The FAR states that a BPA is a simplified method of filling anticipated repetitive needs for supplies or services that functions as a “charge account,” with terms and conditions agreed upon when the BPA is established. A BPA is not a contract; therefore, the government is not obligated to purchase a minimum quantity or dollar amount and the contractor is not obligated to perform until it accepts an order under the BPA. BPAs do not obligate funds; funds are obligated when an order subsequently is placed. Agencies may establish BPAs under GSA’s Schedule program contracts. Subpart 8.4 of the FAR provides procedures for using GSA schedule contracts, including establishing and ordering from BPAs. Prior to the issuance of the FAR in 1984 as the governmentwide procurement regulation, “blanket purchase arrangements,” a vehicle similar to BPAs, were permitted to be established with schedule contractors, if not inconsistent with the terms of the schedule contract, as early as the 1950s. Schedule BPAs use the pre-established terms and conditions of the GSA contract (such as prices and delivery terms) as a starting point, but ordering agencies may add terms and conditions, such as discounted pricing, as long as they do not conflict with those of the GSA contract. Each schedule BPA must address the frequency with which orders will be placed; invoicing procedures; discounts; delivery locations; time and requirements, such as the amount or quantity the agency expects to purchase under the BPA and the work the vendor will perform. The potential volume of orders under a BPA, as indicated by the estimated amount or quantity, provides an opportunity to seek discounts from the GSA schedule contract prices. From the first issuance of the FAR until 1994, agencies establishing schedule BPAs were required to follow the simplified acquisition procedures of Part 13, which emphasized “adequate” or “maximum practicable competition” at the time orders were placed. From 1994 until 1997, the FAR and subsequent GAO bid protest decisions indicated that the policies and procedures of Part 13 did not apply to schedule BPAs and that agencies were to follow the procedures of Subpart 8.4 for placing orders on schedule BPAs, but not for their establishment. Beginning in 1997, the FAR applied the ordering procedures in Subpart 8.4 to the establishment of schedule BPAs, including such steps as considering information about the supply or service offered under schedule contracts or reviewing the catalogs of schedule contractors. It also encouraged agencies to seek discounts when establishing schedule BPAs. A 2004 amendment to the FAR clarified the BPA ordering procedures under Subpart 8.4 and explicitly required agencies to seek discounts. The FAR currently requires federal agencies to seek price reductions from vendors’ schedule prices and to follow certain procedures when establishing schedule BPAs. Which procedures are to be followed depends on whether the BPA will be used to purchase a product or service performed for a fixed price or for a service performed at an hourly rate, and thus requiring a statement of work. Procedures for establishing schedule BPAs and seeking discounts are depicted in figure 1. Agencies may award a schedule BPA to a single vendor or to multiple vendors to fulfill the same requirement. The decision is to be based on a strategy that is expected to maximize the effectiveness of the BPA(s). The FAR states that, in determining how many BPAs to establish, contracting officers are to consider: the scope and complexity of the requirement(s); the need to periodically compare multiple technical approaches or prices; the administrative costs of BPAs; and the technical qualifications of the schedule contractors. After the BPA is established, requirements vary for considering more than one vendor when placing orders, as shown in table 1. DOD is required to adhere to more stringent competition requirements than are at present applicable to civilian agencies. Section 803 of the National Defense Authorization Act for Fiscal Year 2002 directed DOD to amend its regulations to require that any purchase of services exceeding $100,000 under a multiple award contract be made on a competitive basis, subject to limited exceptions. DOD’s implementation of this provision extended the competition requirement to orders under multiple award BPAs. Hence, for such orders exceeding $100,000, DOD contracting officers are required to either (1) notify as many schedule contractors as practicable of the purchase to reasonably ensure that offers would be received from at least three contractors and receive three offers (or determine in writing that no additional contractors could be identified that can fulfill the requirement) or (2) notify all contractors offering the required services under the applicable schedule and afford all responding contractors a fair opportunity to submit an offer and have that offer fairly considered. Congress recently took action to apply multiple award competition requirements that are similar to those in the 2002 statute to all executive agencies. The implementing regulations have not yet been promulgated. We estimate that the federal government obligated between $3.7 billion and $7.9 billion by placing orders under schedule BPAs during fiscal year 2008. Civilian agencies reported spending almost $3.2 billion