CONTRACTING OFFICER UNLIMITED
WARRANT BOARD
Whataiisaianaioption?ai-aians--
Anaioptionaiisaiaaiunilateralairightaiinaiaaicontract,aiforaiaaispecificaiperiodaiofaitime,aiwhereait
heaiGovernmentaimayaielectaitoaipurchaseaiadditionalaisuppliesaioraiservicesaicalledaiforaib
yaitheaicontract,aioraiextendaitheaiperiodaiofaiperformance.
TheaiPCOaishouldaiuseaioptionsaiwhenai(1)aiinaitheaiGovernmentsaibestaiinterest,ai(2)aither
eaiisaiaaineedaiforaiserviceaibeyondaitheaiinitialaiperiod,aiandai(3)aitoaiensureaicontinuityaiofai
service.
TheaiuseaiofaioptionsaiareainotainormallyaiinaitheaiGovernmentsaibestaiinterestaiwhenai(1)aiT
heaiforeseeableairequirementsaiinvolveaiminimumaieconomicaiquantitiesaiandaideliveryaire
quirementsaiareaifaraienoughaiinaitheaifutureaitoaipermitaicompetitiveaiacquisition,aiproducti
on,aiandaideliveryai(2)aianaiindefiniteaiquantityaiorairequirementsaicontractaiwouldaibeaimore
aiappropriateaithanaiaaicontractaiwithaioptions.
WhataimustaiaaiPCOaidoaibeforeaiexercisingaianaioption?ai-aians--
TheaiPCOaimustaidetermineaithat:
1.aiFundsaiareaiavailable
2.aiTheairequirementaifulfillsaianaiexistingaiGovernmentaineed
3.aiExercisingaitheaioptionaiisaitheaimostaiadvantageousaimethodaipriceaiandaiotheraifactors
aiconsidered
4.aiTheaioptionaiwasaisynopsizedaiIAWaiFARai5ai(oraiexempted)
TheaiPCOaishouldaihaveaiaaiwrittenaiD&Faiinaitheaifileaiinaiorderaitoaiuseaioptions
TheaiPCOaishouldaialsoaiconsideraiifaitheaicontractoraiisairesponsibleaiandaiifaitheiraiperform
anceaiisaisatisfactory.
Ifaitheaioptionaipriceaiduringaiaaicompetitiveaisourceaiselectionaiwasainotaievaluated,aiisaithe
aioptionaivalid?ai-aians--
No.aiAllaioptionsaineedaitoaibeaipricedaibecauseaitheyaiwereaiawardedaionaiaaicompetitiveai
basis.
CanaitheaiPCOaiciteaitheai"ChangesaiClause"aitoaiincreaseaiquantitiesaionaiaaiproductionaic
ontract?ai-aians--
No.aiTheaiChangesaiClauseaicannotaibeaiusedaitoaiincreaseaiquantitiesaionaiaaiproductionai
contract.
,(a)aiTheaiContractingaiOfficeraimayaiataianyaitime,aibyaiwrittenaiorder,aiandaiwithoutainoticeai
toaitheaisureties,aiifaiany,aimakeaichangesaiwithinaitheaigeneralaiscopeaiofaithisaicontractaiina
ianyaioneaioraimoreaiofaitheaifollowing:
(1)aiDrawings,aidesigns,aioraispecificationsaiwhenaitheaisuppliesaitoaibeaifurnishedaiareaitoai
beaispeciallyaimanufacturedaiforaitheaiGovernmentaiinaiaccordanceaiwithaitheaidrawings,aid
esigns,aioraispecifications.
(2)aiMethodaiofaishipmentaioraipacking.
(3)aiPlaceaiofaidelivery.
Isaianyaiapprovalairequiredaiforaianaieffortaithataiisaioutaiofaiscopeai?ai-aians--
Changesaioutsideaitheaiscopeaiofaitheaioriginalaicontractaiareaiconsideredainewaiworkaianda
iconstituteaiaaicardinalaichange,aiandaiinaithisaicase,aioneaiofaitwoaithingsaishouldaihappen:
1.aiCompeteaitheainewaiwork
2.aiGetaiaaiJ&Aaiandaiseekaiproperaiapproval
WhataiareaitheaifouraiessentialaielementsaitheaiPCOaimustaiaddressaiwhenaimakingaiaaiSco
peaiDetermination?ai-aians--1.aiScopeaiofaitheaicompetitionai-
aicouldaitheaioriginalaiofferorsaihaveaireasonableaianticipatedaisuchaiaaichange?
