Exceedance of IDIQ Capacity with Modification to Existing Task Order

So you issued an order for A-E Title III (construction management) services under a multiple-award IDIQ contract. Now you want to extend the order because the construction contract is behind schedule. However, extending the order will increase its value, and an increase in its value would exceed the maximum value of the IDIQ contract.

So you want to know if it is permissible to increase the value of the order.

Is that right?

I suspect that since an increase in the value of the order would exceed the maximum value of the IDIQ contract, you would have to prepare a justification for other than full and open competition pursuant to FAR 6.302-1. That's what I suspect. But IDIQ contract practice is all over the map these days and the rules are confusing, so who knows?

If I were in your shoes I would prepare a FAR 6.302-1 justification, which should not be difficult under the circumstances. But check with your contracting staff to see what they say.

Is a FAR 6.302-1 justification necessary for an in-scope* change to a task order?

“6.001 Applicability.

This part applies to all acquisitions except—

       …(c) Contract modifications, that are within the scope* of the contract, including the exercise of priced options that were evaluated as part of the original competition (see  17.207(f));

       …(e) Orders placed under indefinite-quantity contracts that were entered into pursuant to this part when-

   (1) The contract was awarded under  subpart  6.1 or 6.2 and all responsible sources were realistically permitted to compete for the requirements contained in the order; or…

       (f) Orders placed against task order and delivery order contracts entered into pursuant to  subpart  16.5.”

* I understand that the change may exceed the (overall ID/IQ? Individual contract holder) limit?). 

Perhaps the other MATOC contract holders would need to be notified of the necessity to exceed the limit in order to support the extended, separate construction contract. I seriously doubt whether any of them would not understand the need or would object to it. It could happen to any of them under similar circumstances.

We need to be practical here.

vsup said:

The IDIQ ceiling capacity has been met so the question is whether the Task Order can be extended to add additional costs for continued Title III services until the construction contract has ended which will exceed the IDIQ ceiling capacity?

 We are talking about the maximum on the IDIQ as well as the increasing the value of a TO, presumably awarded via fair opportunity right?

So is FAR 52.216-19 in the parent contract?   If so consider (d) of the clause.  

As to the TO consider what your fair opportunity selection process may or may not say.  It might have bearing on what you need to do to increase the TO.  Here I am keying in on that addition of the work cause by the extension and how it may, or may not, be subject to an "exception" to fair opportunity.

In the end I would bet you can extend the TO but you just have administrative actions that you and the contractor must do to make it legit under the terms of the parent IDIQ and TO. 

PS - I do find it interesting that you would have one and the same contractor who designed the work do the construction management.   I  do not know all the details but I had a similar situation way back when and it was akin to letting the fox in the hen house and resulted in significant issues and a claim by the Government against the A-E .

Yes we are wanting to increase the value of the task order and extend the period of performance so services can continue through the end of the construction contract.  The Task Order was awarded under fair opportunity with all multiple award contract holders being given an opportunity to provide these services.  The base IDIQ contract has met its ceiling and by increasing the value of the task order would take the costs over the IDIQ contract ceiling.  The work to be performed is in-scope - it's just a matter of continuing the exact same services until completion of the construction contract.

I am also curious if they are any GAO or other court rulings that indicate it is acceptable to exceed the IDIQ contract ceiling.  I have done some searching in these venues but have been unable to locate any cases relative to this topic.

vsup said:

I am also curious if they are any GAO or other court rulings that indicate it is acceptable to exceed the IDIQ contract ceiling.  I have done some searching in these venues but have been unable to locate any cases relative to this topic.

Erickson Helicopters, Inc., B-415176.3; B-415176.5 (Dec 11, 2017) 

Liebert Corp., B-232234.5, 70 Comp. Gen. 448 (Apr. 29, 1991).

C Culham said:

PS - I do find it interesting that you would have one and the same contractor who designed the work do the construction management.   I  do not know all the details but I had a similar situation way back when and it was akin to letting the fox in the hen house and resulted in significant issues and a claim by the Government against the A-E .

This is common, both for government construction contracts and especially in local government and private A/E contracting.

When I was a consulting engineer in an A/E firm, I usually provided contract admin, QA and technical oversight of the projects that I designed for clients, whether private or local governments and utilities.

As a Registered Professional Engineer, my livelihood, reputation and career always depended upon my honesty and competence in serving our clients.

”Title III” services may mean different things to different organizations. The A/E firm is the “designer of record”.  The USACE often employs The A/E for technical support during construction, shop drawing  and other submittal reviews, etc. USACE generally has its own QA and contract admin staffs.

A problem with many government personnel and organizations is that they often have little knowledge of the licensing laws, professional standard of care in the deign process, the regulations concerning registered PE’s or their roles as the designers of record. The A/E is often considered just another “contractor” rather than a professional partner.

joel hoffman said:

This is common, both for government construction contracts and especially in local government and private A/E contracting.

When I was a consulting engineer in an A/E firm, I usually provided contract admin, QA and technical oversight of the projects that I designed for clients, whether private or local governments and utilities.

As a Registered Professional Engineer, my livelihood, reputation and career always depended upon my honesty and competence in serving our clients.

”Title III” services may mean different things to different organizations. The A/E firm is the “designer of record”.  The USACE often employs The A/E for technical support during construction, shop drawing  and other submittal reviews, etc. USACE generally has its own QA and contract admin staffs.

In this instance that is exactly what we are going - using the A/E "Designer of Record" for technical support during construction, shop drawings, RFI's, submittals reviews, etc.  The QA is being performed by an outside Construction Management company who is separate and apart from the A/E firm.

C Culham said:

Erickson Helicopters, Inc., B-415176.3; B-415176.5 (Dec 11, 2017)

See that decision:

Quote

Task orders that are outside the scope of the underlying multiple-award contract are subject to the statutory requirement for full and open competition set forth in the Competition in Contracting Act of 1984 (CICA), absent a valid determination that the work is appropriate for procurement on a sole-source basis or with limited competition. 10 U.S.C. § 2305(a)(1)(A)(i) (2006); DynCorp Int’l LLC, B-402349, Mar. 15, 2010, 2010 CPD ¶ 59 at 6.

Emphasis added.

The maximum quantity or value of an IDIQ contract is one of its scope-defining terms.

joel hoffman said:

We need to be practical here.

The OP needs to obey the law here.

vsup said:

In this instance that is exactly what we are going - using the A/E "Designer of Record" for technical support during construction, shop drawings, RFI's, submittals reviews, etc.  The QA is being performed by an outside Construction Management company who is separate and apart from the A/E firm.

Yes, those are exactly the typical roles and responsibilities of a “designer of record” under building codes and state licensing laws and regulations.

Vern Edwards said:

The OP needs to obey the law here.

