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Treating a Task Order as the IDIQ ordering instrument


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#1 kitty

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Posted 14 April 2009 - 08:34 AM

I have a customer who has a requirement for a Task Order against our MAC IDIQ contract. The Task Order would include a 6 month Base Period that includes defined work and a deliverable that would be due NLT the 6 mos date, plus numerous "Task Options" that can occur at any time thereafter. Another words, in lieu of an Option Period tied to the task order, they would like the contractor to price multiple "Task Options" that may occur sometime after the first 6 mos. base period ends. There will be gaps between the Base Period and potentially every "Task Option." The task options would need to be exercised when the funding, location, work and dates are identified by yet another customer.

What authority allows these periods to be exercised, independent of the base period and with gaps between under the same Task Order? And, how do you exercise a "Task Option." Typically, an option is exercised while a Base Year or Period is underway and prior to it expiring. In this case, the Base Period will have expired. For example, a deliverable is expected to be submitted during the base period of 6 months. Then a few months pass, and a task option may be exercised with a POP of 2 months; then another task option may be exercised a few months later. Task Options would occur as the customer calls with the funding, location and work identified.

#2 formerfed

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Posted 14 April 2009 - 08:48 AM

You'll first need to look at the ordering provision in your MAC IDIQ contract. There's usually language that covers when orders get placed and how long they can last. The contract probably contains prices such as labor rates applicable to certain periods of performance up to the end of the contract (including options). The ordering provision usually says how long orders can last past the contract period.

You also need to check to see that what you're contemplating isn't inconsistent with the MAC IDIQ contract langauge.

#3 Vern Edwards

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Posted 14 April 2009 - 09:24 AM

I agree with formerfed, but I want to add something. I know of no rule in FAR about the use of options with task orders. I do not believe that the rules in FAR Subpart 17.2 apply to task order options, although I could get an argument about that from any number of people. And I know of no reason why a task order cannot be issued that permits exercise of an option attached to the task order after completion of the work originally required. So, for instance, I can see issuing a task order with a completion date of 30 June that permits exerise of an option against the order after 31 December, assuming that the underlying contract is still in effect.

Having said the above, this comes across as nothing more than a scam to get around the rules for task order competition and the associated hassle. It smells like one of those practices that brings the acquisition profession into ill-repute, subjects agencies to criticism, and prompts the enactment of new laws and the promulgation of new rules. I'm sure that someone can make all sorts of arguments about why the practice makes sense, e.g.: the contractor is sole source and a new task order would be issued pursuant to FAR 16.505(b)(2)(ii) or (iii). I don't buy it.As far as I'm concerned, new task, new task order. As a CO I would not go along with it except in the most extraordinary circumstances. I cannot think what those might be.

Since this is your first post, I suspect that you'll now come back with all sorts of additional information that you didn't tell us in your first post, information that casts new light on the problem, such as a possible rationale for doing it. Am I right?

#4 kitty

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Posted 14 April 2009 - 02:14 PM

I agree with formerfed, but I want to add something. I know of no rule in FAR about the use of options with task orders. I do not believe that the rules in FAR Subpart 17.2 apply to task order options, although I could get an argument about that from any number of people. And I know of no reason why a task order cannot be issued that permits exercise of an option attached to the task order after completion of the work originally required. So, for instance, I can see issuing a task order with a completion date of 30 June that permits exerise of an option against the order after 31 December, assuming that the underlying contract is still in effect.

Having said the above, this comes across as nothing more than a scam to get around the rules for task order competition and the associated hassle. It smells like one of those practices that brings the acquisition profession into ill-repute, subjects agencies to criticism, and prompts the enactment of new laws and the promulgation of new rules. I'm sure that someone can make all sorts of arguments about why the practice makes sense, e.g.: the contractor is sole source and a new task order would be issued pursuant to FAR 16.505(B)(2)(ii) or (iii). I don't buy it.As far as I'm concerned, new task, new task order. As a CO I would not go along with it except in the most extraordinary circumstances. I cannot think what those might be.

Since this is your first post, I suspect that you'll now come back with all sorts of additional information that you didn't tell us in your first post, information that casts new light on the problem, such as a possible rationale for doing it. Am I right?

I wish you were right -- but no. We have done task orders with Option Years in past; however, this is the first time they are asking for task options wherein the time of "exercising", availability of funds, and location of work to be performed (and to what extent) is not known until a customer calls them with a specific need. Other than the first 6 months of identified work, the timing of these "options" may occur within the next year or so. The argument presented is, "the FAR does not state you can't do it." However, my concern is that they are treating the Task Order as the ordering instrument and options as defined under FAR Part 17.2.