2.aiContractaitypeai-
aiRequirmentsaishouldaibeaibetteraidefinedaiinaiaaiFFPaicontractaithereforeairequireailessaic
hanges.
AsaiopposedaitoaiaaiRDT&Eaicontract.
3.aiPeriodaiofaiperformanceai-
aiwillaitheaiPoPaibeaiextendedaisignificantlyaisoaiasaitoaiconstituteainewaiwork?
4.aiOverallaicost/priceaichangeai-
aiwhataihasaibeenaitheaitotalaichangeaiinaipriceaithroughoutaiallaimodifications?
WhataimustaitheaiPCOaidoaiforaianyaichangeaiand/
oraimodificationaiestimatedaitoaibeai$1Maioraimore?ai-aians--
Obtainailegalaireviewaiofaitheaiproposedaiactionaiandaidocumentaitheaireviewaiinaitheaicontr
actaifile
WhereaicanaiaaiPCOailookaitoaihelpaidetermineaiifaiaaichangeaiisaiin-scope?ai-aians--
Variousaisourceaidocumentsaitoaiinclude:aiSOO/SOW/
PWS,aisynopsis,aiRFP,aiexchangesaiwithaiindustry,aimarketaisurveys,aiRFIs,aietc.
Whataiisai"scopeaicreep?"ai-aians--Scopeaicreepaioccursaiwhenaiaaiseriesaiofaiin-
scopeaichangesaimakeaitheaicontractaiasaiaaiwholeaiout-of-
scope.aiTheaiPCOaimustairemainaicognizantaiofaiscopeaicreepaiwhenaichanging/
modifyingaiexistingaicontracts.
WhataiisaiaaiT&Maicontract?ai-aians--Limitations.aiAaitime-and-
materialsaicontractaimayaibeaiusedaionlyaiif—
(1)aiTheaicontractingaiofficeraipreparesaiaaideterminationaiandaifindingsaithatainoaiotheraico
ntractaitypeaiisaisuitable.aiTheaideterminationaiandaifindingaishallaibe—
,(i)aiSignedaibyaitheaicontractingaiofficeraiprioraitoaitheaiexecutionaiofaitheaibaseaiperiodaiorai
anyaioptionaiperiodsaiofaitheaicontracts;aiand
(ii)aiApprovedaibyaitheaiheadaiofaitheaicontractingaiactivityaiprioraitoaitheaiexecutionaiofaitheai
baseaiperiodaiwhenaitheaibaseaiperiodaiplusaianyaioptionaiperiodsaiexceedsaithreeaiyears;ai
and
(2)aiTheaicontractaiincludesaiaaiceilingaipriceaithataitheaicontractoraiexceedsaiataiitsaiownairis
k.aiTheaicontractingaiofficeraishallaidocumentaitheaicontractaifileaitoaijustifyaitheaireasonsaifo
raiandaiamountaiofaianyaisubsequentaichangeaiinaitheaiceilingaiprice.aiAlsoaiseeai12.207(b)ai
foraifurtherailimitations
onaiuseaiofaiTime-and-
MaterialsaioraiLaboraiHouraicontractsaiforaiacquisitionaiofaicommercialaiitems.
CanaiaaiT&Maicontractaibeaiusedaiforaiaaicommercialaiservice?ai-aians--
a)aiExceptaiasaiprovidedaiinaiparagraphai(b)aiofaithisaisection,aiagenciesaishallaiuseaifirm-
fixed-priceaicontractsaioraifixed-
priceaicontractsaiwithaieconomicaipriceaiadjustmentaiforaitheaiacquisitionaiofaicommercialaiit
ems.
