We have a repetitive need for services, of DNA sequencing. A BPA was set up, however, we are being told that it must be an IDIQ? Which is best?
Great question as this very subject has long been in debate for years. In short, whether to utilize a BPA or an IDIQ ultimately comes down to being a matter of preference. Either approach comes with pros and cons.
Legally speaking, an IDIQ is an actual type of contract. Therefore, an IDIQ is a legally binding contract between the government and the contractor. In the event a contractor fails to perform any of the agreed upon requirements, the contractor would be in breach of contract. And so there’s more bite, so to speak, on the government’s part in support of recovering any loses that may have occurred to the contactor failing to perform.
One the flip side, an IDIQ must stipulate a minimum quantity that the government must procure no matter what within the designed period of performance (FAR 16.504(a)(1)). As well as adherence to a variety of other rules involved based upon the contacts total anticipated dollar amount (FAR subpart 16.5)
A BPA is just what the title states, an agreement. Therefore, BPAs are not a legally binding contract in the eyes of the courts. The reason being BPAs lack certain essential elements of a contract (e.g., mutual assent and consideration) based upon the common-law contract formation (Article 2 of U.C.C.) and not the FAR.
The benefits that come with BPA vary, such as predetermination/agreement of terms and conditions, extended length of validity to place orders against, etc. In turn, the government is not obligated to procure a minimal quantity and could purchase nothing in the end with no fault. More freedom comes with utilizing a BPA versus an IDIQ approach.
On the flip side, a BPA is not a legally binding contract. Should the government chose to utilize it and the contractor for whatever reason cannot comply with the terms at that time, there’s no real legal recourse to enforce it. The risk becomes having to potentially re-procure the item and face loss of continuity in services.
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