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NTE Purchase Order for Supplies


Pappy

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We are considering a not-to-exceed quantity purchase order for a recurring supply item with a one year period of performance, with the intent to fund incrementally as the supply is needed. We will award with a substantial initial quantity as the minimum amount and only order more if funds become available (i.e. fallout money). Funding would be added via modification as additional sub-CLIN's to increase the quantity needed up to the NTE limit. Does anyone see a problem with this approach vice an IDIQ? The advantage would be elimination of a new task order for each order and a faster response to obligation.

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21 minutes ago, Pappy said:

We are considering a not-to-exceed quantity purchase order for a recurring supply item with a one year period of performance, with the intent to fund incrementally as the supply is needed. We will award with a substantial initial quantity as the minimum amount and only order more if funds become available (i.e. fallout money). Funding would be added via modification as additional sub-CLIN's to increase the quantity needed up to the NTE limit. Does anyone see a problem with this approach vice an IDIQ? The advantage would be elimination of a new task order for each order and a faster response to obligation.

I think all you are talking about is a contract with options for additional quantities. if not, how is what you are talking about different?

 

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I did not intend to include option CLIN's, just one info CLIN with a NTE quantity and fixed unit price, then as funding becomes available, add sub-CLIN's (AA, AB, etc...) to increase funding and total quantity ordered.

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Do you have any experience with incremental funding? Do you understand it?

What incremental funding clause would you put in the purchase order? Are you familiar with the standard clause? What clause would you write if there were no standard incremental funding clause for what you want to do?

Under your scheme, would the contractor be obligated to deliver on order when you decide to add more funds? What if you sent an order and the contractor rejected it because it had increased its price? What could you do?

Just write an IDIQ contract.

 

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An approach used by some agencies might work. 

Establish a single BPA by synopsis to solicit competition to establish.  By doing so it is concluded that further competition for calls against the BPA is not needed.

In suggesting this approach your OP lacks information that would help determine if a BPA would work.  Commercial or non-commercial item, potential values of calls and overall NTE to name a couple.

 

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12 hours ago, Vern Edwards said:

Do you have any experience with incremental funding? Do you understand it?

What incremental funding clause would you put in the purchase order? Are you familiar with the standard clause? What clause would you write if there were no standard incremental funding clause for what you want to do?

Under your scheme, would the contractor be obligated to deliver on order when you decide to add more funds? What if you sent an order and the contractor rejected it because it had increased its price? What could you do?

Just write an IDIQ contract.

 

Vern, I understand that I can write an IDIQ and cut delivery orders; however, my thought was to create a more streamlined approach for a single commodity with an unknown exact quantity required. The initial PO award would identify within the info CLIN 0001, the maximum NTE quantity of 200 units @ $xxx/unit for all units ordered and the initial obligation would be placed as sub-CLIN AA with an order of 100 units at the established fixed unit price. Any additional orders would be added via modification as sub-CLIN AB, AC, etc... Based on the fact that we have established the full scope of the requirement up to 200 units at $XXX/unit creating our total contract value, the contractor would be required to deliver at the agreed upon price as we increase our quantity ordered up to that maximum NTE quantity. I don't see how the contractor can refuse to deliver without being in default. 

With respect to incremental funding, I do not claim to know much, but do have limited experience with it in my past (this is why I am asking people smarter than me to help). I would add the 232-18 & 19 for availability of funds to cover the fact that I am not fully funded up to the max NTE quantity. Beyond that the limitations of funds clauses appear to be directed toward cost type contracts, so I am not certain what to include. 

I am trying to save time and meet the mission needs, so if you have a reason why this can't be done, please explain, if it is because we already have a clunky IDIQ process, then I know that.

The BPA is another option, but not locked in on delivery and/or price, so I don't like it much, plus it is a little clunky like the IDIQ. (by clunky I mean it is an increased admin burden compared to this simple PO).

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3 hours ago, Vern Edwards said:

Keep in mind that a FAR 13.303 BPA is not a contract and that the contractor cannot be required to accept a call. But it might work if you don't need a contractual commitment.

(Finished this right when @Pappyposted.  I elected to not redo, just post)

 

Good point Vern.   The  OP's approach has no contractual commitment beyond the initial amount either when matters of incremental funding come into play, right?    Even an IDIQ is only a commitment with regard to a minimum.   

