I'm okay with your thought process.

This is from FAR 16.503.  It states the preference for multiple awards that also apply to requirements contracts.

Quote

(b) Application.

(1) A requirements contract may be appropriate for acquiring any supplies or services when the Government anticipates recurring requirements but cannot predetermine the precise quantities of supplies or services that designated Government activities will need during a definite period.

 (2) No requirements contract in an amount estimated to exceed $100 million (including all options) may be awarded to a single source unless a determination is executed in accordance with 16.504(c)(1)(ii)(D).

A requirements contract is a form of indefinite delivery contract.  Contracts must contain some form of consideration to the contractor as GAO notes.  With an indefinite quantity type, consideration is met through the guarantee of a minimum.  With a requirements type, consideration is the promise to buy everything from the contractor.  In this case, consideration is the promise to buy from a pool of contractors.

formerfed said:

In this case, consideration is the promise to buy from a pool of contractors.

Formerfed, would you say that the pool has to be limited to a small number of contractors in order for consideration to apply?  For example, could GSA make its schedule contracts requirements contracts using this authority?

At the heart of this issue is the question: “what constitutes sufficient consideration?”   

If indeed a promise to give part of a job to one contractor and a part to another is sufficient, then it’s hard to imagine that there would be any limitation based on the quantity of contractors you’re giving the work to (unless you’ve divided it to such an extent that it’s deemed token consideration, I suppose). It seems that how the distribution of work is described and executed will be key to determining the sufficiency of consideration. (For example, will a work distribution plan actually result in the apportionment promised?)

I did a single acquisition for three requirements contracts once -- one for each of three geographic regions (east coast, west coast, and midwest).  

This differs from the original poster's situation.  I think a promise of "approximately one-half of the total supplies or services specified in the Schedule" to each of two contractors is reasonable (using the partial set-aside model as an example).  But why?  Why are two contractors necessary?  I understand the case for two requirements contracts in a partial set-aside, where maybe small business cannot provide all of the requirement so we allow them to provide half.  If not partial set-aside, why have two requirements contracts?  Is it for industrial mobilization reasons?  Market segmentation reasons?

Retreadfed said:

For example, could GSA make its schedule contracts requirements contracts using this authority?

I don't think so -- there would be no benefit in doing so, and GSA's FSS schedules are not mandatory as a general rule.  If there are a hundred contractors on a schedule, who wants to promise each contractor 1/100th of the work?

The following comment and response was contained in the final rule for FAR Case 2008-006 (75 FR 13416):

Quote

Comment 14. “Clarify Requirements Clause.” The commenter states that, without additional implementation language, it is assumed that without a determination under FAR 16.504(c)(1)(ii)(D), it will be a violation of FAR to issue requirements contracts over $100 million. The commenter further states that it is assumed that all contracts over $100 million will be multiple-award IDIQ contracts under FAR 16.504(c)(1)(ii)(D). If the assumptions are correct, the commenter requests additional clarifying language Start Printed Page 13419in FAR 16.503 to state that requirements contracts are not authorized over $100 million unless a determination is granted. In addition, if the intent is to allow multiple-award “requirements” contracts, the commenter requests that an alternate to FAR 52.216-21 be added to the ruling that defines how a multiple-award requirements contract will be implemented.

Response: The Councils do not believe a change to FAR 52.216-21 is required as a result of this rule. The FAR does not preclude single-award task- or delivery-order requirements contracts over $100 million, it just requires a written determination by the head of the agency. FAR 16.503(b)(2) already states that requirements contracts are not authorized over $100 million unless a determination is granted. The Councils amended the language at FAR 16.503(a) to clarify that requirements contracts are awarded to one contractor. This change is made to dispel the implication at FAR 16.503(b)(2) that a multiple-award requirements contract may be awarded. See also response to Comment 12.

https://www.federalregister.gov/documents/2010/03/19/2010-5989/federal-acquisition-regulation-far-case-2008-006-enhanced-competition-for-task--and-delivery-order

Don Mansfield said:

The following comment and response was contained in the final rule for FAR Case 2008-006 (75 FR 13416):

https://www.federalregister.gov/documents/2010/03/19/2010-5989/federal-acquisition-regulation-far-case-2008-006-enhanced-competition-for-task--and-delivery-order

Jeez. What an absolute mess of a section!! Two comments in response:

1. The drafters still haven’t “dispelled the implication” because there is a clause (52.216-21 (Alternate III)) that expressly provides permission to award two requirements contracts for the SAME work. (I suppose their counterargument would be that small business interests outweigh the interest in having a single requirement contract. To what end, who knows?)

2. I would still feel comfortable awarding multiple requirements contracts under a scenario such as the one ji mentioned, which is supported by the holding in JRS Management, B-401524.2.

ji20874 said:

But why?  Why are two contractors necessary?  I understand the case for two requirements contracts in a partial set-aside, where maybe small business cannot provide all of the requirement so we allow them to provide half.  If not partial set-aside, why have two requirements contracts?  Is it for industrial mobilization reasons?  Market segmentation reasons?