If the need is immediate in order to continue services and not impact construction, this would appear to be an urgent and compelling need to 1) increase the ID/IQ and 2) task order limit . Thus I’d recommend using the exception at FAR  6.302-2.  The justification for using the same A/E could be the same as previously touched upon herein above. But 6.302-2 allows you to proceed ASAP.

joel hoffman said:

But 6.302-2 allows you to proceed ASAP.

True. But why should it an extension of the construction management task order be an unusual and compelling urgency? Was it sudden and surprising news to the construction manager that the construction would take longer than expected?

Remember, justifications for other than full and open competition can be and are protested.

Just sayin'.

I don’t know when they discovered that the ID/IQ ceiling expired or if the impact of not extending the services will be imminent.

Perhaps another PM or office used it up.

It will likely impact the construction contract effort if not extended, unless there is plenty of time to go through the 6.302-1 process prior to extending the task order. 

I doubt if anyone in the A/E community would protest letting the original A/E who is the engineer of record (designer) complete their services during the construction time extension.  The government would have to go through a form of the Part 36 A/E selection process (qualifications based selection - no price competition) to select a new contractor.

So a protestor would have no advantage over the incumbent, who is already responsible for the integrity of the design. The government has no need or benefit to relieve the A/E of those professional responsibilities.

Why would another firm spend the time and resources to compete for services during a time extension?????  A/E’s don’t have vast resources to compete for a small logical follow on effort with marginal chances for award.

On 11/30/2022 at 4:31 PM, vsup said:

...a new task order was issued for the Title III services during construction...

Is this true?  Or, was a task order issued for a fixed period of performance?

If the task order was issued for the Title III services during construction (perhaps with an anticipated period of performance) and construction isn't finished yet, then the scope has not been completed.  In such a case, the extension is not "new" work.  I believe the intent of the contract maximum requirement of FAR 16.504(a) is to limit the quantity of supplies or services that can be ordered under the aggregate of all task orders -- I do not believe the intent of the maximum requirement is to limit the flexibility of administering existing task orders.

For example, if an IDIQ contract has a maximum quantity (expressed in dollars) of $100 million, and the aggregate of all task orders is $99,000,000, then there is no capacity for a new $2 million task order (or a task order modification for "new" work for $2 million).  However, if there was a need for an adjustment in task order price of $2 million such as pursuant to the Changes clause, Government Property clause, Government Delay of Work clause, or other reason, I do not want to believe that a J&A would be required for the modification to effect that adjustment.

In other words, the maximum quantity is a limit on ordering.

joel hoffman said:

...the ID/IQ ceiling expired...

IDIQ contracts don't have ceilings; rather, they have minimum and maximum quantities that can be ordered.

I'm sharing this as food for thought in a professional forum -- I am not making a legal argument.

Let me use another example -- the IDIQ contract maximum quantity (expressed in dollars) is $100 million, and the aggregate of all task orders is $100 million.  Now it is time for an upward wage determination modification for one task order.  I would want to say the contracting officer does not need a J&A to raise the contract maximum to allow for the subsequent contract price adjustment, as nothing new is being ordered to violate the maximum quantity limitation on ordering.

ji20874 said:

Is this true?  Or, was a task order issued for a fixed period of performance?

If the task order was issued for the Title III services during construction (perhaps with an anticipated period of performance) and construction isn't finished yet, then the scope has not been completed.  In such a case, the extension is not "new" work.  I believe the intent of the contract maximum requirement of FAR 16.504(a) is to limit the quantity of supplies or services that can be ordered under the aggregate of all task orders -- I do not believe the intent of the maximum requirement is to limit the flexibility of administering existing task orders.

For example, if an IDIQ contract has a maximum quantity (expressed in dollars) of $100 million, and the aggregate of all task orders is $99,000,000, then there is no capacity for a new $2 million task order (or a task order modification for "new" work for $2 million).  However, if there was a need for an adjustment in task order price of $2 million such as pursuant to the Changes clause, Government Property clause, Government Delay of Work clause, or other reason, I do not want to believe that a J&A would be required for the modification to effect that adjustment.

In other words, the maximum quantity is a limit on ordering.

IDIQ contracts don't have ceilings; rather, they have minimum and maximum quantities that can be ordered.

I'm sharing this as food for thought in a professional forum -- I am not making a legal argument.

Let me use another example -- the IDIQ contract maximum quantity (expressed in dollars) is $100 million, and the aggregate of all task orders is $100 million.  Now it is time for an upward wage determination modification for one task order.  I would want to say the contracting officer does not need a J&A to raise the contract maximum to allow for the subsequent contract price adjustment, as nothing new is being ordered to violate the maximum quantity limitation on ordering.

One would certainly think so - but that seems to make too much sense.

@ji20874@joel hoffman

See Pegasus Global Strategic Solutions, LLC, B-400422.3, March 24, 2009, and tell us what you think.

Quote

Pegasus protested to our Office the modification of SRCTec’s contract and issuance of the delivery order to that firm, arguing that the “adjunct systems” being procured were beyond the scope of the original contract because the agency had exhausted the amount it was allowed to procure under the contract’s ceiling value. _Pegasus argued that the Army was required to compete the requirement on a full and open basis. After developing the record, the GAO attorney assigned to the case conducted an alternative dispute resolution conference, at which he informed the parties that Pegasus’s protest appeared meritorious, given that the agency’s delivery order, and the modification to that order, exceeded the contract’s ceiling value, and thus the modification to the delivery order was beyond the contract’s scope and could not be accomplished noncompetitively absent an appropriate justification and approval._8 This is so because the delivery order, and modification to that order, would result in a contract materially different from that for which the original competition was held, and absent a valid sole-source determination would be subject to the CICA requirements for competition. See, e.g., Liebert Corp., B-232234.5, Apr. 29, 1991, 91-1 CPD ¶ 413 at 11-12. In response, the agency took corrective action, canceling the contract modification, and we dismissed Pegasus’s protest as academic.

Emphasis added.

There is more. I urge you to read the entire decision.

Vern Edwards said:

@ji20874@joel hoffman

See Pegasus Global Strategic Solutions, LLC, B-400422.3, March 24, 2009, and tell us what you think.

Emphasis added.

There is more. I urge you to read the entire decision.

I don’t disagree with the decision based upon the circumstances. And it was segregable, new work to boot.

Im also not disagreeing that an exception to free and open competition isn’t necessary here. vsup has confirmed that the overall ID/IQ limit has been exhausted. We don’t know how long it has been known that the cost limit has been reached, preventing funding the extension.

Justifying sole source to the designer and its subsequent Title III services task should easily be a no-brainer. The design and Title III services were (apparently) within the scope of the initial selection of the incumbent A/E firm. The A/E firm is the designer of record and is responsible for the integrity of the design. It is the firm that should be and is performing those services.

One can’t simply or easily replace that firm at the (supposed) advance state of construction.

To replace the firm would also require a form of the Part 36 A/E selection process, involving further impact delay. Other firms would have slim chances of  winning a new contract for the remaining services. 

The government have to pay another firm to even become thoroughly familiar with the basis of design - if that is even practical or possible. And it would be wasteful of government funding. 

