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1 hour ago, C Culham said:

Well shoot.   But I will express my opinion anyways.   Not a flippant thought either.   I think it depends and can be (A) or (B).  The FAR holds some legal parameters in its guiding principles but isn't the contract the legal document?   So the contract can be anything the parties to the contract(s) want it to be within the parameters of the FAR.  As we know in the FAR guiding principles if something is not prevented by law, EO, etc. it is ok.   So noting the cited case  an agency decided make the multiple award contract what it wanted it to be, closely associated to (B) and there is no prevention of doing so in the FAR.   Another agency may want theirs to be more closely associated to (A).

I think so too.

I can see where a single task order solicitation is issued to separate ID/IQ contractors, who are awardees,  to compete.

However, like the Federal Supply Schedules and other GWACs, one contract with multiple awardees works, using orders.  The contract instrument is the order, which incorporates the applicable ID/IQ general terms and conditions. The order provides funding and CLIN(s) for payment and other contract admin mechanisms.

I don’t know where my brain was yesterday.

Another concurrent thread concerning a MATOC was confusing, 

There, contractor A had exceeded a ceiling limit but the overall contract capacity (maximum limit) was apparently still open. Orders could be issued to the remaining contractor B.

The OP asked if they still had to provide contractor A the fair opportunity to compete with B for orders, even though no more orders could be issued to A. That question made zero sense to me. It seemed obvious to me - NO. Move on to B. If there weren’t established prices in order to price an order, then negotiate per 15.4. 

Then, confusion began, with an answer essentially saying “The limit isn’t really a limit” . The answer seemingly refers to order limits, not a contract ceiling.

Then, when asked, the OP said: “I don't have an answer for "what was the value of the original acquisition" and "what was the maximum on each contractor's contract."  Sorry.”

It became obvious that we needed to know what the actual limits and other ordering conditions were. The OP seemed to not understand the difference between order limits, individual contractor maximum contract limits (if any) and the overall contract limit.

Answers came back that stated or implied that the fair opportunity process was still applicable even if a contractor ceiling limit was reached.

I wondered why there were  individual (allowed) and overall (required) maximum contract limits if  the fair opportunity process overrides the individual maximum limits.

 

 

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@C Culham Carl, thanks for the thoughts. I said I was done because I don't want to be an accomplice in one of those endless Wifcon back-and-forths that don't go anywhere.

But I'll respond to your comment.

What prompted me to ask my question was the suspicion that most COs don't think about it. They make multiple awards without ever asking themselves whether they are awarding one contract with multiple parties or multiple separate contracts. I think it's important to think clearly about the matter and to consider its possible implications.

I suspect that most COs, who get little or no formal education or training in contract law from DAU and FAI and do little reading about it on their own, think of "contracts" as documents, not the agreements that the documents memorialize. So they think that different contract numbers mean "different" or "separate" contracts.

Consider the Restatement, Contracts, Second, § 1, Contract Defined: "A contract is a promise or set of promises for the breach of which the law gives a remedy, or the performance of which the law in some way recognizes as a duty."

According to Black's Law Dictionary: "contract n. (14c) 1. An agreement between two or more parties creating obligations that are enforceable or otherwise recognizable at law <a binding contract>. 2. The writing that sets forth such an agreement..."

The evidence of an agreement as to promises is not limited to the written document. That is the primary evidence, but not the only evidence. See Burton, Elements of Contract Interpretation (Oxford, 2009) and see the discussion of "extrinsic evidence" in Cibinic, et. al, Administration of Government Contracts, 5th, pp. 177-211. For instance, when it comes to interpreting a contract, a court or board will of course look at the contract document, but it might also consider other facts, such as communications between the parties prior to the dispute. 

If a MATOC/MADOC is one contract with multiple contractors, instead of several separate contracts with several contractors, must the CO interpret the contract terms the same way for all parties? If the CO provides an interpretation to one contractor upon request, should she provide that interpretation to the others, as well, even if they have not asked? Should she surreptitiously interpret the contract differently in order to obtain the outcome that works best for the government in its relationship with each of the parties?

