52.216-21 Requirements
Source: FAR 52.216-21 on acquisition.gov
FAR 52.216-21 requires contractors to fulfill all actual Government requirements for specified supplies or services during the contract period, but does not guarantee purchase of estimated quantities.
Overview
- FAR 52.216-21 establishes the terms and obligations for requirements contracts, where the Government agrees to purchase all actual requirements for specified supplies or services from the contractor during the contract period, but does not guarantee any minimum or maximum quantity beyond what is stated in the contract Schedule. The clause outlines how orders are placed, the contractor’s obligation to fulfill them, and the Government’s rights in urgent situations or when contract limits are reached. Several alternates address specific scenarios, such as nonpersonal services, partial small business set-asides, and contracts involving subsistence for use and resale.
Key Rules
- Requirements Contract Nature
- The contract covers all actual requirements for specified supplies/services during the contract period, but estimated quantities are not guaranteed purchases.
- Ordering Procedures
- Orders are placed as needed under the Ordering clause, and the contractor must fulfill all orders within contract limitations.
- Government’s Purchase Obligation
- The Government must order all its requirements from the contractor, except as otherwise provided (e.g., urgent needs, contract limits).
- Order Limitations and Urgent Needs
- The Government is not obligated to purchase beyond contract limits and may seek other sources for urgent needs if the contractor cannot meet accelerated delivery.
- Completion of Orders
- Orders issued during the contract period must be completed even if performance extends beyond the contract’s end date, subject to a final delivery cutoff.
- Alternates for Special Scenarios
- Alternate clauses modify obligations for nonpersonal services, partial set-asides, and contracts involving resale or brand-name products.
Responsibilities
- Contracting Officers: Must ensure proper inclusion of the clause and any applicable alternates, issue orders per contract terms, and manage allocation between contractors in set-aside scenarios.
- Contractors: Must fulfill all orders placed within contract limits, maintain readiness for variable order quantities, and comply with delivery and performance requirements.
- Agencies: Oversee contract compliance, monitor order allocations, and ensure urgent needs are addressed per the clause.
Practical Implications
- This clause provides flexibility for the Government to meet fluctuating needs without committing to fixed quantities, while obligating the contractor to supply all required items/services. Contractors must be prepared for variable demand and understand that estimated quantities are not guaranteed. Misunderstanding the non-guaranteed nature of estimates or failing to comply with order fulfillment can lead to disputes or performance issues.
As prescribed in 16.506(d), insert the following clause:
Requirements (Oct 1995)
(a) This is a requirements contract for the supplies or services specified, and effective for the period stated, in the Schedule. The quantities of supplies or services specified in the Schedule are estimates only and are not purchased by this contract. Except as this contract may otherwise provide, if the Government’s requirements do not result in orders in the quantities described as "estimated" or "maximum" in the Schedule, that fact shall not constitute the basis for an equitable price adjustment.
(b) Delivery or performance shall be made only as authorized by orders issued in accordance with the Ordering clause. Subject to any limitations in the Order Limitations clause or elsewhere in this contract, the Contractor shall furnish to the Government all supplies or services specified in the Schedule and called for by orders issued in accordance with the Ordering clause. The Government may issue orders requiring delivery to multiple destinations or performance at multiple locations.
(c) Except as this contract otherwise provides, the Government shall order from the Contractor all the supplies or services specified in the Schedule that are required to be purchased by the Government activity or activities specified in the Schedule.
(d) The Government is not required to purchase from the Contractor requirements in excess of any limit on total orders under this contract.
(e) If the Government urgently requires delivery of any quantity of an item before the earliest date that delivery may be specified under this contract, and if the Contractor will not accept an order providing for the accelerated delivery, the Government may acquire the urgently required goods or services from another source.
(f) Any order issued during the effective period of this contract and not completed within that period shall be completed by the Contractor within the time specified in the order. The contract shall govern the Contractor’s and Government’s rights and obligations with respect to that order to the same extent as if the order were completed during the contract’s effective period; provided, that the Contractor shall not be required to make any deliveries under this contract after _________________ [insert date].
Alternate I (Apr1984). If the requirements contract is for nonpersonal services and related supplies and covers estimated requirements that exceed a specific Government activity’s internal capability to produce or perform, substitute the following paragraph (c) for paragraph (c) of the basic clause:
(c) The estimated quantities are not the total requirements of the Government activity specified in the Schedule, but are estimates of requirements in excess of the quantities that the activity may itself furnish within its own capabilities. Except as this contract otherwise provides, the Government shall order from the Contractor all of that activity's requirements for supplies and services specified in the Schedule that exceed the quantities that the activity may itself furnish within its own capabilities.
Alternate II (Apr 1984). If the requirements contract includes subsistence for both Government use and resale in the same Schedule, and similar products may be acquired on a brand-name basis, add the following paragraph (g) to the basic clause:
(g) The requirements referred to in this contract are for items to be manufactured according to Government specifications. Notwithstanding anything to the contrary stated in the contract, the Government may acquire similar products by brand name from other sources for resale.
Alternate III (Oct 1995). If the requirements contract involves a partial small business set-aside, substitute the following paragraph (c) for paragraph (c) of the basic clause:
(c) The Government’s requirements for each item or subitem of supplies or services described in the Schedule are being purchased through one non-set-aside contract and one set-aside contract. Therefore, the Government shall order from each Contractor approximately one-half of the total supplies or services specified in the Schedule that are required to be purchased by the specified Government activity or activities. The Government may choose between the set-aside Contractor and the non-set-aside Contractor in placing any particular order. However, the Government shall allocate successive orders, in accordance with its delivery requirements, to maintain as close a ratio as is reasonably practicable between the total quantities ordered from the two Contractors.
Alternate IV (Oct 1995). If the contract includes subsistence for both Government use and resale in the same Schedule and similar products may be acquired on a brand-name basis and the contract also involves a partial small business set-aside, substitute the following paragraph (c) for paragraph (c) of the basic clause and add the following paragraph (g) to the basic clause:
(c) The Government’s requirements for each item or subitem of supplies or services described in the Schedule are being purchased through one non-set-aside contract and one set-aside contract. Therefore, the Government shall order from each Contractor approximately one-half of the total supplies or services specified in the Schedule that are required to be purchased by the specified Government activity or activities. The Government may choose between the set-aside Contractor and the non-set-aside Contractor in placing any particular order. However, the Government shall allocate successive orders, in accordance with its delivery requirements, to maintain as close a ratio as is reasonably practicable between the total quantities ordered from the two Contractors.
(g) The requirements referred to in this contract are for items to be manufactured according to the Government specifications. Notwithstanding anything to the contrary stated in the contract, the Government may acquire similar products by brand name from other sources for resale.