From the limited description of the circumstances here, there will be harm to the government if the construction is delayed by not extending the Title III services ASAP. We don’t know if there is adequate lead time to justify the ID/IQ increase and justify the sole source extension.

The only issue is exceeding the IDIQ maximum. The OP did not ask about the exception to FULL and open competition.

On 11/30/2022 at 9:11 PM, Vern Edwards said:

However, extending the order will increase its value, and an increase in its value would exceed the maximum value of the IDIQ contract.

So you want to know if it is permissible to increase the value of the order.

Is that right?

I suspect that since an increase in the value of the order would exceed the maximum value of the IDIQ contract, you would have to prepare a justification for other than full and open competition pursuant to FAR 6.302-1. That's what I suspect. But IDIQ contract practice is all over the map these days and the rules are confusing, so who knows?

If I were in your shoes I would prepare a FAR 6.302-1 justification, which should not be difficult under the circumstances. But check with your contracting staff to see what they say.

Vern Edwards said:

The only issue is exceeding the IDIQ maximum. The OP did not ask about the exception to FULL and open competition.

To add more background to the discussion, 

The work associated with this Task Order was originally competed amongst all of the multiple award IDIQ holders, in accordance with FAR 16.605(b)(1).  In the Request for Qualifications letters, all Offerors were informed that the A/E Scope of Work includes the serviced noted below, which may be contracted for via one or more independent task orders.

1)      PreDesign Services (PD)

2)      Schematic Design Services (SD)

3)      Design Development Services (DD)

4)      Construction Document Services (CD)

5)      A/E Construction Administration Services (Title III)

6)     Possible Supplemental Services

The IDIQ contracts were awarded in April of 2021; however, upon the need for the extension to the Title III task order the capacity on the IDIQ was checked to determine if there was sufficient capacity only to learn the IDIQ's capacity had already been met in less than one year.  The capacity was set at $10M; however, due to the Great American Outdoors Act funding the agency received, the capacity was exceeded rather quickly as these actions were not accounted for when the IDIQ's were solicited and awarded.

As the original RFQ sent to all of the IDIQ holders included the verbiage denoted above advising them of the services that would be required over the course of the project and that one or more independent task orders could be issued toward that end, I believe we have met and satisfied the CICA requirements.  

The only question remains is how to complete the modification knowing that the ceiling limit of the IDIQ has been exceeded.  I agree with comments in the string that reprocuring could jeopardize the construction contract.  When the task order was issued it was assumed that the construction would end on a certain date so the Title III services task order was written accordingly.  As is sometimes the case, issues arise during construction which could not be foreseen which delays certain aspects of the work from being completed.  We are looking at a four month extension; therefore, it seems impractical and not in the best interest of the Government to go to the costly expense of reprocurement and following A/E Brooks Act procedures which in some cases can take way longer than the prescribed four months needed to complete construction.  In my opinion, it would seem that the risk to the successful completion of the construction contract and possible costs for Government delay due to the Government's inability to timely respond to RFI requests, submittal review, etc. would not be in the Government's best interest.  

From reading the various GAO cases provided, it would appear that a simple J&A would suffice to document the harm to the Government if we did not extend the Title III services versus completing a re-procurement.  I have seen a couple of examples on SAM.gov recently where various agencies have completed J&A's to lift the ceiling limit of the IDIQ.

So now you know what to do. Go to it.

Vern Edwards said:

So now you know what to do. Go to it.

Agree!!

If I was a CS/CO faced with this situation, I honestly would view it as a simple need to extend the task order period of performance.  The extension is necessary due to delays in the construction.  I would just negotiate the four month extension and be done and likely not even consider a need to modify the contract ceiling since new work is not being ordered.

This discussion is interesting and made me think a little differently.  But I’m still not certain my actions would be wrong.

@formerfedAre you assuming that extension of the construction management task order is at no cost to the government?

According to the OP:

On 11/30/2022 at 2:31 PM, vsup said:

The IDIQ ceiling capacity has been met so the question is whether the Task Order can be extended to add additional costs for continued Title III services until the construction contract has ended which will exceed the IDIQ ceiling capacity?

@Vern Edwards I’m assuming the extension is not at no cost but probably not a significant amount.  I’m guessing below the threshold most agencies have for preparation and approval of formal justifications.  I would just do the task order extension with documentation explaining my actions.

Just now, formerfed said:

I would just do the task order extension with documentation explaining my actions.

Explain why you didn't follow the law? That would make it okay? 🤗

I could write a proper justification in less time.

Vern Edwards said:

Explain why you didn't follow the law? That would make it okay? 🤗

Hmmm.  My approach doesn’t sound so good in that light.  But my thinking was I didn’t order new task work - just took action to complete an existing task that’s required because of delays.  The more I think, the more I see I’m wrong.

Just now, formerfed said:

But my thinking was I didn’t order new task work - just took action to complete an existing task that’s required because of delays.

It doesn't matter that you didn't add "new" work if the amount added exceeds the maximum value of the underlying contract.

What do you guys think the "maximum" of an IDIQ contract means? What don't you understand about "maximum? Read FAR 16.505(a)(10))(i):

Quote

No protest under subpart 33.1 is authorized in connection with the issuance or proposed issuance of an order under a task-order contract or delivery-order contract, except—

                     (A) A protest on the grounds that the order increases the scope, period, or maximum value of the contract...

That is not new. That is more than 27 years old. Where have you been all your lives? I'm embarrassed for some of you guys.

Jeez... Writing a justification for other than full and open competition under the circumstances described in the OP requires no more than half a brain. Some of you made it sound like its heart surgery.

An explanation for breaking the law will make it okay? What a crock.

Ooooohhhh, the mission! It's a construction management contract, for Pete's sake, not a contract to provide ammunition, water, and food to the surviving defenders of a city under siege before the attackers' final assault. It's not Stalingrad or Dien Bien Phu.

Back in the 90's the max value of our ID/IQ was doubled. We still hit the new ceiling, but they wouldn't double it a second time.

No, I don't know how the CO justified it. But we were glad to accept it.

Deleted

here_2_help said:

No, I don't know how the CO justified it. But we were glad to accept it.

Maybe the CO didn't justify it. Maybe the CO just did it. We know from this thread that some COs might do just that.

And wouldn't it have been funny if someone in authority had announced that the maximum had been increased improperly and that the orders issued in excess of the improperly-increased maximum were thus issued in violation of the law, were thus void ab initio, and could thus not be ratified_?_

COs may not like rules, or a particular rule, but when enough of them don't comply we just get more rules. That is exactly what happened to MATOC ordering after the enactment of FASA in 1994. The original fair opportunity rule in FAR 16.505(b) was 565 words long and protests were extremely limited. But after enough bozo COs violated it for one reason or another ("work-arounds" "innovations") it's now 2,397 words long and protests are now more liberally allowed, excuses and after-the-fact explanations notwithstanding.

