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Comparing And Contrasting FAR 8.4 BPAs And IDIQs

 

Can you award an IDIQ Task Order Using the MAS program? Click Here.

So if you have read the blog above, you know that in my opinion, I would never recommend awarding an IDIQ Task Order from a GSA Schedule contract.  In this blog, I am going to provide a comparison between FAR 8.4 BPAs and IDIQ. Why would an ordering agency award an IDIQ task order instead of a FAR Part 8.4 BPA?

IDIQs

Do you have a minimum guarantee? Yes.

FAR 8.4 BPAs

Do you have a minimum guarantee? No.  In fact, an ordering agency is never required to award a task order. Is a BPA a “contract”? Click Here.

IDIQs

Once you award an IDIQ, are you required to award a Task Order? Yes, but not immediately after the award of the IDIQ. The FAR says that at some point thoughout the life of the IDIQ, a TO needs to be awarded to meet the minimum guarantee.  Many agencies have an internal poicy to award the TO concurrently to meet the minimum guarantee.  This actually is derived from the "Red Book" and not the FAR. 

FAR 8.4 BPAs

Once you award a FAR 8.4 BPA, are you required to award a Task Order? No.  As above, an ordering agency is never required to award a task order. Is a BPA a “contract”? Click Here.

IDIQs

Do you have a ceiling price or maximum value on an IDIQ contract?  Yes

FAR 8.4 BPAs

Do you have a ceiling price or maximum value on a FAR 8.4 BPA? No. Why would an ordering agency add an extra limitation that is not required by the FAR? Instead, IAW FAR Part 8.405-3, an estimated value is established with the FAR 8.4 BPA.

IDIQs

What happens to the IDIQ when the ordering agency reaches the maximum value threshold? The IDIQ contract is dead.  For example, let’s say an IDIQ was awarded for a base year + 4 option years, $1 million/per year for a total of $5 million.  If the ordering agency incorrectly calculated IDIQ value due to poor historical data, and has used up its first $1 million in 3 months, what normally happens? The CO modifies the IDIQ and exercises the next option.  What happen if 2.5 years into the contract, the agency has reached the maximum value threshold? The IDIQ contract is dead.

FAR 8.4 BPAs

What happen to a FAR 8.4 BPA when the ordering agency reaches the estimated value of the BPA? IAW FAR Part 8.405-3(e)(iii), the ordering agency seeks additional price reductions and continues on with the performance of the BPA.

IDIQs

What is the standard maximum period of performance of an IDIQ? Base + 4 option periods for a total of five years.

FAR 8.4 BPAs

What is the standard maximum period of performance of a FAR 8.4 BPA? IAW FAR Part 8.405-3(d)(1), Multiple-Award BPAs generally should not exceed five years, but may do so to meet program requirements.  IAW FAR 8.405-3(d)(2) A Single-Award BPA shall not exceed one year. It may have up to four one-year optons. 

IDIQs

Do standard IDIQs requires option periods? Yes.  Extra administration is required as the ordering agency must send letters of intent (LOI) to exercise the option, and then modify the IDIQ contract to exercise the option.

FAR 8.4 BPAs

Are options required on FAR Part 8.4 BPAs?  Currently, options are not required on multiple award FAR Part 8.4 BPAs.  The BPA Contracting Officer need only conduct an annual reveiw  IAW FAR Part 8.405-3(e).  However, single award BPAs require option periods IAW FAR 8.405-3(d)(2). 

Finally, with all the limitations of an IDIQ listed above, I would have a hard time understanding why an ordering agency would rather award an IDIQ instead of establishing a FAR Part 8.4 BPA. What do you think? Is there anything else I should add to this blog?

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