(b)ai(1)aiAaitime-and-materialsaicontractaiorailabor-
houraicontractai(seeaiSubpartai16.6)aimayaibeaiusedaiforaitheaiacquisitionaiofaicommercialais
ervicesaiwhen—
(i)aiTheaiserviceaiisaiacquiredaiunderaiaaicontractaiawardedaiusing—
aiCompetitiveaiProcedures,aiFairaiOpportunity,aiwithaianaiexecutedaiD&F
DefineaiCertifiedaiCostaioraiPricingaiData.ai-aians--
Allaifacts,aithataiasaiofaitheaidateaiofaipriceaiagreement,aioraiifaiapplicable,aianaiearlieraidateai
agreedaiuponaibetweenaitheaipartiesaithat'saiasaicloseaiasaipracticableaitoaitheaidateaiofaiagr
eementaionaiprice,aiprudentaibuyersaiandaisellersaiwouldaireasonablyaiexpectaitoaiaffectaipri
ceainegotiationsaisignificantly.
WhenaiisaiCertifiedaiCostaiandaiPricingaidataairequired?ai-aians--
Whenaiexecutingaiactionsaioverai$750,000aiwithaitheaiexceptionaiofaipricesaiestablishedaiby
aistatute,aicommercialaiitems,aiwithaiadequateaipriceaicompetition,aiandaiwhenaiaaiTINAaiwa
iveraiisaigranted.
Whataiisaitheai"BonaaiFideaiNeeds"aiRule?ai-aians--
TheaiBonaaiFideaiNeedsaiRuleaibasicallyaimeansaithataiaaifederalaiagencyaimustaihaveaiaail
egitimateaioraibonaaifideaineedaiforaitheairequirementaiduringaitheaitimeaiperiodaithataitheaia
ppropriationaiisaiavailable.aiPursuantaitoai31aiU.S.C.ai1502(a),ai"Theaibalanceaiofaianaiappr
opriationailimitedaiforaiobligationaitoaiaaidefiniteaiperiodaiisaiavailableaionlyaiforaipaymentaiof
aiexpensesaiincurredaiduringaitheaiperiodaiofaiavailability,aioraitoaicompleteaicontractsaiprop
erlyaimadeaiduringaitheaiperiodaiofaiavailabilityaiandaiobligatedaiconsistentaiwithaiSectionai1
501aiofaithisaititle.."aiInaiotheraiwords,aitheaibasicairuleaistatesaithataiaaifiscalaiyear'sai(FY)aia
ppropriationaimayaibeaiobligatedaitoaimeetaiaailegitimateaioraibonaaifideaineedaiexistingaiinait
heaiFYaiforaiwhichaitheaiappropriationaiwasaimade.aiThisaiaspectaiofaifundaiavailabilityaisee
ksaitoaiensureaithataionlyaiappropriations,aiwhichaiareaiavailableaiforaiaaispecificaiFYaiareaiu
, sedaitoaimeetaitheailegitimateaineedsaiofaithataiFY.aiTheaibonaaifideaineedsairuleaiappliesaito
aibothaimultipleaiyearaiandaiannualaiappropriations.aiTIME,aiPURPOSE,aiAMOUNT
Youaihaveaijustaiawardedai3aicontractaiactions.aiYouairememberaisomethingaiinaiFARaiPart
ai5aiaboutaisynopsizingaicontractaiawards.aiTheaifirstaiactionaiwasaiaaiSmallaiBusinessaiInno
vationaiResearchaicontractaiforai$99,978.aiTheaisecondaiactionaiwasaiaai$3Mainewaideliver
yaiorderaiunderaianaiexistingaiIDIQaicontractaiandaitheaithirdaiactionaiwasaiaaipurchaseaiorde
raiforai$12,995.aiAsaiaaiPCO,aiwouldaiyouaisynopsizeaitheseaicontractaiactions?ai-aians--
SBIRs,aideliveryaiordersaiunderaiexistingaiIDIQaicontractsaiandaiactionsaiunderaitheaisimplif
iedaiacquisitionaithresholdai($150K)aidoainotairequireaianaiawardaisynopsis.aiHoweveraitheai
dollaraithresholdaiisainotaiaaiprohibitionaiagainstaipublicizingaianaiawardaiofaiaaismalleraiamo
untaiwhenaipublicizingaiwouldaibeaiadvantageousaitoaiindustryaioraitoaitheaiGovernment.