If a MATOC/MADOC is several separate contracts, all containing the same terms, may the CO interpret each contract somewhat differently for each contractor depending on the facts associated with each?

Does it make a difference?

I'm not a lawyer and I don't know the answers to those questions. The answers may be obvious to some lawyers, but I think we so-called acquisition or contracting "professionals" should at least wonder about that, investigate, and be proactive instead of waiting to learn about it in court.

FAR is no help. It refers to both "multiple-award contract" (37 instances) and "multiple-award contracts" (68 instances). The FAR 2.101 definition of multiple-award contract says:

Quote

Multiple-award contract means a contract that is—

(1) A Multiple Award Schedule contract issued by GSA (e.g., GSA Schedule Contract) or agencies granted Multiple Award Schedule contract authority by GSA (e.g., Department of Veterans Affairs) as described in FAR part 38;

(2) A multiple-award task-order or delivery-order contract issued in accordance with FAR subpart 16.5, including Governmentwide acquisition contracts; or

(3) Any other indefinite-delivery, indefinite-quantity contract entered into with two or more sources pursuant to the same solicitation.

Note the use of the indefinite article, "a," which, according to dictionaries, refers to a single thing.

But then you get this, from FAR 15.304(c)(1):

Quote

 

(ii) In accordance with 10 U.S.C. 2305(a)(3), for DoD, NASA, and the Coast Guard—

  (A) The contracting officer may choose not to include price or cost as an evaluation factor for award when a solicitation—

    (1) Has an estimated value above the simplified acquisition threshold;

    (2) Will result in multiple-award contracts (see subpart 16.5) that are for the same or similar services; and

    (3) States that the Government intends to make an award to each and all qualifying offerors (see 2.101).

 

 "A" (singular) solicitation will result in "multiple-award contracts."

The FAR has not won prizes for usage consistency and clarity. And don't presume that the FAR councils have thought this through. They are scribes.

The fact that this matter has not been an issue before a protest tribunal, a board, or a court in the years since the rules about multiple-award contracts were first published in FAR in 1994 doesn't mean that it won't be an issue in the future. All it takes is one article in a law review or legal publication to alert lawyers to possibilities they had not previously considered.

I think it's an interesting question/issue, and I am going to keep researching. I might discover something that I have not yet found. But I'm not going to press for further discussion at Wifcon. 

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One additional thought. If a MATOC or MADOC is one contract with multiple parties, and if one contractor cheats to win an order during a fair opportunity, and if there is a protest, the cheat is discovered, and the protest sustained, would the other contractors have standing to sue the cheater for breach damages in a Federal district court?

Are multiple-award contracts multilateral contracts?

That possibility might interest some people. 

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This was a thought provoking discussion.  Thanks Vern.

So if you have a $50 million maximum, for example, and you apply it as a cumulative amount in a contract clause applicable to the entire pool of all contract holders, it’s one thing - orders can be placed with contract holders in the pool up to the cumulative maximum.  It’s a contract with multiple awards.

But if the $50 million was divided up among the awards such as five awardees each with a clause saying the contract has a $10 million ceiling, it’s something different. 

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52 minutes ago, formerfed said:

This was a thought provoking discussion.  Thanks Vern.

So if you have a $50 million maximum, for example, and you apply it as a cumulative amount in a contract clause applicable to the entire pool of all contract holders, it’s one thing - orders can be placed with contract holders in the pool up to the cumulative maximum.  It’s a contract with multiple awards.

But if the $50 million was divided up among the awards such as five awardees each with a clause saying the contract has a $10 million ceiling, it’s something different. 

Agree.  The only reason to state a separate individual maximum amount would be to recognize and account for the guaranteed minimum amounts within the overall maximum contract amount, for r the other pool members.

The individual limit can be modified, if for some reason one or more firms drop out early. 

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@C Culham You're welcome, Carl, and thank you, in return.

