Jump to content
The Wifcon Forums and Blogs

Mischia

Requirements Contracts

Recommended Posts

I was always taught (right or wrong) that with a Requirements-type contract you have to purchase the items from the awarded Contractor. This would not work with a multiple award, in which case you would probably use an IDIQ type of contract(s).

In the Requirements Clause 52.216-21 it states:

( c) Except as this contract otherwise provides, the Government shall order from the Contractor all the supplies or services specified in the Schedule that are required to be purchased by the Government activity or activities specified in the Schedule.

Now paragraphs d and e give an "out" for particular situations, but otherwise the Requirements-type contract should not be multiple award (or at least so says my old contract attorney).

:D

Share this post


Link to post
Share on other sites

Thank you for the feedback so far.

I ask, b/c I saw a contract awarded by an agency that was a multiple award requirements contract. I had never heard of such a thing and it was contradictory to what I knew about requirements contracts.

I wanted to find out if someone on here knew something different.

Thank you-

Mischia

Share this post


Link to post
Share on other sites

I don't have access to it at this time, but your exact question is addressed in Nash & Cibinic's Formation of Government Contracts. If I recall correctly, it states that theoretically you can have a multiple award requirements contract, as it is not explicitly prohibited. They discuss the background about the FAR re-write discussion on this issue, and (again, if I recall correctly) the re-write team felt that requirements contract should NOT be multiple award.

When I get back to the office next week I'll try to post more specific info if I can - but if you have a copy of that text check that, and if you don't I highly recommend that you obtain a copy. (And get a copy of N&C's Administration of Government Contracts while you're at it - you won't be disappointed.)

Share this post


Link to post
Share on other sites

In the ?Nash, Schooner, O'Brien-DeBakey, Edwards, 2007, Government Contracts Reference Book - 3rd Edition?, the terms "Requirements Contract" and "Requirements-Type Contracts" are two separate terms.

Requirements contract is defined in FAR 16.503(a). Requirements-Type Contracts are defined as two or more contracts. Apparently, per the reference book, "these contracts are not defined in the FAR but have been recognized by the courts". I quote ?they provide an effective way to obtain commitments from a group of contractors when the government has a recurring need for supplies or services that can be furnished by a large number of contractors?.

So based on this, it sounds like with a Requirements-Type contract that multiple awards would be possible.

Share this post


Link to post
Share on other sites

Actually GSA Schedule contracts used to be multiple award requirements contracts or a combination of requirements and IDIQ. The Schedules used to be "mandatory" on all or some agencies. "Mandatory" meant agencies qere required to order supplies and services from the GSA source or obtain a waiver. Those contracts were set up as requirements types and obviously were multiple awards.

User agencies were instructed to acquire the needed supplies and/or services from the low priced source that met their minimum needs.

Share this post


Link to post
Share on other sites

The question of whether one could have a multiple award requirements contract was kicked around in the mid-1990s, when the FAR council was writing the implementation of the task/delivery order contracting rules of the Federal Acquisition Streamlining Act. Prof. John Cibinic discussed the idea in the April 1996 edition of The Nash & Cibinic Report. Here is some of what he said:

The question of enforceability of multiple requirements contracts was raised by the FAR drafters. The FAR Working Group responsible for drafting the FASA implementation made the following comments concerning multiple awards and requirements contracts:

"The working group believes multiple awards are inconsistent with the requirements contracts which require a contractor to receive the buyer's entire requirement to establish legal consideration for the contract. See Appeal of R.C. Swanson Printing & Typesetting Company, GPOBCA No. 15-90, 1993 WL 668317 (1993). The working group is aware of no legal authority that recognizes the legitimacy of multiple award requirements contracts where a requirement is continuously competed. However, the working group is also aware that some individuals advocate the use of "multiple award requirements contracts."

The Working Group then stated: "Although the proposed rule does not apply the multiple award preference to requirements contracts, the proposed rule does not preclude agencies from experimenting with a multiple award requirements contract if the agency believes it can overcome the legal problems (i.e. illusory promise) related to a multiple award requirements contract."

The problem with these statements is that you "can't get there from here." If a "requirements" contract is, by definition, one where a contractor is to "receive the buyer's entire requirement" [emphasis added], it is obvious that Ralph's suggested technique is not a "requirements" contract. However, that does not mean that it is unenforceable.

The only advantage of the arrangement that I can think of is avoidance of a minimum guarantee.

Share this post


Link to post
Share on other sites
I don't have access to it at this time, but your exact question is addressed in Nash & Cibinic's Formation of Government Contracts. If I recall correctly, it states that theoretically you can have a multiple award requirements contract, as it is not explicitly prohibited. They discuss the background about the FAR re-write discussion on this issue, and (again, if I recall correctly) the re-write team felt that requirements contract should NOT be multiple award.

When I get back to the office next week I'll try to post more specific info if I can - but if you have a copy of that text check that, and if you don't I highly recommend that you obtain a copy. (And get a copy of N&C's Administration of Government Contracts while you're at it - you won't be disappointed.)

Vern's post below includes the info I was referring to below, however, fyi, this discussion is also inlcuded in N&C's Formation of Government Contracts, 3rd Edition, Ch. 8 Types of Contracts, VI. Variable Quantity Contracts, A. Requirements Contracts, 2. Use of Requirements Contracts (pages 1190-1191 - I know there is a 4th Edition, but I believe the pages for this reference are the same in that edition).

Share this post


Link to post
Share on other sites

Mike:

The 4th edition of Formation has not been published. It is still in the works. The 4th edition of Administration of Government Contracts has been published.

Vern

Share this post


Link to post
Share on other sites
Mike:

The 4th edition of Formation has not been published. It is still in the works. The 4th edition of Administration of Government Contracts has been published.

Vern

Thanks for correcting that Vern. Any word when it will be coming out?

Share this post


Link to post
Share on other sites
Thanks for correcting that Vern. Any word when it will be coming out?

In regard to multiple awards of requirements contracts, see Paradigm II, LLC, d/b/a JB Carpet & Upholstery Care, ASBCA No. 55849, issued on Feb. 3, 2009, where the contractor asserts there are cases that support this practice.

Share this post


Link to post
Share on other sites
Guest
This topic is now closed to further replies.

×