Whataiisaitheairequirementaiforaiobligatingaifundsaiwhenaiawardingaiindefinite-
quantityaicontracts?ai-aians--ForaiID/
IQaicontractsaiallaisuppliesaiandaiservicesaitoaibeaifurnishedaishallaibeaiobtainedaiviaaidelive
ryaiorder(s)aioraitaskaiorder(s)aiissuedaibyaiindividualsaidesignatedaiinaitheaicontract.aiUpon
aiexecutionaiofaitheaicontract,aianaiobligationaishallaibeairecordedaibasedaiuponaitheaiissuan
ceaiofaiaaideliveryaioraitaskaiorderaiforaitheaicost/
priceaiofaitheaiminimumaiquantityaispecified.aiObtainingaiaaicertificationaiofaiavailabilityaiofaif
undingaifromaitheaifinanceaiofficeaidoesainotaisatisfyaitheairequirementaitoairecordaianaioblig
ationaiinaitheaiofficialaiaccountingairecordsaiofaitheaiGovernmentaiforaitheaiminimumaiorderai
amountaiestablishedaibyaitheaiawardaiofaianaiIDIQaicontract.aiTheaiGovernment'saiactualaio
bligationaimustaibeairecordedaiataitheaitimeaiofaicontractaiaward.aiRecordingaiandaisubsequ
entlyaireportingaitheairequiredaiobligationaiusingaianythingaiotheraithanaiaaideliveryaioraitask
aiorderaiwillairesultaiinaitheaiactionainotaibeingaireportedaiinaiFPDS-
NG.aiTheaiRecordingaiofaiObligationsaiActaiisaiimplementedaiinaitheaiDoDaiFinancialaiMana
gementaiRegulationai(FMR)ai(DoDai7000.14-
R)ai(Seeaiparagraphai080504aiofaitheaiFMR).aiTheaiDefenseaiFinanceaiandaiAccountingaiS
erviceai(DFAS)aiisairesponsibleaiforairecordingaicontractualaiobligationsaiinaitheaiAiraiForcea
iaccountingairecords.aiWhereaitheaiquantityairequiredaiunderaiaaicontractaiisaiindefinite,aithe
aiultimateaiamountaiofaiobligationaiisaideterminedaibyaisubsequentaiorders;aitheaiamountaiof
aianyairequiredaiminimumaiorderaispecifiedaiinaitheaicontract,aihowever,aishallaibeairecorde
daiasaianaiobligationaiuponaiexecutionaiofaitheaicontract.aiForaicontractsaithatairequireaitheai
contractoraitoaiperformaiunilaterallyaiplacedaiordersaiaboveaitheairequiredaiminimum,airecor
daianaiobligationaiinaitheaiamountaiofaitheaiorderaipriceaioraiceilingaiataitheaitimeaitheaiorderaii
saiplaced.aiAnaiorderaiinaiexcessaiofaitheairequiredaiminimumaithataihasaitoaibeainegotiatedai
oraiacceptedaibyaitheaicontractoraiunderaitermsaiofaitheaicontractaishallaibeairecordedaiasaia
naiobligationaiuponaicontractor'saiacceptanceaiofaitheaiorderaiinaitheaiamountaiofaitheaiagre
WhenaimayaiaaiT&Maicontractaibeaiused?aiWhataimustaitheaiD&Faicontain?
aiWhoaiwouldaiapproveaitheaifollowingaiD&Fs:aiAaiT&Maicontractaiforai$650K;aiAaiT&Maicont
ractaiforai$500Kaiinaiwhichaitheaibaseaiperiodaiplusaioptionaiperiodsaiwillaibeaiaaitotalaiofai4aiy
ears;aiAaiT&Maicontractaiforai$1.5Maiofaiservicesai(baseaiplusaioptionsaiwillaibeai5aiyears.)?
ai-aians--
T&Maicontractaimayaibeaiusedaionlyaiwhenaiit'sainotaipossibleaiataitheaitimeaiofaiplacingaithe
WARRANT BOARD
Whataiisaianaioption?ai-aians--
Anaioptionaiisaiaaiunilateralairightaiinaiaaicontract,aiforaiaaispecificaiperiodaiofaitime,aiwhereait
heaiGovernmentaimayaielectaitoaipurchaseaiadditionalaisuppliesaioraiservicesaicalledaiforaib
yaitheaicontract,aioraiextendaitheaiperiodaiofaiperformance.
