16.505
Ordering
Under FAR 16.505, agencies can order flexibly under IDIQ contracts, but for multiple-award contracts they must give all awardees a fair opportunity above the micro-purchase threshold unless a documented statutory exception applies.
Overview
- FAR 16.505 governs how agencies place orders under indefinite-delivery contracts, especially multiple-award IDIQs, and is central to fair opportunity, order documentation, and exception handling.
- Its purpose is to ensure orders stay within contract scope and value, promote competition among awardees, and impose justification, approval, posting, and debriefing rules when agencies limit competition.
Key Rules
- General ordering requirements
- Orders must clearly define supplies or services, remain within the contract’s scope, ordering period, and maximum value, and use performance-based acquisition for services to the maximum extent practicable. Orders must include required administrative data such as line items, schedule, place of performance, accounting data, payment method, and NAICS code.
- Brand-name and manufacturer-specific restrictions
- If an order restricts consideration to an item peculiar to one manufacturer, the contracting officer must justify and approve that restriction. For orders over $40,000, the justification generally must be posted or provided to all contract holders, unless security concerns apply.
- Fair opportunity under multiple-award contracts
- For orders above the micro-purchase threshold, each awardee must receive a fair opportunity to be considered unless a statutory exception applies. Orders above the simplified acquisition threshold generally must be competed, and orders over $7.5 million require enhanced notice, evaluation disclosures, award documentation, and debriefing opportunities.
- Exceptions, approvals, and public posting
- Sole-source or limited-source orders require written justification, with approval levels tied to dollar value. For orders over the simplified acquisition threshold, justifications generally must be posted within 14 days after award, or 30 days for urgent actions, and remain public for at least 30 days.
Responsibilities
- Contracting Officers: provide fair opportunity, establish order pricing when not preset, document award rationale and tradeoffs, obtain and approve justifications, post required notices, and provide notifications/debriefings for orders over $7.5 million.
- Contractors: respond to fair opportunity notices, protect proprietary information in submissions, and understand when debriefings, protests, or size-status issues may arise.
- Agencies: designate an ombudsman, maintain compliant ordering procedures, and ensure acquisition planning, bundling/consolidation compliance, and special rules for A-E services and advisory and assistance services.
Practical Implications
- This section exists to balance flexibility in IDIQ ordering with transparency, competition, and defensible award decisions.
- It affects daily ordering by dictating when all awardees must be considered, what must be documented in the file, and when limited competition requires formal justification and public disclosure.
- Common pitfalls include issuing out-of-scope orders, failing to provide fair opportunity, inadequate sole-source rationales, missing posting deadlines, and overlooking the enhanced procedures for orders over $7.5 million.