Today, 16.505(b) is one of the most convoluted rules in FAR.

Congratulations.

Agreed.

Actually, formedfed, I'm not so sure that you are wrong.  Maybe, maybe not -- we haven't seen the contract so we don't know its text, and its text certainly will matter.  To me, the key is whether the extension constitutes new work or is merely a matter of contract administration.

If it is new work, beyond the scope of the initial task order, then YES, the parent contract's maximum order limitation applies and a J&A (or other appropriate sole source justification) is required -- the task order modification for new work would be subject to protest, as the task order modification orders new work which exceeds the contract's maximum order limitation.

If it clearly is not new work, and is wholly within the scope of the initial task order, then I want to think that a J&A is not required.  If the dollar aggregate of all task orders equals the contract's maximum quantity (expressed in dollars), the existing task orders can still be administered.  Any of them could be modified to deal with a wage determination update, a government property nonavailability, a government delay of work, and so forth, and in my mind none of these would require a J&A and none of these would be subject to protest, as the task order modification is not ordering new work but is a matter of routine contract administration.  If I did this, I would document my rationale and include that memo in the file.

If it is messy and could be seen either way, or if the approval burden was too onerous, I would recommend doing the J&A.

On 12/1/2022 at 11:35 AM, joel hoffman said:

This is common, both for government construction contracts and especially in local government and private A/E contracting.

When I was a consulting engineer in an A/E firm, I usually provided contract admin, QA and technical oversight of the projects that I designed for clients, whether private or local governments and utilities.

As a Registered Professional Engineer, my livelihood, reputation and career always depended upon my honesty and competence in serving our clients.

”Title III” services may mean different things to different organizations. The A/E firm is the “designer of record”.  The USACE often employs The A/E for technical support during construction, shop drawing  and other submittal reviews, etc. USACE generally has its own QA and contract admin staffs.

A problem with many government personnel and organizations is that they often have little knowledge of the licensing laws, professional standard of care in the deign process, the regulations concerning registered PE’s or their roles as the designers of record. The A/E is often considered just another “contractor” rather than a professional partner.

It took me a while but I knew I could find it.  I appreciate your thoughts but do me a favor and search a AGBCA case regarding Swan Wooster.  You will find an interesting read -"The Measure of Malpractice".  I could not copy the link for some reason.

I was the CS for the contracts.

ji20874 said:

If it clearly is not new work, and is wholly within the scope of the initial task order, then I want to think that a J&A is not required.  If the dollar aggregate of all task orders equals the contract's maximum quantity (expressed in dollars), the existing task orders can still be administered.  Any of them could be modified to deal with a wage determination update, a government property nonavailability, a government delay of work, and so forth, and in my mind none of these would require a J&A and none of these would be subject to protest, as the task order modification is not ordering new work but is a matter of routine contract administration.  If I did this, I would document my rationale and include that memo in the file.

@ji20874I presume the above passage describes a personal theory of yours ("I want to think..."). If I'm wrong, and if you have any authoritative underpinning for your theory, please cite it.

According to the GAO's Pegasus decision, cited and described above, the work that was to be added to the that contract was the product of an engineering change proposal and was the subject of the agency's "Within Scope Determination." See the decision, page 3, second paragraph. However, the added work would exceed the contract maximum. The government wanted to increase the maximum so it could modify the delivery order.

The protestor asserted that contractor could not increase the maximum to order more without a J&A, regardless of whether the modification would be within the scope of the contract work, because it was beyond the scope of the IDIQ maximum. The GAO agreed, and so did the agency. It cancelled the modification and went on to conduct a successful separate procurement. And that procurement was for combat support!

In short, Pegasus indicates that in order to make a J&A unnecessary when modifying an IDIQ order it is not enough for the mod to be within the scope of the work. The modification must also be within the contract maximum. In order to increase the maximum or exceed it (effectively increasing it), you must obtain competition or prepare and receive approval of a justification for other than full and open competition.

The uses to which IDIQ contracts are being put in this post-FASA era confront us with new issues. If we do not want within-scope changes and increases in order values to count against IDIQ maximum values, then we should seek a clarification or a change in the rules.

ji20874 said:If it is messy and could be seen either way, or if the approval burden was too onerous, I would recommend doing the J&A.

Certainly doing a J&A is a safe approach. The work should be minimal.  FAR requirements include only the CO for actions under $750,000 for example

It's the proper approach. See 10 USC 3405(g), Contract modifications:

Quote

(g) Contract modifications.--

(1) Increase in scope, period, or maximum value of contract only by modification of contract.--A task order may not increase the scope, period, or maximum value of the task order contract under which the order is issued. The scope, period, or maximum value of the contract may be increased only by modification of the contract.

(2) Use of competitive procedures.--Unless use of procedures other than competitive procedures is authorized by an exception in subsection (a) of section 3204 of this title and approved in accordance with subsection (e) of such section, competitive procedures shall be used for making such a modification.

(3) Notice.--Notice regarding the modification shall be provided in accordance with section 1708 of title 41 and section 8(e) of the Small Business Act (15 U.S.C. 637(e)).

See also 41 USC 4103(e).

What we’re arguing about here is small stuff.  The larger issue is why don’t contracts like this reflect long terms needs to avoid things like hitting the ceiling in the first year?  Sure legislation can add work in this example but legislation is years in the making.  Agency budget, planners and management know about likelihood of that well in advance.  It’s just not communicated to contracting.

Probably contracting will get blamed for delays the next time a need arises for A/E services.

formerfed said:

What we’re arguing about here is small stuff.

This site advertises itself as a "forum," which, according to my dictionary, is "a place, meeting, or medium where ideas and views on a particular issue can be exchanged."

What we're arguing about here is (1) the proper interpretation and application of a long-standing rule in a particular set of circumstances and (2) our obligations as "professionals," as some like to call themselves. Participants here have proposed various courses of action, and we have been arguing about them. The arguments prompted me to think about an old rule in a new light.

The OP's problem is small, in my opinion, and easily solved. (Sad to say, but this forum is mostly a Q&A site for the "quick question" crowd.) And who knows what people have actually been doing out there. But issues about our "professional" obligations (see FAR 1.102 and 1.602), which in this case seem to have arisen from a conflict between formalism and pragmatism, are not.

On 12/3/2022 at 9:55 AM, Vern Edwards said:

Thank you for all the comments and suggestions and for providing your professional insights into the matter.  I believe I have what I need to move forward with this matter.  Thank you all again for your time, energies and thoughts.

ji20874 said:

a wage determination update

ji20874, wouldn't this be justified with a FAR 6.302-5 J&A, Authorized or required by statute, specifically citing the 40 U.S.C. chapter 31, subchapter IV, Wage Rate Requirements (Construction) statute?

ji20874 said:

a government property nonavailability, a government delay of work

Wouldn't these be justified with a FAR 6.302-1 J&A, "Only one responsible source and no other supplies or services will satisfy agency requirements", specifically citing the agency's GFP or delivery date requirement planned for this modification?

