52.216-19 Order Limitations
Source: FAR 52.216-19 on acquisition.gov
FAR 52.216-19 sets clear minimum and maximum order limits for indefinite-delivery contracts, allowing contractors to reject excessive orders if proper notice is given.
Overview
FAR 52.216-19, "Order Limitations," establishes the minimum and maximum order quantities or dollar values that apply to indefinite-delivery contracts, such as indefinite-quantity (IDIQ) and requirements contracts. This clause protects both the Government and contractors by defining the smallest order the Government can place and the largest order the contractor is required to fulfill. It also outlines procedures for handling orders that exceed these limits, including the contractor's right to reject excessive orders within a specified timeframe and the Government's ability to seek supplies or services elsewhere if necessary.
Key Rules
- Minimum Order
- The Government is not obligated to order, nor is the contractor required to furnish, supplies or services below a specified minimum quantity or dollar value.
- Maximum Order
- The contractor is not obligated to honor orders that exceed specified maximums for single items, combinations of items, or cumulative orders within a set period.
- Requirements Contracts
- For requirements contracts, the Government is not required to order any portion of a requirement that exceeds the maximum order limitation.
- Exceeding Maximum Orders
- Contractors must honor orders exceeding the maximum unless they return the order with written notice and reasons within a specified number of days; the Government may then procure from another source.
Responsibilities
- Contracting Officers: Must specify minimum and maximum order limits in the contract and ensure compliance with notification procedures.
- Contractors: Must monitor order quantities, respond promptly to excessive orders, and provide written notice if declining orders above the maximum.
- Agencies: Must respect order limitations and follow procedures if orders are declined.
Practical Implications
- This clause ensures predictability and fairness in ordering under indefinite-delivery contracts, protecting contractors from unmanageable orders and the Government from being forced to buy uneconomical quantities. Failure to comply can result in disputes or delays in fulfilling requirements.
As prescribed in 16.506(b), insert a clause substantially the same as follows:
Order Limitations (Oct 1995)
(a) Minimum order. When the Government requires supplies or services covered by this contract in an amount of less than _____________ [insert dollar figure or quantity], the Government is not obligated to purchase, nor is the Contractor obligated to furnish, those supplies or services under the contract.
(b) Maximum order. The Contractor is not obligated to honor-
(1) Any order for a single item in excess of _____________ [insert dollar figure or quantity];
(2) Any order for a combination of items in excess of ______________ [insert dollar figure or quantity]; or
(3) A series of orders from the same ordering office within _____________ days that together call for quantities exceeding the limitation in paragraph (b)(1) or (2) of this section.
(c) If this is a requirements contract (i.e., includes the Requirements clause at subsection 52.216-21 of the Federal Acquisition Regulation (FAR)), the Government is not required to order a part of any one requirement from the Contractor if that requirement exceeds the maximum-order limitations in paragraph (b) of this section.
(d) Notwithstanding paragraphs (b) and (c) of this section, the Contractor shall honor any order exceeding the maximum order limitations in paragraph (b), unless that order (or orders) is returned to the ordering office within _____ days after issuance, with written notice stating the Contractor’s intent not to ship the item (or items) called for and the reasons. Upon receiving this notice, the Government may acquire the supplies or services from another source.
(End of clause)