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FAR 52.232-18 Availability of Funds for a Task Order under a Single Award IDIQ


ArmyofOne

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3 minutes ago, C Culham said:

Why even issue the TO?

That's a fair question.

A contractor might prefer to have the task order issued sooner (even with the -18 clause) than later.  A task order in hand (even with the -18 clause) might help allay a contractor's uncertainty about future business projections.

The agency might also prefer to issue the task order as a matter of workload management -- PALT time and all that.

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Just now, ji20874 said:

That's a fair question.

A contractor might prefer to have the task order issued sooner (even with the -18 clause) than later.  A task order in hand (even with the -18 clause) might help allay a contractor's uncertainty about future business projections.

The agency might also prefer to issue the task order as a matter of workload management -- PALT time and all that.

Fair answer.   

Or just a written notice - Hey contractor just letting you know we will have a TO for you on Oct 1 as long as funding is available.  Why does it take the issuance of the TO to communicate (said with a shrug)?

PALT and all that, so issuing two documents is some how more efficient?  The TO then a funding modification to it later?

I guess it depends but here is my underlying wonderment - Is the effort really a under the table action to have the contractor actually work?   And yes I know all of the ramifications implied or otherwise but I really am back to the $69 question in the context of the IDIQ.  I get it on a contract to allay uncertainty all the way around but a task order when again if within min/max a contractor could be surprised in a minute from now with a TO that affects future business.

Oh well...................

 

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Certainly, the agency could withhold task order award until after it has appropriated funds.  Yes, an agency could do this.  Maybe an agency should do this.

But inasmuch as we can issue contracts subject to availability of funds, I am okay with allowing for the possibility of doing the same for task orders.

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27 minutes ago, ji20874 said:

Certainly, the agency could withhold task order award until after it has appropriated funds.  Yes, an agency could do this.  Maybe an agency should do this.

But inasmuch as we can issue contracts subject to availability of funds, I am okay with allowing for the possibility of doing the same for task orders.

 Our conversation is an extension both of the instance where the -18 clause is in the contract, in this case an IDIQ, and not but adding to a TO at the TO's award.  If the Government right is present in the contract I am okay with the TO being issued subject to -18.  Where I depart is when -18 is not I do not see it as a simple add to the TO.  My reference is a contract, not IDIQ.  I do not believe the government could add the -18 clause to the contract (after it has been awarded) by unilateral modification.  Remember a TO issuance is a unilateral right but adding clauses not in the parent IDIQ departs from a TO being unilateral.

-18 in the parent IDIQ go for it. -18 not in the parent IDIQ good faith and fair dealing suggests strongly that to get it into a TO the parent IDIQ must be modified, again unless the parent carried language that allows adding of clauses to a TO as the governments right.

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20 hours ago, Vern Edwards said:

What do you mean by "separate contract"? Are you saying that a within-scope change to contractual work is severable work?

Apologies for wording. I was in a hurry What I mean is that the modification may involve a different FY appropriation - Separate action concerning funding. 

Example - Service contract award in/with FY20 funding being modified, within scope, in FY21 will be subject to a different appropriation. It seems logical that a clause added to the initial award (FY20) would not automatically apply to a separate appropriation (FY21) down the road. 

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7 hours ago, C Culham said:

So in doing so you did not change the parent IDIQ "contract"?

No. That clause is only present in the patent IDIQ to address the appropriation's availability for the guaranteed minimum. It is telling the contractor that even though the contract is awarded, we don't have the funding (consideration) to bind the contract and we'll let you know when we do. It has nothing to do with a TO 4.5 years down the road. 

7 hours ago, C Culham said:

The devil in me would suggest yes and to alleviate the matter the 52.232-18 clause should have been added to the "contract" before adding to the TO. 

What about an ID/Requirements contract? You wouldn't have -18 there because the consideration is a promise to order all items/services needed from them. There is no appropriation needed. Are you suggesting we add -18 to all ID/R contracts just in case a TO down the road may be in this situation with funding availability/end of year workload?

7 hours ago, C Culham said:

And most intriguing to me is did you give the contractor the opportunity to consider a price change for your ability to insert the clause?

It intrigues you that I issued a RFP and let the contractor know that the funds to award a contract are not yet available/appropriated?

Edited by Constricting Officer
Repeated language removed.
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Admittedly I am giving up.  Why?  As has been discussed here and elsewhere the world of IDIQ has been so confused.  Example is this very thread where.....