#5 Vern Edwards

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Posted 14 April 2009 - 03:03 PM

If they have not specified the work, then they cannot price it. In that case, use of the options will not conform to the task order competition requirements in FAR 16.505(b)(1). They cannot even justify proceeding in accordance with FAR 16.505(b)(2), since they cannot say what the work is. If you proceed with this you will be in violation of both statute and FAR, and will possibly breach the terms of the contract.

#6 kitty

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Posted 14 April 2009 - 04:00 PM

If they have not specified the work, then they cannot price it. In that case, use of the options will not conform to the task order competition requirements in FAR 16.505(B)(1). They cannot even justify proceeding in accordance with FAR 16.505(B)(2), since they cannot say what the work is. If you proceed with this you will be in violation of both statute and FAR, and will possibly breach the terms of the contract.


The "Task Options" are priced out on the front end of the task order as "Small" "Medium" and "Large" sites. Each of these is defined in general terms based on historical information (even though the specific location will dictate unknown conditions of the site). For the Task Order, they may state, "there may be up to 50 Task Options during the life of the task order (not sure if 1 or 2 years)." Prior to the "exercising" of each of these task options, a customer (or multiple customers in multiple locations) will call and say they need work to be performed at their site. The customer will state whether they believe the site is a Small, Medium or Large. The task option is exercised at the price the contractor provided at the front end of the task order based on the definition of a SM, Med and Lg. Once the contractor arrives to the site, they may determine the job is really a Medium instead of the Small that was priced. In this case, the KO would do a modification to the Task Order and price it at a Medium. The variable may be the condition, access and age of the infrastructure that services will be provided.

#7 Vern Edwards

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Posted 14 April 2009 - 04:22 PM

Well, you keep feeding out a little more information in response to each of my posts, which is more than a little aggravating. I'm not sure what the hell you are doing and I've lost all interest, so I'm done commenting. Maybe you should just do what they ask and let the chips fall where they may.

When am I gonna learn?

#8 kitty

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Posted 14 April 2009 - 04:56 PM

Well, you keep feeding out a little more information in response to each of my posts, which is more than a little aggravating. I'm not sure what the hell you are doing and I've lost all interest, so I'm done commenting. Maybe you should just do what they ask and let the chips fall where they may.

When am I gonna learn?


Perhaps your questions invite people like myself to provide some scenario information so that you can provide your valuable insight. This is all part of the learning process and the purpose of WIFCON. And we appreciate these by the way! My first paragraph is the only part of this scenario I know for certain. The remaining pieces are all based on a number of "what if" conversations with the customer. At this point, making reasonable judgements of the methods we acquire services is my primary focus. Needless to say, I want to know who has done something similar to the above, and what authority did they use to do it. Realizing transparency is important to the current administration, I don't want to be trying something that is not tried, true and ethical.

#9 Vern Edwards

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Posted 14 April 2009 - 06:23 PM

One does not need positive authority to do every little thing. There is no express rule against including an option in a task order that can be exercised after the initial work of the task order has been completed. If you're going to spend a career doing only what you can find express authority to do you aren't going to get much done. And transparency does not preclude trying the previously untried. Whether the use of such an option is otherwise consistent with regulations or appropriate is another issue, to be resolved on the basis of the facts of the case. I don't know whether anyone else has done it, but prior usage, in and of itself, would not make the technique either legal or appropriate in any particular case.

There are others here who have more patience than I about the dribbling out of facts. You'll probably hear from them.

#10 Guest_carl r culham_*

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Posted 16 April 2009 - 09:34 AM

I have had no experience in doing a procurement as your posts suggest but in reading through the thread I generally agree with formerfed and especially Vern's cautions. While the initiative to try new ideas is good what you are describing lacks sound business judgment which I believe is an important point that Vern has attempted discuss.

Managing/administration of Task Orders is a monumental effort in and of itself, administering upto 50 task options seems way beyond smart business especially by my read where I gather you are going to give the authority to the customer to "exercise" the options. Heck why don't you just give them a CO warrant!

As a additional thought what is being proposed not only needs to be viewed from the context of allowance under the parent IDIQ contract and FAR but also appropriation law and proper fiscal management.

#11 kitty

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Posted 16 April 2009 - 12:11 PM

I have had no experience in doing a procurement as your posts suggest but in reading through the thread I generally agree with formerfed and especially Vern's cautions. While the initiative to try new ideas is good what you are describing lacks sound business judgment which I believe is an important point that Vern has attempted discuss.