There is a lot of good guidance on this website, @vsup:

See also:
/legacy/reg/4ffd8f42416d1544.html

See 16.504(a)(4)(ii):

Quote

(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...

See FAR 16.505(b)(10)(i):

Quote

(10)(i) No protest under subpart 33.1 is authorized in connection with the issuance or proposed issuance of an order under a task-order contract or delivery-order contract, except—(A) A protest on the grounds that the order increases the scope, period, or maximum value of the contract...

What FAR does not tell us, and what I have not been able to find, is a statement of the purpose of the maximum. Is it to protect the contractor from excessive government demand? Is it to ensure that the government is required to get competition at some point? Is it both? Is it something else?

The fact that FAR 16.505(b)(10) authorizes a protests against an order that "increases" the maximum suggests that at least one purpose is to ensure competition at some point. But I'm speculating. Thus far I have found no information about the origin of the requirement for a maximum. I suspect that the original purpose was to protect the contractor. If so, it may mean that the CO cannot increase the maximum except by supplemental agreement.

Vern Edwards said:

In order to increase the maximum or exceed it (effectively increasing it), you must obtain competition or prepare and receive approval of a justification for other than full and open competition.

The OP said (s)he had a CPFF task order.  I am curious how the foregoing rule would apply if the task order value needed to be increased after the fact, i.e., performance under the TO was complete, because the contractor had a higher final indirect cost rate than contemplated causing an overrun.  For these purposes, the contractor did not know or could not have known of the overrun in time to give the CO notice of the overrun under the LOC clause.

Voyager, 

I won't do a J&A for these sorts of matters, even if they cause the sum of already-issued orders to exceed the maximum ordering limitation when that limitation is expressed in dollars -- in my mind, a J&A is needed in such a case only if the Government is acquiring new work from the contractor.

There's only been two GAO cases, right?  When I read Liebert, the FAA's maximums-by-CLIN clearly were a unique circumstance to the contract.

When I read the more recent Pegasus Global, I got from it that a GAO attorney conducted ADR before issuance of the decision, and in it the protest risk was determined too great by the Army, due to Liebert.  It was in this ADR, the decision says, that the parties decided the change, "[W]as within the scope of SRCTec’s contract, but for the fact that the upgrade was accomplished by a contract modification that exceeded the contract’s maximum ceiling value."  See B-400422.3, at 8.

Okay, but what if the Army had challenged the protest on the grounds that the changed work could not significantly affect the competitive positions of offerors, a standard against which many other GAO cases are tested?

I think we are due for another case besides these two.  It depends on the answer to Vern's question, though, as these were case law on third-party protests of scope, not scope disputes between Contractor and Government.

I have checked in with a number of colleagues on this matter. Most, but not all, are lawyers. They have fallen into three factions.

• The first and largest faction say that a J&A is "obviously" necessary because the TO will raise the contract value to more than the maximum. They cite the "plain language" of FAR, especially 16.505(b)(10), and the terms of the statutes that I cited above. I'm in that faction.
• The second faction agrees with ji20874 that within scope mods to TOs do not apply to the maximum and that a J&A is not required for a within scope mod even if it will cause the value of the contract to exceed the ceiling.
• The third faction is not sure whether a J&A is required, but thinks that a J&A is the "safest" course of action and is easier than dealing with a protest.

I have delved into the history of IDIQ contracts. The coverage in the 1954 Armed Service Procurement Regulation made no mention of a minimum or a maximum. The 1960 Federal Procurement Regulation required a minimum and a maximum and read very much liked the FAR coverage prior to the enactment and implementation of FASA in 1995. I could find no explanation anywhere, including in the Congressional Serial Set, that explained the purpose of the maximum. The requirement for a minimum appears to have been added in response to court decision which held that a minimum was necessary to provide consideration to bind the parties.

I must admit that I'm intrigued by ji20874's point about increases in wage determinations. It does not make sense to me that they would apply to the maximum.

My bottom line is that if I were CO of an IDIQ contract and wanted to do a within-scope mod to a task order that would raise the sum value of all tasks orders issued to more than the maximum, I would (1) prepare a J&A in support of a modification to increase the contract maximum value and (2) then mod the maximum value and the task order by supplemental agreement. I do not believe that a CO can unilaterally exceed the contract maximum value by changing the task order. I don't think a CO can exceed the maximum contract value except by supplemental agreement. I don't believe that short cuts are sound practice, even with contractor consent.

Although the facts are different𑁋the contract was for supplies, not services𑁋see Liebert Corp., GAO B-232234, April 29, 1991:

Quote

An order in excess of the maximum quantity stated in the contract would be outside the scope of the contract. Such an order would result in a contract materially different from that for which the original competition was held and, absent a valid sole-source determination, would be subject to CICA requirements for competition. See Neal R. Gross & Co., Inc., 69 Comp. Gen. 292 (1990), 90-1 CPD ¶ 212; Clean Giant, Inc., B-229885, supra. We therefore sustain the protest to the extent that the quantities to be ordered are in excess of the stated maximum quantities in the Exide contract.

I'm not sure what bearing that has on a contract under which the maximum is stated in terms of dollars.

Retreadfed said:

The OP said (s)he had a CPFF task order.  I am curious how the foregoing rule would apply if the task order value needed to be increased after the fact, i.e., performance under the TO was complete, because the contractor had a higher final indirect cost rate than contemplated causing an overrun.  For these purposes, the contractor did not know or could not have known of the overrun in time to give the CO notice of the overrun under the LOC clause.

Where did the OP say that s(he) had a CPFF task order?

It’s task order for “Title III” A/E services during an execution of a separate contract to construct the project that the A/E designed. The construction contract has been extended.  The A/E task order needs to be extended but the ID/IQ has reached the stated maximum amount for expenditures.

Voyager mentioned CPFF, apparently in reference to a post by ji20874 mentioning another thread concerning a CPFF contract or task order.

Retreadfed said:

The OP said (s)he had a CPFF task order.  I am curious how the foregoing rule would apply if the task order value needed to be increased after the fact, i.e., performance under the TO was complete, because the contractor had a higher final indirect cost rate than contemplated causing an overrun.  For these purposes, the contractor did not know or could not have known of the overrun in time to give the CO notice of the overrun under the LOC clause.

Great point.

Don Mansfield said:

Great point.

Great point but not applicable to the situation in this thread.

It has often occurred to me that there should be a class (maybe and entirely separate curriculum) covering "interpretation, planning, and execution of contractual actions based on somebody else's crappy work".  This would be in recognition that as a practical matter, most CO's spend their careers trying to understand and manage a contract awarded by someone who has moved on long ago.  This is particularly true in task order contracting, where you might be placing an order against a very poorly written IDIQ authored by some unknown person in a whole 'nother agency.

