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December 21, 2023
Indefinite Delivery, Indefinite Quantity Contracts
The federal government has multiple contracting methods
contract award dollars were obligated on IDVs, which
for use in procuring goods and services, one of which is
include IDIQ contracts (see Figure 1).
called an Indefinite Delivery, Indefinite Quantity (IDIQ)
contract. The Federal Acquisition Regulation (FAR),
Figure 1. DOD and Non-DOD Contract Award
located at Title 48 of the Code of Federal Regulations,
Dollars
defines an IDIQ contract as one that “provides for an
FY2023 (Bil ions of Dol ars)
indefinite quantity, within stated limits, of supplies or
services during a fixed period. The Government places
orders for individual requirements.”
Other types of federal contracts state the exact quantities
and delivery timelines for goods or services, but an IDIQ
contract does not require such specifics beyond a preset
minimum quantity of goods or service at a negotiated price.
This is often called a “minimum guarantee,” which the FAR
states “should not exceed the amount that the government is
fairly certain to order.” An agency usually awards within an
Source: CRS analysis of data from the System for Award
IDIQ contract a pre-set base period of performance, with
Management website (SAM.gov), “Buying Through Government
elective option years that the government may exercise if it
Acquisition Vehicles” report for 10/1/2022 through 9/30/2023.
chooses to extend the duration of the contract. According to
Note: IDVs include IDCs (of which IDIQ contracts are a subset) in
the General Services Administration (GSA), “IDIQ
addition to BOAs and BPAs. The SAM “Buying Through Government
contracts are most often used for service contracts and
Acquisition Vehicles” report does not provide the capability to
architect-engineering services.”
disaggregate IDVs by type to include only IDIQ contracts.
Indefinite Delivery Contracts
Single and Multiple Award IDIQ
IDIQ contracts are a subset of indefinite delivery contracts
Contracts
(IDC), and the majority of IDCs are IDIQ contracts. An
A contracting officer may award IDIQ contracts to multiple
IDC is a contract that has been awarded to one or more
vendors under a single solicitation. This is called a multiple
vendors to facilitate the delivery of supply and service
award IDIQ contract. This allows two or more prequalified
orders. The FAR describes three types of IDCs:
vendors to compete for orders from agencies under
streamlined procedures. The FAR states that multiple award
1. A definite quantity contract provides
IDIQ contracts are the federal government’s preferred
for the delivery of a definite quantity of
contracting method.
supplies or services for a fixed period.
2. In a requirements contract, a contractor
By contrast, a single award IDIQ contract is awarded to a
fulfills all requirements of a specified
single contractor under a single solicitation. An agency may
government activity for products or
award these contracts competitively or noncompetitively.
services over a defined time period.
The FAR requires agency heads to provide written approval
for single award IDIQ contracts that exceed $100 million.
3. An indefinite quantity contract provides
for an indefinite quantity, within stated
Orders
limits, of products or services during a
Once an IDIQ contract has been established, an agency may
fixed period. The FAR states that
place orders to fulfill a need. Agencies place task orders for
indefinite quantity contracts should be
services and delivery orders for supplies. These orders
used only “when a recurring need is
obligate funds and authorize work.
anticipated.”
IDCs are a subset of indefinite delivery vehicles (IDVs),
Under a single award IDIQ contract, a contracting officer
which also include purchasing agreements such as Blanket
may place an order with the vendor following the processes
Purchase Agreements (BPA) and Blanket Ordering
outlined in the contract. Under a multiple award IDIQ, the
Agreements (BOA). In contrast to IDCs, BPAs and BOAs
FAR requires that an agency give all the IDIQ contract
are not legally binding contracts.
holders “fair opportunity” to compete for an order.
In FY2023, approximately 51% of Department of Defense
Unlike other government contracting methods, IDIQ
(DOD) contract award dollars and 61% of non-DOD
contracts establish prices during the individual ordering
process. The FAR states that individual orders “shall clearly
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Indefinite Delivery, Indefinite Quantity Contracts
describe all services to be performed or supplies to be
Some observers argue that using IDIQ contracts can carry
delivered so the full cost or price … can be established
benefits specific to DOD. For example, DOD’s Defense
when the order is placed.”
