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IDIQ Contract Proposed for 10 years


WC79

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I have a curious question. I have a requirement that's being contemplated to be awarded as IDIQ requirements (Non-IT and non-advisory and assistance services) service contract for 10 years (no options). The parent IDIQ would be for 10 years (no options) and the task orders would be awarded within the order period which would be shorter period then the 10 years. The task orders would be awarded as options that would need to adhere to FAR 17.204(e). During internal discussions with policy there's been some varying opinions on whether or not an IDIQ contract be awarded beyond 5 years due to FAR 17.204(e) and FAR 22.1002-1. Since the parent IDIQ does not contain options would FAR 17.204(e) apply? I'm interested in your thoughts on this. 

 

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When you say:

2 hours ago, WC79 said:

The parent IDIQ would be for 10 years (no options) and the task orders would be awarded within the order period which would be shorter period then the 10 years.

I presume that by "10 years" you are referring to the period beginning on the first day of the ordering period, which is stated in FAR 52.216-18, Ordering (AUG 2020), paragraph (a), and the last day on which deliveries or performance can be required, which is stated in FAR 52.216-22, Indefinite Quantity (OCT 1995), paragraph (d).

Then you say:

2 hours ago, WC79 said:

The task orders would be awarded as options that would need to adhere to FAR 17.204(e).

On what do you base that statement? I know the definition of option in FAR 2.101, but task orders have never been considered to be options as addressed in FAR Subpart 17.2.

2 hours ago, WC79 said:

Since the parent IDIQ does not contain options would FAR 17.204(e) apply?

You seem to contradict yourself, but the answer is no.

As for FAR 22.1002-1, you must refer to Department of Labor regulations in order to understand the FAR's obscure reference to a five-year limitation. See 4 CFR 4.145, paragraph (a). That five-year limitation is not applicable in your case.

2 hours ago, WC79 said:

During internal discussions with policy there's been some varying opinions on whether or not an IDIQ contract be awarded beyond 5 years due to FAR 17.204(e) and FAR 22.1002-1.

That's unfortunate. It does not speak well of "policy."

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51 minutes ago, Vern Edwards said:

When you say:

I presume that by "10 years" you are referring to the period beginning on the first day of the ordering period, which is stated in FAR 52.216-18, Ordering (AUG 2020), paragraph (a), and the last day on which deliveries or performance can be required, which is stated in FAR 52.216-22, Indefinite Quantity (OCT 1995), paragraph (d).

Then you say:

On what do you base that statement? I know the definition of option in FAR 2.101, but task orders have never been considered to be options as addressed in FAR Subpart 17.2.

You seem to contradict yourself, but the answer is no.

As for FAR 22.1002-1, you must refer to Department of Labor regulations in order to understand the FAR's obscure reference to a five-year limitation. See 4 CFR 4.145, paragraph (a). That five-year limitation is not applicable in your case.

That's unfortunate. It does not speak well of "policy."

That is correct the period of performance of the parent IDIQ will be 10 years starting on the first day of the ordering period and ending the last day performance is required.

When i mentioned that task orders would be awarded as options I meant that we may build options into the task orders. 

I am struggling with explaining why FAR 17.207(e) would not apply. Other then the fact that the parent IDIQ does not contain options, its not making sense to me. 

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1 hour ago, C Culham said:

My thought.  The "Analysis" section of the linked GAO decision will provide you with valuable insight to consider as there a more details that need to be known about your instant need than what your opening post provides.  Again I highly encourage you to read the GAO decision.

https://www.gao.gov/products/b-302358

Thanks for the GAO case. Could the interpretation of the analysis section be applied to this situation to justify that at the parent level, an IDIQ contract would not be subject to FAR 17.2? 

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1 hour ago, Vern Edwards said:

Why are you struggling with explaining? What don't you understand? Is it because you plan to include options in the task orders?

No, the argument here is that FAR 17.204(e) applies to the parent IDIQ as well. They are also tying in FAR 22.1002-1 that limits service contracts to 5 years. I disagree that it applies to the parent but is it simply because the parent doesn't contain options.  Then what about FAR 22.1002-1?

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According to FAR 17.204(e), "Unless otherwise approved in accordance with agency procedures, the total of the basic and option periods shall not exceed 5 years in the case of services... " You are not going to include options periods in the parent IDIQ contract. So if the rule were to apply, it would apply separately to each task order that includes an option.

As for FAR 22.1002-1, did you read the Department of Labor regulation I cited, 4 CFR 4.145(a), which explains that rule? If not, why don't you go do that?

 

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1 hour ago, Vern Edwards said:

According to FAR 17.204(e), "Unless otherwise approved in accordance with agency procedures, the total of the basic and option periods shall not exceed 5 years in the case of services... " You are not going to include options periods in the parent IDIQ contract. So if the rule were to apply, it would apply separately to each task order that includes an option.

As for FAR 22.1002-1, did you read the Department of Labor regulation I cited, 4 CFR 4.145(a), which explains that rule? If not, why don't you go do that?

 

Thanks. 

In reading FAR 22.1002-1, does this not apply to the parent IDIQ, since no funds are placed on the parent level?

