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    How is DFAR Clause 252.227-7030 - Technical Data Withholdings of Payment: Applicable when issuing an Indefinite Delivery, Indefinite Quantity (IDIQ) Contract. Does the 10% come off the total estimated value of the IDIQ or does the 10% come off the obligated dollars of each delivery order placed against the IDIQ?


    Answer

    You should apply the clause to the delivery order obligation.  IDIQ contracts must have minimum and maximum ordering amounts.  The $2B that you describe is most likely your maximum ordering amount. If the withhold was applied at 10% of $2B, resulting in a $200M withhold, we couldn't even be certain if the minimum order amount, or first delivery order, was above that amount. Applying it to the IDIQ maximum contract value just doesn't wouldn't work in most situations.  The Government should apply the clause to each order; this can be made clear in the basic contract.   I realize that DFAR Clause 252.227-7030, uses the word "contract" which can be confusing when using IDIQ contracts. Something to consider is that Gov't contracts are defined as a combination of offer, acceptance and consideration. The consideration part of the deal is only found in the delivery order.  Also, consider the words at FAR 16.505 (a) (2) which tells us that the full cost or price of the work is established when the order is placed.  I recommend that you also check with your  assigned acquisition lawyer. 
    16.505 -- Ordering.
    (a) General.
     (2) Individual orders shall clearly describe all services to be performed or supplies to be delivered so the full cost or price for the performance of the work can be established when the order is placed. Orders shall be within the scope, issued within the period of performance, and be within the maximum value of the contract.
     

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