Indefinite Delivery Indefinite Quantity IDIQ Task Order Contracts

Indefinite Delivery, Indefinite Quantity (IDIQ) Task Order Contracts Convenient Tool for Flexible Contracting © Copyright 2011 - Cole Price 1

Indefinite Delivery, Indefinite Quantity (IDIQ) Contracting What is it? • An IDIQ “master” or “umbrella” contract provides for the procurement of an indefinite quantity of supplies and/or services – – – – Facilitates the order of goods or services defined by a broad SOW Throughout a specified period of performance Allowing a customer to place Task Orders for individual requirements Quantity limits may be stated as number of units or as dollar values Customer is required to order and Seller required to furnish a minimum quantity Contract may also specify maximum or minimum quantities IDIQ Contract does NOT authorize work Work authorized by Task Orders • Authorized by FAR 16. 504 and as adapted by commercial customers • FAR requires customer to buy a Guaranteed Minimum Amount under the contract but leave actual requirements to later determination – Guaranteed Minimum is typically low – Commitment of funds (including guaranteed minimum) does not occur until actual orders are placed • Can be single award or multiple awards © Copyright 2011 - Cole Price 2

Indefinite Delivery, Indefinite Quantity (IDIQ) IDIQ Master Contract & Task Orders IDIQ Master Contract with Multiple Task Orders IDIQ Master Contract Task Order 1 Task Order 2 Task Order 3 © Copyright 2011 - Cole Price Task Order 4 Etc. 3

Indefinite Delivery, Indefinite Quantity (IDIQ) Contracting Diverse Applications • FFP Commercial Production – Aircraft & Space – – Machine & Sheet Metal parts Subassembly & Assembly Tooling Multiple Customers • • Boeing MDC LB & St. Louis General Dynamics Rohr Industries • • CPFF Studies w/ USAF, AFRL T&M Studies w/ USAF, AFRL CPFF/CPIF Software Development for US Navy CPFF Engineering Development for Commercial & US Govt customers • Engineering Service Contracts to address Obsolescence & Product Improvements • Site Construction & Maintenance • GSA Schedule Contracts © Copyright 2011 - Cole Price 4

Indefinite Delivery, Indefinite Quantity (IDIQ) Contracting Master IDIQ Contract - BASICS • Many similarities to Basic Ordering Agreements (BOA) • “D” for IDIQ Delivery Order Contract –F 33615 -11 -D-2014 –“C” for Contract & “G” for BOA • IDIQ Contract is a “contract to contract”, containing –Cover Page (like a SF 26) –Contract Schedule including CLIN’s, Special & General Provisions, SOW, etc. –SOW with high level description of goods or services to be procured by TO’s –CDRL that serves as “shopping list” for Delivery/Task Orders –GFE, GFI, Patent & Data rights, fee, Invoicing, shipping, security –Minimum & Maximum Quantities (usually expressed in dollars) • IDIQ contract does not authorize any work or expenditures –Contains “Ceiling Price(s)” limiting total of Task Orders –Minimum Quantity that must be procured under IDIQ contract –Task Orders authorize expenditures to accomplish specific SOW’s • Contract Value • Funding © Copyright 2011 - Cole Price 5

Indefinite Delivery, Indefinite Quantity (IDIQ) Contracting Task/Delivery Order - BASICS • Task Orders authorize work – – – Cover page (like SF 1155 for TO award, then SF 30 for mods) Employs IDIQ Contract Ts&Cs by referencing contract number Specific SOW & CDRL requirements Contract Value Contract Funding TO values “count” towards IDIQ Minimum & Ceiling Price • Task Orders each managed like a stand-alone contract – – – TO Unique Changes, Value & Funding, including Proposals & Mods Unique SOW & CDRL requirements Separate Accounting Unique ACRN’s Each Task Order is Closed individually • Types of Work authorized may differ – Completion – Level-of-Effort” © Copyright 2011 - Cole Price 6

