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IDIQ Contract Max Value


Valburns

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I have an IDIQ contract and the contract states that the total amount of the contract shall not exceed $1M. Currently, I have issued a total of $999K of task orders and modifications (in scope mods using the changes clause).

A contracting officer told me I do not have to include the inscope mods when computing how much of the total value has been used.

Let me know if it is correct to not include the cost of inscope mods in the calculation when determining how much is remaining for future task orders.

Thanks

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Does your contract state precisely that "the total amount of the contract shall not exceed $1M"?

Normally IDIQ contracts use language that talks about the mexaimum order limit. See FAR 16.504(a)(1) that says

The contract must require the Government to order and the contractor to furnish at least a stated minimum quantity of supplies or services. In addition, if ordered, the contractor must furnish any additional quantities, not to exceed the stated maximum. The contracting officer should establish a reasonable maximum quantity based on market research, trends on recent contracts for similar supplies or services, survey of potential users, or any other rational basis.

So based on your question, did you state the maximum order amount in terms of dollar value rather than quantity?

If that's the situation, I think you can make a good case that in-scope changes do not count against the maximum order amount. If you specified quantities ordered rather than dollar value and issued change orders that resulted in price increases, you still have the same quantity as the maximum. So I think you can carry that logic forward and exclude changes from impacting what's available for ordering.

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I have an IDIQ contract and the contract states that the total amount of the contract shall not exceed $1M. Currently, I have issued a total of $999K of task orders and modifications (in scope mods using the changes clause).

A contracting officer told me I do not have to include the inscope mods when computing how much of the total value has been used.

Let me know if it is correct to not include the cost of inscope mods in the calculation when determining how much is remaining for future task orders.

Thanks

I have this feeling that "Valburn" is a pseudonym for one of about three possible members here and that this is a test. At any rate, I'll take the bait.

Please ask the KO to justify what she meant by her statement that you "do not have to include the inscope mods when computing how much of the total value has been used."

FAR 16.504 (a) states: "Description. An indefinite-quantity contract provides for an indefinite quantity, within stated limits, of supplies or services during a fixed period. The Government places orders for individual requirements. Quantity limits may be stated as number of units or as dollar values."

FAR 16.504 (a) (4) states in part: "A solicitation and contract for an indefinite quantity must...(ii) Specify the total minimum and maximum quantity of supplies or services the Government will acquire under the contract."

You said: "[T]he contract states that the total amount of the contract shall not exceed $1M."

FAR 16.505 (a) (2) says in part: "...Orders shall be within the scope, issued within the period of performance, and be within the maximum value of the contract."

FAR 16.506 says in applicable part:

"(a ) Insert the clause at 52.216-18, Ordering, in solicitations and contracts when a definite-quantity contract, a requirements contract, or an indefinite-quantity contract is contemplated." This clause discusses ording procedures.

"(b ) Insert a clause substantially the same as the clause at 52.216-19, Order Limitations, in solicitations and contracts when a definite-quantity contract, a requirements contract, or an indefinite-quantity contract is contemplated." This caluse discusses individual order limitations.

"...(e ) Insert the clause at 52.216-22, Indefinite Quantity, in solicitations and contracts when an indefinite-quantity contract is contemplated."

That clause says:

"(a ) This is an indefinite-quantity contract for the supplies or services specified, and effective for the period stated, in the Schedule. The quantities of supplies and services specified in the Schedule are estimates only and are not purchased by this contract.

(b ) Delivery or performance shall be made only as authorized by orders issued in accordance with the Ordering clause. The Contractor shall furnish to the Government, when and if ordered, the supplies or services specified in the Schedule up to and including the quantity designated in the Schedule as the ?maximum.? The Government shall order at least the quantity of supplies or services designated in the Schedule as the ?minimum.?

(c ) Except for any limitations on quantities in the Order Limitations clause or in the Schedule, there is no limit on the number of orders that may be issued. The Government may issue orders requiring delivery to multiple destinations or performance at multiple locations."

(d ) Any order issued during the effective period of this contract and not completed within that period shall be completed by the Contractor within the time specified in the order. The contract shall govern the Contractor?s and Government?s rights and obligations with respect to that order to the same extent as if the order were completed during the contract?s effective period; provided, that the Contractor shall not be required to make any deliveries under this contract after _______________ [insert date].

Assuming that the verbiage "the total amount of the contract shall not exceed $1M" is in the contract, it seems to me that the maximum contract value was advertised as $1 million and that you have currently used $999 thousand of it. I may be wrong and there may be some case law somewhere that defines the total amount of the contract" as something other than the stated limit of the total maximum dollar value of supplies or services the Government will acquire under the contract.

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I have an IDIQ contract and the contract states that the total amount of the contract shall not exceed $1M. Currently, I have issued a total of $999K of task orders and modifications (in scope mods using the changes clause).

A contracting officer told me I do not have to include the inscope mods when computing how much of the total value has been used.

Let me know if it is correct to not include the cost of inscope mods in the calculation when determining how much is remaining for future task orders.

Thanks

If your contract states that "the total amount of the contract shall not exceed $1M," I don't understand how one can argue that placing an order that will cause the amount of the contract to exceed $1M is OK. I can understand how one could argue that making a change to an ongoing order is allowed, even if the result causes the total contract amount to exceed the ceiling, but I think placing a new order would not be allowed.

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Guest Vern Edwards

The original poster referred to "the total amount of the contract" and the "total value." Neither of those terms is official language for an IDIQ contract. The official terminology, which appears in the clause at FAR 52.216-22, "Indefinite Quantity (OCT 1995," paragraph (B), is "maximum quantity." See also FAR 16.504(a)(1), (3), and (4). The maximum may be stated as a quantity of units or a dollar amount. So the offiicial terminology is maximum quantity or maximum amount.

There are two issues: (1) the rights of the parties and (2) the scope of the competition for the contract. Under the clause cited above, the government has no right to order a quantity or amount in excess of the maximum and the contractor has no obligation to accept or perform an order in excess of the maximum. Moreover, the order of any quantity or dollar amount in excess of the maximum is grounds for protest that the order exceeds the scope of the competition for the contract.

Assuming that the contract uses the official terminology, instead of "total amount of the contract" or "total value," then in my opinion the dollar value of in-scope modifications of orders should not count against the maximum quantity/amount. By in-scope, I mean a change to the item or service, but not a purchase of additional items or services. Only orders of supplies or services should count.

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Assuming that the contract uses the official terminology, instead of "total amount of the contract" or "total value," then in my opinion the dollar value of in-scope modifications of orders should not count against the maximum quantity/amount. By in-scope, I mean a change to the item or service, but not a purchase of additional items or services. Only orders of supplies or services should count.

Vern, the poster indicated that the maximum total quantity of services (to be acquired under the contract) has been expressed as a "value" (consistent with 16.505 (a) (2)). Of $1 million, not as a maximum physical quantity of services .

Maybe I'm missing something but it would seem that in-scope changes involving services would count toward the total maximum (monetary) quantity of the services to be acquired under the contract (consistent with the requirement in 16.504 (a) (4)) .

I'm assuming the contract is primarily for services because it uses task orders, not delivery orders. I suppose it could include both but still includes a maximum quantity, value, dollar amount or whatever.

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