In my case, because the customer seeks redundancy to mitigate against performance risk should one contractor fail or default. 

And the reason for a requirements contract rather than an IDIQ is because we need to place many orders every day with little ability to know what the requirement will be next week. Competing orders (which exceed the SAT) would create delay and waste. 

I can think of no other way to marry their need for redundancy with their need for rapid-fire ordering as unpredictable requirements arise.

Okay.  I'm still okay with your thought process, as long as both contractors get half of the work.

ji20874 said:

Okay.  I'm still okay with your thought process, as long as both contractors get half of the work.

I would expect nothing less from Wifcon’s resident rebel, ji!

FrankJon said:

Jeez. What an absolute mess of a section!! Two comments in response:

1. The drafters still haven’t “dispelled the implication” because there is a clause (52.216-21 (Alternate III)) that expressly provides permission to award two requirements contracts for the SAME work. (I suppose their counterargument would be that small business interests outweigh the interest in having a single requirement contract. To what end, who knows?)

2. I would still feel comfortable awarding multiple requirements contracts under a scenario such as the one ji mentioned, which is supported by the holding in JRS Management, B-401524.2.

In the context of FAR subpart 16.5, "multiple award" implies multiple contracts with the same scope. At least that's how the FAR Councils seem to be using the term.

I wouldn't describe what you have in mind as "multiple-award". I think what you're describing is a split award.

Don Mansfield said:

In the context of FAR subpart 16.5, "multiple award" implies multiple contracts with the same scope. At least that's how the FAR Councils seem to be using the term.

I wouldn't describe what you have in mind as "multiple-award". I think what you're describing is a split award.

Can you clarify, Don? It sounds like you're saying ji's "regional" approach is a split award, and to your mind acceptable. I agree. This seems clear based on case law.

But how would you describe the situation described by 52.216-21 (Alternate III)? Surely that must be multiple award, right? I'm not trying to be pedantic here. I would love to find a way to apply the flexibility of that clause to the large businesses in my situation and I'm looking for any plausible explanation to account for the apparent glaring contradiction that the clause creates.

Retreadfed said:

Formerfed, would you say that the pool has to be limited to a small number of contractors in order for consideration to apply?  For example, could GSA make its schedule contracts requirements contracts using this authority?

Funny you mentioned this.  A long time ago, GSA Schedules were requirements contracts and all mandatory for GSA use.  Many were also mandatory on some other agencies (varied depending upon the commodity).  When not mandatory on specific agencies, use was optional and the scope contained similar language.  A GSA lawyer described them as a hybrid requirements/indefinite quantity contract.

FrankJon said:

Can you clarify, Don? It sounds like you're saying ji's "regional" approach is a split award, and to your mind acceptable. I agree. This seems clear based on case law.

But how would you describe the situation described by 52.216-21 (Alternate III)? Surely that must be multiple award, right? I'm not trying to be pedantic here. I would love to find a way to apply the flexibility of that clause to the large businesses in my situation and I'm looking for any plausible explanation to account for the apparent glaring contradiction that the clause creates.

Yes, I think ji's regional approach is fine. I just wouldn't call it "multiple-award".

I don't see what's described by 52.216-21, Alt. III as multiple-award, because each awardee gets half the requirement. That's different than each awardee getting a contract for potentially the whole requirement.

I would also call it a split award, not a multiple award.  Split = half of the ordered supplies or services goes to one contract, and half to the other contract, such as by alternating orders.

Thanks all.

FrankJon said:

I can think of no other way to marry their need for redundancy with their need for rapid-fire ordering as unpredictable requirements arise.

Two or more single-award IDIQs or BOAs?

Jamaal Valentine said:

Two or more single-award IDIQs or BOAs?

I don’t think so. BOAs wouldn’t address my efficiency issue, as I’d still need to follow competition and posting requirements. 

Based on my reading of 16.5 trying to award two or more single award IDIQs to share the work would be an even more tenuous argument than awarding two or more requirements contracts. I’m going to have a battle either way. I think there’s a clearer argument for setting up this arrangement with requirements contracts.

On 11/13/2020 at 3:55 PM, ji20874 said:

such as by alternating orders.

Be careful here however.  This suggests that both requirement contracts are inclusive of the same scope.

Same process as with a partial set-aside -- the work description and contract scope statements can be identical...  The "approximately equal" division of work among the two need not be decided pre-award, but may be administered by the contracting officer post-award through issuance of orders in a manner that half of the work goes to one, and half to the other.

FrankJon said:

I don’t think so. BOAs wouldn’t address my efficiency issue, as I’d still need to follow competition and posting requirements. 