Constricting stated this (emphasis added) - I sent a proposal request a few weeks ago to a single award ID/IQ holder we use for simple construction projects (<$500K). I knew it was EOY with small a chance of getting it negotiated and awarded with current FY$ I had, so I added the clause. I don't need to consult the parent contract to see if the clause is there. It is a matter of appropriation law, related to the task order. Not the parent contract.

Then I get this -

9 minutes ago, Constricting Officer said:

It intrigues you that I issued a RFP and let the contractor know that the funds to award a contract are not yet available/appropriated?

RFP?  FAR Part 15 for a IDIQ TO?  Funds to award a contract not issue an order?  Now I wonder if the TO referenced in all this was bilateral or unilateral?  Yet it doesn't really matter as it is what it is but it seem a hollow right was created by the IDIQ. 

14 minutes ago, Constricting Officer said:

No. That clause is only present in the patent IDIQ to address the appropriation's availability for the guaranteed minimum. It is telling the contractor that even though the contract is awarded, we don't have the funding (consideration) to bind the contract and we'll let you know when we do. It has nothing to do with a TO 4.5 years down the road.

But not done yet as I give up.    I guess 52.216-18(b) does not mean a thing?

19 minutes ago, Constricting Officer said:

What about an ID/Requirements contract? You wouldn't have -18 there because the consideration is a promise to order all items/services needed from them. There is no appropriation needed. Are you suggesting we add -18 to all ID/R contracts just in case a TO down the road may be in this situation with funding availability/end of year workload?

No sir not suggesting it at all.   In fact I will defer to my $69 question with an add on, that being why would you issue a TO under a requirements contract absent funding?  No funding but you have a need?  And once again I guess 52.216-18 does not mean a thing, does 52.216-21...."Delivery or performance shall be made only as authorized by orders issued in accordance with the Ordering clause."

 

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2 hours ago, Constricting Officer said:

It is telling the contractor that even though the contract is awarded, we don't have the funding (consideration) to bind the contract and we'll let you know when we do.

The consideration for an IDIQ contract is the promise to buy the minimum.  That is sufficient to form a binding contract.  However, this does raise the question of how the  liability (obligation) is to be recorded if there are no funds that can be obligated yet.

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3 hours ago, C Culham said:

I guess 52.216-18(b) does not mean a thing?

This would apply if there were a conflict between the order and the contract. If the contract were silent on whether orders would be subject to the availability of funds, then an order issued subject to the availability of funds would not necessarily conflict with the contract.

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12 hours ago, Don Mansfield said:

This would apply if there were a conflict between the order and the contract. If the contract were silent on whether orders would be subject to the availability of funds, then an order issued subject to the availability of funds would not necessarily conflict with the contract.

I am not sure I agree.   Let me play out my thinking and you let me know where I am off base.

You award me an IDIQ absent -18 clause.  After award you issue me orders (TO's) that accomplish the minimum guarantee and I perform and get paid.   After accomplishment of the minimum you issue me an order and you put -18 into the order and----

1. You request me to confirm receipt of the order and the inclusion of -18.  I refuse the order.  Under this possible scenario have you not changed, maybe even breached, the nature of the IDIQ because the order is not an exercise of your unilateral right? 

Or another possibility -

2. You do not request me to confirm.   Upon issuance of a modification to the order which adds funding I refuse to do the work stating that  I expected all TO's to be funded where I could begin work immediately as no where in the parent IDIQ is there a clause applicable to TO's that says they will not be funded and I should not begin work.   Have you not breached the IDIQ by giving me an unfunded TO?

Further and as clarification to my 52.216-18(d) comment Constricting provided that the only purpose of the clause 52.232-18 is to address funding of the minimum guarantee.  I see no exclusionary wording in the 52.232-18 clause that it does not apply to TO's nor does clause 52.216-18 exclude application of (d) to 52.232-18.   Doesn't the plain language of 52.216-18 make the 52.232-18 applicable to TO's?  I was not implying a conflict but I did allude to such a probability in an earlier comment.

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All:

This is not in response to any particular post.

I have not read every post in this thread, but based on those that I have read, I think a poorly written opening post has led us into the weeds.

You've all heard of "terms and conditions."  Black's Law Dictionary, 11th ed., defines condition as follows:

Quote

A future and uncertain event on which the existence or extent of an obligation or liability depends; an uncertain act or event that triggers or negates a duty to render a promised performance. 

In contract law there are two kinds of conditions: conditions precedent and conditions subsequent

Here is how the Restatement of the Law, Second, Contracts 2d § 250 explains those terms:

Quote

In the Restatement of this Subject a “condition” is according as the context indicates, either a fact (other than mere lapse of time) which, unless excused as stated in §§ 294- 307

(a) must exist or occur before a duty of immediate performance of a promise arises, in which case the condition is a “condition precedent,” or

(b) will extinguish a duty to make compensation for breach of contract after the breach has occurred, in which case the condition is a “condition subsequent,” or a term in a promise providing that a fact shall have such an effect.

