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pricelesspearl

IDIQ Maximum Orders 52.216-22(b)

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So...hoping someone can help settle a difference of opinion.  Here is some background.  We have an IDIQ with 6 awardees.  Our contract was awarded with a $25k minimum and a $10M maximum of task order awards under the contract.

One of us is of the opinion that the max amount we can be awarded under the contract is the $10M and the other is of the opinion that the $10M is the max amount we are obligated to accept, but there is nothing prohibiting us from being awarded more than the $10M.  The latter  opinion is based on 52.216(b)  "....The Contractor shall furnish...the supplies and services specified in the schedule up to and including the quantity designated in the schedule as the "maximum"", With the bolded language establishing that we are only obligated to accept up to the max, but not prohibiting us from accepting more.  Neither of us is aware of any other FAR provision that might prohibit us from accepting more than $10M. 

 

Thanks for your thoughts. 

 

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See FAR 16.504(a)(1) and (4)(ii) and 16.505(a)(10)(i)(A). An agency may not issue an order or a set of orders the value of which would exceed the maximum quantity.

 

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Keep in mind, the Maximum value of the contract is $60M.  A maximum of $10M for each of 6 awardees.  What happens if five awardees all reach their maximum?  Is the sixth awardee guaranteed the remainder of the $60M without any competition? 

FAR 16.504(a)(1)  (1) The contract must require the Government to order and the contractor to furnish at least a stated minimum quantity of supplies or services. In addition, if ordered, the contractor must furnish any additional quantities, not to exceed the stated maximum. The contracting officer should establish a reasonable maximum quantity based on market research, trends on recent contracts for similar supplies or services, survey of potential users, or any other rational basis

The bolded language implies that the contractor is obligated to provide (if ordered) more than the minimum, but is not obligated to accept more than the maximum.  It does not mean that the contractor can not choose to accept more than the maximum.

(4)(ii) Specify the total minimum and maximum quantity of supplies or services the Government will acquire under the contract;

 So if this means that the awardee cannot be awarded more than the $10M under contract, they are out of the running for any other task orders?  How does that square with  FAR 16.505(b)(1)(i) which requires that contracting officers  provide each awardee fair opportunity to be considered for each order exceeding $3,500 (unless exempted by FAR 16.505(b)2? 

No protest under subpart 33.1 is authorized in connection with the issuance or proposed issuance of an order under a task-order contract or delivery-order contract, except for—

16.505(a)(10)(i)(A). (A) A protest on the grounds that the order increases the scope, period, or maximum value of the contract.

Same question as above...if the "maximum value of the contract" refers to the maximum allocated to each awardee (as opposed to aggregate value of the whole IDIQ), then an awardee that has reached the $10M cannot be fairly considered for the TO.

 

 

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Also...found this in the archives.  It is the exact situation we are facing...trying to decide if we should bother submitting any more proposals when we are close to the $10M mark.  It seems to support the position that the $10M is the contractor's maximum obligation, not the maximum they can be awarded.  Am I missing something?

 

 

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46 minutes ago, pricelesspearl said:

Am I missing something?

pricelesspearl:

Yes. You are missing what I told you in my last post. For the Government to order more than the maximum would be tantamount to an out-of-scope modificaiton of the contract and ground for protest, as indicated by the regulations I cited.

Good day to you.

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Did you say that there is a maximum contract amount and that each of the six contract holders has an individual limit 1/6 of the total ???  

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Yes...Aggregate ceiling of $60M with 6 awardees.  Our contract states $10M maximum, I am assuming the others are the same.

That is why it makes no sense to me to interpret the $10M as the max we can be awarded.  As I asked before what if 5 awardees meet their maximum?  How can  any remaining task orders be competed?  What happens if 1 or more awardees does $1M of work and then decides not to propose on anything else?  What happens to the rest of their maximum ceiling? I guess the CO could raise the $10M max with a mod, but then that raises the whole IDIQ aggregate.  But maybe I am just overthinking it.

We are bumping up to our $10M max and just need to know if we can propose and if we do, can it be awarded if it puts us over the $10M.

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Is $10 million the max order size or your contract limit? 

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12 hours ago, pricelesspearl said:

 But maybe I am just overthinking it.

You are not overthinking it. You simply don't know the rules. All the questions that you have asked were resolved at least 15 years ago.

Although the maximum may be $60M for the entire set of contracts, the agency probably distributed it among the awardees by setting a maximum of $10M for each contract. When the maximum is reached for a particular contractor the agency can issue no more orders to that contractor. If it did, the other contractors could protest. In order for the agency to raise the maximum on a particular contract it would have to prepare a sole source justification and obtain approval. 

You need to take a class or buy a book, such as The Project Managers Guide To IDIQ Task Order Service Contracts, by Salesky. IDIQ contracting is complicated.

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