Based on my reading of 16.5 trying to award two or more single award IDIQs to share the work would be an even more tenuous argument than awarding two or more requirements contracts. I’m going to have a battle either way. I think there’s a clearer argument for setting up this arrangement with requirements contracts.

Probably right on the BOA aspect. I really wish the FAR Councils would rewrite FAR 5.202(a)(6) or (11).

However, I think a careful read of FAR 16.504(c)(1)(ii)(B)* could lead to a single-award path, but you know your agency better than I do.

*assuming you don’t reach FAR 16.504(c)(1)(ii)(D)(1)

ji20874 said:

Same process as with a partial set-aside -- the work description and contract scope statements can be identical...

Are your sure?....Your contention was that the needs could be ordered via alternating orders.   It appears such would be in conflict with what is provided for in the following FAR subpart, as emphasized.   I agree with the concept of a split requirements contract discussed in this thread but "alternating orders" becomes a scope issue and using alternating orders does not seem to provide for "distinct" portions for a partial setaside.   I would be interested in seeing the wording that would delineate the work for two separate requirements contracts for the same work that would further divide the work into distinct portions to allow alternating orders pursuant to partial setaside.

19.502-4 Partial set-asides of multiple-award contracts.

      (a)In accordance with section 1331 of the Small Business Jobs Act of 2010 ( 15 U.S.C. 644(r)(1)), contracting officers may, at their discretion, set aside a portion or portions of a multiple-award contract, except for construction, for any of the small business concerns identified at 19.000(a)(3) when—

           (1)Market research indicates that a total set-aside is not appropriate (see 19.502-2);

           (2)The requirement can be divided into distinct portions;

C Culham said:

I would be interested in seeing the wording that would delineate the work for two separate requirements contracts for the same work that would further divide the work into distinct portions to allow alternating orders pursuant to partial setaside.

Easy -- just tailor the Alt III text...

• The Government’s requirements for each item or subitem of supplies or services described in the Schedule are being purchased through one non-set-aside contract and one set-aside [two requirements] contract**[s]**. Therefore, the Government shall order from each Contractor approximately one-half of the total supplies or services specified in the Schedule that are required to be purchased by the specified Government activity or activities. The Government may choose between the set-aside Contractor and the non-set-aside [either] Contractor in placing any particular order. However, the Government shall allocate successive orders, in accordance with its delivery requirements, to maintain as close a ratio as is reasonably practicable between the total quantities ordered from the two Contractors.

ji20874 said:

Easy -- just tailor the Alt III text...

Well I understand the approach but I not convinced it is appropriate.  To your latest suggestion "tailoring" of 52.216-21 by my read is not allowed, unless of course one were to follow the FAR deviation process.  Also I actually believe the FAR contemplated "one contractor" for a requirement (scope) that can not be otherwise divided into distinct portions for a partial set-aside. Likewise, convoluting "partial set-aside" to procure the same need through separate contracts that do not have distinct portions does not seem to follow the idea contemplated by the FAR Part 19 nor the SBA regulations.  

All said I have done requirements based on geographic area but I have not then subdivided the geographic area (via a partial set-aside) further but I could see where I might do that for say something like Olympic National Park garbage service where there was a part of the park where there were lots of SB's and another part where there were not, or in other words distinct portions.  However to simply have a need for the garbage service and to ensure redundancy risk you create a partial set-aside with the true intent that actually one contract could handle the whole affair seems a hollow determination in my view. 

Maybe for the "split" (really two awarded) requirement contracts you ought to tell it like it is - the promise ought to be for contract 2 that if contractor 1 cannot perform the work then contractor 2 gets the work until such time as contractor 1 can perform the work.

C Culham said:

To your latest suggestion "tailoring" of 52.216-21 by my read is not allowed, unless of course one were to follow the FAR deviation process.

Carl - My plan here, if I were to use the "alternating order" approach, would be to borrow the 52.216-21 Alt. III language, tailor it accordingly, and put it somewhere in the PWS. So it wouldn't be a clause per se, but it would be a defined ordering procedure that contract awardees agree to.

C Culham said:

However to simply have a need for the garbage service and to ensure redundancy risk you create a partial set-aside with the true intent that actually one contract could handle the whole affair seems a hollow determination in my view.

I don't understand this. There is no risk of a bait-and-switch on the part of the Government because we would have a contract defining how orders are distributed. If the Government doesn't follow that, it's in breach.

When we talk about the allowability of the "alternating order" requirements contracts, we're really talking about whether that's sufficient consideration, right? There's no mandate that I see in the FAR that would prevent me from doing this. To the contrary, there seem to be specific loopholes carved out, despite the intent stated at 16.503(a). So this seems to be a case of "the FAR doesn't say I can't." Now, I'm not extremely well versed in the concept of illusory promises, but logically if the FAR is providing a specific means of splitting orders under Alt. III, the drafters must think this arrangement passes muster. 

