Many federal agencies and contracting officers utilize blanket purchase agreements (“BPA”) to contract for their requirements. BPAs are generally recognized as a simplified method of filing anticipated needs for supplies and services under both FAR 8.405-3 and FAR 13.303.
Although BPAs offer administrative efficiencies for contracting officers, 8(a) Business Development Program Participants should understand that there are certain risks with regard to their utilization. Specifically, the risk of BPAs is all in the name: a BPA is an agreement, not a contract.
SBA regulations expressly state that neither a basic ordering agreement (“BOA”) nor a BPA is a contract under the FAR. As such, a contracting officer must offer, and SBA must accept, each order under a BPA or BOA in addition to offering and accepting the BOA or BPA itself. Furthermore, unlike with other contract types, SBA will not accept for award on a sole source basis any order under BPA or BOA that would cause the total dollar value of the order to exceed the applicable competitive threshold amount, which is generally $4.5 million.
A recent Final Rule makes the offer and acceptance process for BPA orders clear under FAR 19.804-5: contracting officers shall submit an offer letter for, and SBA must accept, each order under a BOA or a BPA under FAR Part 13 and it states that the SBA will not accept any sole-source orders which exceed the competitive threshold amount identified above.
Whereas in the past, agencies may have issued BPA or BOA orders under the 8(a) program without obtaining an acceptance letter from the SBA, that practice is now expressly prohibited. And while there may be some planning opportunities, for example BPAs issued under FAR Part 8, generally this process may cause additional delays in procurements, assuming agency officials are willing to draft separate offer and acceptance letters for each order.
In summary, GovContractPros recommends re-evaluating utilization of BPAs and BOAs under the 8(a) program given some the challenges discussed above. Where 8(a) participants have the opportunity to interface with agency officials or otherwise respond to sources sought notices, we recommend highlighting that BPAs may not be as efficient a contracting vehicle as previously administered. If you have any questions about acquisition planning or contract-type selection, please contact Trevor Skelly.