GeoJeff

And yet the debate apparently rages on...http://www.doi.gov/pam/DIAPR_2010-13.pdf.

Mr. Mansfield:

I agree with what you are saying, it is a question of what serves as the "obligation document" to record the obligation. I believe we are forced to use a DO/TO, if you want to be able to accurately report it to FPDS and for those agencies that have interfaces between the contract writing system and the respective accounting system.

GeoJeff:

Agree, there is a field; but I don't believe the CAR will authenticate. Unable to test it currently, but the business rules state that if the Award Type is an IDV (i.e. IDC type) then the award type is blank. (Section 12B of the business rule).

Section 3C (Dollars obligated) says that if the award type has a value (which it does not for IDV's) the value must be greater than or equal to zero.

Although not stated, presumably if the IDV is blank, then the Obligation amount must also be blank.

Link provided below:

http://www.fpds-ng.com/downloads/FPDS-DES-...c#_Toc204158310

Velhammer:

I think FPDS-NG is a non-issue here, at least for agencies that manually enter their own contract data. A new IDC record will validate whether you enter information in the "Action Obligation" field or not. From FPDS-NG's perspective, it is equally correct to obligate the minimum directly to the award or not, presumably so that one is not forced by business validation rules to make a minimum obligation to a basic award if one then intends to immediately (concurrently is a better word) issue a deliver order that meets the minimum.

"Presumably these business rules are written as an interpretation of policy and regulation."

That's a questionable presumption.

If what you've written is correct, then all we can conclude is that the folks who developed the business rules did not want obligations on basic IDIQ contracts reported in FPDS. This does not mean that obligations are not created or that obligations should not be recorded in the agency's accounting records when IDIQ contracts are awarded.

FPDS-NG does (now, at least) allow the recording of an obligation to an IDIQ award. The field is optional (black), not mandatory (orange).

Good post. I concur, with one minor caveat.

The statement the author debunked ("You don't have to obligate the minimum when you award an IDIQ contract. You can wait until you issue an order to make obligations.") is incorrect except in the very limited circumstance in which the minimum order is issued concurrently with the award of the basic contract. In the situation where 1) the initial order will meet or exceed the contract's guaranteed minimum, and 2) the initial order will be issued concurrently with the basic award, I do not believe there is any violation of the "recording statute."

Chapter 7 of the GAO Redbook (p 7-17) states "In a variable quantity contract (requirements or indefinite-quantity), any required minimum purchase must be obligated when the contract is executed..." That requirement is fulfilled by the concurrent issuance of the first order meeting the minimum; note that the GAO does not explicitly state that the minimum must be obligated to the contract, only that it must be obligated when the contract is executed. Presumably, if the GAO intended to make the former statement, it would have.

Also reference Federal Electric Corporation, ASBCA 11726, 68-1 BCA 6834, and Federal Electric Corporation v. United States, 486 F.2d 1377 (1973). There, the Air Force mailed an official acceptance of the contractor's proposal and issued the first delivery order for the minimum quantity on the same day. The ASBCA ruled that the contract was enforceable, having come in to effect when the minimum order was placed. From Formation of Government Contracts, 3rd ed, pages 1239-1240, "...the Court of Claims upheld the board decision but stated that the contractor was bound to the contract because the minimum quantity had been ordered at the same time the parties entered into the contract." (bold added)

The alternative is silly - obligate the minimum to the award, issue the first order meeting the minimum five minutes later, then deobligate the award five minutes after that. I can't imagine that ten minute obligation serves any legitimate purpose. I agree with the author, however, that unless an order sufficient to meet the contract's minimum is issued concurrently with the award, the minimum must be obligated to the contract. There is no acceptable alterrnative.