I say this because I was recently handed a task order against the GSA OASIS MAC, which had busted its maximum a long time ago without ever acknowledging it.  Even as an entirely innocent party, I still had to justify my own actions in regard to the instant option exercise.  Bottom line, I had to craft a JEFO which 1) explained why the current requested increase was justified, and 2) subtlety glossed over the fact that no JEFO was ever approved in the past for mod amounts over the award TCV (this is why we make the big bucks after all).

Considering that this was a 5-year task order with 14 four-month option periods (who does that???), the busted TCV was the least of my problems.

On 12/1/2022 at 4:13 PM, vsup said:

The work to be performed is in-scope - it's just a matter of continuing the exact same services until completion of the construction contract.

I've always viewed this type of work (Title II or PCAS) as a severable service, because the benefit is received at the time the services are rendered.  Depending on the type of funding you have, and the original duration of the task order; you may not be able to continue to use the funds that are currently obligated on the task order. Assuming it was annual appropriations and the duration was a year, I believe that if you want to extend the term of the task order, you would need to add current year funds for the amount for the work not yet performed. If you deobligate the expired funds at the same time, and there is no additional work being added, this won't increase the overall value of the task order.

Some background:

In 1995, FAC 90-33, 60 FR 49723, September 26, 1995, which implemented the task and delivery order contracting rules created by FASA, added this sentence to 16.504(a)(4)(ii): "Specify the total minimum and maximum quantity or dollar value of supplies or services to be acquired under the contract[.]"

In 2000, FAC 97-17, 65 FR 24317, April 25, 2000, replaced that sentence with this one, which now appears in FAR 15.504(a): "Quantity limits may be stated as number of units or as dollar values."

Prior to FAC 90-33, FAR 16.504 made no mention of dollar values, only quantities. See, e.g., 48 CFR 16.504, 10-1-94 Edition.

Neither FAC explained or commented upon the addition of the phrase "dollar values." However, the phrase "or dollar value" was mandated by FASA itself, Pub. L. 103-355, §§ 1003 and 1054:

"SOLICITATION.-The solicitation for a task or delivery order contract shall include the following...(2) The maximum quantity or dollar value of the services or property to be procured under the contract."

Quantities of units is one thing, dollar values is another. The addition of "dollar values" was probably in recognition of the fact that services are not always measured as quantities of units.

The issue we've been discussing is the product of Congress's and the FAR councils' use of the phrase "dollar values" without explanation as to whether and how changes in dollar values were to apply to the maximum. I have not yet reviewed the congressional hearings leading to FASA, but I suspect that neither Congress nor the councils thought through the implications and potential complications of stating the maximum as a dollar value.

It seems to me, however, that the FAR councils should have thought it through and provided some guidance. I think that failure to apply the dollar value of task order work modifications (not wage determination increases) to the maximum quantity of an IDIQ contract effectively renders the maximum a nullity.

Vel said:

I've always viewed this type of work (Title II or PCAS) as a severable service, because the benefit is received at the time the services are rendered.  Depending on the type of funding you have, and the original duration of the task order; you may not be able to continue to use the funds that are currently obligated on the task order. Assuming it was annual appropriations and the duration was a year, I believe that if you want to extend the term of the task order, you would need to add current year funds for the amount for the work not yet performed. If you deobligate the expired funds at the same time, and there is no additional work being added, this won't increase the overall value of the task order.

The funds are no year funds so this is not an issue in this instance.

joel hoffman said:

Where did the OP say that s(he) had a CPFF task order?

Good question.

Vern Edwards said:

I think that failure to apply the dollar value of task order work modifications (not wage determination increases) to the maximum quantity of an IDIQ contract effectively renders the maximum a nullity.

Why the distinction between work and nonwork (?) modifications? Why would that matter?

Because I think the purpose of the limit was to establish one dimension of the scope of the contract in terms of how much could be bought based on a single competition . I.e., the quantity. I don’t think no work mods affect quantity.

This is speculation on my part.

My conclusion - What a CO will not do is the life blood of protests!

I think it comes down to the "scope of the competition" test, which is stated in Neil R. Gross & Co., 69 Comp. Gen. 247 (B-237434), 90-1 CPD ¶212:

Quote

In weighing [whether a modification is beyond the scope of the competition], we look to whether there is a material difference between the modified contract and the prime contract that was originally competed…. In determining the materiality of a modification, we consider factors such as the extent of any changes in the type of work, performance period and costs between the contract as awarded and as modified…. We also consider whether the solicitation for the original contract adequately advised offerors of the potential for the type of changes during the course of the contract that in fact occurred … or whether the modification is of a nature which potential offerors would reasonably have anticipated under the changes clause.

If the solicitation for an IDIQ contract contained a Changes clause, the offerors were on notice that prices of orders could be adjusted after issuance as a result of change orders. While I think that potential offerors could reasonably expect the agency to ensure that orders are within the contract maximum before issuing them, I don't think it's reasonable to expect the agency to continuously look over their shoulder to ensure subsequent price adjustments don't exceed the contract maximum.

More to digest.

https://www.gao.gov/products/b-299315.7%2Cb-299315.8

Carl, I have no idea why you mentioned a ceiling on a CPFF contract???? This thread  isn’t about a CPFF A/E contract or task order. The original poster has never hinted that the A/E task order is CPFF! 

Secondly, nobody is going to protest extending the A/E task order in this thread. The problem to solve is raising the ID/IQ upper limit so that the government can issue a relatively small increase to the task order to provide designer support during a time extension on a separate construction contract that the A/E designed. If there was ever a situation where a sole source would need to be justified,  this would be a cinch to justify. No other A/E would be interested, either.

joel hoffman said:

Carl, I have no idea why you mentioned a ceiling on a CPFF contract????

Because you and Retread kicked it around as part of the thread.   I never said the OP did.  Because it was brought up I added what I found, just that simple.

joel hoffman said:

nobody is going to protest extending the A/E task order in this thread.

Let me change my conclusion - What a CO will not do and thinking that everything is 100% is the life blood of protests.

Don Mansfield said:

I don't think it's reasonable to expect the agency to continuously look over their shoulder to ensure subsequent price adjustments don't exceed the contract maximum.

😄 That's a laugh. What does reasonableness have to do with anything when it comes to rules? Rules are rules. The questions are: What do they mean? and How are they to be applied? Think about the late electronically-submitted proposal rules.

The rules in this case are (1) an IDIQ contract must state either a maximum quantity or a maximum dollar value, and (2) a company may protest the issuance of an order that increases the maximum dollar value. And see the statutes that I quoted above.

So if an IDIQ contract states a maximum dollar value, then it seems reasonable that the CO must keep track of the contract dollar value. Thus, the question is: How is contract dollar value to be determined? What dollars count against dollar value?

If a CO issues a CPFF task order, and if the task order overruns, does the amount of the overrun count against the maximum contract dollar value? Why? Why not? What does the rule say?

Does the amount of a within-scope change to an order count against maximum contract dollar value? If not, why? What does the rule say?

Does the amount of an out-of-scope change to an order count? If so, why? What does the rule say?

