Task Order Contract

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Task Order Contract

A Brief Introduction About the Task Order Contract

A task order contract is like an umbrella contract for services that do not indicate any specific quantity of goods or services and services that perform the task for any order issuance within the contact period. A delivery order contract is also explained similarly, but the only difference is that it is applied while procuring supplies rather than services positioned against an established contractor or with the government. These are the most commonly used IDIQ type of contract, where IDIQ stands for an indefinite-delivery, indefinite-quantity.

This contract is of two types, single and multiple-award task order contract (Sandner & Snyder, 2000). Though the majority of IDIQ contracts are multiple award task order contracts as they awarded to various contractors to complete. Such contracts need more administrative endeavors as they not only have to complete the contract but also multiple selection strings for the individual task order. There are various systems in place to manage these contracts, and they are known as task order management systems.

Such systems help manage all business processes efficiently and cost-effectively under it, initiating from the customer’s task request to cost estimation and task approvals.

Who Takes the Task Order Contract? – People Involved

This a contract signed between a contractor and a customer for a fixed period for procuring services in a situation when a specific quantity of services cannot be quoted. This provides flexibility to both the contractor and the customer to increase or reduce the volume as per the requirement for the stated duration (Benjamin, 2001).

Purpose of the Task Order Contract – Why Do You Need It?

The rationale behind having this contract in place is that it allows the maintenance of the minimum level of government stocks of particular items and also permits the direct shipment of these to the product or service user. It is also necessary as it allows being flexible both quantity-wise and delivery schedule-wise.

Also, the buyers are flexible while placing orders for the product or services only post materialization of certain particular requirements (Sandner & Snyder, 2000). It is beneficial to buyers who are not certain about the exact quantity that will be required during the contract period. The most important point is that this contract restricts the government obligation to the minimum quantity quoted in the contract.

Contents of the Task Order Contract – Inclusions

The contract template includes the following contents: –

  1. Task Order Number – This is the unique task order identification number for this contract.
  2. Parties – This includes the details of the customer and contractor or government; whoever is the party to this contract.
  3. Word Identification – This gives the name of the project for which this contract was formed
  4. Estimated Cost and Fixed Fee – The contractor here provides the estimated cost of the services being provided and also the fixed charges involved in this project.
  5. Limitation of Funds – This gives the amount of funding currently available for this project
  6. Statement of Work and Deliverables – This provides a complete work description and deliverables that have to be achieved through this project (Benjamin, 2001).
  7. Pre-Contract Cost – This gives the cost incurred before the effective date of this contract by the contractor.
  8. Period of Performance/Effective Date – This gives the duration of the assigned project and also the start date or the effective date of this contract from when the project started.
  9. Details of the key people assigned to the task and administrative representatives– It provides the necessary information of the people involved like their name, position, contact details, etc.
  10. Task Order Report Formats – To monitor the assignment reports.

How to Draft the Task Order Contract?

  1. It is very crucial to choose the right written contract sample
  2. The contract should be simple and easy to comprehend
  3. To protect one’s rights, it is important to be very specific of the details
  4. Mention the performance obligations in detail
  5. Final proofreading is very critical and must be done

Negotiation Strategy

While negotiating this contract, it should always be done reasonably and rationally. The negotiations in this contract are documented by the contract manager. The negotiation mostly happens on the scope of work, the work schedules, workforce, experience of the personnel assigned, and other costs involved. Although certain subjects are non-negotiable like salary, fees, indirect rates, etc. The negotiation should happen before the signing of this contract. (“Task Order Contracting,” 2019).

Benefits & Drawbacks of The Task Order Contract

Benefits –

  1. Cost benefits
  2. Service quality assurance
  3. Prevents misinterpretation of the agreement
  4. Offers approved actions to resolve a dispute

Drawback –

The only drawback that can be thought of having the contract in place is if it is not written properly and comprehensively(1).

What Happens in Case of Violation?

This contract comes along with certain obligations for both sides of the parties involved. Ina scenario when any one party fails to fulfill any of the contractual obligations agreed upon is referred to as a breach of contract(2) or contract violation. This can happen when the timelines are not met, services provided are not as mentioned in the terms and conditions. If this happens, both parties have a right to either get the contract enforced again basis the terms and conditions, or they can ask for the recovery of any financial damage caused by this violation. If things don’t even work, then one can file a lawsuit over the culprit.

In conclusion, having this contract in place is good in scenarios when the quantity of services dealing with is not very certain, it is because this kind of a contract gives one the flexibility to go up and down in the volumes quoted.