Indefinite Delivery, Indefinite Quantity (IDIQ) Contracting RFP’s • RFP for IDIQ contract – Very Comprehensive – Pro-forma contract schedule – Terms including Invoicing, Packaging & Marking, Inspection & Acceptance, Ordering, shipping, etc. – Detailed Special & General provisions – Section L, “Instructions to Offeror” – Section M, “Evaluation Factors” • RFP for Task Orders – Very Brief – Cover Letter referencing IDIQ contract invoking schedule, including associated terms – SOW – CDRL – Terms applicable to Task Orders are in IDIQ contract – Proposal TAT often short (5 to 15 days not uncommon) – Proposal Certification may be required – FAR 16. 501 -2(c) allows orders to be any type under Part 16 © Copyright 2011 - Cole Price 7

Indefinite Delivery, Indefinite Quantity (IDIQ) Contracting ADVANTAGES & DISADVANTAGES • Advantages – It is a binding contract – Expedites ordering of services & goods • Reduces Procurement Lead Times • Simplifies Ordering process – Establishes negotiated contract terms – Up-front selection of qualified bidders – Long term Commitments on rates (if T&M) or fee arrangements (CPIF/CPAF) – Assist with medium to long range resource planning – May establish option terms under the contract – May award multiple contracts for the same service, but the minimum requirement must be met with each award – No dollar limit on individual orders (TO’s may be small or large) – Simplified administration – Procuring agencies can MPR money to procure goods or services • GSA schedule contracts being used frequently • NASA MPR money to USAF to authorize Contractors to perform studies • Outsourcing Procurement © Copyright 2011 - Cole Price 8

Indefinite Delivery, Indefinite Quantity (IDIQ) Contracting ADVANTAGES & DISADVANTAGES • Disadvantages – IDIQ (Master) Contract Proposal Prep costs can be considerable – Minimum Order Quantity can be very small • May have stated quantity limits in units or dollar values • Example: $100 K minimum & $100 M Maximum/Ceiling – Limited to a fixed period • Ordering Period • Period of Performance for completion of all Task Orders – May require greater administration, depending upon terms – Limited Competition – Outsourcing Procurement • Use of MPR to Govt Agency w/ IDIQ contract to procure • Loss of Direct Control over Contractor • Some increased costs for Procuring Agency’s Admin & Mgmt Costs © Copyright 2011 - Cole Price 9

Indefinite Delivery, Indefinite Quantity (IDIQ) Contracting Task/Delivery Orders • Multiple Awards – – Preferred as a matter of policy: FAR 16. 504(c) Are mandatory for IDIQ advisory and assistance service requirements exceeding 3 years and $12. 5 million unless • • • Multiple awards are not practicable Only one contractor can reasonably perform the work Only one responsive, responsible Contractor Only one offer is received Per FAR 16. 505(b)(1), “Fair Opportunity” is required for all orders exceeding $3, 000 except: – – – • Urgent requirements; Requirements that can be fulfilled by only one Supplier; or Requirements that are logical follow-ons to previously ordered requirements. Limits on Task/Delivery Orders in Excess of $100 Million – Prohibition on award to a single source unless agency head determines: • • • Only single source can perform work, Firm fixed price task orders, In the Public Interest © Copyright 2011 - Cole Price 10

Indefinite Delivery, Indefinite Quantity (IDIQ) Contracting Task/Delivery Orders • Do. D 2008 Authorization Act Changes for Task or DO over $5 M – – – Notice of the planned task/DO Reasonable time to respond Disclosure of significant evaluation factors Best value documentation Post award debriefing • Protests of IDIQ Task Orders – Awards of task orders (a. k. a. “down selects”) have historically not been protestable – Protests of task order awards • >$10 M were authorized by 2008 DOD Appropriations Act • TO increased the scope, period or maximum value of the IDIQ contract – Protests of IDIQ (Master) contracts are protestable © Copyright 2011 - Cole Price 11

