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I awarded a ID/IQ contract to three contractors in February '15. We have awarded task orders to two of the three contractors to satisfy the minimum, however, based on the forecast, it is possible that the third contractor might not have the minimum satisfied in the current fiscal year (15/16). To determine our next steps, there have been multiple discussions between contracting officers, legal and branch chiefs. I am a new contracting officer and this is the first task order contract I have administered. I suggested using the fair opportunity exception at FAR 16.505 (b ) (2)(i)(D) to sole source a TO in order to satisfy the minimum. My team leader reviewed my stance and responded as follows: "Seems to me your options are limited. Because the awards were made in FY 15 the Bonafide Need rule requires that the funds available at the time of award FY 15/16 being retained under each contract (whether on the contract or task order). The issue at hand is one of the Agency getting use out of its obligated funds and should be distinguished from a case of needing to satisfy our minimum commitment to the contractor (which does not arise until the ordering period expiries. 1. Satisfying our Appropriation Rule on Bonafide Need We need to maintain 15/16 funding under each contract, whether under the contract itself of under an issued TO that may extend beyond the funds availability for obligation, but will be supportive of the BN at the time of issuance. TO with performance periods stretching beyond the availability of FY 15/16 funds while this appropriation is available would preserve the BN supporting the underlying contract. If we issue a TO using 16/17 funds, we would meet our contractual obligation to the contract holder, but we would still have to keep the funds obligated at award (15/16 funds) on the contracts and to do so otherwise would result in a violation of the BNR, as we would have failed to support the BN for what the contract was procuring. " Legal went further to state: A sole source task order under the exception to FAR 16.505 (b )(2)(i)(D) cannot be issued. The contract POP is 5 years. Therefore, approximately 4 years remain of the POP, while approximately 7 months remain prior to the end of the fiscal year. Consequently, there is enough time for the contract holder in question to receive additional competitive task order awards sufficient to liquidate the balance of the minimum amount obligated to the contract at the time of the award. Neither the FAR guidance nor any of the clauses included in the contract provide for an exception to the "fair opportunity to compete" for task orders that would facilitate the reduction of the outstanding minimum balance and avoid the expiration of the FY funds placed on the contract at the time of award. Furthermore, failure to issue a task order to the contractor in question under which 15/16 funds can be used, does not mean the money is "lost" per se, What it does mean is that , if the Agency does not issue any task orders to the contract holder in question between now and the end of the ordering period, those FY 15/16 funds will still be available to liquidate whatever portion of the minimum is due and owing to the contract holder in question. As to how that amount is calculated, I direct your attention to the CAFC case White v. Delta Construction International, Inc., 285 F.3d 1040. What that means is: The contractor in question would only be due payment of an amount that reflected the delta between the costs it would have incurred had the minimum amount been satisfied in total, given indirect costs and profit. So. I have two questions: 1. How does White V. Delta overrule the Government from fulfilling its obligation under 52.216-22? 2. Why would the use of the fair opportunity exception at FAR 16.505( b ) (2) (i)(D) to sole source a TO in order to satisfy the minimum not apply? I would think the potential to violate the BNR would be even more of a reason to sole source.
