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Don Mansfield posted a comment on a topic, Multiple Award IDIQ Contracts - What are they? 
 

Posted in Multiple Award IDIQ Contracts - What are they?
 
I don't know the answer to the original question, but I think that it's interesting that it's common practice to treat the minimum as if the contracts...

Don, The maximum is simply the max dollar scope of all orders under the MATOC. The min guarantee is simply that.    

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42 minutes ago, Don Mansfield said:

I don't know the answer to the original question, but I think that it's interesting that it's common practice to treat the minimum as if the contracts are separate but the maximum is treated as if it's a single contract.

What's interesting about it? Do you think it means something?

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38 minutes ago, joel hoffman said:

Don Mansfield posted a comment on a topic, Multiple Award IDIQ Contracts - What are they? 
 

Posted in Multiple Award IDIQ Contracts - What are they?
 
I don't know the answer to the original question, but I think that it's interesting that it's common practice to treat the minimum as if the contracts...

Don, The maximum is simply the max dollar scope of all orders under the MATOC. The min guarantee is simply that.    

joel,

Suppose the Government's anticipated requirement was $100M. The solicitation for a MAC states a contract maximum of $100M. The Government makes multiple awards and each IDIQ contract states a maximum of $100M. It doesn't say that $100M is the maximum that could be ordered under all contracts combined.

Fast forward. The Government has issued a total of $100M in orders to multiple MAC contractors, such that no one contractor has received $100M in orders.

If the Government issues another order to one of the MAC contractors, does the contractor have to perform the order? Assume the order would not result in any contractor receiving more than $100M in orders.

7 minutes ago, Vern Edwards said:

What's interesting about it? Do you think it means something? What?

I think it's indicative that nobody thinks about the distinction that you're making. 

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2 hours ago, Don Mansfield said:

joel,

Suppose the Government's anticipated requirement was $100M. The solicitation for a MAC states a contract maximum of $100M. The Government makes multiple awards and each IDIQ contract states a maximum of $100M. It doesn't say that $100M is the maximum that could be ordered under all contracts combined.

Fast forward. The Government has issued a total of $100M in orders to multiple MAC contractors, such that no one contractor has received $100M in orders.

If the Government issues another order to one of the MAC contractors, does the contractor have to perform the order? Assume the order would not result in any contractor receiving more than $100M in orders.

I think it's indicative that nobody thinks about the distinction that you're making. 

I don’t know. The solicitation and the contract are supposed to state the maximum dollar limit of the ID/IQ. You may identify a max for each contractor.

But you must identify the overall max for the ID/IQ. Reference 16.504(a). 

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35 minutes ago, Don Mansfield said:

I think it's indicative that nobody thinks about the distinction that you're making. 

Oh, I wouldn't be surprised to learn that no COs have thought about the distinction that I'm making. I wouldn't be surprised to learn that no policymakers have thought about it.

 

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20 hours ago, joel hoffman said:

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.

Joel, is it fair to say that for MATOC (unlike IDIQ Multiple Award Contracts), there is really no "Base ID/IQ contract" for any Contractor because the Government is not required to order anything from any Contractor and no Contractor is required to perform any work, until and unless there is an Order issued to and accepted by a Contractor? In your experience, have Contractors regularly negotiated exceptions to base document(s) before an Order? Thanks.

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

Vern is comparing a MATOC arrangement where there is one ID/IQ contract or many separate ID/IQ contracts.

I am asking whether a "multiple-award contract" (MAC) is one contract with multiple parties or multiple independent contracts, and I am wondering what the implications are in either case.

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@Neil Roberts Your phrase:

39 minutes ago, Neil Roberts said:

for MATOC (unlike IDIQ Multiple Award Contracts)

does not make sense.

MATOC stands for multiple-award task-order contract. A task-order contract is an IDIQ contract for services. See FAR 16.501-1. Thus, a MATOC is a species of multiple-award contract, an IDIQ multiple-award contract for services.

So what are you talking about?

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12 minutes ago, Vern Edwards said:

@Neil Roberts Your phrase:

does not make sense.

MATOC stands for multiple-award task-order contract. A task-order contract is an IDIQ contract for services. See FAR 16.501-1. Thus, a MATOC is a species of multiple-award contract, an IDIQ multiple-award contract for services.

So what are you talking about?

I am talking about a contract. When it is a contract. Joel indicated that there is a "Base ID/IQ" MATOC contract (where no Order exists). I am asking whether there is really such a contract or whether it is really a contract only when an Order is issued and accepted.  

