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Chip14

Multiple Award IDIQ contracts & Cost Evaluations

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My command is looking at doing a Multiple Award IDIQ solicitation under which we expect to utilze multiple contract type Task and Delivery orders (CPFF, CPFF/LOE, FFP/LOE & FFP). The Program Office is expecting to use Cost Reimbursable LOE Service Task Orders for Studies and Development requirements, and then Fixed Price Delivery Orders for Production Unit buys. We anticipate around 8 potential offerors at the IDIQ level and expect to succesfully downselect and award to 3 or 4 of these firms. The Government is looking at a minimum of around $2M and a maximum of $150M under the IDIQ.

My question is what is the significance of "Cost" in a Multiple Award IDIQ downselect? I realize that under FAR 15.304 "Cost" must be evaluated but what is the significance of cost at the IDIQ level when the true competition on cost/price is not really established until the Task or Delivery Orders are competed from among the successful IDIQ awardees.

Would like your thoughts...

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When the pricing occurs at the task order level, there is not much significance in the evaluation of cost when awarding the IDIQ. It's done to comply with law. We operate under the legal fiction that the costs/prices proposed for these IDIQ contracts represent the amount the Government will actually pay.

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What approach have you seen used to establish a significance to "Cost". On the fixed price issues you have something you can put in the contract with a financial cap that the Government can hang its hat on, but the cost venues you have nothing. Have you seen any approaches used to try and place a relationship on the contractor for his proposed costs to performance?

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Chip14,

I'm not Don but I have seen sample Task Orders used to evaluate both technical approach and price. In your case, perhaps one sample TO for studies and one for Production Units?

Hope this helps.

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What approach have you seen used to establish a significance to "Cost". On the fixed price issues you have something you can put in the contract with a financial cap that the Government can hang its hat on, but the cost venues you have nothing. Have you seen any approaches used to try and place a relationship on the contractor for his proposed costs to performance?

I can think of a couple of things. You could cap the rates at the proposed rates (or within some fixed % of the proposed rates). Or, you could make the proposed fee (stated as a percentage of estimated cost) a maximum for pricing task orders.

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Vern or Bob -

If this has been asked and answered numerous times could you please direct me to those prior responses?

Thank you!

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What approach have you seen used to establish a significance to "Cost". On the fixed price issues you have something you can put in the contract with a financial cap that the Government can hang its hat on, but the cost venues you have nothing. Have you seen any approaches used to try and place a relationship on the contractor for his proposed costs to performance?

Is this a generic question or are you asking concerning some specific ID/IQ type or scope? It might depend upon the type of product or service that would be the scope of task orders and the extent of geographical area covered by the ID/IQ. When using an ID/IQ for construction, for instance, there are so many job specific variables that it is not practical or prudent (in my opinion) to tie down prices for future tasks in the base pool award. However, this is often possible (at least for capped unit prices) in many types of service or supply multiple award task order contracts.

As stated in the links above, the GAO has consistently held that the use of sample task orders is not a valid method of meaningful price competition unless the proposers would be bound to perform at those prices. My organization has done that in the initial base pool awards using a "seed task". The seek task is awarded to one firm as the first task order at the same time as making award to that and other firms for inclusion in the base contract pool or pools. At any rate, mm6ch has identified two threads that likely covered your questions. Is your question specific to a cost reimbursement type ID/IQ?

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