When is a Fair Opportunity given and can a task order be issued to any vendor under an IDIQ multiple award contracts based soley on initial prices that form the IDIQ contract?
This is a great question, but before I answer it, let’s differentiate between Full and Open Competition and Fair Opportunity.
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Full and Open Competition was achieved when you solicited this Multiple-Award IDIQ contract. Your solicitation was made available to any interested party and you instructed them this would be a multiple-award contract and you would select two sources based upon LPTA criteria. Once you selected and awarded this multiple-award IDIQ contract to the two LPTA sources, you completed your Full and Open competition requirements.
Fair Opportunity is what happens when you compete Task/Delivery Orders within a multiple-award contract, in your scenario, the two selected sources. Under Fair Opportunity only those sources are solicited and eligible for the award of the Delivery/Task Order within the terms and conditions of this contract.
To answer your question, your guidance is found in FAR 16.505(b), Orders Under Multiple-Award Contracts. Please note, there are different requirements for orders above $3000 and below SAT, orders above SAT, and orders exceeding $5,000,000. Additionally, please refer to the Exceptions to the Fair Opportunity Process, FAR 16.505(b)(2), to determine how this would apply to your scenario. Regarding your first order for $900,000, since this exceeds the SAT and assuming no exceptions exist, you must provide fair notice to all contractors under the multiple-award contract (FAR 16.505(b)(1)(iii)(B)(1)).
In your question background, you also present the simple logic about having pre-priced CLINS and ask why you would even have to compete or provide fair opportunity to each of the sources when you already know what the lowest price is. I can see your logic, and if your contract CLINs are for a set of stable priced commodities, then that would bring into question why a multiple-award contract was established in the first place.
The purpose behind awarding a multiple-award contract is to provide pre-selected competitive sources for tasks and deliveries having some form of price uncertainty. This uncertainty is usually found in labor and service tasks. For example, you may have CLIN pricing for the labor rate, but you will want to provide fair opportunity to each of your awarded sources to propose to the task. The uncertainty this process will relieve is found in the proposal. Hypothetically, a labor rate of $10/hour for manual digging may be more expensive to accomplish the task than a labor rate of $50/hour using a backhoe. The proposal will bear that out. With deliveries, the uncertainty may be in delivery cost or time. Again, providing fair opportunity to both of your sources will provide you the lowest priced proposal to meet your requirements.
So, if your IDIQ requirements are for stable priced items with little, if any, uncertainty in their pricing over the duration of the contract, then you wouldn’t need a multiple-award IDIQ contract. You could simply use a single award IDIQ contract.