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I am currently working on a sole-source IDIQ. I have solicited multiple fixed price supply items (non-commercial). My RFP includes range pricing and a Best Estimated Quantity (BEQ) /Annual Demand Value (ADV). The BEQ/ADV is based upon forecast data provided by the customer tempered with common sense and  buy history.

For Instance:

A CLIN on my RFP may look something like this

0001AA Antenna Widget

Quantity Range

100-190 (BEQ/ADV – 150)



I expect discreet pricing for all ranges, for all years of the contract (5 in this instance).

My solicitation/RFP requires a FAR 15.408 table 15-2 compliant proposal. I state specifically that cost analysis must be performed by the offeror for subcontracts identified in the CBOM as having total proposed pricing that exceeds the regulatory threshold indicated in FAR Part 15.403-4 AND that Fair and reasonable subcontractor analysis in accordance with FAR 15.404-3(b) shall be provided.

My Question:

What is the basis of the threshold for subcontract Cost Analysis (CAPA) for an IDIQ contract? Is it based on the max quantity you anticipate buying or the estimated quantity you believe you will buy…The BEQ/ADV or the Max?

In the example above, would you base the threshold on unit price x qty of 270 OR unit price x qty of 270…obviously very simplistic because on some of these RFP’s there are hundreds of items.

I ask this because  I interpret the subcontractor CAPA threshold as being the anticipated maximum value of the contract (max value for all solicited items IDIQ). The problem is that we are asking for ranges above what we historically buy, because our customer anticipates that there could be a need for those higher quantities.

Contractors raise concerns on ROI and provide long lead time for proposal development when they interpret the RFP in that manner.

I believe there truly is a case to be made for limiting the CAPA threshold to what we plan to buy (ADV/BEQ), but do have concerns that high dollar value subcontracts will go unchallenged. Regardless of the CAPA threshold, contractors would still be required to provide subcontractor pricing for all ranges and typically provide a high % of firm quotes with their bid.

I would also like to add some additional context. I make a thorough evaluation of the ADV/BEQ we use and remove ranges (especially high ranges) when I have no reason to believe the Government will have a need to buy at that high a quantity.

Interested in your thoughts on the topic.

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You must stipulate a maximum quantity in your IDQ contract, and you must use the dollar value associated with the maximum quantity when applying the certified cost or pricing data threshold. Take a look at FAR 16.504(a)(4)(ii) and 1.108(c):

16.504 -- Indefinite-Quantity Contracts.


(4) A solicitation and contract for an indefinite quantity must


(ii) Specify the total minimum and maximum quantity of supplies or services the Government will acquire under the contract;

1.108 – FAR Conventions.

The following conventions provide guidance for interpreting the FAR:

 (c) Dollar thresholds. Unless otherwise specified, a specific dollar threshold for the purpose of applicability is the final anticipated dollar value of the action, including the dollar value of all options. If the action establishes a maximum quantity of supplies or services to be acquired or establishes a ceiling price or establishes the final price to be based on future events, the final anticipated dollar value must be the highest final priced alternative to the Government, including the dollar value of all options.

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Based on my understanding of the facts, it appears that subcontractors are being requested to perform a cost analysis. I am not aware of any requirement that a bidder perform a cost analysis of subcontractors in response to an RFP. An analysis, yes. And, a requirement for submittal of certified cost or pricing data.Prime contractors and first tier subcontractors should perform a cost analysis of subcontracts after subcontract selection, before or after award.There is always the possibility, and it is preferred, that there be no submittal of certified cost or pricing data and no cost analysis when there is competition.

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