Rule aims to boost BPA competition

Proposed rule would require agencies to solicit at least three bids

Proposed rule

A proposed rule published today would require agencies to solicit at least three bids when ordering services or establishing blanket purchase agreements under the General Services Administration's Federal Supply Service schedules system.

The proposed change to the Federal Acquisition Regulation (FAR) is intended to establish a single set of procedures for activities that have not previously been well-regulated.

The proposal calls for agencies to consider at least three schedule providers when purchasing goods or fixed-price services, and it requires them to send a statement of work to at least three providers when trying to order services priced at hourly rates. In either case, if an agency is trying to establish blanket purchase agreements, the agency must also consider additional providers, although the proposal does not specify how many.

Under current rules, agencies can purchase services under BPAs even if they have only one such agreement and the prices aren't fixed. That means there really is no competition, said Chip Mather, vice president of Acquisition Solutions Inc. "If the only way you can price it is by getting a quote from the vendor, then you [should] have to get competition," he said. "If it's pre-priced, then it's already competed."

The proposed changes are an effort to close that loophole, said Neal Fox, GSA's assistant commissioner in the Office of Acquisition.

"It's trying to make sure BPAs aren't established going around the ordering procedures themselves," he said. "We want the blanket purchase agreements to be established using the appropriate amount of competition."

The new rule would require agencies, in submitting statements of work, to ask service providers for fixed prices.

Fox said there is no widespread problem of agencies establishing noncompetitive BPAs, but, "We want to make the ordering procedures clear. GSA takes its responsibility pretty seriously to keep our customers well informed."

Mather applauded the effort to bring order to what has been chaotic.

"There's been a real dearth of guidance in this area," he said. "The guidance that was there, some was in the FAR, some was on the GSA Web site. If it was on the Web site, it was in multiple locations. It's been problematic and it really takes a dedicated contracting officer to find out what the rules are."

"In the past, BPAs have been pretty wide open, pretty much open to the interpretation of the contracting agency," added consultant John Okay, president of J.L. Okay Consulting Inc. "This at least sets some uniform regulations for everybody."

The rule will make the agreements more competitive, he said, citing the proposed new language. "That implies at least four contractors are going to have a look at the statement of work," he said. "It looks like the people who wrote this are trying to balance the need for competition against the reason for writing BPAs in the first place, which is to streamline acquisitions."

Public comments on the proposed rule are due by June 17.

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