What changes in dollar amount count as changes in dollar value? Does a CO have go keep track of some, but not others? If so, which ones? What does the rule say?

Or should COs just go about their business as they see fit and deal with protests if and when they arise? Would that approach be "professional"?

Is the rule clear? Can you base an argument on the language of the rule alone, or do you have to make a bunch of assumptions? And if you must make assumptions, on what do you base them? Reasonableness? From whose point of view?

I did not go through an example exercise but as I was researching  I do wonder if other "limitation" clauses for a CPFF Task Order (in the order itself or the parent IDIQ) play into the whole of monitoring.

Also I do have trouble applying decisions from other than IDIQ contracts to a discussion of scope regarding a maximum for an IDIQ.   Case in point was the last decision I posted.  It would seem a J&A solves the debate on raising an IDIQ maximum.

"As discussed below, we do not need to decide the question of whether the modification is within the scope of MEP's contract because, even assuming that it was not, the agency properly supported the modification with a reasonably based J&A under 10 U.S.C. sect. 2304(c)(1)."

A modification of the maximum grounded on a sound J&A mutes the issue. But it's "extra" effort. I'd bet that most agencies do not track order mods against the maximum.

Just now, Vern Edwards said:

I'd bet that most agencies do not track order mods against the maximum.

Not even a bet.   They do not even track orders with regard to the maximum!  While my experience is aged factually it was so.  I expect research today would find IDIQ's (not within GSA FSS) that carry some sort of language that says not only the agency can use but so can XYZ agency (see example below).    I would offer that the whole discussion in this thread was to an extent a reason agency's evolved to BPA's in some cases.  Minor reason,  yes, but I did sit in on discussions where the subject of maximums came up.

https://www.blm.gov/press-release/blm-announces-contracting-opportunities-multi-agency-orphaned-well-cleanup-program

Vern Edwards said:

What does reasonableness have to do with anything when it comes to rules?

When applying the "scope of the competition" test, the GAO considers "whether the modification is of a nature which potential offerors would reasonably have anticipated under the changes clause."

Don Mansfield said:

I think it comes down to the "scope of the competition" test,

Don, this test would apply if a protest is filed.  However, there is another aspect to this issue and that is whether the contractor is required to comply with a mod that results in the maximum dollar value of an IDIQ contract being exceeded.   The resolution of this question would fall within the disputes process and not protest procedures.

Retreadfed said:

Don, this test would apply if a protest is filed.  However, there is another aspect to this issue and that is whether the contractor is required to comply with a mod that results in the maximum dollar value of an IDIQ contract being exceeded.   The resolution of this question would fall within the disputes process and not protest procedures.

Yes, good point. I was referring to the issue of whether a J&A would be required.

Don Mansfield said:

When applying the "scope of the competition" test, the GAO considers "whether the modification is of a nature which potential offerors would reasonably have anticipated under the changes clause."

Okay, but even if the scope of the competition test applies, and I'm not certain that it does, would it be reasonable to anticipate that the government would increase the dollar value of the contract to more than the maximum dollar value?

I'm not convinced that would be necessary if, when placed, the order was within the maximum.

Retreadfed said:

However, there is another aspect to this issue and that is whether the contractor is required to comply with a mod that results in the maximum dollar value of an IDIQ contract being exceeded.

I don't think so. See FAR 52.216-22(b), second sentence. I think that overrides the Changes clauses.

Of course, it all depends oh now you measure dollar value.

I think COs must track IDIQ contract dollar value and consider the effect on dollar value when modifying the contract. And I do not think a CO can increase an IDIQ maximum dollar value except by supplemental agreement.

The policymakers should provide clarification, except that I suspect no one would want it. They're doing whatever they like.

On 12/7/2022 at 5:49 AM, C Culham said:

Because you and Retread kicked it around as part of the thread.   I never said the OP did.  Because it was brought up I added what I found, just that simple.

Let me change my conclusion - What a CO will not do and thinking that everything is 100% is the life blood of protests.

I’m not saying don’t do what you have to do to legally increase the limit on the ID/IQ to add a few more months to the design support on the task order. Just do it as quickly as possible.

I’m saying that when you do it, no other A/E firm is going to protest the out of scope action. The most they could get out of it is a chance to do what? Participate in an A/E selection for a small contract that they won’t win?

There is no price competition in an A/E selection. It’s qualification based selection. However, the government won’t select a firm that has to learn the design and construction project from scratch, plus cause delay impact costs on the construction contract! The designer of record would win a new competition to complete the work they are already performing satisfactorily.

It would be very disruptive. A/E firms are dependent upon maintaining good relations with clients . They generally aren’t going to disrupt an active A/E contract and a construction contract for a “chance” to earn what is essentially peanuts.

I am a registered professional engineer. I was in an A/E firm before I went to work for the government. I’ve associated with A/E firms since then over the course of four decades. No reputable A/E firm is going to protest an action to let the current A/E firm, as the designer of record, finish this project, based upon the scenario presented herein.

Most A/E firms don’t have unlimited financial resources to pursue small tasks, especially one where the client is  satisfied with their current firm. Why would they risk pissing off the government to make some point? It’s unrealistic to fear the possibility of a protest here.

If the need is immediate, use the exception to full and open competition that allows the quickest action to fund the extension.

This would be a great example for a Senator William Proxmire Golden Fleece Award. If you don’t know who he was, I suggest looking him up…

…and talk about going down rabbit holes. CPFF? Sheesh!!!!

One last question on this topic.  If the agency has MATOC's would this change the answers to any of these questions when only one IDIQ MATOC holder would be over their capacity.  If not, are there any court cases that you all know of that involve MATOC's.

On 1/11/2023 at 4:05 PM, vsup said:

One last question on this topic.  If the agency has MATOC's would this change the answers to any of these questions when only one IDIQ MATOC holder would be over their capacity.  If not, are there any court cases that you all know of that involve MATOC's.

I believe that it would be much simpler [EDIT: here] if only one MATOC holder will exceed their capacity than if the entire MATOC limit is exceeded.

You would only be dealing with the other pool members than full and open industry competition. No firm outside of the MATOC would be an interested party, in line for task orders on the contract.

I think that you could justify the necessity to modify or change the task order to the other pool members so the incumbent can complete the service. You could use a rational similar to the logical follow on exception to equal opportunity, as has been explained earlier herein. The incumbent is the designer of record for a construction contract which has to be extended, etc, etc.

It’s not a new effort, it’s completing an existing effort, necessary to maintain the integrity of the design and to avoid adversely impacting the construction contract progress - cost and time avoidance.

No I don’t have a court case. Instead of constantly living in fear of protests, effectively communicate with the other pool members, expressing the necessity. I seriously doubt if they would object…if the extension is for a relatively small dollar amount that wouldn’t prejudice their interests as fellow MATOC members.

If all else fails for the situation (individual MATOC cost limit would be exceeded to complete the existing task), one should be able to issue a small, new sole source A/E contract, using a simplified A/E selection procedure.