@formerfed FAR 16.504(a)(1) says

Quote

The contract must require the Government to order and the contractor to furnish at least a stated minimum quantity of supplies or services. In addition, if ordered, the contractor must furnish any additional quantities, not to exceed the stated maximum. The contracting officer should establish a reasonable maximum quantity based on market research, trends on recent contracts for similar supplies or services, survey of potential users, or any other rational basis.

How does that apply to multiple-award contracts (MACs)?

If a MAC consists of one contract with multiple contractor parties

1. The parties might agree that one min for the contract might serve as consideration for all the contractors and that the government is promising to buy the min from any one contractor or some combination of contractors, but not from every contractor. If the parties expressly agree on that point, then it is likely to stand up in court.

2. All parties might agree that the contract max is equal to the program max, and that the government can go to the max with any one contractor or with some combination of contractors, but not with every contractor. (To say that the government could go to the program max with every contractor would seem to violate the FAR requirement for a "reasonable" maximum quantity.)

3. Or all parties could agree on a min for each of the contractors and set one max for the contract, rather than a max for each contractor.

4. Or the parties might agree to set a min and a max for each of the contracting parties. However, the requirement that the max be a reasonable quantity might be interpreted to mean that you must allocate a portion of the program max to each contractor. That might not be in the government's best interest.

If a MAC is consists of multiple independent contracts

If "a" MAC is really a pool of independent contracts, then you need a min and a max for each and it seems reasonable that the max for each could be either the program max or some equitably allocated portion of the program max.

I am well aware that MACs have been in widespread use since the mid-1990s and that there does not seem to have been much if any litigation arising from disagreements over the nature of a MAC, whether "it" is one contract with multiple parties or multiple independent contracts.

Yet.

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@joel hoffman

50 minutes ago, joel hoffman said:

The only reason to state a separate individual maximum amount would be to recognize and account for the guaranteed minimum amounts within the overall maximum contract amount, for r the other pool members.

The individual limit can be modified, if for some reason one or more firms drop out early. [Emphasis added.]

Joel, please clarify what you are talking about---one contract with multiple parties or multiple independent contracts.

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To all readers:

Please understand that I am speculating about these matters. I am not asserting anything except that I think the FAR is in some ways obscure with respect to the topic at hand. I do not claim to know the answers to the questions that I have posed. I'm just trying to figure things out.

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8 hours ago, Vern Edwards said:

@joel hoffman

Joel, please clarify what you are talking about---one contract with multiple parties or multiple independent contracts.

I was referring to one contract with multiple parties.

The best way to do it is probably not to bother setting individual maximum limits.  Simply state in the single solicitation and resulting contract(s) the max contract limit, which includes minimum guaranteed amounts to each awarded pool member. This would be applicable for single awarded contract or separately awarded contracts, alike.

So you can just say something to the effect that the maximum contract amount is $XXXX, including the minimum guaranteed amounts for all pool members.

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No one contractor in a MATOC can win orders for the max contract amount. So explain that - that’s the short of it. 

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4 hours ago, Vern Edwards said:

Why not (at least in theory)?

Because all the guaranteed minimums to other pool members are included in the maximum contract amount

 One contractor theoretically can win all orders but you must subtract the guaranteed minimums from the max total

Total contract amount would be sum of all orders plus sum of all guaranteed minimums to the rest of the pool.

So you can just say something to the effect that the maximum contract amount is $XXXX, including the minimum guaranteed amounts for all pool members.

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I do not know much about Multiple Award Contracts. Here is what Defense Acquisition University (DAU) indicates:

"IDIQ: Multiple Award

A new multiple award IDIQ contract containing the scope of products or services that can be ordered against it may be established and awarded to multiple vendors. When the need arises to place orders against the multiple award contract, all awardees holding a base contract are requested to submit a proposal to provide each contractor a fair opportunity to be considered for each order."

In the above statement, I don't see the consideration that I would normally want to see in order to label it a contract...the Government doesn't seem to be required to order anything and the contractor doesn't seem obligated to even bid on whatever the Government may order.