TheaiPCOaishouldaiuseaioptionsaiwhenai(1)aiinaitheaiGovernmentsaibestaiinterest,ai(2)aither
eaiisaiaaineedaiforaiserviceaibeyondaitheaiinitialaiperiod,aiandai(3)aitoaiensureaicontinuityaiofai
service.
TheaiuseaiofaioptionsaiareainotainormallyaiinaitheaiGovernmentsaibestaiinterestaiwhenai(1)aiT
heaiforeseeableairequirementsaiinvolveaiminimumaieconomicaiquantitiesaiandaideliveryaire
quirementsaiareaifaraienoughaiinaitheaifutureaitoaipermitaicompetitiveaiacquisition,aiproducti
on,aiandaideliveryai(2)aianaiindefiniteaiquantityaiorairequirementsaicontractaiwouldaibeaimore
aiappropriateaithanaiaaicontractaiwithaioptions.
WhataimustaiaaiPCOaidoaibeforeaiexercisingaianaioption?ai-aians--
TheaiPCOaimustaidetermineaithat:
1.aiFundsaiareaiavailable
2.aiTheairequirementaifulfillsaianaiexistingaiGovernmentaineed
3.aiExercisingaitheaioptionaiisaitheaimostaiadvantageousaimethodaipriceaiandaiotheraifactors
aiconsidered
4.aiTheaioptionaiwasaisynopsizedaiIAWaiFARai5ai(oraiexempted)
TheaiPCOaishouldaihaveaiaaiwrittenaiD&Faiinaitheaifileaiinaiorderaitoaiuseaioptions
TheaiPCOaishouldaialsoaiconsideraiifaitheaicontractoraiisairesponsibleaiandaiifaitheiraiperform
anceaiisaisatisfactory.
Ifaitheaioptionaipriceaiduringaiaaicompetitiveaisourceaiselectionaiwasainotaievaluated,aiisaithe
aioptionaivalid?ai-aians--
No.aiAllaioptionsaineedaitoaibeaipricedaibecauseaitheyaiwereaiawardedaionaiaaicompetitiveai
basis.
CanaitheaiPCOaiciteaitheai"ChangesaiClause"aitoaiincreaseaiquantitiesaionaiaaiproductionaic
ontract?ai-aians--
No.aiTheaiChangesaiClauseaicannotaibeaiusedaitoaiincreaseaiquantitiesaionaiaaiproductionai
contract.
,(a)aiTheaiContractingaiOfficeraimayaiataianyaitime,aibyaiwrittenaiorder,aiandaiwithoutainoticeai
toaitheaisureties,aiifaiany,aimakeaichangesaiwithinaitheaigeneralaiscopeaiofaithisaicontractaiina
ianyaioneaioraimoreaiofaitheaifollowing:
(1)aiDrawings,aidesigns,aioraispecificationsaiwhenaitheaisuppliesaitoaibeaifurnishedaiareaitoai
beaispeciallyaimanufacturedaiforaitheaiGovernmentaiinaiaccordanceaiwithaitheaidrawings,aid
esigns,aioraispecifications.
(2)aiMethodaiofaishipmentaioraipacking.
(3)aiPlaceaiofaidelivery.
Isaianyaiapprovalairequiredaiforaianaieffortaithataiisaioutaiofaiscopeai?ai-aians--
Changesaioutsideaitheaiscopeaiofaitheaioriginalaicontractaiareaiconsideredainewaiworkaianda
iconstituteaiaaicardinalaichange,aiandaiinaithisaicase,aioneaiofaitwoaithingsaishouldaihappen:
1.aiCompeteaitheainewaiwork
2.aiGetaiaaiJ&Aaiandaiseekaiproperaiapproval
WhataiareaitheaifouraiessentialaielementsaitheaiPCOaimustaiaddressaiwhenaimakingaiaaiSco
peaiDetermination?ai-aians--1.aiScopeaiofaitheaicompetitionai-
aicouldaitheaioriginalaiofferorsaihaveaireasonableaianticipatedaisuchaiaaichange?
