Grand Strategy, LLC, CBCA 6795, December 20, 2022 -- Minimum and Maximum Order Quantities

[bob7947]

I've seen a number of questions and discussions about minimum and maximum quantities ordered under a requirements contract here.  On December 20, 2022, the Civilian Board of Contract Appeals heard a dispute on such a case -- Grand Strategy, LLC, CBCA 6795, December 20, 2022.

[Vern Edwards]

It's important to keep in mind that there are two kinds of minimums and maximums associated with IDIQ contracts.

• First, there are the required minimum and maximum quantity or dollar value of the contract as a whole. Every IDIQ contract must include a contract minimum and a contract maximum quantity or dollar value. See FAR 16.504(a)(1) and (a)(4)(ii) and 52.216-22(b).
• Second, there are minimum and maximum quantity or dollar value limitations on individual orders. Such order minimums and maximums are optional. See FAR 16.504(a)(3) and 52.216-19.

The Grand Strategy decision cited by Bob is about a dispute over the proper interpretation of the order limitations clause, FAR 52.216-19. It does not involve a dispute over the contract minimum or maximum quantity or dollar value.

Recently there was a lengthy Wifcon thread about the proper interpretation and administration of IDIQ contract maximums when expressed as dollar values, which may be problematical when an IDIQ contract is for the procurement of services that are not specified in terms of a quantity of units of service. See Contract Administration, "Exceedance of IDIQ Capacity..."

The issue was whether all increases in order dollar values must be tallied against the contract maximum dollar value. Some said yes, others said no. Those who say yes argued that the maximum dollar value is absolute, and all increases in order dollar values, whatever the cause, must be tallied against the maximum. Those who say no argued that increases in order dollar values due to within-scope changes or to within-scope increases in performance costs need not be tallied against the maximum.

The FAR does not address the issue. Neither does the Grand Strategy decision.