Managing/administration of Task Orders is a monumental effort in and of itself, administering upto 50 task options seems way beyond smart business especially by my read where I gather you are going to give the authority to the customer to "exercise" the options. Heck why don't you just give them a CO warrant!

As a additional thought what is being proposed not only needs to be viewed from the context of allowance under the parent IDIQ contract and FAR but also appropriation law and proper fiscal management.


Good morning and thank you for your comments. The scenario has changed slightly, albeit still within the same realm. The request is to treat the task order as an ordering instrument wherein they award a task order for let's say 12 months. The task order would consist of 50 subtasks which would be treated as though they were options. For consideration, the government would "exercise" one of the priced subtasks at time of award (contractor will have priced all 50 preaward (based on a general description and estimated number of Small, Medium, and Large sites). During the 12 months, they would "order" when the customer called with a location, job and funding. It is an IDIQ within an IDIQ at the task order level. I agree with you wholeheartedly, but would like to turn over as many rocks to understand how those who have done it work out the details (or not). It appears to have too many risks for both parties, and in my judgment -- does not meet the intent of the FAR for IDIQ/Ordering.

#12 formerfed

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Posted 16 April 2009 - 12:13 PM

The "Task Options" are priced out on the front end of the task order as "Small" "Medium" and "Large" sites. Each of these is defined in general terms based on historical information (even though the specific location will dictate unknown conditions of the site). For the Task Order, they may state, "there may be up to 50 Task Options during the life of the task order (not sure if 1 or 2 years)." Prior to the "exercising" of each of these task options, a customer (or multiple customers in multiple locations) will call and say they need work to be performed at their site. The customer will state whether they believe the site is a Small, Medium or Large. The task option is exercised at the price the contractor provided at the front end of the task order based on the definition of a SM, Med and Lg. Once the contractor arrives to the site, they may determine the job is really a Medium instead of the Small that was priced. In this case, the KO would do a modification to the Task Order and price it at a Medium. The variable may be the condition, access and age of the infrastructure that services will be provided.


If this is what you are doing, why do you need options? I've seen similar work done with one task order. The task order is for providing site support - say configure, install, implement and train. Because sites vary, you have small, medium and large and each is priced separately. The task order is estimated at 50 sites and show the estimated breakdown. The task order includes language that a work order or authorization gets issued to the contractor to perform work at a specific site. The task order can be funded upfront of incrementally.

#13 Justin Intern

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Posted 11 February 2010 - 10:52 AM

I have a quick question along the same lines of this topic...

Requirement: IDIQ Roofing with a capacity of $6M.

Contract Vehicle: MAC. The IDIQ requirement will be awarded though a task order under a MAC on let's say T.O. 15 and the new roofing work will be ordered against task order 15 for the life of the contract (1 year).

Situation: Task order 15 was solicited to 3 MAC contractors. Contractor C wins Task Order 15. Contractor C gets all of the roofing task orders for the term of the contract.

FAR 16.505 (:P(1)(i) states the contracting officer MUST provide each awardee a fair opportunity to be considered FOR EACH ORDER exceeding $3,000 issued under the multiple delivery-order contracts or multiple task-order contracts, ...

First off, I'm wondering why not just award as a single award IDIQ. Second is it okay to put a whole IDIQ contract under a single task order?

#14 Don Mansfield

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Posted 11 February 2010 - 11:30 AM

First off, I'm wondering why not just award as a single award IDIQ. Second is it okay to put a whole IDIQ contract under a single task order?

To answer your first question, it probably has to do with the fact that there is a statutory preference for making multiple awards under IDIQ contracts. At one time, Congress was dissatisfied with the lack of competition at the task/delivery order level, so they called for making multiple awards and competing task orders.

Now agencies are making the multiple awards to comply with the wishes of Congress, but essentially making the task orders single award IDIQs. I don't know that such a practice is legal (or illegal), but I expect it to catch on since Congress recently made it more difficult to enter into single award IDIQ contracts over $100,000,000. I give it a few years before Congress catches wind of this (if they haven't already), and requires competition for IDIQ task orders (i.e., task orders that are essentially single award IDIQs) under IDIQ contracts or somehow cracks down on the practice. We could also see a decision stating that the practice doesn't provide all awardees a fair opportunity.

It's actually kind of entertaining, if not sad, to watch how agencies always seem to find a way to evade Congress's dogged attempts to increase competition. It reminds me of the movie Catch Me If You Can.

#15 Vern Edwards

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Posted 11 February 2010 - 12:15 PM

Let's not forget FAR 16.504( c)(1)(ii)(b), which says:

(B) The contracting officer must not use the multiple award approach if?

