This post was written by Joelle E.K. Laszlo.
Late last summer, we blogged on an interim rule designed to increase competition for multiple-award schedule (“MAS”) contracts issued by civilian government agencies. The interim rule took effect even as the implementing agencies sought comments on its provisions. One year and just seven comments later, the final rule, tweaked only slightly from its predecessor, is set for launch. While its potential impact is difficult to predict, snarky blog titles aside, the best approach is one that includes both caution and optimism.
The two most significant changes in the final rule: (1) correct, to $103 million, the threshold amount above which single-award blanket purchase agreements (“BPAs”) are precluded (except under very limited circumstances); and (2) remove the requirement that an ordering activity’s competition advocate approve the exercise of an option under a single-award BPA. A third change requires an ordering activity to evaluate the reasonableness of the total price for the staffing proposed, when a BPA includes the provision of services on an hourly basis. The final rule takes effect April 2.
As reported in our earlier blog, the rule change will likely permit thrifty contracting officers (“COs”) to more easily shop the market, especially when placing orders under BPAs. In fact, the final rule requires a CO to seek a price reduction whenever an order or BPA exceeds the simplified acquisition threshold. One commenter to the interim rule argued that this requirement may cause future offerors to significantly inflate their starting prices in anticipation of multiple rounds of price reduction (either as a result of competition or direct request). The irony of that prospect is that if a competition is not so competitive, the government may not wind up getting the lowest possible price.
As we have before, we recommend a calm and rational approach to future MAS contracting. An overly clever strategy will probably be just that – overly clever, and not necessarily winning. The wise contractor will also be careful, however, not to misunderestimate its competitors.