FAR 16 covers “types of contracts” and this is where you’ll find indefinite delivery contracts, in FAR Subpart 16.5. There are actually three types of indefinite delivery contracts: definite-quantity contracts, requirements contracts, and indefinite-quantity contracts. They are all used to acquire supplies and/or services when the exact times and/or exact quantities of future deliveries are not known at the time of contract award. Current regulations show a preference for multiple award contracts.
But, let’s talk about indefinite delivery indefinite quantity (IDIQ) contracts which are commonly used and widely known. The FAR cites the following advantages: government stocks can be maintained at minimum levels; direct shipment to users, permits flexibility in both quantities and delivery scheduling and ordering of supplies or services after requirements materialize; limits the Government’s obligation to the minimum quantity specified in the contract and may provide for any appropriate cost or pricing arrangement under FAR Subpart 16.
Essentially though in practice and plain language, a contracting agency will use an IDIQ to streamline the acquisition process and to cut down on procurement administrative lead team (PALT) which is how long it takes to award a contract. Whereas the award of the IDIQ will likely take several months (or years for a multimillion dollar/multi-agency contract) – once it has been awarded, the task or delivery orders can be issued in weeks or even days. That’s a win for the Contracting Office, the End User and the Contractor.
The process is streamlined because once the IDIQ is awarded, the task (for a service) or delivery (for a product) orders are then issued based on the Ordering procedures in the IDIQ which must be in accordance with FAR 16.505. The FAR requires that all awardees be given a Fair Opportunity to compete for each requirement unless one of certain exceptions applies. Furthermore, protests are not allowed under the task or delivery order contract unless the grounds are that the order increases the scope, period or maximum value of the contract – otherwise the value must exceed $10M or $25M depending upon the agency.
The IDIQ (if over $25K) will be advertised in SAM as full and open competition or a set aside (dependent upon market research) so all qualified offerors can submit proposals; however, once the IDIQ is awarded, the task or delivery orders will only be issued to the IDIQ awardees.
You are probably aware of many of the very large IDIQs such at the OASIS and SEWP, but are you aware that most agencies award IDIQs for their own use? This is why you may not see many opportunities posted for construction contracts in Region 1 of GSA, for example – it’s because they have an IDIQ in place for those requirements.
If you are not currently an awardee under an IDIQ, you can certainly market to the contractors who do hold the IDIQ because they may need the service or product you can provide. (If they are a large business, they also have a Sub Contracting Plan in place and have to make best efforts to meet their agreed upon socioeconomic award goals.) Also, do your research to determine when an IDIQ expires so that your company can potentially submit a proposal for the re-compete. (Respond to Sources Sought notices when you see them!)
To get you started in market research, the FAR points us to The Interagency Contract Directory (ICD) which is a central repository of Indefinite Delivery Vehicles (IDV) awarded by the Federal agencies where the IDV is available for use at both the intra-agency and interagency levels. IDVs include Government-Wide Acquisition Contracts (GWAC), Multi-Agency Contracts, Other Indefinite Delivery Contracts (IDC), Federal Supply Schedules (FSS), Basic Ordering Agreements (BOA), and Blanket Purchase Agreements (BPA). You can find that directory at the following url:
https://www.contractdirectory.gov/contractdirectory/
(Hint: If you leave the search box empty and push the search button, you’ll “hit the jackpot” of IDVs, award data and more!)
In summary, IDIQs are a useful contract vehicle for end users, contracts staff and contractors. As a contractor you may have the opportunity to compete and win a single or multiple award IDIQ for one agency, for multi agencies, or as a subcontractor to a contractor who holds the IDIQ.