Overview
FAR Subpart 7.2 provides policies and procedures for agencies to determine the most cost-effective quantities for supply acquisitions. It focuses on gathering market intelligence from offerors to ensure the Government achieves the best balance between unit price and total acquisition cost without purchasing more than is reasonably required.
Key Rules
- Statutory Compliance: Under 10 U.S.C. 3242 and 41 U.S.C. 3310, agencies must procure supplies in quantities that result in the most advantageous total and unit costs, provided those quantities do not exceed the agency's actual needs.
- Solicitation Requirements: Solicitations must, if practicable, invite offerors to provide their opinion on whether the requested quantity is economical and to recommend alternative quantities that would be more advantageous to the Government.
- Mandatory Provision: Contracting Officers (COs) must insert the provision at 52.207-4, Economic Purchase Quantity-Supplies, in most supply solicitations.
- Exceptions: The requirement to include the provision does not apply to:
- GSA Multiple Award Schedule (MAS) contracts.
- Cases where the Government already possesses the necessary data.
- Scenarios where it is "impracticable" for the Government to change its future requirements.
Responsibilities
- Contracting Officers:
- Incorporate the required FAR provision in solicitations.
- Collect and transmit offeror responses regarding economic quantities to inventory managers or requirements development activities.
- Consult with technical/inventory personnel if offeror data suggests significant potential savings.
- Amend or cancel solicitations if a different quantity is deemed more advantageous after consultation.
- Offerors:
- Advise the Government on the economic viability of the proposed purchase quantity.
- Recommend more advantageous quantities and provide corresponding total and unit price quotations for those quantities.
- Inventory Managers / Requirements Development Activities:
- Analyze the data provided by offerors to establish and evaluate economic order quantities.
- Concur or non-concur with proposed changes to acquisition quantities based on agency needs and budget.
Practical Implications
- Market-Driven Intelligence: This subpart allows the Government to leverage the private sector's knowledge of production efficiencies (e.g., price breaks at certain manufacturing volumes) that the Government might not be aware of during the planning phase.
- Strategic Procurement vs. Administrative Speed: While a CO might want to move quickly to award, the discovery of a "significant price variation" triggers a mandatory consultation. This prevents the Government from "leaving money on the table" by purchasing 95 units at a high price when 100 units might trigger a massive volume discount.
- Avoidance of Waste: The regulation serves as a check against "over-buying." Even if a larger quantity offers a lower unit price, the Government is prohibited from purchasing quantities that exceed what is "reasonably expected to be required," preventing unnecessary storage costs and potential obsolescence.
- Communication Bridge: It forces a formal communication channel between the CO (the buyer) and the Inventory Manager (the end-user), ensuring that the business side of the house and the operational side are aligned on procurement volume.