2.aiContractaitypeai-
aiRequirmentsaishouldaibeaibetteraidefinedaiinaiaaiFFPaicontractaithereforeairequireailessaic
hanges.
AsaiopposedaitoaiaaiRDT&Eaicontract.
3.aiPeriodaiofaiperformanceai-
aiwillaitheaiPoPaibeaiextendedaisignificantlyaisoaiasaitoaiconstituteainewaiwork?
4.aiOverallaicost/priceaichangeai-
aiwhataihasaibeenaitheaitotalaichangeaiinaipriceaithroughoutaiallaimodifications?
WhataimustaitheaiPCOaidoaiforaianyaichangeaiand/
oraimodificationaiestimatedaitoaibeai$1Maioraimore?ai-aians--
Obtainailegalaireviewaiofaitheaiproposedaiactionaiandaidocumentaitheaireviewaiinaitheaicontr
actaifile
WhereaicanaiaaiPCOailookaitoaihelpaidetermineaiifaiaaichangeaiisaiin-scope?ai-aians--
Variousaisourceaidocumentsaitoaiinclude:aiSOO/SOW/
PWS,aisynopsis,aiRFP,aiexchangesaiwithaiindustry,aimarketaisurveys,aiRFIs,aietc.
Whataiisai"scopeaicreep?"ai-aians--Scopeaicreepaioccursaiwhenaiaaiseriesaiofaiin-
scopeaichangesaimakeaitheaicontractaiasaiaaiwholeaiout-of-
scope.aiTheaiPCOaimustairemainaicognizantaiofaiscopeaicreepaiwhenaichanging/
modifyingaiexistingaicontracts.
WhataiisaiaaiT&Maicontract?ai-aians--Limitations.aiAaitime-and-
materialsaicontractaimayaibeaiusedaionlyaiif—
(1)aiTheaicontractingaiofficeraipreparesaiaaideterminationaiandaifindingsaithatainoaiotheraico
ntractaitypeaiisaisuitable.aiTheaideterminationaiandaifindingaishallaibe—
,(i)aiSignedaibyaitheaicontractingaiofficeraiprioraitoaitheaiexecutionaiofaitheaibaseaiperiodaiorai
anyaioptionaiperiodsaiofaitheaicontracts;aiand
(ii)aiApprovedaibyaitheaiheadaiofaitheaicontractingaiactivityaiprioraitoaitheaiexecutionaiofaitheai
baseaiperiodaiwhenaitheaibaseaiperiodaiplusaianyaioptionaiperiodsaiexceedsaithreeaiyears;ai
and
(2)aiTheaicontractaiincludesaiaaiceilingaipriceaithataitheaicontractoraiexceedsaiataiitsaiownairis
k.aiTheaicontractingaiofficeraishallaidocumentaitheaicontractaifileaitoaijustifyaitheaireasonsaifo
raiandaiamountaiofaianyaisubsequentaichangeaiinaitheaiceilingaiprice.aiAlsoaiseeai12.207(b)ai
foraifurtherailimitations
onaiuseaiofaiTime-and-
MaterialsaioraiLaboraiHouraicontractsaiforaiacquisitionaiofaicommercialaiitems.
CanaiaaiT&Maicontractaibeaiusedaiforaiaaicommercialaiservice?ai-aians--
a)aiExceptaiasaiprovidedaiinaiparagraphai(b)aiofaithisaisection,aiagenciesaishallaiuseaifirm-
fixed-priceaicontractsaioraifixed-
priceaicontractsaiwithaieconomicaipriceaiadjustmentaiforaitheaiacquisitionaiofaicommercialaiit
ems.