So as I do in every Forum discussion I get involved in I do a little reading to get my brain to turning.   In the case of this thread it seems to me that @Pappy might want to set the procurement up as a "Requirements Contract".   It solves the contractual commitment issue.  Any alternative to OP's intention does not solve one need that he/she wants, avoiding issuing more than one order or PO.  Yet modifying a Purchase Order throughout a year would seem in my mind the same amount of paper work as issuing calls, orders, etc.

Tools that make more sense therefore are IDIQ, competitive (my wording) BPA or a Requirements.   Heck there might even be one more "Standing Quotation" FAR 13.103.   Bottomline  for me is the OP is trying to invent something where there are tools in the FAR already that would meet the need and concerns and be as or more minimal as the NTE idea.

 

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Just now, Pappy said:

Vern, I understand that I can write an IDIQ and cut delivery orders; however, my thought was to create a more streamlined approach for a single commodity with an unknown exact quantity required.

The initial PO award would identify within the info CLIN 0001, the maximum NTE quantity of 200 units @ $xxx/unit for all units ordered and the initial obligation would be placed as sub-CLIN AA with an order of 100 units at the established fixed unit price.

Any additional orders would be added via modification as sub-CLIN AB, AC, etc...

Based on the fact that we have established the full scope of the requirement up to 200 units at $XXX/unit creating our total contract value, the contractor would be required to deliver at the agreed upon price as we increase our quantity ordered up to that maximum NTE quantity.

I don't see how the contractor can refuse to deliver without being in default. 

@Pappy I simply do not understand how what you have described, as reformatted by me, is simpler than an IDIQ or option arrangement.

1. You describe a CLIN 0001 specifying a NTE quantity of 200 units at a specified unit price. But you do not have funds for 200 units. 

2. You then describe a SUBCLIN 0001AA as an "order" of 100 units.

3. You would then "modify" the contract to add another SUBCLIN 0001AB for another 100 units.

Is a contract modification for an additional quantity easier to do at your office than a delivery order or the exercise of an option? Really?

Am I right to presume that you intend for the contract mod to be unilateral? If so, what clause would you put in the contract to give the CO the authority to do that? You would have to have clause, right? If there is no standard clause, you would have to write one, right?

Look, Pappy, if you think that's easier than issuing an IDIQ contract or including an option in the order, please be my guest.

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Ok, I see that you don't think it is providing any benefit of reduced admin burden, so let's agree to disagree on that point. With respect to the clause defining the CO authority to mod the contract to add funds and increase quantity, I would simply include in the original solicitation language that makes it clear that we have the unilateral right to order any quantity up to the NTE limit at said unit price at any time during the PoP of the PO. Fairly simple and straight forward. 

Do you have any advice on the incremental funding that the limitation of funds clauses won't cover?

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18 hours ago, Pappy said:

I did not intend to include option CLIN's, just one info CLIN with a NTE quantity and fixed unit price, then as funding becomes available, add sub-CLIN's (AA, AB, etc...) to increase funding and total quantity ordered.

You don't have to add an optional line item to do what you want. Compare FAR 52.217-6 and -7. I think you would use -6.

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13 minutes ago, Pappy said:

Ok, I see that you don't think it is providing any benefit of reduced admin burden, so let's agree to disagree on that point. With respect to the clause defining the CO authority to mod the contract to add funds and increase quantity, I would simply include in the original solicitation language that makes it clear that we have the unilateral right to order any quantity up to the NTE limit at said unit price at any time during the PoP of the PO. Fairly simple and straight forward. 

Do you have any advice on the incremental funding that the limitation of funds clauses won't cover?

Pappy, are you saying that the CLIN is unit priced for a NTE total quantity of 200 with individual orders of 1-200?  Just want to be sure that I understand.  Thanks.

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7 minutes ago, Pappy said:

Do you have any advice on the incremental funding that the limitation of funds clauses won't cover?

I don't think what you are describing is incremental funding. You are just buying a base quantity and buying more later when you have funds--like any other option. You don't need a limitation of funds clause.

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36 minutes ago, Don Mansfield said:

I don't think what you are describing is incremental funding. You are just buying a base quantity and buying more later when you have funds--like any other option. You don't need a limitation of funds clause.

Yes, I can see that now. I guess I am just creating an IDIQ in PO format. 

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