These open quantity contracts have raised two issues.
Victor P. Goldberg, Discretion in Long-Term Open Quantity Contracts: Reining in Good Faith, 35 U. C. Davis L. Rev 319 (2002).
The authority under this subsection extends to the procurement of parts, components, and systems (including weapon systems) common with and required for other nuclear powered vessels under joint economic order quantity contracts.
The Secretary of the Navy may use funds deposited in the Fund to enter into contracts known as "economic order quantity contracts" with private shipyards and other commercial or government entities to achieve economic efficiencies based on production economies for major components or subsystems.
The customer can, when he makes his specification, select any grade of goods, he desires, and, upon so selecting, they will be delivered to him, up to the quantity contracted for, within the time agreed upon, at prices contracted for applicable to the several grades.
And the American portion covers such things as rebuilding the electric, transportation, communications and oil industries, and what the Wolfowitz memo delicately calls "the indefinite-delivery, indefinite-quantity contract to equip the new Iraqi army".
In September 2009, the department awarded a 5-year, multiple-award, indefinite-delivery/indefinite-quantity contract to three companies: PAE Government Services DynCorp International and Protection Strategies Inc.., with the ceiling for each coming in at $375 million.
This paper proposes an alternative scheme in which the regulator offers each firm a menu of linear price-quantity contracts; faced with this menu, each firm′s dominant strategy is to truthfully report its private information and self-select the contract that is ex post efficient.
