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Circumventing >$103M Single-Award IDIQ Waiver

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“FAR 16.503( b )(2): No requirements contract in an amount estimated to exceed $103 million (including all options) may be awarded to a single source unless a determination is executed in accordance with 16.504( c)(1)(ii)(D).”

First off I don’t like this rule. I believe I understand its intention, but I think it ill-conceived and if followed in-letter, it is constantly violated in-spirit (at least in my organization). I also see it somewhat silly making this a requirement in addition to other sole-source regulations (at least 6.302-1) since why would we want to approve a single award, when we’ve just certified something like ‘Only One Responsible Source and No Other Supplies or Services Will Satisfy Agency Requirements’? It seems to me like requiring a cardiogram to verify someone’s heart isn’t beating after they have been declared dead.

There are plenty of ways around this rule, one of the simplest being restructuring the contract as a regular C-Type contract. The end result is that instead of having to undergo the delay and effort of routing an approval up to the head of the agency, contracts that would arguably be much more appropriately structured as an IDIQ contract are being forced into other types to avoid this process.

Multiple Award isn’t always being avoided, but there are some clear to light-grey cases where all/most of 16.504( c)(ii)( B ) applies, but teams just don’t want to take the chance.

We’ve found that teams are reluctant to go the traditional waiver path because if the HoA denies it, they are stuck in the situation of almost having to do a multiple-award IDIQ, since switching to a C-Type contract (or other side-road) at that point would be seen as blatant circumventing of this rule. Also, administratively it typically doesn't take as long to drop an order against a single-award IDIQ (or mod a C-Type contract) than it does to compete an order on a multiple-award IDIQ.

Despite my initial rant, I am not looking to debate the merit of this rule (not much prospect of changing things at this level). I am curious as to your experience. Are acquisitions in your area circumventing this rule as well? Are you seeing contract vehicles shoe-horned into other types (or other such circumvention) to avoid having to go to the HoA for this determination? Should teams be encouraged to stop skirting this rule, or is the status quo working? Other thoughts from those in the contractor arena?

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I disagree with your rant. You don't need to do a sole source justification to make a single-award IDIQ contract. I think you misconstrue single award to mean sole source. You can compete an IDIQ contract and make a single award with no sole source justifications. The intent is that for large contracts over $103M that will be using this structure is to have multiple award contracts because you have decided that you will have continuing requirements over the period of the contract for frequent orders. Instead of locking up such a large requirement with one contractor, you are locking it up with multiple contractors who all have an equal chance to "win" each order. That wasn't your question, but felt that should be said. And, FWIW, the intent was probably focused towards agencies who were setting up large IDIQ contracts for commercial (like) items that multiple contractors could fulfill but were giving them to one vendor.

And, I don't think that people are circumventing the rule. If you have a legitimate reason as to why your IDIQ should only have one awardee, then you shouldn't have a problem getting the waiver through. An example would be an IDIQ on a vehicle program. It wouldn't be prudent for you to have multiple awardees because of the cost of upkeeping a vehicle line, but you may have multiple requirements throughout hte year to order vehicles.

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I’ve never understood this requirement. A requirements contract is, by definition, awarded to just one contractor, per FAR 16.503(a). It has to be single-award, or you don’t have a requirements contract. What’s the point in getting a high-level official to sign that it’s OK to award to a single source, as opposed to multiple sources? It’s tantamount to requiring the head of the agency to approve all requirements contracts over $103 million. Seen in that vein, it may not be quite as onerous as it sounds. After all, how many requirements contracts over $103 million do you award? And you may not have to go all the way to your agency head. He/she may have delegated the authority to make these determinations. For example, in the Department of the Navy, the authority rests with the Senior Procurement Executive – still a pretty high level for what should be a straightforward determination, but at least it’s not as burdensome/time-consuming as having to go to the Secretary of the Navy.

I would prefer that requirements contracts be excepted by law from this requirement (41 USC §4103/10 USC §2304a), but in the absence of a statutory change, couldn’t an exception be made in the FAR for requirements contracts, such that the determination could be made by the chief of the contracting office?

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I’ve never understood this requirement. A requirements contract is, by definition, awarded to just one contractor, per FAR 16.503(a). It has to be single-award, or you don’t have a requirements contract. What’s the point in getting a high-level official to sign that it’s OK to award to a single source, as opposed to multiple sources? It’s tantamount to requiring the head of the agency to approve all requirements contracts over $103 million.

When the rule was added to FAR in 2010, the FAR councils explained that the determination is required for requirements contracts because they are task or delivery order contracts and Section 843 of the FY2008 NDAA required such a determination for task and delivery order contracts. See 75 FR 13418 - 19, March 19, 2010. Except for that, I agree that it does not make a lot of sense.

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I disagree with your rant. You don't need to do a sole source justification to make a single-award IDIQ contract. I think you misconstrue single award to mean sole source. You can compete an IDIQ contract and make a single award with no sole source justifications.

Perhaps I wasn't as clear as I could have been. I didn't mean to imply you had to get a sole source justification to make any single award IDIQ >$103M, I was complaining about the requirement in FAR 16.504 ( c )( 3 ) The requirement for a determination for a single-award contract greater than $103 million:( i ) Is in addition to any applicable requirements of Subpart 6.3

So any single award IDIQ >$103M that is also sole source not only has to get a sole source justification, they also have to get the single-ward waiver. (Department of Redundancy Department)

In this case I’d like to find out I’ve been misinterpreting this. But if I am, I’m not the only one.

And you may not have to go all the way to your agency head. He/she may have delegated the authority to make these determinations. For example, in the Department of the Navy, the authority rests with the Senior Procurement Executive – still a pretty high level for what should be a straightforward determination, but at least it’s not as burdensome/time-consuming as having to go to the Secretary of the Navy.

Fair point. It’s our SPE too, but still A LOT of scrutiny (and time) gets put on any document going up to that level.


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All you have to do is tack a single sentence on at the end of the J&A required by FAR 6.3:

"This J&A also constitutes the determination required by FAR 16.504( c)(1)(ii)(D)(1), pursuant to the authority of FAR 16.504( c)(1)(ii)(D)(1)(iii)."

What's the big deal? I don't see anything in FAR which prohibits the agency head from delegating the authority to make that determination.

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