Delivery and Quantity Contracts

FAR Part 16

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Subpart 16.5-Definite Contracts

 

16.500  Scope of subpart.

 

(a) This subpart prescribes policies and procedures for making awards of indefinite-delivery contracts and establishes a preference for making multiple awards of indefinite-quantity contracts.

 

(b) This subpart does not limit the use of other than competitive procedures authorized by Part 6.

 

(c) Nothing in this subpart restricts the authority of the General Services Administration (GSA) to enter into schedule, multiple award, or task or delivery order contracts under any other provision of law. Therefore, GSA regulations and the coverage for the Federal Supply Schedule program in Subpart 8.4 and Part 38 take precedence over this subpart.

 

(d) The statutory multiple award preference implemented by this subpart does not apply to architect-engineer contracts subject to the procedures in Subpart 36.6. However, agencies are not precluded from making multiple awards for architect-engineer services using the procedures in this subpart, provided the selection of contractors and placement of orders are consistent with Subpart 36.6.

 

16.501-1  Definitions.

As used in this subpart—

“Delivery-order contract” means a contract for supplies that does not procure or specify a firm quantity of supplies (other than a minimum or maximum quantity) and that provides for the issuance of orders for the delivery of supplies during the period of the contract.

 

“Task-order contract” means a contract for services that does not procure or specify a firm quantity of services (other than a minimum or maximum quantity) and that provides for the issuance of orders for the performance of tasks during the period of the contract.

 

16.501-2  General.

 

(a) There are three types of indefinite-delivery contracts: definite-quantity contracts, requirements

       contracts, and indefinite-quantity contracts. The appropriate type of indefinite-delivery contract may

       be used to acquire supplies and/or services when the exact times and/or exact quantities of future

       deliveries are not known at the time of contract award. Pursuant to 10 U.S.C. 2304d and 41 U.S.C.

       4101, requirements contracts and indefinite-quantity contracts are also known as delivery-order

       contracts or task-order contracts.

 

(b) The various types of indefinite-delivery contracts offer the following advantages:

     (1) All three types permit—

          (i) Government stocks to be maintained at minimum levels; and

         (ii) Direct shipment to users.

 

     (2) Indefinite-quantity contracts and requirements contracts also permit—

          (i) Flexibility in both quantities and delivery scheduling; and

         (ii) Ordering of supplies or services after requirements materialize.

 

     (3) Indefinite-quantity contracts limit the Government’s obligation to the minimum quantity specified in

            the contract.

 

     (4) Requirements contracts may permit faster deliveries when production lead time is involved, because

            contractors are usually willing to maintain limited stocks when the Government will obtain all of its

            actual purchase requirements from the contractor.

 

(c) Indefinite-delivery contracts may provide for any appropriate cost or pricing arrangement under

      Part 16. Cost or pricing arrangements that provide for an estimated quantity of supplies or services

      (e.g., estimated number of labor hours) must comply with the appropriate procedures of this subpart.

 

16.502  Definite-quantity contracts.

 

(a) Description. A definite-quantity contract provides for delivery of a definite quantity of specific supplies

       or services for a fixed period, with deliveries or performance to be scheduled at designated locations

       upon order.

 

(b) Application. A definite-quantity contract may be used when it can be determined in advance that—

     (1) A definite quantity of supplies or services will be required during the contract period; and

     (2) The supplies or services are regularly available or will be available after a short lead time.

 

16.503  Requirements contracts.

 

(a) Description. A requirements contract provides for filling all actual purchase requirements of

      designated Government activities for supplies or services during a specified contract period (from one

      contractor), with deliveries or performance to be scheduled by placing orders with the contractor.

    

     (1) For the information of offerors and contractors, the contracting officer shall state a realistic

           estimated total quantity in the solicitation and resulting contract. This estimate is not a

           representation to an offeror or contractor that the estimated quantity will be required or ordered, or

           that conditions affecting requirements will be stable or normal. The contracting officer may obtain

           the estimate from records of previous requirements and consumption, or by other means, and should

           base the estimate  on the most current information available.

 

     (2) The contract shall state, if feasible, the maximum limit of the contractor’s obligation to deliver and

            the Government’s obligation to order. The contract may also specify maximum or minimum

            quantities that the Government may order under each individual order and the maximum that it may

            order during a specified period of time.

 

(b) Application.

 

     (1) A requirements contract may be appropriate for acquiring any supplies or services when the

            Government anticipates recurring requirements but cannot predetermine the precise quantities of 

             supplies or services that designated Government activities will need during a definite period.

    

     (2) No requirements contract in an amount estimated to exceed $103 million (including all options) may

            be awarded to a single source unless a determination is executed in accordance with

            16.504(c)(1)(ii)(D).

 

(c) Government property furnished for repair. When a requirements contract is used to acquire work

       (e.g., repair, modification, or overhaul) on existing items of Government property, the contracting

       officer shall specify in the Schedule that failure of the Government to furnish such items in the

       amounts or quantities described in the Schedule as “estimated” or “maximum” will not entitle the

       contractor to any equitable adjustment in price under the Government Property clause of the contract.

 

(d) Limitations on use of requirements contracts for advisory and assistance services.

    

     (1) Except as provided in paragraph (d)(2) of this section, no solicitation for a requirements contract for

             advisory and assistance services in excess of three years and $12.5 million (including all options)

             may  be issued unless the contracting officer or other official designated by the head of the agency

            determines in writing that the services required are so unique or highly specialized that it is not

            practicable to make multiple awards using the procedures in 16.504.

 

     (2) The limitation in paragraph (d)(1) of this section is not applicable to an acquisition of supplies or

             services that includes the acquisition of advisory and assistance services, if the contracting officer

             or other official designated by the head of the agency determines that the advisory and assistance

            services are necessarily incident to, and not a significant component of, the contract.