4 hours ago, Don Mansfield said:

Which is it? IDIQ or requirements?

 

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9 hours ago, WC79 said:

This is a requirements, indefinite deliver contract. Per FAR 16.501-2(a)

Ok, so it's a requirements contract--not an IDIQ contract like it says in the title of the thread and like you have described it several times.

So, you want to know if a requirements contract can have a ten-year ordering period without options, correct?

Ok, according to FAR 1.102(d) we start with the assumption that such a thing is permissible. Then, we look for laws (statute or case law), executive orders, or regulations that would prohibit it. 

Have you found anything that would prohibit it?

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11 hours ago, WC79 said:

No, the argument here is that FAR 17.204(e) applies to the parent IDIQ as well.

The Department of Defense apparently believes that 17.204(e) applies to the parent IDIQ.

(DFARS)

217.204 Contracts.

(e)(i) Notwithstanding FAR 17.204(e), the ordering period of a task order or delivery order contract (including a contract for information technology) awarded by DoD pursuant to 10 U.S.C. 3403—

(A) May be for any period up to 5 years;

(B) May be subsequently extended for one or more successive periods in accordance with an option provided in the contract or a modification of the contract; and

(C) Shall not exceed 10 years unless the head of the agency determines in writing that exceptional circumstances require a longer ordering period.

----

So, if your agency FAR supplement allows for something similar, then you could have a 60 month base ordering period, but would need at least one option for another 60 months.

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6 hours ago, Vel said:

The Department of Defense apparently believes that 17.204(e) applies to the parent IDIQ.

Actually, DFARS 217.204(e)(i) says that FAR 17.204(e) does not apply to IDIQ contracts (task and delivery order contracts).

FAR 17.204(e) covers only contracts containing options and states that the "period" of such contracts may not exceed five years.

The five-year limit on the ordering period of task and delivery order contracts in 10 USC 3403(f) is separate from the limit in 17.204(e) and is not associated with the use of options. In fact, that five-year limit may be exceeded through the use of options. The purpose of DFARS 217.204(e)(i) is to put DOD COs on notice that the five-year limitation in FAR 17.204(e) does not apply to task and delivery order contracts with options.

I did not find a five-year limit on the ordering period of task and delivery order contracts awarded by civilian agencies pursuant to Title 41 of the USC, except those for advisory and assistance services, but I may have missed it.

I don't think the OP has said whether they work for DOD or a civilian agency.

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8 hours ago, Don Mansfield said:

So, you want to know if a requirements contract can have a ten-year ordering period without options, correct?

Ok, according to FAR 1.102(d) we start with the assumption that such a thing is permissible. Then, we look for laws (statute or case law), executive orders, or regulations that would prohibit it. 

Have you found anything that would prohibit it?

@Don MansfieldVel sent me off to look at the statutes governing task and delivery order contracts. 10 USC 3403(f) says:

Quote

Contract Period.-The head of an agency entering into a task or delivery order contract under this section may provide for the contract to cover any period up to five years and may extend the contract period for one or more successive periods pursuant to an option provided in the contract or a modification of the contract. The total contract period as extended may not exceed 10 years unless such head of an agency determines in writing that exceptional circumstances necessitate a longer contract period.

So, is a requirements contract a task and delivery order contract? If so, you cannot have a requirements contract with a 10-year ordering period unless it includes an option for years 6 through 10.

See 10 USC 3401, Task and delivery order contracts: definitions:

Quote

In this chapter:

(1) Delivery order contract.—The term "delivery order contract" means a contract for property—

(A) that does not procure or specify a firm quantity of property (other than a minimum or maximum quantity); and

(B) that provides for the issuance of orders for the delivery of property during the period of the contract.

(2) Task order contract.—The term "task order contract" means a contract for services—

(A) that does not procure or specify a firm quantity of services (other than a minimum or maximum quantity); and

(B) that provides for the issuance of orders for the performance of tasks during the period of the contract.

I think those definitions encompass requirements contracts for supplies and services, as described in FAR 16.503. If I'm right, then you cannot have a requirements contract with a ten-year ordering period unless you have an option for years 6 through 10.

A professional contract specialist should know how to do that kind of research. Unfortunately, agencies do not provide that kind of education and training, so contract specialists must teach themselves.

It never ceases to amaze me that many contract specialists come here with questions before they've done much research.

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My thoughts.  Speaking of FAR not supplemented by agencies only.

The CO has wide latitude in determining an ordering period for a requirements contract or a IDIQ contract.

Requirements contracts do have monetary limitations. FAR 16.503.

IDIQ contracts have considerations related to single or multiple award. FAR 16.504.

The CO would need to support a period based on need as I would suspect that one could argue a lengthy Requirements or IDIQ could run against the general principles of transparency and fostering competition.  The latter especially if a requirements contract.

Orders would be subject to the principles of time, purpose and amount.  It is here, at the order level, where application of options would then be determined as appropriate based on the principles of FAR part 17.

I do wonder the sensibility of either a Requirements or IDIQ contract being 10 years considering the whims of congress and the dynamics of economies.

My thoughts are based on various reads in doing a relatively deep dive of documents found on the internet.

 

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