C Culham said:

Maybe for the "split" (really two awarded) requirement contracts you ought to tell it like it is - the promise ought to be for contract 2 that if contractor 1 cannot perform the work then contractor 2 gets the work until such time as contractor 1 can perform the work.

This looks like a clear illusory promise to Contractor 2. There is no promise that any work will go to them, even if requirements arise.

FrankJon said:

C Culham said:

Maybe for the "split" (really two awarded) requirement contracts you ought to tell it like it is - the promise ought to be for contract 2 that if contractor 1 cannot perform the work then contractor 2 gets the work until such time as contractor 1 can perform the work.

Expand

This looks like a clear illusory promise to Contractor 2. There is no promise that any work will go to them, even if requirements arise.

FrankJon, I think so, too.

And it would be administratively burdensome to determine and inform contractor 1 that it can’t perform the work to be assigned to contractor 2 and to determine, document and inform the contractors at the point that #1 can again perform the work. Looks like a possible source of contention.

If you can do this, you certainly ought to be able to pre-establish a split and method of allocation at the two contract formation(s). If potential contractors object, they could protest the terms of the solicitation and you’ll find out whether it is acceptable or not.

I think that you may have to show that there is a reasonable need to award two contracts rather than one. Also, that, if there is a significant difference in prices (cost to the government) between the two contracts, how that is in the best interest of the government to split the work between a lower and higher cost contractor, if the need could be satisfied by using a single contractor.

I still say there is no need to _"_pre-establish a split and method of allocation at the two contract formation(s)."  And, there is no need to pre-divide the work into two "distinct portions" pre-award.  The apportionment (half to one, half to the other) can be done post-award on an order-by-order basis, as illustrated by the Alt. III text.

FrankJon said:

Carl - My plan here, if I were to use the "alternating order" approach, would be to borrow the 52.216-21 Alt. III language, tailor it accordingly, and put it somewhere in the PWS. So it wouldn't be a clause per se, but it would be a defined ordering procedure that contract awardees agree to.

C Culham said:

Understand and just on this point alone it makes sense.

FrankJon said:

I don't understand this.

So by this Forum the contract has been determined not to be a multiple award, correct?   By this Forum it has been suggested to do a partial set aside to solve the dilemma, correct?   So to do so I would suggest that simply saying we need to do a partial to afford us having two contracts is not an adequate determination of the SB set aside but I will leave that to you and your read of FAR Part 19.   Additionally I hope the solicitation states that as required by the FAR - "identify which portion or portions are set aside and not set aside."  Again the alternating order approach does not in my view, especially if the alternating orders would have different quantities.

FrankJon said:

This looks like a clear illusory promise to Contractor 2. There is no promise that any work will go to them, even if requirements arise.

Its not illusory if you tell the truth and truth is you want a second contractor on a contract in case the first contractor can not perform and this occurs the second contractor will get the work.  That is you clear intent, not pounding the square peg into the round hole of "partial set aside" or adjusting -21 to make the deal or even squeezing the deal into Alt III as it reads.   A requirements contract by its own right does not promise one bit of work but if work is needed the government will use the contractor.

Here I will admit there are lots of unknowns that would help my contentions.  Specifically has the agency contracted for this need before?  If so how many times has a contractor failed in the past to help establish estimated quantities for the the second contract?  Or, is it new concept and new contracts where you are guessing about quantities on one contract and guessing on the failure of a contractor to develop the second contract?  And if so why aren't other procurement strategies available to plug the hole if the first contractor does not or fails to perform like T4D, claims, sole source, etc. etc.    And the list goes on.

As I noted in a previous post I too cannot point to an exacting citation that says can not do it, rather I just have the concerns noted.  In part, these concerns stem from the the related contract IDIQ and the reasoning industry, to which the Government agreed, created fair opportunity.   While the discussion of multiple award was clarified here in Forum it is a guess and not a test of the instant procurement.  Any bets by anyone based on "alternating orders" where the GAO might stand.  I got my feelings expressed here in on where they might.   Noting again IDIQ which I agree is not Requirements but it is clear that GAO and the FAR has settled on the fact that alternating orders under an IDIQ is not an appropriate so I question they would think it right under a Requirements.

Finally a possible suggestion beyond what I have provided here.   Send the "facts" to GAO for an advance determination and see what they say.  The primary fact being we just want two requirements contracts for the same work and we want to alternate orders between the two contractors and see what they say.

C Culham said:

Its not illusory if you tell the truth and truth is you want a second contractor on a contract in case the first contractor can not perform and this occurs the second contractor will get the work.  That is you[r] clear intent...

