Types of IDIQ Contracts Available in the Market

Posted by Fedvital on December 17th, 2020

IDIQ contracts are one of the  premium federal contracts that bring you exclusive combinations of indefinite elements offering top-notch flexibility to best meet the Government’s needs. Most of the time the appropriate type of IDIQ is used to acquire supplies and services when the quantity of project work as well as the turnaround is unknown. According to the Federal Property and Administrative Services Act of 1949, there are  three different types of IDIQ contracts.    

Three major indefinite-delivery contracts include  the following:

1. Definite-quantity contracts

2. Requirements contracts

3. Indefinite-quantity contracts

Definite-quantity contracts
A definite-quantity IDIQ contracts (FAR 16.502) is quite contrary to the name IDIQ itself.  In fact, this is a definite quantity of specific supplies or services for a fixed time frame. Most importantly, the deliveries and the performance are prescheduled at the particular location and that too at the designated time.

Requirements Contracts
According to FAR 16.503, the Requirement contracts are a special kind  of IDIQ contracts. These  are more of a need based  contracts  that are used for filling  up all sorts of actual purchase requirements of designated Government activities. The supplies and services for a specific contract  period  is paid  and  if deemed  necessary, new requirements are added along with it.The  payment is commensurate with the  deliveries or performance of the vendor and solely depends on the discretion of the contractor.

Indefinite-quantity Contracts
As the name suggests indefinite-quantity (IDIQ) contract, as per FAR 16.504 is all about those contracts  where the contactor and vendor both do not have any idea about the timeline and the quantity of the  products. Precisely, it’s about indefinite quantity of work without or within quantified limits, of supplies or services during a fixed period. The Government places orders for individual requirements. Quantity limits will be specified later as per the units or as dollar values. Funds for the minimum amount of the contract are applied at that the time of award. Requirements above the minimum are then obligated on the contract when needed.   

Multiple Award Contracts
This also comes under IDIQ contracts, but it is called so because two or more contracts from one solicitation are awarded to a single supplier. But, this is certainly an unfeasible decision because he may fail to meet the total requirements. The awards are for the same generic types of items at various points. However the following must be true in order to get categorized as Multiple award Contract.

·There’s always two or more contracts available to provide the supply or service

·The terms must be favourable enough for the single contracts

·It offers  cost efficiency to the  administrative  expenses.

·Requirements are huge and hence one contractor is not always enough to accomplish the same.