under schedule BPAs, with the five civilian agencies in our review obligating almost $2.3 billion of this amount, or almost 72 percent of total civilian agency obligations. Although orders under schedule BPAs (for goods and services) comprised only about 2.3 percent of civilian agencies’ reported obligations during fiscal year 2008, usage of schedule BPAs by civilian agencies has grown substantially over time, by 382 percent from fiscal year 2004 to 2008 ($659 million to $3.2 billion). We were unable to develop similar trend information for DOD due to the data’s being unavailable, but for fiscal year 2008, we estimate that DOD obligated between $0.5 billion and $4.7 billion under schedule BPAs. Unlike civilian agencies, DOD does not use the available fields in FPDS-NG to distinguish its schedule BPAs from its traditional BPAs and indefinite delivery contracts. Therefore we could not readily determine DOD’s overall usage of schedule BPAs or what DOD is buying under these BPAs. We attempted to use data from DOD’s own procurement database (the DD350 database) and information from defense agency officials to identify schedule BPAs, but found additional inaccuracies. For example, we identified possible schedule BPAs for several Army organizations with obligations totaling roughly $319.8 million in fiscal year 2007. However, after further review and consultation with Army officials, we found that only about 16 percent of this amount had actually been obligated under schedule BPAs. A DOD acquisition official informed us that the department is taking actions to implement new reporting procedures in FPDS-NG. Civilian agencies’ use of schedule BPAs to purchase services has increased vastly more than their overall growth in services contracting in recent years. From fiscal years 2004 to 2008, civilian agency schedule BPA obligations for services increased by 475 percent, compared to a slightly negative growth in their overall service contracting. In addition, civilian agency schedule BPA purchases of services increased far more than their purchases for goods during the same time period. Figure 2 illustrates the trend in civilian agency obligations under schedule BPAs for products and services. We could not portray a similar analysis for DOD because of the data issue discussed earlier. The majority of schedule BPAs in our sample—74 percent of the 336 DOD and civilian agency BPAs we reviewed—were established to acquire services as opposed to goods. The most frequently cited broad categories of services in the BPAs we reviewed were management support services, other professional services, and program management/support services. The estimated purchase amounts when the BPAs were established ranged from $10,000 to $734 million, with the average estimated dollar amount just over $64 million. Specific examples of services acquired under the schedule BPAs in our review include: a BPA established by DHS for a range of acquisition support services, including drafting performance work statements and quality assurance surveillance plans; a BPA established by the Federal Emergency Management Agency (FEMA) to provide program management support for implementing the Pre-Disaster Mitigation Program; several BPAs established by the Navy to obtain analytical support for budget formulation and execution and other activities; and a BPA established by the Food Safety and Inspection Service to obtain court reporting services. When the agencies established the BPAs in our sample to acquire goods, the most frequently cited categories were for data processing software; software and system configuration; and printing, duplicating, and bookbinding. For example, the Social Security Administration established a BPA to buy color copiers, and the Navy established a BPA to obtain software. Other examples of goods purchased through schedule BPAs in our sample include: special purpose boats purchased by the Coast Guard for various law body armor purchased by the Air Force; laboratory equipment and supplies purchased by the Department of Health and Human Services; and fire engines purchased by the Forest Service. In addition to saying they use schedule BPAs to fulfill recurring needs, many of the contracting officials we spoke with cited BPAs’ flexibility and the speed with which they can be used as reasons they chose to use them as opposed to other contract vehicles, such as indefinite delivery contracts. Several contracting officials noted that schedule BPAs do not require the government to commit to any minimum dollar obligation or amount, as would an indefinite delivery/indefinite quantity contract. For example, a contract specialist at DHS’s Immigration and Customs Enforcement explained that his office does not receive funding, and therefore cannot obligate funds, until the budget is passed; in recent years, this has occurred during the second quarter of the fiscal year. Using a schedule BPA allows his office to be ready whenever it receives funds. Also, a contracting officer at FEMA said that she can establish a schedule BPA and have it ready for use when the agency has to respond to natural disasters and to conduct recovery operations without having to guarantee a minimum amount. However, some contracting officials noted that the lack of a binding contract can be a potential negative, since a vendor can decline to accept an order.