Per 16.504, it looks like the contractor is required to furnish the minimum. Does this apply to each multiple award contractor? Do the awarded multiple award contracts each include a price for the minimum quantity? If not, what happens if a contractor, for whatever the reason, does not submit any bids for orders? Apparently, under 16.505, the contractor must be awarded the minimum.

What happens in real life?

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@Neil Roberts

11 hours ago, Neil Roberts said:

What happens in real life?

Almost anything you could think of. Nobody knows how each of those contracts actually work over the course of millions of orders each year, not even their administrative contracting officers, and certainly not DAU.

I'm looking for inputs from people who think they know what they are and how they work.

@joel hoffmanThanks.

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My thinking but not yet a conclusion.

“Multiple Award Contract”  One solicitation that results in more than one contract.

“Multiple” – “having or involving several parts, elements, or members” Ref. Online dictionary

“Award” – “To take a bid for a contract” Ref.  Online dictionary

“Contract” – “An agreement between two or more parties creating obligations that are enforceable or otherwise recognizable at law <a binding contract>. 2. The writing that sets forth such an agreement...  Ref.  post by Vern Edwards

Here I believe the definition relates to "an" agreement where it might be say a contractor, the procuring party, and another interested party.  For the world of the FAR consider an 8(a) award.  Singular contract with more than two parties.

Where in the FAR is the implication of a MAC limited to an IDIQ?   Thinking about provisions and clauses of the FAR could not there be several contracts awarded under one solicitation to accomplish the same work, yet defined in each contract is the scope for each contract?

Consider…..

FAR 52.215-1 – “… The Government intends to award a contract or contracts…”  and “…The Government reserves the right to make an award on any item for a quantity less than the quantity offered…and “The Government reserves the right to make multiple awards if, after considering the additional administrative costs, it is in the Government’s best interest to do so.”

Here it would seem reasonable that as the government proceeds on any contract that was a result of more than one award under a solicitation that the government could reserve the right to "reallocate the capacity amongst the contract holders, if necessary."  And, absent such a reservation still make it happen through bilateral modification(s).

Then there is this for construction projects.

FAR 52.236-8 – “The Government may undertake or award other contracts for additional work at or near the site of the work under this contract….”

It could be that the coining of the term “MATOC” is the complicating factor.  There is no such thing.   There is one solicitation that allows for more than one contract to be awarded as a result of the solicitation.  It is not a contract with multiple awardees it is a contract that is an award that occurred from a solicitation that allowed for multiple contracts to be awarded as a result of the solicitation.

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@C Culham

I'm confused by two of the entries at the beginning of your last post.

  1. A multiple-award contract is not a solicitation. According to FAR 2.101 it's a contract.
  2. Award is the act of accepting an offer.
28 minutes ago, C Culham said:

Where in the FAR is the implication of a MAC limited to an IDIQ? 

In the FAR 2.101 definition of multiple-award contract.

As for FAR 52.215-1, the phrase "make multiple awards" in paragraph (f)(6) does not necessarily mean the same as "award a multiple-award contract." A CO can make multiple awards (award multiple contracts) without awarding a multiple-award contract as defined in FAR 2.101.

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43 minutes ago, Vern Edwards said:

I'm confused

I stand corrected on No. 1 and your follow-up regarding definition.  I should have looked there.  The differentiation that you next mention, pursuant specifically to the FAR, is understood.

 

 

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@C Culham What do you think? If we could simply decide whether to make a MAC (1) a single agreement with multiple parties or (2) multiple separate agreements, which approach would be in the best interests of all involved?

I guess that in order to answer that question we would have to think through the implications associated with each approach.

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31 minutes ago, Vern Edwards said:

@C Culham What do you think? If we could simply decide whether to make a MAC (1) a single agreement with multiple parties or (2) multiple separate agreements, which approach would be in the best interests of all involved?

I guess that in order to answer that question we would have to think through the implications associated with each approach.

From a Contractor standpoint, not sure how a single agreement would work for multiple parties. Each Contractor may have different outlooks regarding exceptions to terms and conditions or business matter additions or exceptions. Typically, Contractors prefer not to share their contract language with competitors.