(b)ai(1)aiAaitime-and-materialsaicontractaiorailabor-
houraicontractai(seeaiSubpartai16.6)aimayaibeaiusedaiforaitheaiacquisitionaiofaicommercialais
ervicesaiwhen—
(i)aiTheaiserviceaiisaiacquiredaiunderaiaaicontractaiawardedaiusing—
aiCompetitiveaiProcedures,aiFairaiOpportunity,aiwithaianaiexecutedaiD&F
DefineaiCertifiedaiCostaioraiPricingaiData.ai-aians--
Allaifacts,aithataiasaiofaitheaidateaiofaipriceaiagreement,aioraiifaiapplicable,aianaiearlieraidateai
agreedaiuponaibetweenaitheaipartiesaithat'saiasaicloseaiasaipracticableaitoaitheaidateaiofaiagr
eementaionaiprice,aiprudentaibuyersaiandaisellersaiwouldaireasonablyaiexpectaitoaiaffectaipri
ceainegotiationsaisignificantly.
WhenaiisaiCertifiedaiCostaiandaiPricingaidataairequired?ai-aians--
Whenaiexecutingaiactionsaioverai$750,000aiwithaitheaiexceptionaiofaipricesaiestablishedaiby
aistatute,aicommercialaiitems,aiwithaiadequateaipriceaicompetition,aiandaiwhenaiaaiTINAaiwa
iveraiisaigranted.
Whataiisaitheai"BonaaiFideaiNeeds"aiRule?ai-aians--
TheaiBonaaiFideaiNeedsaiRuleaibasicallyaimeansaithataiaaifederalaiagencyaimustaihaveaiaail
egitimateaioraibonaaifideaineedaiforaitheairequirementaiduringaitheaitimeaiperiodaithataitheaia
ppropriationaiisaiavailable.aiPursuantaitoai31aiU.S.C.ai1502(a),ai"Theaibalanceaiofaianaiappr
opriationailimitedaiforaiobligationaitoaiaaidefiniteaiperiodaiisaiavailableaionlyaiforaipaymentaiof
aiexpensesaiincurredaiduringaitheaiperiodaiofaiavailability,aioraitoaicompleteaicontractsaiprop
erlyaimadeaiduringaitheaiperiodaiofaiavailabilityaiandaiobligatedaiconsistentaiwithaiSectionai1
501aiofaithisaititle.."aiInaiotheraiwords,aitheaibasicairuleaistatesaithataiaaifiscalaiyear'sai(FY)aia
ppropriationaimayaibeaiobligatedaitoaimeetaiaailegitimateaioraibonaaifideaineedaiexistingaiinait
heaiFYaiforaiwhichaitheaiappropriationaiwasaimade.aiThisaiaspectaiofaifundaiavailabilityaisee
ksaitoaiensureaithataionlyaiappropriations,aiwhichaiareaiavailableaiforaiaaispecificaiFYaiareaiu
, sedaitoaimeetaitheailegitimateaineedsaiofaithataiFY.aiTheaibonaaifideaineedsairuleaiappliesaito
aibothaimultipleaiyearaiandaiannualaiappropriations.aiTIME,aiPURPOSE,aiAMOUNT
Youaihaveaijustaiawardedai3aicontractaiactions.aiYouairememberaisomethingaiinaiFARaiPart
ai5aiaboutaisynopsizingaicontractaiawards.aiTheaifirstaiactionaiwasaiaaiSmallaiBusinessaiInno
vationaiResearchaicontractaiforai$99,978.aiTheaisecondaiactionaiwasaiaai$3Mainewaideliver
yaiorderaiunderaianaiexistingaiIDIQaicontractaiandaitheaithirdaiactionaiwasaiaaipurchaseaiorde
raiforai$12,995.aiAsaiaaiPCO,aiwouldaiyouaisynopsizeaitheseaicontractaiactions?ai-aians--
SBIRs,aideliveryaiordersaiunderaiexistingaiIDIQaicontractsaiandaiactionsaiunderaitheaisimplif
iedaiacquisitionaithresholdai($150K)aidoainotairequireaianaiawardaisynopsis.aiHoweveraitheai
dollaraithresholdaiisainotaiaaiprohibitionaiagainstaipublicizingaianaiawardaiofaiaaismalleraiamo
untaiwhenaipublicizingaiwouldaibeaiadvantageousaitoaiindustryaioraitoaitheaiGovernment.
