A Blanket Purchase Agreement (“BPA”) is a “simplified method filling anticipated repetitive needs for supplies or services by establishing ‘charge accounts’ with qualified sources of supply. FAR 13.303-1(a). However, it is clear that a BPA alone is not a contract, and any BPA must comply with contract terms, including the entire term of the contract. Diltex, Inc., B-433434, June 17, 2024.
The Federal Circuit has found that BPA’s reflect illusory promises that do not impose obligations on either party, and therefore BPAs do not constitute valid contracts, where the government is not required under the terms of the BPA to place any orders with the contractor. Crewzers Fire Crew Transp., Inc. v. United States, 741 F.3d 1380 (Fed. Cir. 2014). BPA’s may only be used for purchases that are otherwise authorized by law or regulation. Frequently BPAs are used between the General Services Administration (“GSA”) and the vendor, typically where the vendor holds a GSA Schedule contract. See FAR 8.405-3, which specifically authorizes the use of BPAs under any schedule contract, using best value methods.
Diltex sought to win one of two BPAs under a solicitation for general purpose information technology equipment issued by the GSA to two contractors—to be selected using lowest priced technically acceptable methodology. The initial RFQ stated that if the base year and four 1- year options were exercised, the total performance period would be 60 months. Because of administrative problems, the GSA requested that offerors extend their quotations five times, over a period of 3 months. The agency advised Diltex that its GSA schedule contract expired on January 15, 2029, and its contract had no option periods that would cover the BPA’s period of performance, which ended March 6, 2029. Therefore, the agency could not make award to Diltex because its BPA would extend beyond the contract performance period, which was prohibited by FAR 8.45-3(d)(3). Diltex protested to the GAO.
Diltex’s response in its protest was that its schedule contract “fell short” by 49 days, and the government was at fault for requesting that offerors extend their offers for a period of 90 days.
GAO held that the agency had reasonably determined that Diltex was ineligible for award because its BPA would extend beyond the current term of its GSA schedule contract, and denied the protest.
Takeaway: when pursuing a BPA under a schedule contract, ensure that your schedule contract covers the full period of the BPA, otherwise seek to extend your schedule contract before you submit your offer.
For other helpful suggestions on government contracting, visit:
Richard D. Lieberman’s FAR Consulting & Training at https://www.richarddlieberman.com/, and Mistakes in Government Contracting at https://richarddlieberman.wixsite.com/mistakes.
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