Inaccurate or negligently prepared estimates. Because a contractor is entitled to rely upon the estimated quantities in the solicitation when preparing its offer or bid, the government has an obligation to use the best and most current information in preparing estimates. The contractor is not responsible if the government was negligent in some way or did not properly prepare estimates. For instance, estimated quantities of HWAC maintenance service orders based on a study several years old or estimates that did not consider the impact of the replacement of older equipment would not be based upon the most current information available when the solicitation was prepared.

Ordering requirements from another contractor. The government’s obligation under a requirements contact is most obviously violated when the government orders all or part of its requirements from another contractor. This is a violation of the basic agreement. For example, suppose there is a requirements contract for custodial services for specific buildings on a base and there is also an IDQ contract for other buildings on the same base. It is improper for the government to order custodial work in buildings covered by the requirements contract from the contractor on the IDQ contract even if the line item pricing is lower.

Changes in how the government meets requirements. It is improper for the government to change the way it meets its requirements without compensation the contractor for the financial impact of that change. The government often violates its obligations under a requirements contract in this way because changes in policies or procedures made by managers often, unwittingly, impact requirements contracts. Often policies or procedures are changed to improve efficiency or save money. If the government makes a change, however, it must compensate the contractor for any financial impact caused by the change.

A change to how a requirement is met is often hard to recognize. One example concerns vehicle maintenance services. A solicitation provided an estimated amount of work based upon a semi-annual preventative maintenance schedule for each vehicle. After the contract was awarded, the government determined that an annual preventative maintenance schedule would properly maintain the vehicles at a lower cost. The contractor was not responsible for the government’s change of maintenance policy and fewer preventative maintenance orders. The contractor was entitled to recover for the cost impact caused by ordering annual rather than semi-annual maintenance.

If there is a variation from the estimated quantities that impacts performance costs, the first step is to find out what caused the variation. As this article points out, some causes for variations entitle the contractor to recover additional payments. The next step is to quantify the impact of the variation. The failure of the government to order estimated quantities may be approached as (1) a partial termination entitling the contractor to recover performance costs (2) a change entitling the contractor to re-price the line items or (3) a variation which may result in payment of the full contract price as if the government had ordered the estimated quantities. The proper choice of approach can maximize the amount recovered.

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