Overview
FAR 8.405 establishes the mandatory procedures for placing orders and establishing Blanket Purchase Agreements (BPAs) against Federal Supply Schedules, distinguishing requirements based on dollar thresholds and the complexity of the requirement. It ensures that while schedule ordering is streamlined, agencies still maintain competition and document "best value" determinations.
Key Rules
- Threshold-Based Competition:
- At or below Micro-Purchase Threshold (MPT): Orders can be placed directly with any schedule contractor; no competition is required, though distributing orders is encouraged.
- Above MPT up to the Simplified Acquisition Threshold (SAT): Agencies must survey at least three schedule contractors (via GSA Advantage, catalogs, or RFQs) to ensure a best-value selection.
- Above SAT: Agencies must post a Request for Quotation (RFQ) on eBuy or provide the RFQ to enough contractors to reasonably ensure at least three quotes are received.
- Services Requiring a Statement of Work (SOW): Ordering activities must develop a performance-based SOW and evaluation criteria. For these orders, the agency is specifically responsible for evaluating the proposed level of effort and labor mix to determine price reasonableness.
- Blanket Purchase Agreements (BPAs): Multiple-award BPAs are preferred. Single-award BPAs exceeding $150 million are prohibited unless the head of the agency provides a written determination for specific exceptions (e.g., only one source is capable).
- Price Reductions: While agencies may request price reductions at any time, they are required to seek a price reduction for any order or BPA that exceeds the SAT.
- Small Business Discretion: Contracting officers have the discretionary authority to set aside orders or BPAs for small business concerns, even though FAR Part 19's mandatory preference programs generally do not apply to GSA Schedules.
- Documentation: Agencies must document the contracts considered, the basis for the award decision, and price reasonableness (especially for services).
Practical Implications
- The "Rule of Three" serves as the minimum standard for competition; failing to receive three quotes for orders above the SAT requires a written determination explaining why no other capable sources could be identified.
- Since BPAs under GSA Schedules require an annual review to confirm the underlying schedule is still active and the pricing remains "best value," agencies must treat these as active management tools rather than "set and forget" vehicles.