Acquisition University (DAU) states that the flexibility
associated with IDIQ contracts may allow for more
According to GSA, IDIQ contracts “streamline the contract
effective security cooperation between the United States
process and speed service delivery.” A contracting officer
and its allies and partners by allowing DOD to “meet
can place a task or delivery order using a pre-existing IDIQ
various mission needs quickly.”
contract instead of having to draft, solicit, and award a new
contract. IDIQ contracts may also yield cost savings
On the other hand, the National Defense Industrial
compared to using standard contracting methods, as the
Association, one of the largest defense industry trade
government is not obligated to procure goods or services
groups, asserts that IDIQ contracts may “hurt small
beyond the minimum guarantee.
businesses,” as the source selection criteria used for larger
contract vehicles may conflict with small business
Frequent Uses of IDIQ Contracts
contracting goals. DAU also states that a downside to using
According to GSA, IDIQ contracts “are used when GSA
IDIQ contracts is that the “processes to establish IDIQ
can’t determine, above a specified minimum, the precise
traditionally have long procurement lead time to award.”
quantities of supplies or services that the government will
require during the contract period.” The Government
Issues for Congress
Accountability Office (GAO) found that IDIQ contracts
Ten of the 18 DOD single award IDIQ contracts reviewed
accounted for approximately one-third of federal contract
in a 2017 GAO report were not awarded competitively.
obligations in FY2015. Approximately two-thirds of IDIQ
According to DAU, a single award contract “increases
obligations were for services, and one-third were for
potential for vendor lock,” whereby an agency cannot easily
supplies.
transition to a competing vendor’s product or service. This
could result in “cost, schedule, and performance risk if the
Federal Supply Schedule
contractor is under-performing.”
GSA maintains a supply schedule—a list of goods and/or
services available to federal agencies from multiple GSA-
By contrast, according to DAU, multiple award IDIQ
selected vendors at varying prices. This schedule is known
contracts allow for fair opportunity, which “enables
as either the Federal Supply Schedule (FSS) or a multiple
selection of best of breed solutions” and “reduces risk for
award schedule. Agencies may order commercial goods and
vendor lock and keeps pressure on pricing,” which may
services listed on the schedule in varying quantities at the
result in increased competition among vendors and better
prices stated on the schedule. The FSS, therefore, provides
prices for the government.
a simplified process for agencies to acquire goods and
services while also obtaining volume discounts. Although
As a multiple award IDIQ contract could be awarded to as
GSA awards most FSS contracts, GSA may authorize other
few as two vendors, a lack of competition could still be
agencies to award contracts and publish supply schedules.
considered a risk under these contracts. According to GAO,
For example, the Department of Veterans Affairs awards
“contracting officers must avoid situations in which
schedule contracts for certain medical items.
contractors specialize in one or a few areas of the work,” as
this may increase the likelihood that some of the orders
Governmentwide Acquisition Contracts
under an IDIQ contract could be awarded noncompetitively
A governmentwide acquisition contract (GWAC) is an
despite the presence of multiple vendors.
IDIQ contract for information technology goods and
services awarded by one agency for government-wide use.
Further Reading
Under the Clinger-Cohen Act (40 U.S.C. §11302), the
• 48 C.F.R. §16.5 (or FAR Subpart 16.5), “Indefinite
Office of Management and Budget designates agencies that
Delivery Contracts.”
may manage and operate GWACs. Agencies currently
operating GWACs include GSA, the National Institutes of
• GAO, Federal Contracts: Agencies Widely Used
Health, and the National Aeronautics and Space
Indefinite Contracts to Provide Flexibility to Meet
Administration.
Mission Needs, GAO-17-329, April 13, 2017.
DOD Use of IDIQ Contracts
• DAU, “Contracting Cone: Indefinite Delivery Indefinite
DOD is one of the federal government’s main users of IDIQ
Quantity (IDIQ) Contracts (FAR Subpart 16.5).”
contracts. According to a 2017 GAO report, DOD
accounted for 68% of all IDIQ obligations from 2011 to
2015. DOD generally follows federal guidelines concerning
Dominick A. Fiorentino, Analyst in Government
IDIQ contracts. The DOD-specific acquisition regulation
Organization and Management
document, the Defense Federal Acquisition Regulation
Alexandra G. Neenan, Analyst in U.S. Defense
Supplement, outlines several DOD-specific procedures and
Infrastructure Policy
rules related to IDIQ contracts.
IF12558
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Indefinite Delivery, Indefinite Quantity Contracts
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