That language is a little awkward. Here's  how Black's Law Dictionary defines condition precedent:

Quote

An act or event, other than a lapse of time, that must exist or occur before a duty to perform something promised arises. • If the condition does not occur and is not excused, the promised performance need not be rendered.

FAR 52.232-18 is a classic example of a condition precedent. We have a contract, but before any duty to perform arises the contractor must receive notice and the contracting officer must confirm it in writing.

Use of FAR 52.232-18 is prescribed in FAR 32.706-1:

Quote

(a) Insert the clause at 52.232-18, Availability of Funds, in solicitations and contracts if the contract will be chargeable to funds of the new fiscal year and the contract action will be initiated before the funds are available.

(b) The contracting officer shall insert the clause at 52.232-19, Availability of Funds for the Next Fiscal Year, in solicitations and contracts if a one-year indefinite-quantity or requirements contract for services is contemplated and the contract-

           (1) Is funded by annual appropriations; and

           (2) Is to extend beyond the initial fiscal year (see 32.703-2(b)).

That's it, and it's very specific. You can't just use the clause whenever you like. Any other use would be a FAR deviation as defined in FAR 1.401(a).

Now, I think the confused OP's question ("Does FAR 52.232-18 Availability of Funds, allow authority to issue an award to a task order under a single award IDIQ.") was whether the use of the clause in an IDIQ contract applies only to the basic contract or to both the basic contract and each order issued thereunder. Well, FAR 52.216-18(b) says: 

Quote

(b) All delivery orders or task orders are subject to the terms and conditions of this contract. In the event of conflict between a delivery order or task order and this contract, the contract shall control.

As far as I'm concerned, case closed. The question from the OP has been answered.

Now, if the basic contract does not include 52.232-18, may the CO insert that clause in an individual order? Tell me, where in the standard terms of an IDIQ contract does it say that a CO can insert a FAR clause into an order that is not in the underlying contract? I don't know of any standard FAR clause that authorizes a CO to do that. But if a CO does that, and we know that ignorant, careless, or willful COs do, and if the contractor acknowledges or performs without objection, then I think a court might go ahead and enforce it. However, silence is not necessarily acquiescence.

I think that's the point that Carl (C Culham) made in his last post.

Finally, in addition to FAR 32.706-1, see FAR 32.703-2(b). What circumstances would warrant applying FAR 52.232-18 to an individual task order?

We should have told the OP to rewrite his or her question in English and then provide some background information.

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1 hour ago, Vern Edwards said:

All:

You have reflected my intent accurately.

Between my latest post and yours I was doing research about "terms and conditions".   It lead me to FAR Part 12 where 52.212-4 is titled "Contract Terms and Conditions-Commercial Items".  It would seem that with regard to a FAR part 12 procurement your comments regarding terms and conditions is bolstered this fact.

Then there is even more weeds as to whether the -18 clause is a commercial practice that would afford its addition to 52.212-4 via tailoring?  

Conclusion - Background information as to whether the contract in question is a commercial item acquisition might be useful as well.

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On 9/27/2021 at 8:22 AM, ArmyofOne said:

Greetings, 

Does FAR 52.232-18 Availability of Funds, allow authority to issue an award to a task order under a single award IDIQ.  Certainly understand it needs to be included in the Solicitation/RFP and award.  However, can the award be issued without the certified funding while it's forthcoming and not be at risk of an ADA? 

It has been answered. A task order may be issued without funding and the task order may reference the -18 clause, already in the base contract. The -18 clause states that there is no government obligation until funding is provided.

The order must include the accounting and appropriation data. Since there is no applicable funding at this point, you would state in the order that no funding is presently available and not to proceed until until funding is put on the task order. I don’t know what limitations the various automated contract writing systems have but the accounting and appropriations block should make it clear that no funding is currently available.

(16.505 (a) (7). “Orders placed under indefinite-delivery contracts must contain the following information:  

…(iii) For supplies and services, line item number, subline item number (if applicable), description, quantity, and unit price or estimated cost and fee (as applicable). The corresponding line item number and subline item number from the base contract shall also be included. 

(iv) Delivery or performance schedule…

…(vii) Accounting and appropriation data…”)

Of course, the parties will be communicating with each other, so the contractor will already know this. But the written order simply documents this for the record, so that it is obvious as well for any other outside party or reviewer. 

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