Agencies May Use “On-Ramps” Under BPAs, GAO Confirms

When an agency solicits competitive proposals to establish multiple blanket purchase agreements, the agency may include “on-ramp” procedures to potentially award additional BPAs at a later date.

In a recent bid protest decision, the GAO confirmed that the FAR allows agencies to use on-ramp procedures to add additional BPAs–and that on-ramped BPA holders don’t enjoy an inherent unfair competitive advantage, at least not under the facts at issue.

The GAO’s decision in Al Baz 2000 General Trading & Contracting Company W.L.L., B-415353.5 (Feb 12, 2018) involved an Army solicitation for the establishment of up to eight BPAs.  The awardees were to provide non-tactical vehicle leasing and maintenance services.  The solicitation provided that the initial BPAs would be for a base year, and would include six one-year option periods.

Each offeror was to propose BPA ceiling unit prices.  Those ceiling prices would be incorporated in the BPAs of the awardees.  Orders would then be competed among BPA holders.  When bidding on an order, each BPA holder could propose its ceiling unit prices, or provide discounted prices.

The solicitation included on-ramp procedures under which the Army could add new BPA holders.  According to the solicitation, the Army could use the on-ramp at any time by reopening the competition and using the same basis of award established in the initial solicitation.  Any additional BPAs added as a result of an on-ramp were to contain the same terms and conditions as the initial BPAs, including the same period of performance.

Al Baz 2000 General Trading & Contracting Co. filed a pre-award bid protest challenging the on-ramp procedures.  Al Baz contended that the on-ramp would result in unfair competition for orders because new potential offerors would have insight into the initial BPA awardees’ total pricing.  Al Baz also argued that the new awardees would have less risk as compared to the initial BPA holders because of the shorter period of performance and a better understanding of market conditions.

The GAO wrote that “the incorporation of on-ramp procedures is consistent with the authority granted to agencies to add additional BPAs pursuant to FAR 13.303-5(d).”  That FAR provision “authorizes the establishment of additional BPAs to ensure maximum practicable competition.”  Thus, “we find no basis to challenge the agency’s inclusion of a provision that, in essence, incorporates this regulatory authority.”

Turning to Al Baz’s specific objections, the GAO first said that “we can discern no reasonable possibility of competitive prejudice from the disclosure of the initial awardee’s total evaluated prices.”  The GAO noted that the total evaluated price “is calculated by summing the proposed ceiling prices for more than 1,200 contract line item numbers.”  Thus, “we find no reasonable basis to conclude that a potential offeror on a future on-ramp procurement could reasonably discern confidential proprietary or business pricing information based on the total evaluated price.”

The GAO then held that Al Baz’s final objection, regarding unfair competition, was “misplaced.”  The GAO wrote that even if additional awardees had better knowledge of market conditions, they would merely be “in a better position to establish BPAs with lower ceiling prices.”  However, “all BPA holders competing for individual orders are free to provide lower prices based on actual market conditions at the time the agency solicits an order.”

The GAO denied the protest.

The term “on-ramp” is often used to describe a procedure in which a contracting officer may add new small businesses throughout the life of a multiple-award set-aside contract.  Such provisions are sometimes called “open season.”

As the Al Baz case demonstrates, on-ramps aren’t limited to small business set-aside GWACs.  Under the FAR, the government can add new BPAs “to ensure maximum practicable competition.”