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Contracting by Negotiation
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Indefinite-Delivery Indefinite-Quantity (IDIQ) Contracts
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| Description |
| FAR 15 describes the procedures for competitive and non-competitive open market acquisitions exceeding the Simplified Acquisition Threshold (SAT). Open market is defined as products or services not available from required sources of supply, such as GSA schedule contracts, outlined in FAR 8. |
IDIQ contracts provide a method to order from existing agency indefinite-delivery contracts as well as contracts awarded by another agency (i.e. Government-wide Acquisition Contracts (GWACs) and Multi-Agency Contracts (MACs)).
Existing IDIQ contracts should be considered prior to establishing a new agency specific single or multiple award IDIQ vehicle. IDIQ ordering procedures are described at FAR Part 16.505 and DFARS Part 216.505.
Establishing an agency unique IDIQ contract may be an appropriate business decision to support a portfolio of programs when recurring needs are anticipated. New IDIQ contracts can be awarded to a single or multiple vendors
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| Common Applications |
- All types of supplies and services, to include construction
- Defense Business Systems and enterprise resource planning systems
- Solutions and technologies
- IT software and products, to include Agile development
- IT systems
- Weapon systems
- Aircraft
- Ships
- Space systems
- Research & development
- Advisory and assistance services
- Engineering services
- Special studies
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- All types of supplies and services, to include construction
- Defense Business Systems
- Solutions and technologies
- IT software and products
- IT systems
- Weapon systems
- Aircraft
- Ships
- Space systems
- Research and development
- Advisory and assistance services
- Engineering services
- Special studies
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| Pros |
- Ability to uniquely negotiate terms and conditions, and pricing arrangements enables improved mission outcomes
- Use of competitive range or multi-step process provides time saving mechanism to negotiate with only highest rated vendor offers
- Use of change orders enables flexibility to adjust to urgent/unforeseen circumstances
- Provides opportunity to design and negotiate solutions that meets mission requirements from basic to large scale, complex acquisitions
- No funding thresholds exist providing maximum flexibility in acquiring capabilities for major acquisition programs
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- Ability to offer agency wide ordering through an established IDIQ increases flexibility to meet various mission needs quickly
- Ability to establish streamlined ordering procedures for future requirements reduces lead time to award
- Ability to establish set prices for products and services significantly reduces procurement lead time at the ordering level
- Ability to establish unique contract terms and conditions increases flexibility for all types of acquisition programs
- Continuous competition reduces risk for vendor lock and keeps pressure on pricing
- Fair opportunity enables selection of best of breed solutions
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| Cons |
- Regimented processes traditionally have a longer procurement lead time to award and does not lend to quick delivery of capability
- Selection of appropriate terms and conditions, including data rights increases burden on Government to ensure terms are explicit
- Procedures require labor intensive and government resource support increasing administrative burden and costs
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- Processes to establish IDIQ traditionally have long procurement lead time to award
- Fair opportunity requirement increases lead time to award through evaluations at the ordering level
- Conditions and scope limitations (work scope, ceiling, and period of performance) imposed on GWAC/MAC contract vehicle may reduce flexibility in acquiring products and services
- Procedures require labor intensive and government resource support increasing administrative burden and costs
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| Restrictions |
- Requirement cannot be met through FAR 8 Federal Supply Schedules or existing contract vehicle
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- Scope determination required (work, period of performance, and ceiling)
- Fair opportunity required for a delivery-order or task-order exceeding micro-purchase threshold unless one of the following statutory exceptions applies:
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- The agency need for the supplies or services is so urgent that providing a fair opportunity would result in unacceptable delays
- Only one awardee is capable of providing the supplies or services required at the level of quality required because the supplies or services ordered are unique or highly specialized
- The order must be issued on a sole-source basis in the interest of economy and efficiency because it is a logical follow-on to an order already issued under the contract, provided that all awardees were given a fair opportunity to be considered for the original order
- It is necessary to place an order to satisfy a minimum guarantee
- For orders exceeding the simplified acquisition threshold, a statute expressly authorizes or requires that the purchase be made from a specified source
- In accordance with section 1331 of Public Law 111-240 (15 U.S.C. 644(r)), contracting officers may, at their discretion, set aside orders for any of the small business concerns identified in FAR Part 19.000(a)(3). When setting aside orders for small business concerns, the specific small business program eligibility requirements identified in FAR Part 19 apply
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