Overview
FAR 16.505 prescribes the policies and procedures for placing orders under indefinite-delivery contracts, focusing on the requirement to provide "fair opportunity" to contract holders in multiple-award scenarios. It establishes the administrative framework for order issuance, documentation requirements, and the specific statutory exceptions where competition for an individual order may be waived.
Key Rules
- Fair Opportunity: For multiple-award contracts, the contracting officer must provide every awardee a fair opportunity to be considered for each order exceeding the micro-purchase threshold, unless a specific exception applies (e.g., urgency, unique source, or logical follow-on).
- Order Limitations: All orders must be within the original scope, period of performance, and maximum value of the base contract.
- Exceptions to Fair Opportunity: Any waiver of competition must be supported by a written "Justification for an Exception to Fair Opportunity" (JEFO). Approval levels for these justifications increase with dollar value, ranging from the Contracting Officer to the Senior Procurement Executive for very high-dollar requirements.
- Enhanced Competition (>$7.5M): Orders exceeding $7.5 million carry mandatory requirements for formal notice of the agency's requirements, disclosure of significant evaluation factors/subfactors, and the right to a post-award debriefing.
- Protest Thresholds: Protests of orders are generally prohibited unless the order increases the scope, period, or value of the base contract, or if the order exceeds $10 million (for civilian agencies) or $25 million (for DoD, NASA, and the Coast Guard).
- Brand-Name Restrictions: Restricting consideration to an item peculiar to one manufacturer requires a specific brand-name justification and must be posted with the solicitation if the order exceeds $40,000.
Practical Implications
- Efficiency vs. Compliance: While the ordering process is intended to be more streamlined than traditional FAR Part 15 procedures, the administrative burden and legal risks (such as protests and mandatory debriefings) increase significantly as the order value crosses the $7.5 million and $10 million/$25 million thresholds.
- Strategic Documentation: Contracting officers must maintain clear "decision documentation" for every order to justify the selection and price reasonableness, even when formal evaluation plans or scoring are not required.