Procuring specialized scientific supplies - many different items at low volume and $ - anything other than P-Cards?

[General.Zhukov]

What are some procurement arrangements I can use in our situation -see below - other than using a P-Card?   (I think this is contract admin issue more than anything else, but if this question is a better fit elsewhere let me know)
 

Situation:

- A civilian agency's remote facility housing many small heterogenous laboratories.  Their scientific and laboratory supplies are a constant procurement problem. They use P-Cards, but are wondering if there are alternative solutions.

- Heterogenous labs means different types of specialized supplies.   Most supplies come from a few big well-known companies (like Thermo Fisher), but lots of different items and some items have a single source.  For the crown-jewel instruments (like this one) we have support contracts & warranties, so not a major problem here.

- Small means very low dollar volume of these supplies.   Almost all purchases are under micro, many are under $100. Annually in sum, maybe $500K - $1.0MM.

- Remote means delivery is relatively slow and expensive given the low $.  A lab assistant can't just grab the P-Card, and drive to a nearby warehouse full of, for example, special gloves resistant to particular chemicals that leach through latex.  

- Because of funding and non-contracting reasons, creating a mini-stockpile or better supply management at this facility aren't feasible in the short-term. 

 

Comments:

- My guess is that P-Cards are the best and only method of procurement for this situation. There isn't anything else that would be effective.  But... maybe I'm wrong - this isn't my area of expertise.

 - A BPA doesn't seem like the right fit given the small scale, because at these very low dollar values, issuing a BPA Call for something under micro seems excessive.  Takes too long, administrative cost of a call exceeds the value of the supplies being purchased, etc.  

- This sort of situation is probably much more common in DoD world, which I know very little about.  I was activity duty logistics but didn't deal with the supply chain.  Where the stuff came from wasn't my concern.  

- No department or government-wide acquisition vehicle or civilian equivalent of DLA that we could use, at least none I am aware of. Caveat - some of their scientific/laboratory/medical supplies are indeed purchased from GSA or VA, but those common items aren't the main problem.  The problem is with niche specialized supplies that aren't on any vendor's FS schedule (or whatever they are called these days).   

- Made in America makes this more difficult.  For example, they need a type of Xylene-resistant gloves.  I've been told these need a waiver.  

[ji20874]

BPA is exactly the right answer -- this is what Part 13 BPAs are best for.  However, you write, "...issuing a BPA Call for something under micro seems excessive.  Takes too long, administrative cost of a call exceeds the value of the supplies being purchased, etc."

That's because agencies have overly-formalized the BPA purchase process.  BPAs done right, the way they used to be done (and still should be done), would solve your problem.  The agency would establish BPAs with Thermo Fisher and as many other suppliers as they want to, non-competitively and without funding -- those BPAs would reference or incorporate the vendor's commercial catalog, perhaps with a discount -- an authorized user would order his or her $100 item by telephone from whichever BPA holder he or she wanted to, and the agency would make one payment at the end of the month to pay for all the purchases made during the month.

[Don Mansfield]

How about "lab supplies as-a-service"? In other words, you pay a contractor to maintain prescribed stock levels over a period of time. 

[formerfed]

3 hours ago, ji20874 said:

BPA is exactly the right answer -- this is what Part 13 BPAs are best for.  However, you write, "...issuing a BPA Call for something under micro seems excessive.  Takes too long, administrative cost of a call exceeds the value of the supplies being purchased, etc."

-- an authorized user would order his or her $100 item by telephone from whichever BPA holder he or she wanted to, and the agency would make one payment at the end of the month to pay for all the purchases made during the month.

 

2 hours ago, Don Mansfield said:

How about "lab supplies as-a-service"? In other words, you pay a contractor to maintain prescribed stock levels over a period of time. 

Either of these two are excellent choices.  In the case with BPAs, take the contracting office out of purchasing except establishing the BPAs.  Designate program office personnel as ordering officials. Administrative costs should be close to that of a P Card action

[C Culham]

5 hours ago, ji20874 said:

BPA is exactly the right answer

And not to be overlooked is the possilbe use of the P Card as the payment vehicle for the BPA's.  Agency policy, cardholder delegation, etc may come into play but I would suggest it should be explored.  Reference FAR 13.301.

[RJ_Walther]

On 4/25/2024 at 1:14 PM, ji20874 said:

the agency would make one payment at the end of the month to pay for all the purchases made during the month

While I agree this is how BPAs should be used, this may cause issues on the obligation recording side these days with automatic financial management systems. In the DOD obligations must be recorded within 10 days of incurring them, and I assume other agencies have similar rules, so the monthly roll-up thing no longer works and someone is either manually recording obligations for every call directly in the financial system, or a contracting officer is creating individual calls in their contract writing system so the obligations can flow through to the financial system, or the calls are being placed with the P-Card, which is what General.Zhukov was trying to avoid in the first place (possibly because in many cases the "automated" approval process for P-card purchases takes longer than the process for getting a purchase order). None of these are issues with the contracting regulations, they're all financial management regulations or financial system-driven problems.

So that probably leaves the "lab supplies as-a-service" idea as the best option, maybe FFP if you have very steady/predictable usage and don't see significant price fluctuations in your supplies or T&M if it needs to be more flexible.

