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Proper Use of IDIQ Rates on Task Orders


Sam101

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Hello, say I'm a CO managing an IDIQ with a two year ordering period and labor category rates as follows:

Year 1: 1/1/2021 - 12/31/2021     Analyst I - $95.00

Year 2: 1/1/2022 - 12/31/2022   Analyst I - $100.00

I send the vendor an RFP for a Task Order with the following period of performance: Base: 04/15/2021 - 12/14/2021 Option 1: 12/15/2021 - 08/14/2022 for 500 hours of Analyst I for each performance period, i.e., 500 hours for the base and 500 hours for option 1 as well.

Can I expect a price proposal like this?:

Base: $95.00 X 500 hrs = $ 47,500.00   Option 1: $95.00 X 500 hrs = $47,500.00

Or like this?:

Base: $95.00 X 500 hrs = $47,500.00   Option 1: ($95.00 X (how ever much hours the Analyst I will spend doing work from 12/15/2021 through 12/31/2021, say 30 hours) 30 hrs = $2,850.00) + ($100.00 X 470 hrs = $47,000.00) = $49,850.00

I usually do it the first way because I don't allow mixing of rates and the rates at the time of option exercise stick through the entire option period, but which way is more common? Also, I'm unsure what "rates agreed to in the IDIQ" really means, can it possibly mean that the hourly IDIQ rates are there for the purposes of awarding a base period of performance and then the contractor is free to escalate that base rate for the options as long as it is reasonable and it doesn't exceed the rate in place for the IDIQ period under which the majority of the task order performance period is happening? For example, can Option 1 be 500 hours at $100.00 per hour? Would it make a difference if the IDIQ had a 1-year base ordering period and a 1-year option ordering period and the option ordering period was not exercised yet? Can the task order option 1 still be $100 per hour for any number of hours if not all 500 hours in this case?

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Why bother with an RFP?  If you're working with a single-award IDIQ contract you already know the hourly rates and you already know the number of hours you want to order, maybe you should just issue the task order according to the way you want to do it?

If you're dealing with multiple-award IDIQ contracts, note that the FAR calls it an announcement rather than an RFP.  Just issue the announcement and let the contract holders price it as they wish.  You might get discounts with prices below the contract rates.

 

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12 hours ago, Sam101 said:

I usually do it the first way because I don't allow mixing of rates

Well this just strikes me.........what does the entire contract say?  And then there is a person like ji20874 who decides to say (and do) it like this.  Then there is me who says I like doing it like this! 

Or in other words you have given a smidgen of information for me to draw a conclusion when in fact the entirety of the IDIQ is what rules!  So going 360 do it the way the contract says and if the contract is void of good enough details then make it up like you are and if you get away with it with the contractor then there you go. 

Crappy answer on my part?  We I do not think so by just by one example.  Let's say your contract is a commercial item contract and 52.212-4 is in the contract and has not been tailored.   What does 52.212-4 say about rates.    And then we go from there.

You will probably think me too blunt but for me if your contract is not definitive enough that you, another, or me can make up a way then well it is not a very good contract.

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That's a good answer C Culham, I should have added a bit more detail to my question, the IDIQ says "the contractor shall adhere to the LCAT (labor category) IDIQ hourly rates at time of task order award for the base performance period of a task order, i.e, if a task order is issued on the last day of the IDIQ year 1 ordering period the entire base period of the task order shall have the LCAT rates at or below those of year 1's ordering period of the IDIQ."

This makes sense when the base period of the task order is 12 months or long enough for option 1 of the task order to begin after the IDIQ year 2 ordering period is in effect. I guess I can state in individual RTOPs (Request for Task Order Proposals) where the RTOP has the base performance period ending at least two or so months away from the next IDIQ ordering period beginning that proposers can use the next year's IDIQ rates for that task order's option period 1.

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Carl, I never agreed with the original poster's approach, and I never indicated that I do it one way or the other.

Sam, I think you are making it too hard.  Your parent IDIQ contract seems to say rather clearly that the rates in effect on the first day of a performance period apply for the entire period, right?  So if that is what it says, maybe you should just do it?  After all, that is what you and your contractor bargained for when the contract was awarded.  Read the contract, then do what the contract says.  It's easier that way. 

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