I do not think that is the original poster's intent.  I think the intent is to split the requirement with each of two contractors getting half.  Having two contractors provides some safety cushion for the agency.  And I don't think the original poster intends to do a partial set-aside to get two contractors, but simply to adapt that approach.

ji20874 said:

I do not think that is the original poster's intent.  I think the intent is to split the requirement with each of two contractors getting half.  Having two contractors provides some safety cushion for the agency.  And I don't think the original poster intends to do a partial set-aside to get two contractors, but simply to adapt that approach.

Correct. We would like to have between two and four contractors performing a relatively even amount of work. No set-aside.

I just ran to the office to grab my reference books. I’ll post some long-form quotes on this topic when I get home.

FrankJon said:

relatively

Hmmm!   Thanks for listening and I will be interested in the long form quotes.

FrankJon said:

Correct. We would like to have between two and four contractors performing a relatively even amount of work. No set-aside.

This has gotten very complicated.  You are just awarding two or more contracts for a proportional and approximately equal amount of work.  You place orders to ensure that equal distribution.  Just write that simple ordering procedure as others had said in the solicitation/contract.  My advice is just go ahead and do it.  It’s becoming unnecessarily confusing and complex.

These terms from The Government Contracts Reference Book (4th Ed.) were touched upon in a previous Wifcon post, but for posterity I'll flesh them out a bit more here and add emphasis and edits as appropriate to the topic.

Quote

REQUIREMENTS CONTRACT [Starts with FAR definition.] The contractor is legally bound to such a contract because the government's promise to buy its requirements constitutes consideration. [More language from the FAR.] In spite of the definition that requirements contracts call for purchasing all of an agency's requirement from a single contractor, such contracts have been used to purchase all supplies and services in excess of those that can be provided by a government activity or to purchase a stated percentage of the activity's requirements.

Quote

REQUIREMENTS-TYPE CONTRACTS Two or more contracts that provide that all actual purchase requirements of designated government activities for specific supplies or services during a specified contract period will be obtained from the holders of these contracts. . . . These contracts are not described in the FAR but have been recognized by the courts. (226 F.3d 1329 (Fed. Cir. 2000)). The provide an effective way to obtain commitments from a group of contractors when the government has a recurring need for supplies or services that can be furnished by a large number of contractors.

The second definition is particularly interesting, though most of the references date back at least 20 years so I don't know whether they'll be persuasive. Regardless I still plan to look into them.

Formation of Government Contracts (4th Ed.) also provides a wealth of information on this topic. Most pertinent, on pg. 1347 it states:

Quote

The FAR does not address the potential advantages of dividing requirements between contractors without using set-aside techniques. However, there is no prohibition of such practice, and it is clear that the government might benefit in some circumstances by dividing a requirement geographically, mathematically, or by prescribing the mode of competition to be used in selecting the contractor for each requirement. Dividing the requirement and issuing two or more requirements contracts would also meet the statutory preference for multiple task order or delivery order contracts.

I have to think about how "prescribing the mode of competition to be used" would work in this context.

FrankJon said:

I have to think about how "prescribing the mode of competition to be used" would work in this context.

Thank you for the additional information.  You comment as quoted above is as you note important as I have tried to explain.   

FrankJon said:

Dividing the requirement and issuing two or more requirements contracts would also meet the statutory preference for multiple task order or delivery order contracts.

So the concept of "split" as discussed versus multiple is an issue as well to pay attention to.

Thanks again.....

formerfed said:

It’s becoming unnecessarily confusing and complex.

The way of the contracting world in my view.   I have not made it so, I have just referred to guiding principles that make it so.  And yes the OP could probably just do it, and everything would be smooth sailing but in the off chance, and depending on the need what is the detriment if stormy seas are encountered where doing right by the guiding principles would have prevented the storm.  Lots of complexity to consider for what is best.

C Culham said:

The way of the contracting world in my view.   I have not made it so, I have just referred to guiding principles that make it so.  And yes the OP could probably just do it, and everything would be smooth sailing but in the off chance, and depending on the need what is the detriment if stormy seas are encountered where doing right by the guiding principles would have prevented the storm.  Lots of complexity to consider for what is best.

Agree. This is a DOD service contract that could be worth $10B over 10 years. I won’t be able to “just do” anything. This is only the first thorny issue in a long process. 

I genuinely appreciate the many reasoned perspectives I received on this topic.

FrankJon, I wish you well.  However, as I learn more (as you share more as the thread develops), my enthusiasm wanes a little.  At the first, I was sort of thinking you were imagining two contractors, but now were talking about four.  And at the first, I was not thinking about a billion dollars a year.  Are you thinking  25-25-25-25 split in the work among the four contractors, with task or delivery orders assigned by the agency without any further competition at the task order level?

That’s a potential outcome being discussed, possibly with prospective price redetermination. As I said earlier, one of the fundamental constraints is that the unpredictability, volume, and relentless occurrence of requirements doesn’t lend itself to the fair opportunity process, at least not in a way that I’ve seen and would feel comfortable with.

