• R.D. Lieberman,Consultant

GAO Warns Against Use of Flexible Ordering Agreements


The Government Accountability Office (“GAO”) recently found two agencies using a new, but unlawful approach to task and delivery orders, the Flexible Ordering Agreement (“FOA”). This is used on Indefinite Delivery, Indefinite Quantity (“IDIQ”) contracts, such as a Government Wide Agency Contract (“GWAC”). The Federal Acquisition Regulation (“FAR”) does not define or mention FOAs. However, the GAO has held them to be unlawful and warned agencies against their use in two recent decisions, DLT Solutions, Inc., B-412237 et al, Jan. 11, 2016, 2016 WL 241468 and Harris IT Serv. Corp., B-411699 et al, Oct. 2, 2015, 2015 CPD ¶ 293.

A Flexible Ordering Agreement is a solicitation that contemplates the issuance of a single, second-tier IDIQ instrument, under which the agency will then place subsequent task orders, without providing the GWAC contract holders with a fair opportunity to compete for those task orders. An FOA could be viewed as a “task order” against a task order. In Harris IT Serv. Corp., the GAO held that this type of contract vehicle exceeded an agency's express authority to award task and delivery order type contracts pursuant to provisions of the Federal Acquisition and Streamlining Act of 1994, 41 U.S.C. §§4401–4106 (“FASA”). The GAO found that the FOA violated FASA because it fails to specify:

  • The quantity to be acquired

  • A delivery schedule

  • The place of delivery or performance

FASA requires that every delivery ordered placed under an IDIQ contract include these three items. FAR 16.505(a)(7). The agency called the FOA a “delivery order,” but once that delivery order is placed, all other GWAC contractors will no longer have a “fair opportunity” to compete for subsequent delivery orders, as required by FASA and FAR 16.504(c)(1)(i). Therefore, the FOA violates both FAR and the law. And it is abundantly clear that FOAs, or delivery orders against a delivery order, can seek performance that is totally different from what was originally competed by the agency.

In Harris IT, the GAO flatly ruled that FOA’s were unlawful, without explicitly calling them Flexible Ordering Agreements. But more recently in DLT Solutions, where the agency explicitly called the delivery order it contemplated awarding a “FOA,” the GAO noted that it had “recently found such contract vehicles [to] exceed an agency’s express authority to award task and delivery order contracts” pursuant to FASA. However, because DLT did not challenge the type of contract prior to submission of proposals, any protest of the solicitation was untimely and GAO declined to rule on it. However, GAO stated very clearly “[a]lthough we do not address this issue, nothing in this decision should be construed as reflecting this Office’s concurrence with the agency’s use of a FOA” under a GWAC.

#FlexibleOrderingAgreements

The website of Richard Donald Lieberman, a government contracts consultant and retired attorney who is the author of both "The 100 Worst Mistakes in Government Contracting" (with Jason Morgan) and "The 100 Worst Government Mistakes in Government Contracting." Richard Lieberman concentrates on Federal Acquisition Regulation (FAR) consulting and training, including  commercial item contracting (FAR Part 12), compliance with proposal requirements (FAR Part 15 negotiated procurement), sealed bidding (FAR Part 14), compliance with solicitation requirements, contract administration (FAR Part 42), contract modifications and changes (FAR Part 43), subcontracting and flowdown requirements (FAR Part 44), government property (FAR Part 45), quality assurance (FAR Part 46), obtaining invoiced payments owed to contractors,  and other compliance with the FAR. Mr.Lieberman is also involved in numerous community service activities.  See LinkedIn profile at https://www.linkedin.com/in/richard-d-lieberman-3a25257a/.This website and blog are for educational and information purposes only.  Nothing posted on this website constitutes legal advice, which can only be obtained from a qualified attorney. Website Owner/Consultant does not engage in the practice of law and will not provide legal advice or legal services based on competence and standing in the law. Legal filings and other aspects of a legal practice must be performed by an appropriate attorney. Using this website does not establish an attorney-client relationship. Although the author strives to present accurate information, the information provided on this site is not guaranteed to be complete, correct or up-to-date.  The views expressed on this blog are solely those of the author. FAR Consulting & Training, Bethesda, Maryland, Tel. 202-520-5780, rliebermanconsultant@gmail.com

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