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Strategy Question, Pros and Cons


baierle

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Hello--

I am interested in hearing your thoughts on the pros and cons of using "option for increased quantity" instead of IDIQ:

1- clearly defined supply items, firm fixed price, non competitive award.

2-total requirement is 4 systems, over the course of three fiscal years, and subject to continued need and funding.

3-base award will procure and fully fund 2 of these.

Either scenario would work, I believe.

And, human nature tends to keep us (me) on the path with which I am most familiar.

What would you consider to be more advantageous to the Government: structure this as Base plus options, or as IDIQ with guarantee minimum being the first 2?

I will appreciate any and all feedback.

EB

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Scenario 1--OPTIONS

Base award of 2 with an option for 1 or 2 more

Scenario 2--IDIQ

IDIQ contract with a minimum of 2 and a maximum of 4

first task order buys 2

later task orders, if any, buy 1 or 2 more

I don't see much difference.

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I know--there is not much difference in my opinion.

I was hoping someone with much more experience than I would give something that I have not already thought about.

The reason for this posting is that I am being queried as to why I chose to structure this as base plus options and not IDIQ.

I don't have much of an argument except it's what I know.

same reason re: why not Requirements vs. IDIQ---same answer: comfort zone.

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I guess one reason, besides "comfort zone", as to why I chose not go base plus options instead of IDIQ is because of the low quantitiy of 4.

I understand that isn't a great reason and am grasping for more substance to support my approach.

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One possible difference slight as it may be. More potential risk for the Government if a base plus options versus a IDIQ or Requirements. Why? Based on one thought, for the base scenario what happens if the Government does not exercise its right to the option by the required point in time? Seems that an IDIQ or Requirements allows a little more lee way for the Government to exercise their right to issue a task/delivery order.

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Okay, just to be controversial, here is my opinion:

Order w/ Options - Unique Pros:

* Main Reason: Can utilize existing contracts, such as Federal Supply Schedules or Government Wide Acquisition Contracts (before we enter the menagerie of "where in the FAR does it say you can't issue an IDIQ against an IDIQ," most GWACs include express prohibitions in placing IDIQ-type contracts against them);
* FPDS is easier to complete because there are less fields.
* You do not need to make a determination for single award like you would with an IDIQ.
* I can say the word option quicker than IDIQ.

IDIQ pros:

* You do not need a determination and findings for each purchase, unlike an option modification, see FAR 17.207. I can't remember the CO's name, but he received a nice civil penalty for blindly exercising an option without actually determining the price fair and reasonable.
* For ordering, I think the OF347 takes less time and effort to complete than a SF-30.
* Easier to administer because if you want to change an order, you just modify it. For an options contract, you need to make a new modification to your order to change an already issued modification (essentially modifying a modification). Imagine incremental funding issues.
* You do not need to make a justification in the file that use of an IDIQ is appropriate like you would with a determination for use of options.
* An option contract requires an obligation to be enforceable.
* You need to timely notify and execute options per the contract or they become invalid. Exercising them late by mutual agreement becomes new work subject to FAR Part 6. You just issue the order for IDIQs.
* You can have a multiple year IDIQ that spans over five years. For an options contract, you need to exercise the option each year to extend the term.
* IDIQs can typically have multiple contracts types (FFP/T&M/CR) that the agency can get credit in FPDS. For an options contract, only the predominant contract type is reported.
* This is silly, but unfortunately, IDIQ contracts look better on your resume.

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Guest Vern Edwards

I like metteec's thoughtful analysis and congratulate him on it. Seriously. That's the kind of thinking (and sense of humor) that we need. Anyway, he convinced me that options is the better way to go:

* FPDS is easier to complete because there are less fields.
* You do not need to make a determination for single award like you would with an IDIQ.
* I can say the word option quicker than IDIQ.

That last bullet did it for me.

He did make one mistake:

* You can have a multiple year IDIQ that spans over five years. For an options contract, you need to exercise the option each year to extend the term.

That's not true for options for additional quantities, which are different than options to extend the contract term. However, he might be right about the resume business, I don't know.

I would go with options mainly because the use of IDIQ has become ridiculous.

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Requirements doesn't seem appropriate- you have a minimum order chambered and ready to go, so why would you imply that this is the only vendor you can buy these systems from?

If there is certainty you need four systems, you have the opportunity to be the first person in the office to utilize FAR 16.502. You said subject to need, though . . .

I would respond to the queries in the following manner: " IDIQ : Risky! :: FFP + Options : Safe and comforting!" Then ask to be excused due to a medical condition.

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