anonymous

So your opinion is 17.1 does not apply if the contract/order is fully funded at the time of award, but that 17.1 does apply if the contract/order is not fully funded at the time of award? FAR 17.102 - Applicability is not explicit on when the subpart applies in this situation. However, FAR 17.104 - General states: “(a) Multi-year contracting is a special contracting method to acquire known requirements in quantities and total cost not over planned requirements for up to 5 years unless otherwise authorized by statute, even though the total funds ultimately to be obligated may not be available at the time of contract award.” [emphasis added]. This seems to indicate that a multi-year contract may either be incrementally funded or fully funded at time of award. Again, there is no distinction between whether no-year, multiple-year, and 1-year appropriations are used. I agree that the main purpose of the policies and procedures of 17.1 is to establish cancellation procedures to protect the contractor in a multi-year contract funded with annual appropriations when it is unknown if future years' funds will be available, however 17.1 also requires the Government to make a formal determination that "1) The need for the supplies or services is reasonably firm and continuing over the period of the contract; and (2) A multi-year contract will serve the best interests of the United States by encouraging full and open competition or promoting economy in administration, performance, and operation of the agency’s programs." It seems wise to me to require the documentation of the determination that a multi-year contract which “locks in” pricing and other contract terms over a long period of time is preferable to a multiple year contract which gives the Government the option on a periodic basis to not continue with the contract if it’s determined that contract pricing and terms are no longer the best alternative. In my agency, the HCA approves the determination for any multiyear contract. If FAR 17.1 does not apply to multi-year contracts that are fully funded at time of award with no-year appropriations, then the above determination and approval would also not be required.

Q: Do the policies and procedures of FAR 17.1 apply to contracts/orders when using no-year appropriations? Opinions between operations, policy, and legal counsel at our agency are vastly mixed on this question. Some argue it does not apply and point to Principles of Federal Appropriations Law, 3d ed. (GAO Redbook), Vol. I, Chapter 5, Section 8 - Multiyear Contracts, p. 5-39 which states: “An agency may engage in multiyear contracting only if it has (1) no-year funds or multiple year funds covering the entire term of the contract or (2) specific statutory authority.” [emphasis added]. Also see FAR 17.101 which states: “This subpart implements 41 U.S.C. 3903 and 10 U.S.C. 2306b and provides policy and procedures for the use of multi-year contracting.” So, if a CO is placing a multi-year contract/order under the authority of the no-year appropriation and is not relying on the specific statutory authority at 41 USC 3903 or 10 USC 2306B (the multi-year statutory authority of FASA), then does FAR 17.1 apply? Conversely, one could argue that FAR 17.101 states that this subpart implements the multi-year authority of FASA and provides policies/procedures when using a multi-year contract (regardless of authority used). The definition of multi-year at FAR 17.103 states in part: “”Multi-year contract” means a contract for the purchase of supplies or services for more than 1, but not more than 5, program years.” The definition does not differentiate between type of authority or appropriation used. In a previous version of the FAR (prior to FAC 90-40 when the multi-year authority of FASA was promulgated and added to the FAR), the description of multi-year contracting at 17.1 was inclusive of no-year, multiyear, and 1-year appropriations. See here: https://acquisition.gov/far/90-39/html/17.html at FAR 17.102-1(a): “Multiyear contracting may be used when no-year or multiyear funds are available or, in the case of 1-year funds, when multiyear contracting is specifically authorized by statute.” Thanks in advance for any comments on this matter.

baierle, Can you clarify your position? Is it your position that an IDIQ contract cannot be performance-based if delivery/task orders issued against it are not performance-based? As a reminder, FAR 37.601( states:

True or false: The following is a Performance-Based Services Acquisition (PBSA): 1) The contract is an indefinite-delivery indefinite-quantity (IDIQ) contract. 2) The contract work statement is a Performance Work Statement (PWS) with "generalized" task areas describing work to be performed. 3) The contract states that work to be performed will be defined at the task order level. 4) Task order work statements are Statements of Work (SOW) and task orders are not performance-based in and of themselves. 5) The contract includes award term incentives. 6) The contract includes a Quality Assurance Surveillance Plan (QASP) that describes how the contractor can achieve each award term. 7) The QASP states that the contractor must receive an overall past performance rating of "Very Good" in the current period to receive a subsequent award term. For example, if the contractor receives an overall past performance rating of "Very Good" in Year 1 of the contract Base Period, the contractor is given Award Term 1 (Year 3) as an incentive. 8) The QASP states that the 5 performance objectives are the 5 standard past performance criteria as listed in the Contractor's Performance Assessment System (CPARS). They are: Quality of Product/Service, Schedule, Cost Control, Management, and Small Business Utilization. 9) The QASP states the performance standard is an overall "Very Good" past performance rating for each past performance criterion.