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  • Question

    Is it legal to exercise an option on a IDIQ Requirements contract, with no funds? What is the violation? Can you execute the base contract with no funds, for an IDIQ Requirements contract with no funds,, pending receipt of the delivery or task order with funds?


    Answer

    The consideration in a requirements type contract is the fact that if there is any work, that the firm is guaranteed to all the work. (If you give it to someone else, you still have to pay the contract holder as well) .  This is different from an IDIQ contract where multiple  vendors are each guaranteed a minimum order.   Back to your concern on execising an option on the base requirements contract, Normally, the Calls or Orders carry the funding.  You must exercise the base contract options----can't place orders later if you let the contract die.  If (rare) the base carries the funding, then must exercise it SAF - Subject to Availability of funds.See also FAR 32.703 Contract Funding Requirements, FAR 32.703-2  Availability of Funds, and FAR 17.207  Execise of Options, and FAR 52.217-4

     

     

     

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