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6 hours ago, C Culham said:

FAR 52.236-8 – “The Government may undertake or award other contracts for additional work at or near the site of the work under this contract….”

This clause is used when it is contemplated that other contractors will be working on,adjacent to or near the subject contract site. The contractor is required to cooperate, accommodate and adapt scheduling , etc. so that the separately performed work may be performed concurrently with the contractor’s work.

This is not an example of a multiple award contract - the scopes are distinctly different.

Same is true where the government reserves to the right to split up the overall work between two or more awarded contractors.

The definition of multiple award contracts in Part 2 refers to various forms of ID/IQ contracts.

EDIT: If overlooked Verns post above where he makes similar points. Sorry . 



 

 

Edited by joel hoffman
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4 hours ago, Neil Roberts said:

From a Contractor standpoint, not sure how a single agreement would work for multiple parties. Each Contractor may have different outlooks regarding exceptions to terms and conditions or business matter additions or exceptions. Typically, Contractors prefer not to share their contract language with competitors.

Neil,  Vern is comparing a MATOC arrangement where there is one ID/IQ contract or many separate ID/IQ contracts. Either way, the purpose is to compete for delivery or task orders. For the latter, there is no conflict between the seaparate pool members. The work is ordered and purchased using an order that incorporates the terms and conditions of the Base ID/IQ contract(s) for convenience. The orders are stand alone arrangements.

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5 hours ago, Vern Edwards said:

I guess that in order to answer that question we would have to think through the implications associated with each approach.

I agree and close to my original thoughts in my first response where I suggested a "depends".

58 minutes ago, joel hoffman said:

This is not an example of a multiple award contract - the scopes are distinctly different.

I understand you later noted Vern's post yet I would not buy into this statement 100%.  In my experience, while minimal, I have seen the scopes almost be identical.  A whole other subject that should not detract from the discussion here.

48 minutes ago, joel hoffman said:

For the latter, there is no conflict between the seaparate pool members.

I am not sure on this as well.  After all I can pull up GSA FSS contract details for 200 different contractors in the same SIN and there are differences.

I think I will disconnect now.   The initial question is thought provoking and having surfed GAO decisions and other documents I think it would take a very detailed analysis to come up with a final conclusion.  Most importantly I am now bogged down by the fact that the FAR and its guidance is probably most important.   Doing something in the commercial market place does not have the constraints the FAR does.

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21 minutes ago, C Culham said:

I understand you later noted Vern's post yet I would not buy into this statement 100%.  In my experience, while minimal, I have seen the scopes almost be identical.  A whole other subject that should not detract from the discussion here.

Carl, by definition in FAR 2, multiple award contracts are various types of ID/IQ’s :

”Multiple-award contract means a contract that is—

(1) A Multiple Award Schedule contract issued by GSA (e.g., GSA Schedule Contract) or agencies granted Multiple Award Schedule contract authority by GSA (e.g., Department of Veterans Affairs) as described in FAR part 38;

(2) A multiple-award task-order or delivery-order contract issued in accordance with FAR subpart 16.5, including Governmentwide acquisition contracts; or

(3) Any other indefinite-delivery, indefinite-quantity contract entered into with two or more sources pursuant to the same solicitation.”

The clause at 52.236-8 Other Contracts, is used in fixed price construction contracts and in fixed price demolition contracts. It is used for the purposes stated in the clause. It has no direction connection with multiple award contracts. It is possible that the clause could be used in two or more task orders for construction work by a member or members of a MATOC that will be concurrently performed near each other. But it doesn’t make separate contracts into MACs. 

“52.236-8   Other Contracts.

As prescribed in 36.508, insert the following clause:

Other Contracts (APR 1984)

The Government may undertake or award other contracts for additional work at or near the site of the work under this contract. The Contractor shall fully cooperate with the other contractors and with Government employees and shall carefully adapt scheduling and performing the work under this contract to accommodate the additional work, heeding any direction that may be provided by the Contracting Officer. The Contractor shall not commit or permit any act that will interfere with the performance of work by any other contractor or by Government employees.”

 

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