23 hours ago, Don Mansfield said:

How about "lab supplies as-a-service"? In other words, you pay a contractor to maintain prescribed stock levels over a period of time. 

 

 

[Don Mansfield]

So the financial systems can't accommodate bulk funding (FAR 13.101(b)(4))?

[C Culham]

20 hours ago, RJ_Walther said:

In the DOD obligations must be recorded within 10 days of incurring them

I just wonder as the 10 days seems inconsistent DFARS PGI 204.606 regarding "Express Reporting" that allows for monthly?   I guess a person would have to dig deeper.

[RJ_Walther]

On 4/27/2024 at 10:21 AM, C Culham said:

I just wonder as the 10 days seems inconsistent DFARS PGI 204.606 regarding "Express Reporting" that allows for monthly?   I guess a person would have to dig deeper.

Yeah, again unfortunately it works under the contracting rules, DFARS PGI 204.606 is specifically for when the contract action needs to be reported, but the DoD Financial Management Regulation Volume 3 Chapter 8 says "In no instance shall obligations be recorded any later than 10 calendar days following the day that an obligation is incurred." I'm not sure whether other agencies have similar rules.

 

On 4/26/2024 at 4:22 PM, Don Mansfield said:

So the financial systems can't accommodate bulk funding (FAR 13.101(b)(4))

Hopefully they can (assuming they can match multiple contracts to a single funding document), so you can get the bulk funding document committing funds at the beginning of the month and make multiple calls against it (because we regularly sit on funding documents for much longer than a month while working on contract awards), it's the recording of the obligations that breaks the traditional BPA model. But there's always a risk when a new system is created that it prevents us from doing something that the FAR says we can do. I assume the right people are in the room for new contract writing systems, I'm not so sure that's always the case for financial management systems.

[C Culham]

41 minutes ago, RJ_Walther said:

Yeah, again unfortunately it works under the contracting rules, DFARS PGI 204.606 is specifically for when the contract action needs to be reported, but the DoD Financial Management Regulation Volume 3 Chapter 8 says "In no instance shall obligations be recorded any later than 10 calendar days following the day that an obligation is incurred."

Actually DoD Financial Management Regulation Volume 3 Chapter 8 at 3.3.2.2 says this which one could conclude provides an exception to the 10 day rule - "notwithstanding".  I will leave to DoD to interpret but the regulation is confusing by my read.

3.3.2.2. Ten-Day Rule. Record obligations in the official accounting records at the time a legal obligation is incurred, i.e., contract is signed. In all instances, obligations must be recorded within 10 calendar days following the day that an obligation is incurred (to include obligations incurred when invoices are overpaid or duplicate payments are made). Notwithstanding the ten-day rule, record all obligations (per line of accounting) in the official accounting records in the same month in which the obligation is incurred. If an obligation is not recorded within the specified timeframe, follow section 14.0.

[formerfed]

Or  issue funded delivery orders to cover periodic estimated needs (monthly, quarterly, annually, etc.).  Designated program officials would be authorized to place oral orders under the funded document.  The contractor is instructed to submit monthly invoices that covers the billing period.  The obligation that gets recorded is the funded order.  

[C Culham]

On 4/25/2024 at 8:22 AM, General.Zhukov said:

My guess is that P-Cards are the best and only method of procurement for this situation. There isn't anything else that would be effective.  But... maybe I'm wrong - this isn't my area of expertise.

I agree.

While my prevous posts to this thread will remain.  I had this afterthought.   I actually think the purchase card is the best method.  Why?  I have this nagging memory that the purchase card while an industry standard so to speak came to Federal procurement to benefit just in time procurements.  Not the type of just in time that your read about today but that where procurement offices were not bogged down by what is defined as micro-purchases and the thought that "supply rooms" as they once looked could be abandoned to something smaller or even not at all.  Likewise the first step doing like we all do in our real life - simply, and to better look like a commercial entity.   To this latter thought I think about myself.   I do not have a BPA, Lab Supplies as a Service, or even IDIQ with Safeway, Home Depot, my local mom and pop establishment and the many other places I frequent on a continual basis.   I simply walk in, and in these days, plop down my card and buy what I need.   No fear of split procurements or the need for something else because I am a repetitive customer.

Also no fear that Xylene-resistant gloves need a waiver.   If I need them because they fit the purpose of personal mission then there you go, just plop down the card whenever I run out and need more.

My suggestion now, stick to your gut and go with the card.

[General.Zhukov]

On 4/26/2024 at 4:22 PM, Don Mansfield said:

So the financial systems can't accommodate bulk funding (FAR 13.101(b)(4))

I don't know exactly how their finances work (not my office, and our agency has complicated funding - 50% appropriations from Congress, 50% fees from industry, both with many strings attached), so I excluded it from consideration here.  But yes, it's likely that they could use something like bulk funding if they figure out the timing part.  That is a part of FAR 13 I didn't know about!

 

Thanks for the suggestions. 

 

I think we will probably consider a short-turn-around FAR 13 BPA for the relatively more expensive items and stay with P-Cards for the little stuff.  If we can get a new BPA to be much, much faster than our other BPAs/IDIQs.  My agency has many BPAs (we love them, we use them the most in HHS), but they are for far larger and far more complex requirements.  BPA Calls for millions of dollars of professional services, not hundreds of dollars of supplies.