Acquisition Strategy - Insufficient funds for full requirement

[Brian Ray]

Greetings and thanks in advance for insights.

Our agency has a requirement for Multifunctional Devices (fancy copier/scanners) for 1 EA per location for close to 400 locations across our state.

The original intent was to lease the equipment, however our buy vs lease analysis indicates that buying is much more cost effective than the originally contemplated base plus four lease contract.

This leads us to the following issue: The locations and requirements have been clearly identified, however the funding to purchase is insufficient in FY18 to meet the entirety of the requirement.

A key concern of our customer is the potentiality of creating one contract with one vendor and equipment type in FY18 and then in the FY19 a different vendor and equipment type. Naturally, this would be an undesirable outcome. It has been suggested that an IDIQ may be an option, however we have clearly defined requirements and in this scenario an IDIQ under FAR 16.500-504 would seem to indicate that an IDIQ would be inappropriate given our scenario considering that if we had the entirety of funding in FY18, then we would not have contemplated an IDIQ type contract.

In summation, I am looking for some ideas and thoughts on a path forward that gets our agency one machine type and contractor while preferably all on one contract, whereby we procure as many as possible in FY18 and the remainder in FY19. Bottom line is to get one machine and contractor for all machines.

 

Thank you

 

 

[kevlar51]

why not just a contract (for the quantity the agency can afford now) and an option (for the rest)?

[Guest Vern Edwards]

42 minutes ago, Brian Ray said:

I am looking for some ideas and thoughts on a path forward that gets our agency one machine type and contractor while preferably all on one contract, whereby we procure as many as possible in FY18 and the remainder in FY19. Bottom line is to get one machine and contractor for all machines.

How about an IDIQ contract stipulating a two-year ordering period, a minimum to be purchased in the first year, no additional minimum in the second year, and a maximum covering both years.

[C Culham]

If you are really serious about “gets our agency one machine type and contractor” then throw consideration of a Requirements Contract into the mix.  Additional thought is that the “must” with regard to multiple award IDIQ’s needs to be considered and addressed if you head the IDIQ direction.

From FAR 16.5 regarding application - –

Requirements Contract -  A requirements contract may be appropriate for acquiring any supplies or services when the Government anticipates recurring requirements but cannot predetermine the precise quantities of supplies or services that designated Government activities will need during a definite period.

IDIQ-Contracting officers may use an indefinite-quantity contract when the Government cannot predetermine, above a specified minimum, the precise quantities of supplies or services that the Government will require during the contract period, and it is inadvisable for the Government to commit itself for more than a minimum quantity. The contracting officer should use an indefinite-quantity contract only when a recurring need is anticipated.

[joel hoffman]

I was thinking that, too. If the organization is sure that it will be able to fund the known requirement over two fiscal years, an 18 month or two year requirements contract would seem to fit the need. 

Edit: But if the “precise quantities” are known, then perhaps a definite quantity contract or just a simple contract with an option for the next fiscal year to complete the total needs might be appropriate. 

[Brian Ray]

Thank you for the feedback. Since we do in fact know exactly what we need and where, it does seem to make the most sense to contract for a base set of units with FY18 funding and an option to be exercised as soon as possible in FY19 for the remainder.

Thanks again

[Guest Vern Edwards]

And you're absolutely certain that you'll get the funding you want in FY19? No matter what happens in the world? Nothing will prevent you from exercising that option on time? No delay in Congress. No shutdown.

Keep in mind that you must exercise an option as it is. You cannot exercise it for fewer units than specified. And exercising it late might be dicey.

Options preserve pricing, but are not as flexible as IDIQ ordering.

Just saying. Don't want to talk about it.

[jewettr]

And to follow up on what Vern wrote, are you sure your quantities won't change?  I wholeheartedly agree with the preference for an IDIQ JUST in case anything changes.

[Brian Ray]

The quantities are set and a known quantity since the locations have been fully identified with one machine per location: every unit/armory etc. has been accounted for.

Relative to being absolutely certain to having the remaining funding required in the next FY. There is of course no way to claim certainty, however it is on the top of the G6 priority list so the comfort level is as high as one could reasonably expect.