Combination FFP/IDIQ Contracts

TAP-

The mere fact that a modification may increase the maximum dollar value of the contract does not, in and of itself, make it "out of scope" and subject to FAR 6.302. There are other potential reasons for such a modification that could be within the scope of the contract. You need to consider the reason for the modification before you can tell whether it is wihtin the scope of the contract or not.

Interesting question. The most interesting quote from the clauses is this one, from the second clause:

The maximum shall not be exceeded except as may be provided for by formal modification to the contract.

Thus, the author(s) of the clause thinks that "formal" modifications do not count against the contract maximum. On what basis did he, she, or they reach that conclusion?

FAR 16.504(a)(4)(ii) says that an IDIQ contract must specify the mazximum quantity of supplies or services the government "will acquire" under the contract. Note that it says, "will acquire," not "will order." The clause at FAR 52.216-22, Indefinite Quantity, says, at paragraph (:

The Contractor shall furnish to the Government, when and if ordered, the supplies or services specified in the Schedule up to and including the quantity designated in the Schedule as the "maximum."

FAR 16.504(a) says that the maximum may be stated in terms of a number of units or as dollar values.

Suppose that an IDIQ contract for services stipulates a maximum of $10 million and hourly labor rates. The rates are to be used to establish firm-fixed prices for task orders. Suppose further that the Government issues ten orders intially worth $1 million each, for a total of $10 million. Now suppose that the government decides that it wants to change one or more of the orders in ways that would increase their prices. Questions:

1. Is the contractor obligated to accept the changes in light of the fact that the indefinite quantity clause says that the contractor's obligation is limited to the $10 million maximum?

2. If the contractor were willing to agree to an increase of the maximum, would such an increase be subject to protest pursuant to FAR 16.505(a)(9)(i)(A)?

3. If the government issues changes that increase the prices of orders before the maximum is reached, should the value of the changes be counted against the maximum, such that the government is thereafter limited in terms of how much more it can order?

Is the maximum the maximum that may be ordered under the ordering clause, or is it the maximum that may be acquired. Is "acquire" synonymous with "order," or does it include modifications of orders? Check out the definition of "acquisition" in FAR 2.101.

Those are fun questions for which I have no supportable answers. Have I missed something in FAR? I have not checked for case law.

OK, I guess I should have been more specific. I'm asking about a modification that would increase the IDIQ amount by either increasing quantities or adding IDIQ line items to the schedule.

Thanks!

OK, I guess I should have been more specific. I'm asking about a modification that would increase the IDIQ amount by either increasing quantities or adding IDIQ line items to the schedule.

Thanks!

Out of scope. End of story.

Vern,

Yes, that's what I thought as quantity is not one of the items listed in the changes clause. But it seems that with other contracts you can bi-laterally change pretty much anything that's within the general scope of the contract. Per NFAS higher level approval is required when a mod will double the original price of the contract. I realize better acquisition planning would have provided more realistic IDIQ quantities, but now I'm stuck administering a ten-year $200+M contract that doesn't meet customer's needs and I have no way to fix it?

Thanks!

(3) Level III contracting officer approval is required when the price of a modification will

exceed the original contract price or when the sum of the modifications issued to date, together

with the one proposed, exceeds the original contract price. This approval is not required for

utility service contracts with approved tariffs.

Vern,

Yes, that's what I thought as quantity is not one of the items listed in the changes clause. But it seems that with other contracts you can bi-laterally change pretty much anything that's within the general scope of the contract. Per NFAS higher level approval is required when a mod will double the original price of the contract. I realize better acquisition planning would have provided more realistic IDIQ quantities, but now I'm stuck administering a ten-year $200+M contract that doesn't meet customer's needs and I have no way to fix it?

Thanks!

(3) Level III contracting officer approval is required when the price of a modification will

exceed the original contract price or when the sum of the modifications issued to date, together

with the one proposed, exceeds the original contract price. This approval is not required for

utility service contracts with approved tariffs.

TAP,

Additional levels of approval above the CO have nothing to do with whether a change is in scope or not. With your IDIQ contract, the competition and resulting contract award was based on quantities/needs ranging from the minimum up to the maximum. In other words, the offerors competed for a contract within those boundaries. You can't later go back and increase the quantity without a JOFOC and complying with FAR part 5.