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18 minutes ago, Neil Roberts said:

Joel indicated that there is a "Base ID/IQ" MATOC contract (where no Order exists). I am asking whether there is really such a contract or whether it is really a contract only when an Order is issued and accepted.  

In order for there to be an order, there must first be a contract. Think about it. That contract is commonly referred to as the "base contract," although it is a silly term.

And an order placed against an IDIQ contract does not have to be accepted. The contract requires the contractor to perform. See FAR 52.216-22(b), which is a contract clause in an IDIQ contract.

This thread isn't educational. When I started it I assumed that participants would be people with enough background to understand and think about the issues I am raising.

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Neil - yeah, “what he said.” I agree with Vern. The term “base ID/IQ contract” is a colloquial expression for the ID/IQ contract whether, MATOC, SATOC, MAC, MACC or whatever acronym you want to use. For a multiple award contract, it establishes a pool of contractors and is the mechanism used to issue task or delivery orders.

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1 hour ago, Neil Roberts said:

Thanks for the reference to FAR, Vern. It clearly indicates to me that there is no contract until there is an order.

FAR 52.216-22(b) ( nor 52.216-22(a) for that matter) does not indicate, state or hint that “there is no contract until there is an order”. If the contract includes a minimum order obligation, it is a binding contract.

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5 hours ago, Neil Roberts said:

Joel, is it fair to say that for MATOC (unlike IDIQ Multiple Award Contracts), there is really no "Base ID/IQ contract" for any Contractor because the Government is not required to order anything from any Contractor and no Contractor is required to perform any work, until and unless there is an Order issued to and accepted by a Contractor?

One practical challenge is that the IDIQ creates an obligation, which triggers the Recording Statute and requires certain things within certain timeframes. We commonly see this resolved by issuing an order for the ‘minimum’ concurrent to the award of the base or parent contract. What’s interesting to me is that maybe all parties don’t need to receive separate minimums. If they’re parties to a single contract, perhaps a single awarded minimum is all that’s required (regarding consideration) for contract formation.

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12 hours ago, Jamaal Valentine said:

One practical challenge is that the IDIQ creates an obligation, which triggers the Recording Statute and requires certain things within certain timeframes. We commonly see this resolved by issuing an order for the ‘minimum’ concurrent to the award of the base or parent contract. What’s interesting to me is that maybe all parties don’t need to receive a minimum if theirs parties to a single contract.

Back in the day, when I awarded IDIQ contracts for supplies, we recorded the obligation for the minimum on the contract document, then assigned those funds to an order or orders via "administrative notice" ("administrative change" today) as we issued them until the minimum was purchased. We did that because we did not always have an immediate requirement on the date of contract award or for some time afterward. Some agencies may still do that. But simultaneous award of the contract and issuance of an order for the minimum seems to be a common practice today.

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40 minutes ago, Jamaal Valentine said:

What’s interesting to me is that maybe all parties don’t need to receive a minimum if theirs parties to a single contract.

I speculated about that in an earlier post in this thread.

I further speculate that a promise (1) to include an offeror in an exclusive pool of contractors and (2) to give them a fair opportunity to compete for sales against only others in the pool could serve as the consideration necessary to bind the parties. If that is right, then there would be no need for the government to promise a minimum purchase from each (or any) contractor in order bind the parties. That being the case, there would be no need to record an obligation of funds on the date of award.

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26 minutes ago, Vern Edwards said:

Neil, you're not going to educate others if you are going to say things like there is no IDIQ contract until there is an order. You clearly don't know enough about IDIQ contracts to do any educating.

I didn't start this thread so I could answer questions from people who want to learn about IDIQ contracts. I started it to solicit the opinions of others who know something about the subject, and said so in my first post.

As for your expectations, well, if you say something as wrong as you said in your last post, I'm going to say so, and in no uncertain terms. Expect that.

Ok, Vern. No problem. I would like to let readers to decide for themselves or collaborate with others to decide what this means in FAR 52.216-22 (b) "Delivery or performance shall be made only as authorized by orders..." I didn't post a related question for you to answer, but I am glad you took the time to respond with the FAR reference. I do believe I am qualified by experience and education to answer your initial post here entitled, "Multiple Award IDIQ Contracts-What are they? I think at what point in formulation they are or are not an enforceable contract IS an answer to your question. I look forward to you responding to my views and wish you have no problem with my doing the same. Peace!     

