Do you have a great contract vehicle that’s about to expire? Think that’s the end of the road? While it always pays to have more than one Indefinite Delivery Indefinite Quantity (IDIQ) contract through which your customer can reach you, you don’t have to say “goodbye” to that old favorite that has driven good business just yet.
Most IDIQ vehicles, contracts like NASA SEWP and GSA Alliant, have clauses that allow for task orders executed during the life of the contract to continue on, in some cases up to 60 months after the underlying contract expires. The rules apply not only to performance on an initial task order, but to options as well. Most recently, GSA added this provision to all Multiple Award Schedule contracts.
Look for FAR Clause 52.216-22, Indefinite Quantity, in your IDIQ contract vehicle. If it’s there, you have the protection and ability to work on long-term business even after the IDIQ expires. The contract shall, however, govern both the contractor’s and government’s rights and obligations with respect to any order to the same extent as if the order were completed during the contract’s effective period.
Do federal customers feel comfortable with this? Many do. The practice of placing business on an “old” contract is nothing new. Federal contracting officials and customers have their favorite contract vehicles too. If they’re familiar with how to order from one contract they will likely be more inclined to go with what they know rather than wait for something new. Similarly, great performance on your part can make follow on business an easy decision, meaning that over-worked contract shops have one less thing to worry about.
Large government contractors actively seek to secure work under an about-to-expire contract they already have as a hedge against the risk of not being awarded a follow-on vehicle or if delays postpone the effective date of any new contract. This helps even out business cycles and brings predictability to transition times when it otherwise might be lacking. This new work can be added with less competition too, especially if you do the leg work to make your federal customer’s paperwork easier to execute.
It’s important to keep in mind, though, that these great features do not apply to Blanket Purchase Agreements (BPA’s) made against GSA Schedule contracts. GSA has been clear that no BPA can live on after the underlying Schedule contract upon which it is based expires. This may be news to contractors and customers, but exposes both to considerable risk in the event a competitor or other party points out the problem. Continuing otherwise defeats the purpose of providing predictability and stability – for both you and your customer.
Don’t wait until the last minute of the contract to have discussions about follow-on business with your federal customers. Put your business case together in advance and always make sure you point out why this approach is in the best interest of the government. Advanced planning increases the chances of success, and makes you look like a true partner.
And you thought all contract clauses were there to cause problems.