Air Force, Navy apply brakes to additional BPAs

The Air Force and the Navy late last month stemmed the proliferation of blanket purchase agreements (BPAs) on General Services Administration schedules by restricting the number of new deals that service personnel can initiate. The Air Force's action Oct. 24 was the most drastic suspending the creation of any new BPAs until a task force creates policies governing their use.

A memo from the Contracting Division of the Office of the Assistant Secretary of the Air Force for Acquisition said recent attempts within the service to use BPAs as centralized ordering vehicles "have raised some difficult policy issues." According to the memo officials from the Small Business Administration have questioned the effect BPAs might have on small and disadvantaged businesses and Air Force procurement officials are concerned that BPAs may not be appropriate vehicles for getting "the best business deal" on complex services.

"Also we are concerned [that we] may be perceived as contradicting our previous arguments to Congress that we need stable long-term contractual relationships with a single provider for certain professional services " according to the memo.

The Air Force's action represents what may be the first pullback from the sweeping trend of using BPAs to obtain IT products and services quickly and inexpensively. BPAs have been used extensively by all three military services and some civilian agencies to negotiate prices lower than those listed on GSA schedules.Army officials could not be reached for comment.

The Navy issued a policy memo Oct. 27 that said naval organizations cannot initiate new BPAs until they make sure the requirements for purchasing information technology cannot be met by an existing BPA or by another contract listed on the service's ITEC Direct online catalog.

Valerie Wallick executive director in the office of the Navy's chief information officer said the policy represented her office's response to complaints from industry that the growth of BPAs could lead to duplicative ordering vehicles within the service.

"We should have a cohesive policy associated with how we buy information technology so we decided to focus our people on what they need and make sure they don't put BPAs out there if they can use some other ordering vehicle " Wallick said.

She said the Navy had been working on a BPA policy for months and she believed the similar timing of the Navy and Air Force memos was coincidental.

AF Leaves Wiggle Room

The Air Force's BPA suspension will not affect existing Air Force BPAs and the service will issue waivers allowing some customers to use the agreements for standardization or security reasons.

The Air Force will establish an integrated project team to outline the types of requirements that are appropriately met through BPAs how to support the use of small businesses when negotiating the agreements and how contracting officers can "exercise sound business judgment in awarding BPAs and issuing orders."

The memo said the moratorium on BPAs would stay in effect "until further notice."

Maj. Glenn Bright the small-computer program manager for the Air Force's Standard Systems Group (SSG) said BPAs can be useful for procurements that require a quick turnaround but he added that the moratorium is necessary to allow the service to ensure that users of BPAs do not duplicate each other's efforts. He said indefinite-delivery indefinite-quantity contracts such as the Air Force's Desktop V deal - managed by SSG - can produce better prices by combining requirements from across the service and assuring vendors of a certain amount of business.

"If everyone starts doing BPAs it dilutes our purchasing power and our ability to negotiate better prices " Bright said.

The frustration of not having the purchasing power to drive down the prices on BPAs is pushing the military services to curtail BPA growth said Carl Peckinpaugh a lawyer in the government contracts section of Winston & Strawn Washington D.C. and a columnist for FCW. "The feeling in the Navy and Air Force is they aren't getting low enough prices out of these BPAs because there are too many of them " he said.

Bright emphasized that the Air Force is not generally opposed to BPAs noting that SSG awarded a BPA this year to Government Technology Services Inc. for printers. "It has worked quite well " he said. "We were able to provide printers at a very low price and with very little overhead cost.

"But right now very few policies are in place concerning BPAs " Bright added. "We need to ensure [that] mechanisms are in place so they are used properly."

Bill Gormley assistant commissioner for acquisition at GSA's Federal Supply Service said late last week that he had not seen the Air Force memo but he said he hopes those who work on the service's BPA policy will first collect the opinions of BPA users whom he believes reap enormous benefits from BPAs. He added that no one in the Air Force has contacted him about the memo and said he would like to meet with acquisition officials to offer his ideas.

Gormley said he believes Air Force personnel have been extremely responsible in their approaches to using BPAs. "I was so impressed by some of the Air Force's programs that we wanted to use them as a model for other agencies."

Joel Lipkin vice president of business development at GTSI said he viewed the Air Force moratorium as "a very balanced approach" because it allows current BPAs to continue and allows users to employ BPAs in cases that involve standardization.

Larry Allen executive director of the Coalition for Government Procurement said he believes the Air Force's action was prudent as long as it is only a temporary ban on BPAs. He said he believes Air Force officials are concerned that contracting offices may not be using BPAs correctly and he added that many vendors share those concerns.

"BPAs are a great way for agencies to get quick and easy access to IT " Allen said. "Having said that there is a concern that agencies may be setting themselves up as procurement shops in competition with the schedules program that spawned them. And vendors are concerned that agencies may be overstating the amount of business they can do with BPAs so companies may be making business decisions they might not have made if the numbers were more accurate."