techprocurement.org | Contract vehicles

Contract vehicles #

If you’ve ever looked at a government contractor’s website, you might notice a heading that says “Contract Vehicles.” This is a very common pattern. And there’s a really good reason for it. If you want to buy stuff from that contractor, you’ll want to find out whether you can “use one of their vehicles;” the smart contractors make it easy for you to find out.

But what is a contract vehicle? In the next few sections, we will cover what a contract vehicle is, why contract vehicles are used to get stuff done, and the main vehicles to know about: Schedules, GWACs, BPAs, and IDIQs.

What is a contract vehicle? #

A contract vehicle is a contract that establishes the terms and conditions for future transactions. Contract vehicles exist because “open competition” is burdensome and time-consuming; and rather than use open competition for things that the government regularly needs, the government establishes contract vehicles to streamline the process. Sometimes people refer to contract vehicles as “hunting licenses,” because they allow vendors to go after work.

The technical name for a “contract vehicle” is an “indefinite delivery vehicle” or “IDV.” Armed with this knowledge, you can filter for IDVs within USASpending.gov to see if a particular vendor or agency has a contract vehicle available for use. To do that, look for the “Award Type” filter and filter by “Contract IDV.”

In addition to reducing the burden and timeline for open market competition, contract vehicles typically establish “ceiling prices” for services and supplies. Typically, the government will seek discounts from the ceiling prices when placing a specific order, so the ceiling price often does not reflect the actual costs when a subsequent contract is established.

Finally, as discussed below, there are certain procedural flexibilities that come with contract vehicles, as well as some limitations. We’ll cover many of the most important ones, but know that no contract vehicle can serve all of the government’s needs.

Schedules and GWACs #

The first set of vehicles are Schedules and Governmentwide Acquisition Contracts (GWACs, pronounced “Gee-Whacks”). They’re super important to know about because massive amounts of money flow through them. These vehicles are also important because, by default, any federal agency can use them. That means that if a vendor or solution is on that vehicle, you can get to that vendor or solution. Finally, they’re important because, as part of category management policies, the Office of Management and Budget generally requires agencies to use “best-in-class vehicles,” and the Schedules and GWACs meet that requirement.

GSA Multiple Award Schedules Information Technology Contracts #

If you have ever paid even the slightest attention to tech procurement before, there’s a decent chance you’ve heard of “Schedule 70.” That’s because the GSA Multiple Award Schedules program is the largest government contract in the whole world, and tech is a big part of the Schedules Program. In fiscal year 2019 alone, Schedule 70 accounted for $2.5 billion in federal IT spend.

Notably, though, Schedule 70 doesn’t exist as such anymore. Instead, GSA consolidated all of the schedules into single schedule contracts. But people still colloquially refer to the program as Schedule 70; the proper name for the program is now MAS IT (pronounced “Mass Eye-Tee”).

In addition to having the largest diversity of vendors, the IT Schedule is an extremely flexible vehicle. For example, under the IT Schedule, if you think you’re going to have sufficient competition, you can compete among any 3 vendors on the IT Schedule. Full stop. Another example is that you can combine professional services and IT services under the same contract and even enable “contractor teaming agreements” with multiple vendors. Or, you can buy things not on a vendor’s schedule contract as an “Order Level Material.” Or, you can also establish “blanket purchase agreements” or “BPAs” against the IT Schedule (we’ll cover BPAs in more detail below). And, on top of all of that, the actual “ordering procedures” are streamlined for purchases made against schedules. In short, schedules are super flexible.

There are a few principal downsides to using IT Schedules. First, vendors have to pay GSA a 0.75% industrial funding fee for each order, which vendors pass on to the agency as an increased cost. Second, options around “contract type” are limited. You cannot establish “cost type” contracts under the Schedules program; only firm-fixed price and labor-hour contracts are permitted.

GWACs #

Beyond the GSA Multiple Award Schedules program, the other category of large contract vehicles are the GWACs. There are 6 GWACs families: 3 managed by GSA, one managed by NASA, and 2 managed by NIH.

  • GSA Alliant
  • GSA 8(a) STARS
  • GSA Vets
  • NASA SEWP
  • NITAAC CIO-CS
  • NITAAC CIO-SP3

One of the principal benefits of using a GWAC is that an order under $10 million cannot be protested.

IDIQs and BPAs #

Often times, individual agencies will establish contract vehicles for use by that agency. The two major types of these contract vehicles are what are called (1) “Indefinite Duration / Indefinite Quantity” or “IDIQs” and (2) “Blanket Purchase Agreements” or “BPAs.” Typically, IDIQs or BPAs are created as “multiple award” IDIQs/BPAs, which means that multiple vendors can compete for individual task orders.

Although there are legal differences between the two types, the main differences are:

  • IDIQs, like GWACs, cannot be protested for orders under $10 million.
  • BPAs, unlike IDIQS, can be created against GSA Schedules, making their establishment procedurally easier
  • BPAs have an upper limit that can be spent against them, but are typically not bound by time. By contrast, IDIQs are typically bound by a contract term and the upper limit can be adjusted.

Agencies often have a mixture of IDIQs and BPAs they use, which significantly affects acquisition strategies for projects within a given agency. If your agency has IDIQs or BPAs that are routinely used, you should get to know them sooner rather than later.