CAS applicable at the IDIQ contract?

[Steward]

Interested to get thoughts from the community on this matter. 

Scenario: An IDIQ is awarded with a $1 Billion ceiling, no task orders have yet been awarded.

Question: Does CAS apply at the IDIQ contract level or only on subsequent task order awards should they exceed the appropriate threshold(s).

[here_2_help]

Steward, this question has been debated since 1994. A search reveals a 2011 WIFCON thread on this topic. There are articles on this topic. There are presentations on this topic. There are lots of opinions from which to choose.

Short answer: There is no "official" and authoritative answer to this question from the CAS Board. Unofficial opinions, be they from DCAA or from CAS experts or from attorneys or from industry, vary.

My understanding is that the Section 809 panel is discussing this question pretty much right now. We will have to wait to see what answer they recommend, and whether Congress and/or DoD agree with the recommendation.

In the meantime, your opinion is probably as valid as anybody else's.

[Steward]

Thank you here_2_help, I bounced around and wasn't able to land on a definitive answer and now I know why. 

[Don Mansfield]

Steward,

The FAR Councils asserted (but did not explain why) CAS would apply to every task order. I wrote a blog that touched on this issue eight years ago. This was a comment and response pertaining to the applicability of CAS to task and delivery orders accompanying a final rule on CAS (70 FR 11743-01):

Quote

 

Task Order Contracts

31. Comment: One respondent stated that one of the many situations that greatly affect the cost accumulation calculation that is not addressed in the proposal is the trend toward task order contracts that may have both fixed fee and incentive fee tasks, as well as CAS covered and non-CAS covered tasks.

Councils' response: Nonconcur. The Councils believe that this situation is adequately covered by the language at FAR 30.605(h)(5), and the definition of "Affected CAS-covered contracts" at FAR 30.001.

[...]

As for the issue of CAS-covered versus non-CAS-covered tasks, a contract cannot contain both CAS-covered and non-CAS-covered tasks. In order for CAS-coverage to differ between tasks, each task would have to be a separate contract. In such cases, the definition of affected CAS-covered contracts would exclude the non-CAS covered tasks from the computation of the cost-impact.

 

 

I pointed out what I thought was an inconsistency because the FAR Councils had just commented that it was "commonly understood" that the applicability of TINA was made at the task or delivery order level.

I think you can make a valid argument that CAS should be determined on an order-by-order basis. Paragraph (a) of the clause at FAR 52.230-2 states:

Quote

Unless the contract is exempt under 48 CFR 9903.201-1 and 9903.201-2, the provisions of 48 CFR Part 9903 are incorporated herein by reference and the Contractor, in connection with this contract...

Note that the conditional nature of the clause contemplates the possibility that the contract could be exempt. This places an implied onus on the contractor to make this determination. In a contract that were not indefinite delivery, the contractor would typically make this determination when completing the provision at FAR 52.230-1 and probably wouldn't make it again. However, we know from the Supreme Court's Kingdomware  decision that a task or delivery order is a "contract" as defined at FAR 2.101, which would also be the applicable definition for interpreting FAR 52.230-2(a) (by operation of FAR 52.202-1). Thus, in an indefinite delivery contract, the clause also contemplates the possibility that a task or delivery order could be exempt. There's no basis to exclude task and delivery orders from the definition of "contract" when interpreting FAR 52.230-2(a).

The argument is not perfect, but it's the best I can do.