awarding the BPA negotiated discounts from the GSA labor category rates of 11-18% off, by using a single-award BPA acquisition strategy and soliciting that it would have a $100M maximum order limit.  Made my price analysis documentation very easy as the ordering CO.

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16 hours ago, Voyager said:

@C CulhamIt sounds like you are talking about BPAs of the FAR 13.303 variety.  I suspect this because FAR 13.303-5, Purchases under BPAs, actually requires the CO "limit documentation of purchases to essential information and forms."  Hence, there would be no memorandum to document any discount at the order level.  Am I helping you recollect?  It can be confusing if one of these BPAs is established by relying on a GSA FSS's terms and conditions. 

Contrast that type of ordering to ordering from a FAR Subpart 8.4 GSA FSS BPA, which is typically for hourly rate services these days, and you will see in FAR 8.405-3(c), Ordering from BPAs, that documentation of price and technical analyses (in all but name) is required: https://www.ecfr.gov/current/title-48/chapter-1/subchapter-B/part-8/subpart-8.4/section-8.405-3#p-8.405-3(c)(3)

Oh how I wish GSA had used a different name for this type of award!

Rigmarole to get on schedule. More rigmarole to win a multiple award BPA against a schedule contract. Even more rigmarole to get an order under the multiple award BPA. They turned a simple idea from Part 13 into what to me is a confusing idea.

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22 hours ago, Voyager said:

@C CulhamIt sounds like you are talking about BPAs of the FAR 13.303 variety.  I suspect this because FAR 13.303-5, Purchases under BPAs, actually requires the CO "limit documentation of purchases to essential information and forms."  Hence, there would be no memorandum to document any discount at the order level.  Am I helping you recollect?  It can be confusing if one of these BPAs is established by relying on a GSA FSS's terms and conditions. 

Contrast that type of ordering to ordering from a FAR Subpart 8.4 GSA FSS BPA, which is typically for hourly rate services these days, and you will see in FAR 8.405-3(c), Ordering from BPAs, that documentation of price and technical analyses (in all but name) is required: https://www.ecfr.gov/current/title-48/chapter-1/subchapter-B/part-8/subpart-8.4/section-8.405-3#p-8.405-3(c)(3)

Oh how I wish GSA had used a different name for this type of award!

 To your implication BPA versus GSA-FSS BPA.   I am not talking about the former.   I was keeping on topic of sorts as I was talking a product (commodity) and not a service.   When it comes to services, well its even worse.   I remember the adage from my younger days that a BPA was like setting up an credit account, it no longer applies.   I am with Vern.

 

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23 hours ago, ContractSpecialistTJohn said:

This BPA is for internal use and not Government wide use.  Thanks 

I understood this to be the case all along.   I am a little perplexed as to what the clarification means no matter.   The real whys and discussion was focused on a BPA's via GSA-FSS, whether multi-agency or single agency.

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On 8/20/2022 at 3:01 AM, Vern Edwards said:

Rigmarole

Well, do all of these hoops we make contractors jump through resemble the commercial market?  I think from the contractor perspective the idea of needing a GSA schedule to unlock a CO’s ability to use FAR Subpart 8.4 is certainly not reflective of commercial markets.  But then once that rigmarole is through, don’t BPAs as I’ve described them at least resemble everyday B2B transactions?  Buyers will always seek a preferred customer discount by soliciting a known amount of purchasing leverage.  They may just call them Long Term Agreements instead.

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