In a previous article, I related my experiences in contracting for a hotel rooms cell phones, and rental cars in Jordan, in support of a military exercise being conducted there. To support that exercise, I personally traveled to Jordan three times and spent more than a month in five-star hotels (a necessity, given the security conditions for US military personnel in that country; simply put, only the luxury hotels have the proper security measures and features to adequately safeguard potential terrorist targets). While I had nothing to do with the exercise, it cost the US government approximately $20,000 in airfare and lodging expenses for me to travel there. In this article, I will explain a more effective means to handle the simplistic contracting efforts for such an activity, namely, the issuance and use of a Blanket Purchase Agreement.
A BPA is not an official contract, but instead is a pricing agreement between the vendor and the customer. It is not binding, but if both parties continue to agree on the pre-arranged price, then the customer can prepare an order against that agreement. The utility of the BPA is that it enables someone other than the Contracting Officer to place that order (commonly called a ‘call.’) Basically, the Contracting Officer prepares the BPA and signs it with the vendor. The CO then appoints an authorized caller (one who has the limited authority to place calls against the agreement) and therefore the CO is not required to be present or involved in these orders. The authorized caller requests and receives approved funding (one must have pre-approved funds to obligate them, otherwise it’s illegal), and then places the call. The caller submits the call forms to the Contracting Officer, who validates them against the vendor’s invoice (to make sure the charges and the funds match), and then processes the call sheets for payment via the proper finance office.
How this would apply to this case study is that I could have traveled to Jordan only once, to complete the market research necessary to prepare accurate, effective BPAs. After that, I could have authorized one or two of the military members to place calls, and then just stayed at my home base and processed call sheets when ready. Instead of being away for more than thirty days, I could have stayed and continued working on other projects, while the contracting effort was done mostly by the delegated callers. Additionally, the BPAs can remain in effect for years, with only occasional modifications to adjust prices or change certain terms.
Since they are not binding, BPAs are low-risk – even with an approved BPA with current pricing, the vendor can still opt to not accept the call or demand a higher price. Similarly, the government enjoys tremendous flexibility regarding time, quantity and duration. Again, even if the BPA is active and current, the government does not have to place orders, and the vendor can decline any order placed. Another risk mitigation factor is to clearly define the items contained in the BPA – in this case, we could only rent certain types or classes of vehicle, and only certain phones with blocks of minutes for usage. If a given item is not listed in the BPA, then the caller cannot order it until the CO goes through the process of adding it to the BPA. And of course, the CO must train and oversee the callers – only trained and qualified personnel should receive the CO’s delegated authority.
Government contracting is usually complex, deliberate, and paperwork intensive. To safeguard the hard-earned money of the US taxpayers, there are very specific procedures and accountability that make the whole process cumbersome. BPAs are one way that the process requirements can be alleviated and simplified without incurring undue risk to the government or the taxpayers.