NGDenise Posted July 30, 2019 Report Share Posted July 30, 2019 Understand that term liability requires incremental funding, but under a requirements contract, with no funding or obligation, how can a contractor "obligate" the Government (DOD)? Hypotheticially speaking, USG issues a requirements contract for contractor A to buy and store widgets upfront with the hopes that other contractors will enter agreements with contractor A to buy down the widgets, and thus compensate Contractor A. What can Contractor A do to obligate the Gov if they are left with inventory or if no contractors agree to contract for the widgets? Link to comment Share on other sites More sharing options...
ji20874 Posted July 30, 2019 Report Share Posted July 30, 2019 Is contractor A a willing party to the requirements contract? Who can issue delivery orders under the contract? Other contractors? I don’t understand how a Government agency, in a contract with contractor A, can force other contractors B, C, . . . n, to order their widget needs from contractor A. Maybe contractor A needs to negotiate for some other contract type. Link to comment Share on other sites More sharing options...
NGDenise Posted July 31, 2019 Author Report Share Posted July 31, 2019 Contract A is a willing party. Hoping to gain goodwill and future opportunities with USG. USG administers the requirements contract. Other contractors are "expected" to contract with Contractor A under a DOD directive for a widget that they can only get with Contractor A. Contractor A is looking for a way, however, to obligate the USG if not enough other contractors come to buy this widget. Term liability language doesn't seem to apply here, but is there any other language or clause that Contractor A can invoke? Also, USG did not plan for this in their current budget, so have no way to fund this themselves for another 2 fiscal years. May have funding in FY22. Link to comment Share on other sites More sharing options...
ji20874 Posted July 31, 2019 Report Share Posted July 31, 2019 Negotiate an IDIQ contract instead of a requirements contract, and have the government promise to order the difference between whatever the other contractors purchase and the contract minimum. And negotiate a reasonable minimum, not a nominal minimum. Or, accept the risk that goes along with a requirements contract in exchange for the goodwill you seek. Link to comment Share on other sites More sharing options...
C Culham Posted July 31, 2019 Report Share Posted July 31, 2019 "Hypotheticially speaking, USG issues a requirements contract for contractor A to buy and store widgets upfront with the hopes that other contractors will enter agreements with contractor A to buy down the widgets, and thus compensateContractor A." "Store" Neither a Requirements nor an IDIQ contract buys a "thing" it buys a promise. A promise to pay for a minimum (IDIQ) or a promise to only order needs, if they arise, from you exclusively (Requirements). So if the government wants you store widgets for you then to provide to other contractors then make them buy them. Link to comment Share on other sites More sharing options...
Retreadfed Posted August 1, 2019 Report Share Posted August 1, 2019 NGDenise, in your scenario, what is the consideration flowing from the government that is sufficient to establish a binding contract? Link to comment Share on other sites More sharing options...
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