Understanding the Government’s Purchasing Strategy
During a government agency’s strategic planning (its future acquisition approach, how it will be buying services, solutions, products, and equipment), the agency determines its need to purchase specific services, solutions, products, or equipment. Once this need is determined, a government agency must determine which type of contract or contract vehicle will best serve the government’s needs. These unknown quantities and timelines result in government agencies choosing the flexibility of an IDIQ or GWAC contract vehicle that allows the agency the expanded flexibility in determining its needs more specifically in the future, e.g., over the life of the IDIQ or GWAC contract.
The term “IDIQ” stands for “Indefinite Delivery, Indefinite Quantity,” which is a contracting strategy used by government agencies in the United States while the term “GWAC” stands for “Governmentwide Acquisition Contract.” See IDIQ/GWACs for definitions and additional information on IDIQs and GWACs.
Following is an overview of the government’s purchasing strategy as it relates to IDIQs and GWACs:
- Contract Type: IDIQ and GWAC contracts are structured to provide flexibility to the government in terms of quantities and delivery schedules over a specified period.
- Indefinite Quantity: The government buyer does not commit to a specific quantity of goods or services at the time of contract award. Instead, they establish a maximum quantity that can be ordered under the contract.
- Indefinite Delivery: The delivery schedule is not fixed upfront. Orders are placed by the government agency as needed, often based on specific requirements or task orders issued against the IDIQ or GWAC contract.
- Task Orders: Under an IDIQ and GWAC contract, task orders or delivery orders are issued when the government agency needs specific goods or services. These task orders outline the details of what is required, including quantity, delivery schedule, and other terms.
- Flexibility: IDIQ and GWAC contracts provide flexibility to the government in responding to changing requirements and needs. They allow for efficient procurement of goods and services without the delays associated with traditional contracting methods.
- Competition: While IDIQ and GWAC contracts are often awarded based on competitive procedures, they can also include multiple vendors (multiple-award IDIQs or GWACs) to promote competition for task orders.
- Duration: IDIQ and GWAC contracts can have a base period and option periods, allowing for long-term planning and continuity in procurement.
Overall, IDIQ and GWAC contracts are favored by government agencies for their flexibility and ability to streamline the procurement process for recurring needs or projects with uncertain requirements. They are commonly used for services such as IT support, construction, consulting, and other professional services where specific needs may vary over time.