About a third of government contracts are of the “indefinite delivery/indefinite quantity” category, GAO has said, with DoD, DHS and VA the main users of such contracts–and DoD alone using them more than all other agencies combined.
Such contracts are used when the exact quantity and timing of products or services are not known at the contract award time. About two-thirds are for services, the rest for goods. The share of such contracts among all government contract remained relatively constant even while government overall reduced contract spending over 2011-2015, a report said.
Agencies favor them because of their flexibility, said GAO. “Contracting officials noted it was easier and faster to place an order under an IDIQ contract than to solicit and award a separate contract each time a need arose. Price and technical approach can still be evaluated at the time of placing an order, but the overall turnaround time, they said, is significantly less than for a new contract. Contracting officials also stated that IDIQ contracts were easier to administer.”
“By not needing to specify an exact quantity or timing of delivery at the time of contract award, program offices can accommodate unforeseen needs on an ongoing basis through issuance of orders,” it added.
GAO did not state an opinion regarding whether agencies overuse such contracts, but it did find that 10 of the 18 single-award IDIQ contracts it reviewed at DoD were not competed, generally because only one contractor could meet the need. “For the competed single-award contracts, contracting officials cited various reasons for choosing a single-award IDIQ approach, such as the need to build and maintain knowledge as orders were awarded over time,” it said.