Indefinite Delivery, Indefinite Quantity (IDIQ) Contracting Drives Procurement Changes • New Applications for IDIQ Contracts – Major System Development – Software Maintenance • Multiple Awards • Task Orders are competed • Lowers Customer Administrative Burden on Buyer • Increases Administrative Burden on Contractors, so Contractors must find leaner ways of doing business – Develop new Processes • • • Proposal Prep Process Co-SOW Development Alpha Price Obtain expeditious Subcontractor proposals Expedite estimating, pricing & sign-off approval © Copyright 2011 - Cole Price 12

Indefinite Delivery, Indefinite Quantity (IDIQ) Contracting Key Contract Provisions • • • (Task/Delivery) Ordering Provision Min & Max Order Quantities/Dollars Guaranteed Minimum Fee/Profit Fixed Hourly Rates (T&M or FFP-Lo. E) Order of Precedence – More likely to have conflicts between IDIQ & Task Orders Organizational Conflict of Interest (OCI) Delivery/Task Order Placement Procedures Task Order Proposal Prep Cost recovery – – – • • • Payment Terms Special & General Provisions Period of Performance – – • • • Separate CLIN Use B&P Recover under TO. . . If awarded Ordering Task Order Performance IP Rights Security Requirements Key personnel Reimbursement of Travel costs Subcontracting – ID “approved” subs in contract SOW & CDRL – high level shopping lists © Copyright 2011 - Cole Price 13

Indefinite Delivery, Indefinite Quantity (IDIQ) Contracting To bid or not to bid - Things to Consider 1. How many awards will there be? 2. If there are multiple awards by size and socio-economic categories, what will the order of preference be for deciding the competitive category at the Task Order Level? 3. For Small Business Set-asides, does the Prime have to do 50% of the work? (Contract Level vs. Task Order Level) 4. Can I bid as both a Prime Contractor and a Subcontractor? a. To other Small Businesses b. To other Large Businesses? 5. Is this a bundling of existing contracts? If so which ones? 6. If I win, can I afford to do business development? 7. Who/How to pay for proposal prep? 8. If this award is for new business, what is the projected budget by fiscal year? (Does the customer have any money? ) 8. Do I have the Subcontracting Staff and Process in place to price Task Order proposals & administer this contract? 9. If there is only going to be a single award do the RFP Section L proposal instructions and Section M evaluation criteria lend themselves to making a single award? 10. Contract type (CPFF, CPIF, CPAF, FFP-Lo. E, T&M, or ? ? ? ) 11. Will provisions for Fee/Profit allow for reasonable returns (ROC, ROS, RONA)? 11. Will contract establish fixed rates or rate ceilings? If so, how long? 12. Will Key Personnel provision dedicate resources needed for other programs/pursuits? © Copyright 2011 - Cole Price 14

Indefinite Delivery, Indefinite Quantity (IDIQ) Acquisition Concerns • • • Pricing Baselines – for IDIQ & subsequent Task Orders. Need to Implement a pricing and analysis tool that enables the development, categorization, and factoring of baseline estimates to focus pricing analysis on high risk or competitive advantage areas. Bid Approvals – The standard proposal governance and approval models are often not agile enough to accommodate the timelines required for TO’s Subcontractor Management/Collaboration – Affects Competitiveness & Time needed to respond to Task Order RFP’s. Strategic Variables – Need to assess high rate of complexity based on the wide range of services and work products included under the IDIQ contract. Because each task order SOW will vary, use of a consistent bidding strategy may not be feasible. For this reason it is vital that a variable and configurable proposal strategy be adopted. Subcontracting/Teaming – Speed is critical to compete and win IDIQ contracts, including subsequent task orders. Subcontract agreements are necessary to configure a timely response that meets customer requirements. In order to lower the “overhead” inherent in complex teaming arrangements, a modular strategy and framework should be established. This bid approach aligns subcontractors with services and work products in a pre-bid “matrix” that facilitates rapid proposal TAT’s and PO placement for TO support. Competitive Intelligence/Analysis – As competition increases, contractors will discover that a robust competitive intelligence capability will play a key role in their success. Both the gathering of critical competitor information (while complying with Procurement Integrity laws) and the enablement of an analysis utility will be vital to winning © Copyright 2011 - Cole Price 15