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Requirements Contracts


longhornjoe

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I am trying to better understand requirements contracts as permitted by FAR 52.216-21. First, can anyone recommend a good text or treatise on this topic? I have read Multiyear Procurement: The Different Faces of Congress," in The Nash & Cibinic Report, Vol. 9, No. 7, 40 (July 1995).

Next, I'm trying to understand the relationship between a delivery order issued against the underlying requirements contract. Assume the requirements contract is for five years, which basically means the Government will obtain its requirements for the subject of the contract, whatever those requirements are, for five years. If the delivery order is for a base year and includes four options, and the Government decides not to exercise one or more of the options, how does this action affect the requirements contract? Seems to me that the Government must still purchase its obligations from the contractor, if it has any.

Now, make the issue more difficult (at least for me). If the underlying requirements contract and delivery order were issued at the same time, can the Government successfully argue that the requirements obligation is only for one year, with options? I believe that the answer to this last question depends on the language of the contract itself and an interpretation of the parties' intent for the term/duration of the underlying requirements contract. But I'm curious if anyone has ever run into this issue before. Thanks.

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…joe –

Normally as a general rule the underlying requirements contract would not be affected by how a DO is administered with regard to base and option periods of the DO whether the DO is issued at the same time as the requirements contract is or if the DO is issued at a later date. Your additional thought is correct any needed requirements would have to be procured from the contractor for the period of the underlying contract but again pursuant to the terms and conditions of the underlying contract.

Encountering such a problem where the there is interpretation otherwise (again absent specific contract language) suggests to me not a very good meeting of the minds of the parties to the contract.

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