EDIT: another option, which would be legal, although not necessarily make sense, would be to issue a small task to one of the other pool members and tell them to subcontract the work to the incumbent. This would be a last resort if the cost limitation is an absolute.

What would you do if the limit was reached and there was a valid claim by the A/E firm which would require additional payment? I don’t think that the limit is intended to be an absolute block on completing an existing A/E task.

It could happen to any of the pool members.

For A/E MATOCs, the scenarios presented in this thread could be a lesson learned not to box yourself in with absolute cost limitations. Include some flexibility for situations,  such as that presented here (e.g., “necessary”, “non-discretionary” modifications to existing task orders, arising during execution) where possible in the description of the limitations…

For that matter, the same philosophy could be appropriate for construction MATOCs or SATOCs.

vsup said:

If the agency has MATOC's would this change the answers to any of these questions when only one IDIQ MATOC holder would be over their capacity.  If not, are there any court cases that you all know of that involve MATOC's.

I don't remember what all of "these questions" were, and I'm not going to go back and look.

But, generally, each of the multiple-award contracts has its own maximum and minimum and is treated separately, unless the contracts in some way state otherwise.

vsup said:

If the agency has MATOC's would this change the answers to any of these questions when only one IDIQ MATOC holder would be over their capacity.

By capacity, I presume you mean maximum amount that can be ordered.  In my experience, when an RFP is issued for a MATOC, it states the maximum amount that may be ordered under all contracts awarded pursuant to the RFP.  When the contracts are awarded, each individual contract states the maximum for all contracts listed in the RFP as maximum for each individual contract.  In this case, if one contractor exceeds the maximum stated in its contract, which is the same as the maximum stated for all contracts combined, would this not impact all MATOC contractors?

Retreadfed said:

By capacity, I presume you mean maximum amount that can be ordered.  In my experience, when an RFP is issued for a MATOC, it states the maximum amount that may be ordered under all contracts awarded pursuant to the RFP.  When the contracts are awarded, each individual contract states the maximum for all contracts listed in the RFP as maximum for each individual contract.  In this case, if one contractor exceeds the maximum stated in its contract, which is the same as the maximum stated for all contracts combined, would this not impact all MATOC contractors?

If one contractor “exceeds” the maximum in its contract, if it is the same as the maximum stated for all contracts combined, this would impact all MATOC contractors.

Beyond that, it would seem that this contractor has been awarded all of the task orders.

In addition, the limitation prevents the government from “exceeding” any single pool member’s contract.

Is a "multiple-award task order contract" (MATOC) one contract with multiple parties or multiple separate contracts with identical terms?

Vern Edwards said:

Is a "multiple-award task order contract" (MATOC) one contract with multiple parties or multiple separate contracts with identical terms?

My belief it should be the latter, at least separate contracts.  Not sure how the courts might view it but is how I have always viewed it.   My thought it is not identical terms however because terms might different - example is not pricing a term?

Retreadfed said:

By capacity, I presume you mean maximum amount that can be ordered.  In my experience, when an RFP is issued for a MATOC, it states the maximum amount that may be ordered under all contracts awarded pursuant to the RFP.  When the contracts are awarded, each individual contract states the maximum for all contracts listed in the RFP as maximum for each individual contract.  In this case, if one contractor exceeds the maximum stated in its contract, which is the same as the maximum stated for all contracts combined, would this not impact all MATOC contractors?

Here’s an example.  An interesting piece is the last sentence stating there’s no upper limit on task orders

Quote

B.4 MAXIMUM CONTRACT CEILING AND MINIMUM CONTRACT GUARANTEE
(a) Maximum. The maximum contract ceiling value of all contracts in this multiple award procurement is established at $50 Billion dollars.
(b) Minimum. The minimum guaranteed award amount for this IDIQ contract is $2,500 dollars per Contractor for the full term of the Master Contract. The exercise of the option period does not re-establish the contract minimum.
Should the contract expire or be unilaterally terminated for convenience by the Government without the contractor receiving the minimum guaranteed award amount, the contractor may present a claim to the contracting officer for an amount not to exceed the minimum guaranteed award amount. The minimum guaranteed award amount is not applicable if the contract is terminated for default or is bilaterally cancelled by the parties. The contractor has one year after contract termination or expiration to submit their claim to the contracting officer or waives entitlement.
(c) The Government has no obligation to issue Task Orders (TO) to the Contractor beyond the amount specified in paragraph (b) of this clause. Once the conditions of paragraph (b) have been met the Contractor continues to be afforded fair opportunity, as per FAR 16.505(b)(1), to compete for Task Orders issued through the expiration of the Master Contract or termination of the Contractor’s Master Contract, whichever occurs first.
(d) As a result of an awarded Task Order that satisfies the minimum contract guarantee the government will deobligate the funded minimum contract guarantee from the Contractor’s Master Contract.
There is no maximum dollar ceiling for an individual Task Order.

On 1/11/2023 at 7:20 PM, joel hoffman said:

Instead of constantly living in fear of protests, effectively communicate with the other pool members, expressing the necessity.

Maybe "Put them on notice" is a better term than "effectively communicate"?  OASIS for example has hundreds of SB & LB vendors.   What do you do if someone objects?  Assuaging the belligerence of even a small % of the OASIS vendors would be a huge task.

My agency did an industry day for OASIS SB Pool 1 under NAICS 541611 and we had 95 participants.

Vern Edwards said:

Is a "multiple-award task order contract" (MATOC) one contract with multiple parties or multiple separate contracts with identical terms?

I think the answer to that (whichever it is) once embraced will help us address the matter of how to apply thresholds to MATOCs.

Maybe it's to be found somewhere, but I've looked and not located in policy or regulation, any clear treatment of how to value MATOCs when applying thresholds for such purposes as Agency approvals and applicability of the Contractor Performance Assessment Reporting System (CPARS)...

If a MATOC is one contract with many parties, would a breach by one contractor entitle the others to compensatory damages, if any?

Vern Edwards said:

Is a "multiple-award task order contract" (MATOC) one contract with multiple parties or multiple separate contracts with identical terms?

Neither, but the latter is the closest answer.  Under an RFP for MATOCs, a certain number of contracts can be reserved or set aside for small business concerns.  Thus, you can have some contracts that are awarded to large businesses that will have one set of terms and conditions, e.g., a requirement  for a small business subcontracting plan, and contracts awarded to small businesses with another set of terms and conditions, e.g., limitation on subcontracting.

REA'n Maker said:

Maybe "Put them on notice" is a better term than "effectively communicate"?  OASIS for example has hundreds of SB & LB vendors.   What do you do if someone objects?  Assuaging the belligerence of even a small % of the OASIS vendors would be a huge task.

My agency did an industry day for OASIS SB Pool 1 under NAICS 541611 and we had 95 participants.

My comment was addressing the A/E MATOC in this thread.

I don’t disagree with you concerning MATOCs with many contract holders.