FrankJon, would you believe me if I told you that you could fair opportunity without creating a solicitation?  Remember, the requirement for fair opportunity is that all multiple-award contractors have a fair opportunity to be considered -- that's all.  Unfortunately, we seem to have turned that into a Part 15 source selection.  But FAR 16.505 only requires a "notice," not a solicitation or RFTOP or whatever you call it, and even then only for order opportunities over the SAT.

FrankJon said:

That’s a potential outcome being discussed, possibly with prospective price redetermination. As I said earlier, one of the fundamental constraints is that the unpredictability, volume, and relentless occurrence of requirements doesn’t lend itself to the fair opportunity process, at least not in a way that I’ve seen and would feel comfortable with.

1. What would be the value of a typical order?

2. Is the acquisition for a commercial item?

Quote

would you believe me if I told you that you could fair opportunity without creating a solicitation?

I am aware. The administrative burden would be significant, and possibly overwhelming. Happy to have a side discussion to share more.

Don Mansfield said:

1. What would be the value of a typical order?

2. Is the acquisition for a commercial item?

1. Over the SAT, under $6M.

2. Yes, the CIG has deemed it commercial.

FrankJon said:

1. Over the SAT, under $6M.

2. Yes, the CIG has deemed it commercial.

Why not a competitive multiple-award BPA? You can rotate purchases among the awardees. You don't even have to deal with the fair opportunity process. 

Quote

FAR part 13 does not explicitly discuss competitive awards of multiple BPAs or purchases made thereunder. However, the Government Accountability Office (GAO) denied a protest against the Drug Enforcement Agency’s (DEA’s) use of this procedure in Logan LLC, Comp. Gen. COMP. GEN. DEC. B-294974.6, December 1, 2006. After competing the award of multiple BPAs, the DEA planned to rotate purchases among the multiple BPA holders instead of conducting competitions. The protestor argued that the rotation procedure failed to meet the competition standard of FAR 13.104 (i.e., “competition to the maximum extent practicable”). The GAO disagreed—

“In this case, DEA complied with the statutory requirement to obtain maximum practicable competition when it established the BPAs for these small purchases. Under these circumstances, there is no requirement that DEA compete among the BPA holders each individual purchase order subsequently issued under the BPAs.” [Internal citation omitted].

Note that the limit for purchases under BPAs for commercial items is $7 million (or $13 million under certain conditions) (FAR 13.303-5(b)(2)). While there is no monetary limit for orders under a multiple-award contract, there are competition requirements at FAR 16.505(b) (i.e., “fair opportunity”) that begin for orders above $3,500 and become increasingly more burdensome depending on the value of the order. By comparison, the rotation procedure is comparatively simpler.

Don Mansfield said:

Why not a competitive multiple-award BPA? You can rotate purchases among the awardees. You don't even have to deal with the fair opportunity process.

That's interesting, Don. Do you have a reference for that text?

I'll certainly add this to my list of approaches to research. But initially I'm not seeing the advantage of this over the "multiple/split award" requirements approach in terms of application.

FrankJon said:

But initially I'm not seeing the advantage of this over the "multiple/split award" requirements approach in terms of application.

I am.

Think of four FAR part 13 commercial item BPAs commercial items.  Each purchase under the BPAs can be up to $7,000,000 (see FAR 13.303-5(b)(1)), and your clauses and approval thresholds will be based on $7 million (not $1 billion, or $250 million).  Based on the case Don cited, you can do one synopsis up front to establish the BPAs and then you do not have to do further synopses for individual purchases.

FrankJon said:

That's interesting, Don. Do you have a reference for that text?

Here you go: https://donacquisition.com/blog/10-blog/23-13-reasons-why-sap-is-simpler

ji20874 said:

Based on the case Don cited, you can do one synopsis up front to establish the BPAs and then you do not have to do further synopses for individual purchases.

Would you cite the exception at FAR 5.202(a)(11)?

Quote

The proposed contract action is made under the terms of an existing contract that was previously synopsized in sufficient detail to comply with the requirements of 5.207 with respect to the current proposed contract action.

If so, how would you respond to someone saying that the exception only applies to contracts, not BPAs.

Some more basic questions.  Why did you start out with requirements contracts?  What’s the rational over just IDIQ?  How difficult is it to put a simple order selection process in place?  What criteria differentiates companies if you did multiple awards?  Certainly with $1 Billion annually and the stated need for redundancy, some consideration should be given to this. Back to the original plan of two companies, what would be the reasoning to give 50% of the work to a higher price company?  Are the services available from any existing contract vehicles like GSA?

formerfed said:

Why did you start out with requirements contracts?  What’s the rational over just IDIQ?

