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  • Question

    If the end user greatly exceeds the BEQ in a 5yr IDIQ, can the contractor cancel the contract?


    Answer

    In FAR 52.216-22, Indefinite Quantity, paragraph (b), the clause states, "Delivery or performance shall be made only as authorized by orders issued in accordance with the Ordering clause. The Contractor shall furnish to the Government, when and if ordered, the supplies or services specified in the Schedule up to and including the quantity designated in the Schedule as the “maximum.”  Also, see also FAR 16.504(a)(1): 

    (a) Description. An indefinite-quantity contract provides for an indefinite quantity, within stated limits, of supplies or services during a fixed period. The Government places orders for individual requirements. Quantity limits may be stated as number of units or as dollar values.

    (1) The contract must require the Government to order and the contractor to furnish at least a stated minimum quantity of supplies or services. In addition, if ordered, the contractor must furnish any additional quantities, not to exceed the stated maximum. The contracting officer should establish a reasonable maximum quantity based on market research, trends on recent contracts for similar supplies or services, survey of potential users, or any other rational basis.

    There are two issues: (1) the rights of the parties and (2) the scope of the competition for the contract. Under the clause cited above, the government has no right to order a quantity or amount in excess of the maximum and the contractor has no obligation to accept or perform an order in excess of the maximum. Moreover, the order of any quantity or dollar amount in excess of the maximum is grounds for protest that the order exceeds the scope of the competition for the contract.

     

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