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Mesut Özil

5 Year IDIQ Contract

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Need help with an issue, two years ago our Contracting Outfit awarded an IDIQ for programming of software and updating the current software and adding a mobile application so that the sever can be accessed via mobile phone.   So the value of the contract  $5,000,000 was awarded for the entire term in the assumption that the value balances will remain for the entire 5 years or if exhausted.

 In addition the contract contains option years for the sole purpose that if exercised at the anniversary that allows the awardee to increase his hourly rates.

The contract specialist that prepared the contract package is retired and a new specialist has determined that this was not the correct way to award this contract  and therefore declared the contract as being invalid and will not let the originator use the contract anymore.

 

My question:  Is the new contract specialist correct that this is an invalid contract, and if yes can it be remedied with a bilateral modification that removes the option years and in lieu auto increases the labor rates at the annual anniversary?

 

Thank you

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You better start running harder or you may get traded.  You were my favorite player but you been slacking lately. 

Anyway, to your question.  I cannot opine on all the reasons there might be something wrong with the contract but it probably has to do with the funds. I assume it is a  labor hour contract since you mention annual labor rates.  Funds are usually annual and cannot fund more than 365 days from obligation on severable T&M labor hour contracts.   So they would not have been available for 5 years as you thought. 

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Mezut, your post is confusing.  Can we try to clear it up a little.  You say the contract is an IDIQ contract.  Did it have a minimum value representing the government's obligation to issue orders against the contract?

Has the government met its obligation to place orders for the minimum amount?

What was the ordering period specified in the contract?  Was it five years or one year coinciding with the option periods?

Was the $5M the maximum amount of services the government could order?

Was the $5M obligated if so, was it obligated against the contract or under an order?

Is the contract subject to the SCA?  If so, are revised wage determinations requested each time an option is exercised?

Have any options been exercised?

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1 hour ago, Mesut Özil said:

The contract specialist that prepared the contract package is retired and a new specialist has determined that this was not the correct way to award this contract  and therefore declared the contract as being invalid and will not let the originator use the contract anymore.

Does the contract contain a Termination for Convenience clause? Has it been exercised?

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15 hours ago, here_2_help said:

Does the contract contain a Termination for Convenience clause? Has it been exercised?

I haven't personally seen an IDIQ contract terminated for convenience. From a contractor's perspective, I've seen plenty of dead IDIQ contracts that probably should have been (and two that I really wished would have been).  But the folks on the Government side I've worked with always seemed to go with the "we might be able to use this in the future" approach, figuring at worst they'd just stop ordering from it and it'd go away.

On one occasion, an agency had an IDIQ with Company X for a specific solution. Then the agency combined Company X's solution with our own and placed it under a new IDIQ with Company X as sub to us. The agency left Company X's IDIQ open and stagnant, which created a toxic environment in the program because Company X (a necessary sub) held the very vocal belief that once we inevitably failed, the agency would pull the program from our IDIQ and place it back under theirs.

I had a very good working relationship with the CO, and brought that issue up. Perhaps a bit presumptuously on my part, I asked if he'd terminate the sub's IDIQ--it wasn't utilized and its existence was having a negative effect on the program the agency was paying for. The CO was understanding, but didn't want to lose the IDIQ, because if some unforeseen event came up and they needed it, it'd be there for them.

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