ID/IQ, Requirements, can they be Firm Fixed Price?

[VA Junior CO]

Good afternoon. I have been having a debate with one of my senior CO's regarding contract types.

She says there are 3 flavors of contracts

1. Fixed Price

2. Cost Reimbursement

3. Other contract types

I can follow that line of thought as I have a nice chart that says just that on my wall. The rub comes in when I make the following statement

"You can have a Fixed Price Requirements contract"

or

"An ID/IQ can be a Fixed Price Contract"

I make my point based on the assumption that the rates in the schedule can be fixed, how much is used doesnt matter and is an acceptable variable in a fixed price ID/IQ.

I am thinking, though I can not support this in the FAR, that you have 2 basic contract types, Fixed Price, and Cost Reimbursement - and that ID/IQ and Requirements can apply to either or as the task orders that result from the IDIQ or Requirements contract will be either FFP or Cost.

I never win arguments with her, so im hoping for a rare victory, I just cant prove my point in the FAR since it doesnt say anywhere when discussing IDIQs a fixed price option.

Any thoughts?

[Don Mansfield]

VA Junior CO,

The terms "Fixed-price", "cost-reimbursement", "time-and-materials", etc. are used to describe a contract's pricing arrangement. The terms "definite quantity", "requirements" and "indefinite quantity" are used to describe a contract's delivery arrangement. A contract's delivery arrangement and its pricing arrangement are two different, unrelated, aspects of the contract.

Let's say you have a baseball. The baseball is white. The baseball is round. Both are true statements about the baseball, but they describe different aspects of the baseball--one statement describes its color, the other its shape.

So, you could have a contract with a fixed-price pricing arrangement and an indefinite delivery arrangement (i.e., Definite quantity, requirements, IDIQ) and you could have another contract with a fixed-price pricing arrangement and a definite delivery arrangement. This would be like having one round ball that was white and another round ball that was black.

[Guest Vern Edwards]

Think of the problem as a 3 x 3 matrix.

Across the top, under the overarching heading: Pricing Arrangements, there are three columns: headed Fixed-Price, Cost-Reimbursement, and Time & Materials/Labor-Hour.

Along the side, to the right of the overarching heading: Delivery/Quantity Arrangements, there are three rows, headed Indefinite-Delivery-Definite-Quantity, Indefinite-Delivery-Indefinite-Quantity, and Indefinite-Delivery-Requirements.

Each cell in the matrix represents a combination. There are nine combinations.

[VA Junior CO]

Thank you for your responses, I do appreciate them.

[brian]

.

Vern,

in your Matrix, all three "Delivery/Quantity Arrangements" possibilities involve Indefinite-Delivery:

• Indefinite-Delivery-Definite-Quantity,
  
• Indefinite-Delivery-Indefinite-Quantity, and
  
• Indefinite-Delivery-Requirements.
  

But in my experience, not nearly as broad as yours, all my contracts (just a handful) called for what I would consider "Definite Delivery:" I had an explicitly stated quantity to be delivered on or by a Required Delivery Date.

I miss a lot, and may have missed something here, but couldn't this be a fourth type of Delivery/Quantity Arrangement, "Definite Delivery/ Definite Quantity ?"

Wouldn't that make 12 boxes in the Matrix ?

Or was the discussion limited to Indefinite Delivery contracts, and I missed it ?

Changing subjects, I have an idea why VA Junior CO is confused about this. Long ago, I myself thought that if a contract is "fixed price," then the total contract value was some known certain sum, until changed by contract modification. Turns out, "fixed price" meant "fixed price per item," not "fixed total price."

.

[Guest Vern Edwards]

Vern,

in your Matrix, all three "Delivery/Quantity Arrangements" possibilities involve Indefinite-Delivery:

• Indefinite-Delivery-Definite-Quantity,
  
• Indefinite-Delivery-Indefinite-Quantity, and
  
• Indefinite-Delivery-Requirements.
  

But in my experience, not nearly as broad as yours, all my contracts (just a handful) called for what I would consider "Definite Delivery:" I had an explicitly stated quantity to be delivered on or by a Required Delivery Date.

I miss a lot, and may have missed something here, but couldn't this be a fourth type of Delivery/Quantity Arrangement, "Definite Delivery/ Definite Quantity ?"

Wouldn't that make 12 boxes in the Matrix ?

Or was the discussion limited to Indefinite Delivery contracts, and I missed it ?

Changing subjects, I have an idea why VA Junior CO is confused about this. Long ago, I myself thought that if a contract is "fixed price," then the total contract value was some known certain sum, until changed by contract modification. Turns out, "fixed price" meant "fixed price per item," not "fixed total price."

Brian,

You're right. I was talking only about the so-called "indefinite-delivery" contracts described in FAR Subpart 16.6, and I should have made that clear. You can add a fourth row to the matrix: Definite-Delivery-Definite-Quantity.

Thanks

[here_2_help]

You know, I've been to several "Government Contracting" seminars and classes over the past years, and these posts are absolutely the most clear and direct explanation of contract type vs. delivery type that I've ever experienced.

It may seem like Contracting 101, but when such a clear explanation is so rarely put forth, one begins to wonder just how fundamental such an understanding is.

Thanks to all because I learned something useful this week.

It was helpful.