Quantity Limits on Option Ordering CLINs of IDIQ Contracts

Comment/suggestion with regards to a protest to Court of Federal Claims (COFC). Exercise of option on IDIQ contract. See Magnum Opus Technologies, Inc., v. U. S. and Luke & Associates, Inc. and TerraHealth, Inc., Nos. 10-106C, 10-127C; May 28, 2010. (June 4, 2010)

A: COFC case found for plaintiff (contractor) which alleged Govt.'s exercise of an unpriced IDIQ option violated Competition in Contracting Act (CICA) as Contracting Officer would not be able to make determination that:

(1) the price of an unexercised option is the more advantageous offer and fair and reasonable per [FAR 17.207(d)]; and

(2) that the option satisfies FAR Part 6 with regards to amount specified in or reasonably determinable from the basic contract [FAR 17.207(f)].

B: FAR 16.504 [indefinite Quantity Contracts] subparagraph (a) [Description] states "Quantity limits may be stated as number of units or as dollar values."

Based on A & B above, one should always ensure option ordering CLINs are stated in terms of at least price (if not quantity AND price). Otherwise, exercise of the option would be in violation of CICA.

(By the way, this is another reason advocating the use of using longer base year ordering CLINs in lieu of option CLINs for additional ordering periods.)