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IDIQ ORDERING CEILINGS

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We are working under an IDIQ and the Agency has issued task orders that total more than the ordering ceiling (for example the max. ordering ceiling is $10M but our task orders now total $12M). Because we believed there was some risk in accepting task orders above the ordering ceiling in the IDIQ, we inquired to Govt. CO if we could even accept the task orders (?).

When we asked to have the IDIQ ceiling increased to match the task orders, the CO stated the Government would not issue the task orders if it did not intend to increase the ordering ceiling in the IDIQ at some point. In the past, the ceiling increase as been delayed due Govt. "legal" issues but we eventually got the ceiling increased via modification. We are now requiring a 2nd ceiling increase to match the task orders issued.

How exposed are we? Does the Govt have to increase the ceiling to cover the task orders issued? . Can we assume if a task order is issued beyond the IDIQ ceiling, the Govt. automatically has to make the contractor whole and the task order issued overrides the ceiling?

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Guest Vern Edwards
How exposed are we? Does the Govt have to increase the ceiling to cover the task orders issued? . Can we assume if a task order is issued beyond the IDIQ ceiling, the Govt. automatically has to make the contractor whole and the task order issued overrides the ceiling?

It's not clear to me whether you're talking about the contract maximum or a maximum order limitation. Which is it?

If you're talking about the contract maximum, then you are not violating any rules by accepting orders that exceed the maximum. The, CO, however, is violating the rules and could face a protest. I don't think that the government could refuse to pay for work done under an order in excess of the maximum once you have accepted it, although you could get an argument about that.

You are not obligated to accept orders in excess of the maximum, but you can if you want to. The same holds true for the maximum order limitation. That is there for your protection, so you do not have to accept an order that might exceed your capacity to perform. You do not have to accept orders that exceed the maximum order imitation, but you can if you want to. The CO is not breaking any rules by issuing an order that exceeds the maximum, but he would breach the contract if he insisted that you accept such an order.

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And sometimes the clause 52.216-19 Order Limitations is not as well "filled in" as could be...that is clearly and understandably expressing what the limits are for 1. individual orders and 2. the combination of orders over a defined period of time and/or 3. not enough forethought was put into the ramifications of the limitation amounts set - do they jive with the reality of contracted project in practice?

Having recently inherited a IDIQ with a not so well crafted (a note in this FAR clause says "substantially the same") 52.216-19, some of the orders presented to me exceed the individual limit or the combination limit. As a result, I take care to point that fact out to the Contractor and formalize the acceptance of the orders in question too.

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It's not clear to me whether you're talking about the contract maximum or a maximum order limitation. Which is it?

If you're talking about the contract maximum, then you are not violating any rules by accepting orders that exceed the maximum. The, CO, however, is violating the rules and could face a protest. I don't think that the government could refuse to pay for work done under an order in excess of the maximum once you have accepted it, although you could get an argument about that.

You are not obligated to accept orders in excess of the maximum, but you can if you want to. The same holds true for the maximum order limitation. That is there for your protection, so you do not have to accept an order that might exceed your capacity to perform. You do not have to accept orders that exceed the maximum order imitation, but you can if you want to. The CO is not breaking any rules by issuing an order that exceeds the maximum, but he would breach the contract if he insisted that you accept such an order.

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It's not clear to me whether you're talking about the contract maximum or a maximum order limitation. Which is it?

If you're talking about the contract maximum, then you are not violating any rules by accepting orders that exceed the maximum. The, CO, however, is violating the rules and could face a protest. I don't think that the government could refuse to pay for work done under an order in excess of the maximum once you have accepted it, although you could get an argument about that.

You are not obligated to accept orders in excess of the maximum, but you can if you want to. The same holds true for the maximum order limitation. That is there for your protection, so you do not have to accept an order that might exceed your capacity to perform. You do not have to accept orders that exceed the maximum order imitation, but you can if you want to. The CO is not breaking any rules by issuing an order that exceeds the maximum, but he would breach the contract if he insisted that you accept such an order.

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We are working under an IDIQ and the Agency has issued task orders that total more than the ordering ceiling (for example the max. ordering ceiling is $10M but our task orders now total $12M). Because we believed there was some risk in accepting task orders above the ordering ceiling in the IDIQ, we inquired to Govt. CO if we could even accept the task orders (?).

When we asked to have the IDIQ ceiling increased to match the task orders, the CO stated the Government would not issue the task orders if it did not intend to increase the ordering ceiling in the IDIQ at some point. In the past, the ceiling increase as been delayed due Govt. "legal" issues but we eventually got the ceiling increased via modification. We are now requiring a 2nd ceiling increase to match the task orders issued.

How exposed are we? Does the Govt have to increase the ceiling to cover the task orders issued? . Can we assume if a task order is issued beyond the IDIQ ceiling, the Govt. automatically has to make the contractor whole and the task order issued overrides the ceiling?

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Thank you. Sorry for the delay. We are referring to the maximum order limit under an IDIQ. The task orders issued sum to an amount in excess of the ordering ceiling in the IDIQ. It sounds like we do not have to worry that the ordering ceiling was exceeded. If the Govt exceeded the max. ordering amt. by issuing the excess task orders and we accepted them, the intent is clearly established and the task orders issued over-rule the ceiling.

At some point, it would be best if the IDIQ were modified to increase the ordering ceiling to match the task orders issued but not imperative. The amount over the ordering would not be disallowed in an audit and we are not at any risk. Do you concur?

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Guest Vern Edwards
Thank you. Sorry for the delay. We are referring to the maximum order limit under an IDIQ. The task orders issued sum to an amount in excess of the ordering ceiling in the IDIQ. It sounds like we do not have to worry that the ordering ceiling was exceeded. If the Govt exceeded the max. ordering amt. by issuing the excess task orders and we accepted them, the intent is clearly established and the task orders issued over-rule the ceiling.

At some point, it would be best if the IDIQ were modified to increase the ordering ceiling to match the task orders issued but not imperative. The amount over the ordering would not be disallowed in an audit and we are not at any risk. Do you concur?

There is absolutely no need to modify the contract to increase the maximum order limitation. The government may issue and you may accept orders that exceed the ceiling on a case-by-case basis. The would be no grounds to "disallow" the amount in excess of the limit. The MOL limits the government's right to impose an order upon you, not its authority to ask if you would accept such an order.

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