Whataiisaitheairequirementaiforaiobligatingaifundsaiwhenaiawardingaiindefinite-
quantityaicontracts?ai-aians--ForaiID/
IQaicontractsaiallaisuppliesaiandaiservicesaitoaibeaifurnishedaishallaibeaiobtainedaiviaaidelive
ryaiorder(s)aioraitaskaiorder(s)aiissuedaibyaiindividualsaidesignatedaiinaitheaicontract.aiUpon
aiexecutionaiofaitheaicontract,aianaiobligationaishallaibeairecordedaibasedaiuponaitheaiissuan
ceaiofaiaaideliveryaioraitaskaiorderaiforaitheaicost/
priceaiofaitheaiminimumaiquantityaispecified.aiObtainingaiaaicertificationaiofaiavailabilityaiofaif
undingaifromaitheaifinanceaiofficeaidoesainotaisatisfyaitheairequirementaitoairecordaianaioblig
ationaiinaitheaiofficialaiaccountingairecordsaiofaitheaiGovernmentaiforaitheaiminimumaiorderai
amountaiestablishedaibyaitheaiawardaiofaianaiIDIQaicontract.aiTheaiGovernment'saiactualaio
bligationaimustaibeairecordedaiataitheaitimeaiofaicontractaiaward.aiRecordingaiandaisubsequ
entlyaireportingaitheairequiredaiobligationaiusingaianythingaiotheraithanaiaaideliveryaioraitask
aiorderaiwillairesultaiinaitheaiactionainotaibeingaireportedaiinaiFPDS-
NG.aiTheaiRecordingaiofaiObligationsaiActaiisaiimplementedaiinaitheaiDoDaiFinancialaiMana
gementaiRegulationai(FMR)ai(DoDai7000.14-
R)ai(Seeaiparagraphai080504aiofaitheaiFMR).aiTheaiDefenseaiFinanceaiandaiAccountingaiS
erviceai(DFAS)aiisairesponsibleaiforairecordingaicontractualaiobligationsaiinaitheaiAiraiForcea
iaccountingairecords.aiWhereaitheaiquantityairequiredaiunderaiaaicontractaiisaiindefinite,aithe
aiultimateaiamountaiofaiobligationaiisaideterminedaibyaisubsequentaiorders;aitheaiamountaiof
aianyairequiredaiminimumaiorderaispecifiedaiinaitheaicontract,aihowever,aishallaibeairecorde
daiasaianaiobligationaiuponaiexecutionaiofaitheaicontract.aiForaicontractsaithatairequireaitheai
contractoraitoaiperformaiunilaterallyaiplacedaiordersaiaboveaitheairequiredaiminimum,airecor
daianaiobligationaiinaitheaiamountaiofaitheaiorderaipriceaioraiceilingaiataitheaitimeaitheaiorderaii
saiplaced.aiAnaiorderaiinaiexcessaiofaitheairequiredaiminimumaithataihasaitoaibeainegotiatedai
oraiacceptedaibyaitheaicontractoraiunderaitermsaiofaitheaicontractaishallaibeairecordedaiasaia
naiobligationaiuponaicontractor'saiacceptanceaiofaitheaiorderaiinaitheaiamountaiofaitheaiagre
WhenaimayaiaaiT&Maicontractaibeaiused?aiWhataimustaitheaiD&Faicontain?
aiWhoaiwouldaiapproveaitheaifollowingaiD&Fs:aiAaiT&Maicontractaiforai$650K;aiAaiT&Maicont
ractaiforai$500Kaiinaiwhichaitheaibaseaiperiodaiplusaioptionaiperiodsaiwillaibeaiaaitotalaiofai4aiy
ears;aiAaiT&Maicontractaiforai$1.5Maiofaiservicesai(baseaiplusaioptionsaiwillaibeai5aiyears.)?
ai-aians--
T&Maicontractaimayaibeaiusedaionlyaiwhenaiit'sainotaipossibleaiataitheaitimeaiofaiplacingaithe
