The federal government uses several different types of contracting to purchase supplies and services. One that is frequently used when a specified delivery time of a service or quantity of supplies is not known at the time of the contract is the IDIQ (infinite delivery/infinite quantity.) There are three types of IDIQ contracts:
- Definite quantity
- Indefinite quantity
The last two are also known as task order or delivery order contracts depending on what the contract is for. IDIQ contracts are usually issued for a set number of base years with renewal options for additional years. Typically, an IDIQ contract does not exceed five years.
IDIQ contracts are characterized by having minimum and maximum elements as part of the contract. It could be for a set number of units (in the case of supplies) or a dollar value (in the case of services provided).
There are several advantages to using an IDIQ contract. One, with this type of contracting the process is more streamlined than typical government contracting, so the delivery specified in the contract is sped up and received sooner than with more conventional types of contracting. This can be especially critical during times when supplies or services need to be delivered quickly and can’t wait on the longer contracting processes.
Another advantage is that because it takes less time to award, it costs less money and time on the front end when compared to the longer base contracting processes. Before awarding a contract, the responsible program office does a considerable amount of market research into the company or companies under consideration of a contract issuance.
After a contract is awarded, there are checks and balances to ensure the specifics of the contract are being met. Because an IDIQ contract has set parameters, cost-overruns, which are common in government building projects under other types of contracting, are non-existent.
Still another advantage is that contracts can be awarded to only a single company or several companies within a single contract without having to go through the competitive bid process as with other types of contracting. And not only can the contract be multiple awarded (going to two or more companies), but the delivery of the contracted services or supplies can go to multiple government agencies or dedicated to a single agency depending on how the contract is written.
And finally, another advantage is that the awarding cannot be protested by companies not getting a contract, thus a contract does not get bogged down in a legal suit.
Two federal government agencies that routinely use IDIQ contracts are the General Services Administration (GSA) and Department of Defense (DoD). Even many of the states are now starting to adopt this process for many of their contracting needs because of its efficiency and simplicity.
IDIQ Contracting vs BPA
An IDIQ contract can at first look seem to be similar to a Blanket Purchase Agreement (BPA) when in fact they are much different. An IDIQ contract focuses on a fixed about of time or quantity. A BPA focuses on a fixed budget. An IDIQ contract may state minimum or maximums in the contract or the delivery may be on demand all within the specified terms of the contracts. A BPA on the other hand may not have a specified number of services or units delivered during the course of the contract, but instead is driven by a fixed monetary amount. Once that money is spent, the contract ends (unless renegotiated).
In this fast-moving world of today, the older process-burdened types of contracting are going the way of the dinosaur. Instead contracting systems like the IDIQ are being used more and more at not only the federal level, but at state and local levels of government too.