I didn't "start out" my research by posting to Wifcon. An IDIQ was of course one of the first approaches I looked at. I went down the requirements path because the customer seeks multiple awards and providing fair opportunity every day may not be feasible.

formerfed said:

How difficult is it to put a simple order selection process in place?  What criteria differentiates companies if you did multiple awards?

The factors would probably not be difficult. Past performance and price. But the contract would require a dedicated KO to compete and cut orders (literally) every day, and often more than once per day. My office may not be able to support that. (Now, if we could accumulate orders as with a BPA and cut one order per month to pay for them, that seems feasible. I haven't looked into that.)

formerfed said:

Back to the original plan of two companies, what would be the reasoning to give 50% of the work to a higher price company?

Redundancy. And coverage of excess requirements that one contractor cannot perform alone under a given order.

formerfed said:

Are the services available from any existing contract vehicles like GSA?

Yes, we think so, but our contract type may not be appropriate (we'll likely need FP-EPA or FP-PPR). And the same ordering difficulties would exist as mentioned above.

@FrankJon   I sometimes forget myself but when researching a need a search of the WIFCON archives can be very useful.   One of the suggestions of the Forum is look first and ask questions later.  On this note I am providing this post blast from the past to add to your research effort.

FrankJon said:

Yes, we think so, but our contract type may not be appropriate (we'll likely need FP-EPA or FP-PPR).

FP-PPR is not permitted for commercial item acquisitions.

Don, I don't know if the DEA contracting officer cited an exception to synopsizing the purchases under the BPAs -- but the contracting officer apparently did synopsize the BPAs, even though synopsis is not required for establishing BPAs -- and the GAO seemed to think that that synopsis was adequate to cover the purchases under it.  That was a great decision, don't you think?

FrankJon said:

Yes, we think so, but our contract type may not be appropriate (we'll likely need FP-EPA or FP-PPR). And the same ordering difficulties would exist as mentioned above.

Ok, based on the information so far I would go GSA if market research showed a good pool of vendors on Schedule.  Pick some vendors, prepare an RFQ describing your approach, and use a simple selection process.  Describe your goals in the RFQ and let offerors propose the need pricing.  The Schedule contracts allow for EPA as do orders.

https://interact.gsa.gov/wiki/can-order-prices-be-escalated-task-order

Develop an easy method of ordering.  You can ask vendors as part of market research for their ideas as well.  Or you can say about half of the work goes to each company.

GSA is quick, easy, no synopsis, and you pick the sources solicited.

Don Mansfield said:

FP-PPR is not permitted for commercial item acquisitions.

Right....thanks.

I assume you're talking about establishing a BPA, although it wasn't stated. I don't see how the following could work:

formerfed said:

Or you can say about half of the work goes to each company.

Since orders are over the SAT I'll need to comply with the competitive procedures at 8.405(c)(2)(iii).

Otherwise, yes, there appears to be some potential.

FrankJon said:

I'll need to comply with the competitive procedures at 8.405(c)(2)(iii).

No.  We're talking about BPAs under FAR part 13, Simplified Acquisition Procedures).  See FAR § 13.303.

ji20874 said:

No.  We're talking about BPAs under FAR part 13, Simplified Acquisition Procedures).  See FAR § 13.303.

Formerfed is pursuing a different line than you.

ji20874 said:

Each purchase under the BPAs can be up to $7,000,000 (see FAR 13.303-5(b)(1)

I think I’d be limited to the SAT unfortunately. I have no supplementary regulation beyond the DFARS. That doesn’t offer a higher threshold in this case.

FrankJon said:

I think I’d be limited to the SAT unfortunately. I have no supplementary regulation beyond the DFARS. That doesn’t offer a higher threshold in this case.

DoD contracting activities can also go up to $7.5 million (I said $7 million earlier, but that threshold was raised).

FrankJon said:

I think I’d be limited to the SAT unfortunately. I have no supplementary regulation beyond the DFARS. That doesn’t offer a higher threshold in this case.

ji20874 said:

DoD contracting activities can also go up to $7.5 million (I said $7 million earlier, but that threshold was raised).

FrankJon,

You are wearing everyone’s patience thin here.  Apparently you are more interested in finding reasons why you can’t do something than how you can.  Ji20874 offered you a very feasible approach citing the FAR authority concerning BPAs and a sufficiently high call limit. You countered that the DFARS doesn’t provide that higher threshold.  In case you didn’t know, FAR rules.  DFARS supplements the FAR.  If the FAR says it’s okay, do it.

formerfed said:

FrankJon,

You are wearing everyone’s patience thin here.  Apparently you are more interested in finding reasons why you can’t do something than how you can.  Ji20874 offered you a very feasible approach citing the FAR authority using BPAs and a sufficiently high call limit. You countered that the DFARS doesn’t provide that higher threshold.  In case you didn’t know, FAR rules.  DFARS supplements the FAR.  If the FAR says it’s okay, do it.