(1) Only one contractor is capable of providing performance at the level of quality required because the supplies or services are unique or highly specialized;
(2) Based on the contracting officer?s knowledge of the market, more favorable terms and conditions, including pricing, will be provided if a single award is made;
(3) The expected cost of administration of multiple contracts outweighs the expected benefits of making multiple awards;

(4) The projected task orders are so integrally related that only a single contractor can reasonably perform the work;
(5) The total estimated value of the contract is less than the simplified acquisition threshold; or
(6) Multiple awards would not be in the best interests of the Government.

Italics added. What is happening now is blind compliance with the multiple award preference, probably out of fear of criticism, but such compliance is contrary to FAR. The regulation says that COs "must not" make multiple awards if the administrative costs exceed the potential benefits. Multiple awards are costly to administer. FAR 16.5049 c)(1)(ii)( C) requires COs to document the reason for using either a multiple award or a single award contract. I wonder how many COs consider and discuss the administrative costs of multiple awards versus the prospective benefits of competition.

Justin Intern: MAC is the abbreviation for "multi-agency contract," not multiple award contract. See FAR 2.101. It's not clear to me how you used the abbreviation.

#16 formerfed

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Posted 11 February 2010 - 12:17 PM

Now agencies are making the multiple awards to comply with the wishes of Congress, but essentially making the task orders single award IDIQs. I don't know that such a practice is legal (or illegal), but I expect it to catch on since Congress recently made it more difficult to enter into single award IDIQ contracts over $100,000,000.


I see a lot of that. One reason is people just don't make the task order competition simple. They fail to understand that it can be very easy and quick. Consequently they do things like making a task order award as you described to avoid having to do competition all over again.

In many cases, that's not bad. One big reason for competition is it helps ensure the government is getting a good deal. But if people do a good job with their negotiations on a single award IDIQ task order, the outcome is positive. One problem though is competition can be for things other than the best price such as competition for ideas and solutions. A single award eliminates that concept.

#17 joel hoffman

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Posted 11 February 2010 - 12:41 PM

Justin Intern: MAC is the abbreviation for "multi-agency contract," not multiple award contract. See FAR 2.101. It's not clear to me how you used the abbreviation.


Vern, the Navy refers to multiple award ID/IQ contracts as "Multiple Award Contracts" ("MAC's or a "MAC" for short).

#18 napolik

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Posted 11 February 2010 - 01:15 PM

Vern, the Navy refers to multiple award ID/IQ contracts as "Multiple Award Contracts" ("MAC's or a "MAC" for short).


While Monsieur Edwards is correct as to the FAR definition of MAC, the acronym is commonly used in DOD to represent "Multiple Award Contract". Here is an extract from the DFARS:

"216.501-1 Definitions.

?Multiple award contract,? as used in this subpart, means--

(1) A multiple award task order contract entered into in accordance with FAR 16.504©; or

(2) Any other indefinite-delivery, indefinite-quantity contract that an agency enters into with two or more sources under the same solicitation."

#19 napolik

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Posted 11 February 2010 - 01:24 PM

Now agencies are making the multiple awards to comply with the wishes of Congress, but essentially making the task orders single award IDIQs. I don't know that such a practice is legal (or illegal), but I expect it to catch on since Congress recently made it more difficult to enter into single award IDIQ contracts over $100,000,000. I give it a few years before Congress catches wind of this (if they haven't already), and requires competition for IDIQ task orders (i.e., task orders that are essentially single award IDIQs) under IDIQ contracts or somehow cracks down on the practice. We could also see a decision stating that the practice doesn't provide all awardees a fair opportunity.


For FY 10, DOD has revised the way it develops its competition goals to consider competition for task orders issued under multiple award contracts. It has also modified its data collection mechanism to capture information on the degree of competition obtained when issuing a task order under a multiple award contract. If only one source is solicited, the action is non-competitive.

#20 Vern Edwards

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Posted 11 February 2010 - 02:09 PM

While Monsieur Edwards is correct as to the FAR definition of MAC, the acronym is commonly used in DOD to represent "Multiple Award Contract". Here is an extract from the DFARS:

"216.501-1 Definitions.

“Multiple award contract,” as used in this subpart, means--

(1) A multiple award task order contract entered into in accordance with FAR 16.504?; or

(2) Any other indefinite-delivery, indefinite-quantity contract that an agency enters into with two or more sources under the same solicitation."


Does DFARS assign the abbreviation MAC to multiple award contracts the way that FAR does for multi-agency contracts? The commonly accepted abbreviation for multiple award task order contracts is MATOC. For multiple award delivery order contracts it's MADOC.




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