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  • Question

    Is a RAD required for a BPA over the SAT, even though the AFI only references a contract.


    Answer

    A. The FAR references quoted below in pertinent part are applicable to this response.

     

    FAR 2.101 – Definition of Words and Terms

          “Acquisition” means the acquiring by contract with appropriated funds of supplies or services … by and for the use of the Federal Government through purchase or lease, … .

          “Contract” means a mutually binding legal relationship obligating the seller to furnish the supplies or services (including construction) and the buyer to pay for them. It includes all types of commitments that obligate the Government to an expenditure of appropriated funds and that, except as otherwise authorized, are in writing. … [C]ontracts include … job orders or task letters issued under basic ordering agreements.

     

    FAR 13.303-1 -- General

          (a) A blanket purchase agreement (BPA) is a simplified method of filling anticipated repetitive needs for supplies or services by establishing “charge accounts’’ with qualified sources of supply (see Subpart 16.7 for additional coverage of agreements).

     

    FAR 16.703 -- Basic Ordering Agreements

    (a) Description. A basic ordering agreement is a written instrument of understanding, negotiated between an agency, contracting activity, or contracting office and a contractor, that contains:

          (1) terms and clauses applying to future contracts (orders) between the parties during its term,

          (3) methods for pricing, issuing, and delivering future orders under the basic ordering agreement. A basic ordering agreement is not a contract.

     

    FAR 16.503 -- Requirements Contracts

    (a) Description. A requirements contract provides for filling all actual purchase requirements of designated Government activities for supplies or services during a specified contract period (from one contractor), with deliveries or performance to be scheduled by placing orders with the contractor.

          (1) For the information of offerors and contractors, the contracting officer shall state a realistic estimated total quantity in the solicitation and resulting contract.

          (2) The contract shall state, if feasible, the maximum limit of the contractor’s obligation to deliver and the Government’s obligation to order.

     

    (b) Application. (1) A requirements contract may be appropriate for acquiring any supplies or services when the Government anticipates recurring requirements but cannot predetermine the precise quantities of supplies or services that designated Government activities will need during a definite period.

     

    FAR 16.504 -- Indefinite-Quantity Contracts

    (a) Description. An indefinite-quantity contract provides for an indefinite quantity, within stated limits, of supplies or services during a fixed period. The Government places orders for individual requirements. Quantity limits may be stated as number of units or as dollar values.

          (1) The contract must require the Government to order and the contractor to furnish at least a stated minimum quantity of supplies or services. In addition, if ordered, the contractor must furnish any additional quantities, not to exceed the stated maximum.

     

    (b) Application. Contracting officers may use an indefinite-quantity contract when the Government cannot predetermine, above a specified minimum, the precise quantities of supplies or services that the Government will require during the contract period, and it is inadvisable for the Government to commit itself for more than a minimum quantity. The contracting officer should use an indefinite-quantity contract only when a recurring need is anticipated.

     

    B. Air Force Instruction (AFI) 63-138 dated 11 May 2017, Acquisition of Services, quoted below in pertinent part is also applicable to this response.

     

    1.2.1. This instruction applies to:

          1. All … services acquisitions with a requirement value estimated greater than or equal to the simplified acquisition threshold (SAT) utilizing AF appropriated funds purchased by the AF or any other acquisition entity for a requirement that benefits the AF, and

          2. All … services acquisitions with a requirement value estimated greater than or equal to the SAT utilizing appropriated funds of others and executed by an AF entity.

     

    3.2. Requirements Approval Authority (RAA). Following preliminary market research, the acquisition team formulates a solution for the mission requirement. When the analysis leads to a solution to contract for services, the organization’s senior official approves the requirement via a Requirements Approval Document (RAD), prior to approval of the acquisition strategy.

     

    3.3. Requirements Approval Applicability.

    3.3.1. RADs are mandatory for all services acquisitions greater than or equal to the SAT utilizing funds appropriated to the AF to include acquisitions acquired by and/or for the AF. A validating process of requirements below $10M is mandatory; however, the form and formatting is at the discretion of the RAA. The RAA needs to show the existence of a requirements review process.

     

    C. Interpretation, Analysis and Application of Pertinent Requirements

     

    1. FAR 13.303-1(a) states that certain coverage set forth in FAR subpart 16.7 regarding Basic Ordering Agreements (BOA’s) also applies to Blanket Purchase Agreements (BPA’s). FAR 16.703(1)(3) states that a BOA, and hence a BPA, is not a contract. As set forth in FAR 2.101, “Acquisition” means acquiring by contract with appropriated funds of supplies or services. Hence when read together, a BPA does not constitute an “acquisition” as defined by the FAR. However, FAR 2.101 also states that contracts include … job orders or task letters issued under BOA’s, and therefore the terms “contract” and "acquisition" would also apply to any individual orders issued under a BPA.

     

    2. AFI 63-138, paragraph 1.2.1 states that this instruction applies to all services acquisitions with a requirement value estimated greater than or equal to the simplified acquisition threshold (SAT) that utilize either AF appropriated funds or appropriated funds of other agencies and executed by an AF entity. As indicated above, a BPA is only an agreement and is not a contract and hence not an “acquisition” as defined by the FAR. Therefore, a BPA in and of itself is not covered by AFI 63-138. However, an individual order issued under a BPA is a “contract” as defined by the FAR and therefore constitutes an acquisition as defined by the FAR. Consequently, pursuant to the requirements set forth in AFI 63-138 sections 3.2 and 3.3 as described above, a separate RAD approved by the cognizant RAA would be required for each order issued under the BPA that exceeds the SAT and utilizes AF or other funding.

     

    3. Based on this analysis, we recommend either using a Requirements contract as described in FAR 16.503(a) & (b) or using an Indefinite-Quantity contract as described in FAR 16.504(a) & (b) for this acquisition situation in lieu of using a BPA which is not a contract. A Requirements contract would be appropriate for acquiring the required vehicle maintenance services when your customer anticipates recurring requirements but cannot predetermine the precise quantities of such services that they will need during a definite period. An Indefinite-Quantity contract would appropriate for acquiring such vehicle maintenance services when the customer cannot predetermine, above a specified minimum, the precise quantities of such services that they will require during the contract period, and it is inadvisable to contractually commit to more than a minimum quantity.

     

    4. Based on the above, either of these contract types would seem to be more efficient for this acquisition situation in lieu of a BPA in which case the RAA must approve a RAD for each order issued under the BPA. Once the RAA has approved the RAD and associated acquisition strategy for either a Requirements or an Indefinite Delivery “contract” type for the procurement of the vehicle maintenance services, then any orders under either of these contract types would not require individually approved RADs unlike a BPA.

     

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