Wow formerfed! That came out of left field! My interpretation of FAR 13.305(b) is apparently different than yours. It’s a shame you’re so irked by that. I started this topic in a much different place and thought it was over more than once until other approaches were brought up. I enjoyed the open flow of alternate ideas but I didn’t come here asking for them. And I remain optimistic about the possibility of employing the multiple award requirements approach, which I learned a lot about.   

formerfed said:

If the FAR says it’s okay, do it.

This is an utterly absurd statement by the way. I wonder how much thought you gave it before typing it.

FrankJon,

I apologize for the way I came across.  Wifcon is a place to learn and share ideas and I posted against that concept.  But some of your thoughts reflect  inexperience and a lack of understanding.  You need to digest and analyze the suggestions of experts like Don and ji20874 rather than just doubting what they say.  They are coming from positions of successful experience.

Formerfed: Apology accepted, but I would respectfully disagree with your characterization of how I consider the information shared on here. For instance the idea of a pre-competed BPA raised by Don and Carl is new and very interesting to me. I don’t merely disagree to be contrarian; rather I try to provide reasonable interpretations of often ambiguously-written text (in this case, 13.305(b)). If that shows inexperience then I have a hard time imagining what experience in this business looks like. If that annoys you then perhaps another hobby is in order. All due respect to ji, but s/he takes a famously flexible view of FAR language (to the envy of many) and is not infallible. 

I recall earlier in this discussion revealing scholarly information about multiple award requirements contracts that was not known to many and that supported my initial ideas.

I also found a former post by one of the “Old Guard” at Wifcon supporting my view that DOD may lack the authority to issue calls above the SAT. 

So it seems at least possible that my individual findings and interpretations bring some value to this forum, despite the views of more seasoned professionals. I think one should and can do both things at Wifcon: critically question ideas while recognizing the enhanced value of the “Old Guard’s” input. 

I do hope that your counterparts haven’t also found my posts to be dismissive. It certainly is never my intent here.

FrankJon,

I am surprised that the DFARS does not give you the flexibility that the FAR is willing to allow.  All the talk within DoD about streamlining and 809 panel recommendations and so forth are just hot air if they haven't already tended to business such as doing what FAR 13.303-5(b) already allows.

Maybe you can make that recommendation and get an award for it?  All those generals and SES's say they want ideas, so here is a simple one of just doing what the FAR already allows!

FrankJon said:

BPA raised by Don and Carl

Just an example.   At the US Forest Service they had a vehicle, an EERA (Emergency Equipment Rental Agreement) that was challenged as it did not fit FAR principles nor its use allowed for competition.  Simply write a EERA with contractor then use them on an incident when you pleased.  The Forest Service then studied and through the GAO decisions posted  the with links in this thread came up with an Incident Blanket Purchase Agreement (IBPA).  They solicit annually the establishment of IBPA's then established hundreds of IBPA's and then use an allocation system called VIPR to award calls against the IBPAs.  In VIPR even though they call it "solicit" the system queries availability of those holding an IBPA as one of the allocation systems tick points to then chose a contractor for an order.  VIPR uses other things like geographic location, price, etc.   VIPR was developed as an allocation system to avoid the simple alternating of orders.   All circling back to my concern voiced early on in this thread in structuring a a multiple award requirements contract with definitive process of placing orders rather than just an alternating process.  

Here is a link about IBPA's and VIPR.

https://www.fs.fed.us/business/incident/vipr.php?tab=tab_d

The link to the referenced OIG Audit findings in the above link does not work......but this one does.

https://www.fs.usda.gov/sites/default/files/2019-05/08601-40.fd_.fs__0.pdf

ji20874 said:

Maybe you can make that recommendation and get an award for it?  All those generals and SES's say they want ideas, so here is a simple one of just doing what the FAR already allows!

PS - Exactly what USDA-FS did with regard to IBPA's.  Did not change the whole of the AGAR but did get approval for the specific IBPA vehicle.   Maybe @FrankJon takes a small bite of the apple for the specific need as an innovative idea to help prove that a wholesale change be implemented in the DFARS that takes the limitation to the commercial item threshold of $7.5 million when the need is determined to be a commercial item.

FrankJon said:

I do hope that your counterparts haven’t also found my posts to be dismissive. It certainly is never my intent here.

I didn't.

Thanks for the enlightening discussion, all. I’ve yet to check all the references but it seems like I now have a few workable options to put forth.

FrankJon, looking back through the replies, your initial thoughts may work. You haven’t mentioned what are the differentiators among offerors doing this work bu I assume price is important.  You might be concerned about criticism giving a big share of the work to a higher priced offeror.  That’s assuming the other factors aren’t a big consideration.

If it were me, I might structure an award process where a lower priced offeror might get a larger share.  For example, one company gets 60% or 70% of the work.  Just something more to think about.