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natavas

Option period pricing

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This may be a silly question but please foregive me as I am new to government contracting.

Our contract with government customer covers a base period (Dec 2011-Dec 2012) and three option periods all having incrementally increased pricing. It also states that phased delivery of 200 each per month beginning in 86 days after receipt of order.

We received a timely notice of excercising the option to extend for Option year 1 for Dec 2012-Dec 2013. The notice also restates that the price for the option period will be $X (as negotiated in the base contract).

The customer has placed an order for deliveries in option year 1 (2013) but referenced pricing from base year, not pricing for year 1. When we insisted that price should be adjusted, customer responded the price should be at the time of the "award" not based on delivery dates.

Am I correct to insist that for all orders with deliveries in the option period from December

2012 to December 2013 the price should be increased? What is the authority to support the answer?

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You need to read your contract to get your answer. You might find that the base period pricing applies to all orders issued during the base year, regardless of when delivery occurs.

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As a follow up, here is the caption from the contract:

"This is an indefinite Quantity Contract. Orders may be issued on this contract for a period of Dec 2011 - Dec 2012. Actual unit prices will be specified on individual delivery orders issued under this contract. "

"The price for the base period and the option periods are as follows:

Base Period $X, Opt Period 1 - $X, Opt Period 2 - $X, Opt Period 3 - $X

As far as I can tell there is nothing more specific on whether it is for orders issued or orders with delivery dates.

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I have to suppose here that the base period price applies to orders issued during the base period, regardless of when delivery occurs.

In general practice, exercising an option period on an IDIQ contract gives the Government the right to issue more orders during the option period, but does not re-price orders already-issued orders.

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Every IDIQ contract has two periods. The first is the period within which orders may be placed, as stipulated in the clause at FAR 52.216-18, Ordering (OCT 1995), paragraph (a). The second is the period within which delivery or performance may be required, as stipulated in the clause at FAR 52.216-22, Indefinite Delivery (OCT 1995), paragraph (d).

I agree with ji20874 that orders placed within a stipulated ordering period should be at the prices applicable to that period, even if delivery takes place within an option ordering period.

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I inherited some IDIQ labor hour service contracts that did not specify how TO rates should be proposed and the contractors were proposing one rate till it matched the base contract POP and then the next year higher rate the rest of the TO period. It was a very complicted TO so it was an administrative nightmare tracking timecard dates to the rates on invoices. So on the recompete I ensured to inform that the rates in place the date of TO award would be for the whole TO year. A roar of grumbling ensued but they accepted the requrement. Lesson learned - make sure it is spelled out in the contract and task orders what rates/prices apply and when.

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