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14 hours ago, Neil Roberts said:

I would like to let readers to decide for themselves or collaborate with others to decide what this means in FAR 52.216-22 (b) "Delivery or performance shall be made only as authorized by orders..."

The complete paragraph is:

Quote

Delivery or performance shall be made only as authorized by orders issued in accordance with the Ordering clause. The Contractor shall furnish to the Government, when and if ordered, the supplies or services specified in the Schedule up to and including the quantity designated in the Schedule as the "maximum." The Government shall order at least the quantity of supplies or services designated in the Schedule as the "minimum.

The contractor is obligated from the date of award to deliver what is ordered within the ordering period, and the government is obligated to buy the stipulated minimum. There must be a contract before the government can issue any order and have a right expect the contractor to perform.

The purpose of the first sentence in FAR 52.216-22(b), quoted above, is to stipulate that the Government will pay only for what the Government orders in accordance with the Ordering clause. It is a limitation on the Government's liability.

Neil, I respect you for what you know, and I don't want you to withdraw. But you clearly don't know much about indefinite-delivery contracts. When it comes to IDIQ, read a book to get a clue. Try Formation of Government Contracts, 4th ed, by Cibinic, Nash, and Yukins, pp. 1,386 - 1,406. Learn something before you quibble with people who have been around for a while. (Not that we can't be wrong.)

Start your own post, a place where learners can collaborate with others in study.

Everybody has to start learning at some point. No shame in that.

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On 3/8/2021 at 7:26 PM, Vern Edwards said:

Oh, I wouldn't be surprised to learn that no COs have thought about the distinction that I'm making. I wouldn't be surprised to learn that no policymakers have thought about it.

 

I agree.  Until this thread I thought each contract could have a minimum and a clause defining the maximum as a ceiling consisting of cumulative orders placed against all contracts.  That became the basis of multiple stand-alone individual contracts. 

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@formerfedI think what you will see now if you look at RFPs for MATOCs and MADOCs is one of the following:

  1. a min is set for each contractor and the program max applies to the pool of contractors; or
  2. a min is set for each contractor and a share of the program max is allocated to each contractor as its max.

Under 1 and 2, the sum value of all orders cannot exceed the program max.

I have not seen an RFP in which the entire program max was set as the max for each contractor, but I have not seen all the RFPs. I would not think that appropriate if a MATOC/MADOC is one contract with multiple parties, but if it's multiple separate contracts... ?

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2 hours ago, Vern Edwards said:

but if it's multiple separate contracts... ?

Well I am probably lost but here is my thinking.

The FAR says this – “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.   

Isn’t reasonable that there is an outside chance that under every MAC that only one contractor could get all the work that the multiple awards are intended to acquire?  So I say that each contract could use the maximum of all the needs even where there is hope that the program will get their needs from the many on the MAC and not just one.   I understand ability, capability and capacity of a contractor when it comes to delivery orders but for task orders, where this discussion seems targeted, are these same concerns present?

The government is only obligated with regard to the minimum.  Dare I say the minimum they will acquire.   For the max there is no obligation, no “will”.  There is no guarantee even under fair opportunity that any contractor will get more than their minimum.  There is no fiscal obligation beyond the minimum so no issue on fund management, anti-deficiency, etc..   Simply stating a possible wish and a possible “if you win all task/delivery orders contractor” the government might spend $XXXX with you Mr/Mrs contractor.

And then there is the ability to curb hitting the maximum and overextending the abilities of a contractor on a contract where the MAC can also carry maximums with regard to how many individual task/delivery orders in numbers or dollars that a contractor would be forced to accept unilaterally. 

I harken back to my read, and a previous post, where more money, at least from data from 5 years back, was spent on single award IDIQs.   My guess here is that all the MAC’s have irrelevant maximums anyway.   Add in as well the thought that while my read of the discussion does not seem to rope in GSA FSS and how they work, GSA FSS are an example where the max is carried as implied by individual contracts and not the sum total of all the contracts under a specific SIN. 

4 minutes ago, here_2_help said:

This is an important thread as the "contract value" impacts the CAS coverage status of both the contract and the contractor.

Makes me wonder what there are more of…Commercial Item or Non-Commercial Item MACs (not counting GSA FSS)?

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24 minutes ago, Vern Edwards said:

GSA's OASIS GWAC, which is a MAC, has a minimum, but does not have a maximum. I don't know how that was done. I saw no mention in the contract of a FAR deviation.

I don’t think the FAR requires a maximum.  FAR 16.504 uses “should” in saying “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.”

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