Jump to content
The Wifcon Forums and Blogs

Recommended Posts

My company was awarded an IDIQ from the Gov't as part of a multiple prime IDIQ vehicle. We are currently weighing whether to issue our subcontractors a BOA or an IDIQ. Since each task order at the prime level (there are multiple primes) will be competed and our team will need to stay very flexible in order to win, I believe that a BOA would probably be more appropriate than an IDIQ Subcontract. We envision that labor rates within the established labor categories for each task order will need to be different depending on the SOW and the price to win. If we used an IDIQ in lieu of a BOA then any pricing that we established (labor rates) would most likely need to be discounted once the task orders are released/competed (so I don't think an IDIQ would be as appropriate). Another reason I don't believe the IDIQ would be appropriate is that my company would not be able to promise a minimum and would not do a very good job in estimating a maximum subcontract value.

In order to stay as flexible as possible, I believe a BOA would be the right choice for my company to issue to subcontractors but I am seeking your help in determining possible pitfalls associated with BOAs (vs using an IDIQ subcontract).

I understand that a BOA is not a contract and the subcontractor is under no legal obligation to accept a task order (or purchase order if that the preferred terminology when speaking about a BOA). But once my company issues a TO and the subcontractor accepts (either formally in writing or by commencing work), then they do have an obligation to complete that work in accordance with the terms and conditions of the BOA, incorporated docs and any instructions included in the TO. Both vehicles are used to streamline orders however I believe there is much more in setting up an IDIQ than a BOA because the IDIQ would contain pricing to be evaluated and a ceiling value which would set off many threshold related administrative work (FFATA cert, EEO, CAS, etc.). I realize that with a BOA, the administrative part would need to be completed with each TO award depending on the value of each award however I think this is a risk worth taking since we can't really predict how many task orders we will actually win or the values. I know that the values can be as low as 100k and as much as hundreds of millions.

Does anyone have any experiences to share with respect to services based BOAs in lieu of IDIQs? Any concerns one might have with putting a BOA in place with their subs in this scenario? Oh yeah, workshare to the subs is not an issue in our situation as my company did not make any promises to any of the subs.

From DAU website (https://dap.dau.mil/aap/pages/qdetails.aspx?cgiSubjectAreaID=22&cgiQuestionID=18517):

The key distinction in their application is that Government is in a position where it can commit itself to a minimum quantity when awarding an IDIQ contract, whereas the Government may not be able to commit to a minimum quantity when setting up a BOA. Further, BOAs are commonly used to streamline ordering when using simplified acquisition procedures. IDIQ contracts are commonly used to expedite the ordering process for requirements of any dollar value. The ceiling for some IDIQ contracts is in the billions, with individual orders under those contracts in the hundreds of millions.

Just curious - Why are BOAs commonly used when using simplified acquisition procedures as stated above...why would there be a limit on the dollar value of a BOA?

Share this post


Link to post
Share on other sites

Another reason I don't believe the IDIQ would be appropriate is that my company would not be able to promise a minimum and would not do a very good job in estimating a maximum subcontract value.

Why do you think your company would have to promise a minimum?

Share this post


Link to post
Share on other sites

Vern,

I guess we would not need to promise a minimum and can simply label the minimum as "the amount of the initial task order award." I have it stuck in my mind that a BOA would be the best solution because the pricing of each task order (especially labor rates) could change based on the price to win. If I could set up an IDIQ without establishing any kind of specific pricing (only negotiate terms and conditions) then that would be best but I think that is pretty much the description of a BOA.

I would love to be wrong in this case and go with an IDIQ sans pricing because I am more familiar with setting up an IDIQ (I have never actually set up or administered a BOA).

Thanks for the help!

Share this post


Link to post
Share on other sites

You have not answered my question. Why do you think that as a private sector entity you have to promise to buy a minimum (or issue an order that stands for a minimum) in order to award an IDIQ contract? Where do you get that idea? What if you did not have to agree to a minimum, however you label it? Would that change your thinking about a BOA?

Share this post


Link to post
Share on other sites

Writing more broadly to Vern's point, generally, you have discussed concepts that relate to arrangements between the government and a commercial entity. Why do you think those same concepts apply to arrangements between two commercial entities?

Share this post


Link to post
Share on other sites

Ok, I think I see what you all are getting at. The reason I originally thought there had to be a minimum is that the Government is normally required to include a minimum. I understand that my company is not the Government and therefore I would not necessarily need to list a minimum. With this same concept in mind, I guess that I would not need to include pricing as part of the IDIQ master subcontract either. My main concern stems from the pricing piece and not the minimum. My end goal is to negotiate the terms and conditions now and then have the flexibility to price each task order without being locked into any particular labor rates for the specified labor categories.

Share this post


Link to post
Share on other sites

The consideration required to bind private parties under an IDIQ contract need not take the form of a promise to buy a minimum. Other forms of consideration are possible. Whatever is mutually acceptable to the parties. As for pricing, you can negotiate any arrangement you can persuade the other party to accept.

Generally, if you need the supplier in order to fulfill your obligations under the government contract, a subcontract would be better than a BOA.

Share this post


Link to post
Share on other sites

My understanding is there are different types of IDIQ contracts. A requirements contract would require no miminium order, as the the buyers consideration is the promise to buy all future requirements - for a specified period - from the seller. An indefinite delivery contract has no such condition so a minimum buy obligation is required to form a contract.

If it is not feasible to negotiate the pricing arrangement then I think a BOA setting out the terms would be about all one could accomplish. When you receive the prime contract you could negotiate the price and issue a subcontract.

Share this post


Link to post
Share on other sites
Guest
This topic is now closed to further replies.

×