16.504
Indefinite-quantity contracts
Indefinite-quantity contracts require clear minimum and maximum quantities, detailed ordering procedures, and a strong preference for multiple awards to ensure competition and flexibility.
Overview
FAR 16.504 defines the requirements and procedures for indefinite-quantity contracts (IQCs), which allow the government to acquire an unspecified quantity of supplies or services within stated limits over a fixed period. These contracts require the government to order at least a minimum quantity and allow for additional orders up to a maximum. The section outlines mandatory contract elements, such as specifying contract period, minimum and maximum quantities, a clear statement of work, ordering procedures, and authorized ordering activities. It also details when IQCs are appropriate—primarily when recurring needs are anticipated but precise quantities cannot be determined in advance.
Key Rules
- Minimum and Maximum Quantities
- Contracts must specify a minimum (more than nominal) and a reasonable maximum quantity, based on market research or rational basis.
- Mandatory Contract Elements
- Solicitations and contracts must include period of performance, quantity limits, statement of work, ordering procedures, authorized ordering activities, and oral order provisions if used.
- Multiple Award Preference
- Contracting officers should prefer multiple awards for the same or similar supplies/services unless certain exceptions apply, and must document the decision.
- Single-Award Restrictions
- Single-award IQCs over $100 million require a written determination by the agency head and Congressional notification in certain cases.
- Advisory and Assistance Services
- Multiple awards are required for advisory and assistance IQCs over 3 years and $15 million unless exceptions are documented.
Responsibilities
- Contracting Officers: Must ensure all required contract elements are included, determine and document multiple vs. single award decisions, and comply with notification and documentation requirements for large contracts.
- Contractors: Must be prepared to fulfill orders within the stated minimum and maximum quantities and comply with all contract terms and ordering procedures.
- Agencies: Must provide oversight, ensure compliance with award preferences, and notify Congress when required.
Practical Implications
- IQCs provide flexibility for recurring but unpredictable needs, but require careful planning and documentation. Failure to specify clear minimums, maximums, or ordering procedures can lead to disputes or noncompliance. Multiple award requirements are designed to promote competition, but exceptions must be well-justified and documented.