It Started with Indefinite Delivery Contracts
Existing in federal procurement since 1981 (by coincidence the year Rainmaker was formed), and only recently making its way down to state and municipal levels, Indefinite Delivery (ID) contracting is a procurement mechanism designed to streamline the competitive bidding process for governmental agencies, and, to a lesser extent, large, private sector businesses.
Invented by the Department of Defense (DoD) for use by the North Atlantic Treaty Organization (NATO), ID contracts have been used routinely and effectively by the DoD for installation maintenance, minor repair, and construction projects since their inception in 1981. If the Indefinite Delivery contract covers the provisions of construction services, it is typically referred to as a “JOC,” or “Job Order Contract”. Contracts designed primarily for non-construction-related services are referred to as “TOC” or “Task Order Contracts”.
Three Types of Indefinite Delivery or ID Contracts
There are essentially three types of Indefinite Delivery contracts:
- Definite Quantity Contracts,
- Requirement Contracts, and
- Indefinite Delivery Indefinite Quantity Contracts.
What Is an Indefinite Delivery Indefinite Quantity (IDIQ) Contract?
In contrast to Definite Quantity and Requirement Contracts, as defined by the Federal Acquisition Regulations, an Indefinite Delivery Indefinite Quantity or IDIQ contract provides for an indefinite quantity, within stated limits, of supplies or services to be furnished during a fixed period, with deliveries or performance to be scheduled by placing orders with the contractor. The legal origin of IDIQ contracts is the Federal Acquisition Regulation (FAR) section 16.504(a) (48 C.F.R. 16.504(a)).
Example of an IDIQ contract:
A government agency wishes to have in place a group of pre-qualified, fully vetted companies willing to perform snow removal services from its highways during the winter. The government agency does not know when storms will affect the roadways or the amount of snow that needs to be removed. The IDIQ and the laws and regulations associated with an IDIQ allow this type of contract to be bid on and awarded. Actual contract awards under this contract are done at the task order (or work order) level when services for snow removal are required.
Usage of IDIQs
IDIQ contracts are most often used for Service Contracts and Architect-Engineering (A-E) services. Awards are usually for base years as well as option years. The government places Delivery Orders (for supplies) or Task Orders (for services) against a basic contract for individual requirements. Minimum and maximum quantity limits are specified in the basic contract either as the number of units (for supplies) or as dollar values (for services). The government uses an IDIQ contract when it cannot predetermine, above a specified minimum, the precise quantities of supplies or services that it will require during the contract period.
An IDIQ contract allows for a certain amount of contract process streamlining, as post-IDIQ contract award negotiations can be made only with the selected company (or companies) that have been awarded the IDIQ contract vehicle, and such contracts are exempt from protest, per Federal Acquisition Regulations Subpart 33.
IDIQ contracts are awarded by numerous U.S. government agencies, including, but not limited to, the General Services Administration (GSA), the Department of Health and Human Services (HHS), the Department of Homeland Security (DHS), the Federal Aviation Administration (FAA), the Army Corps of Engineers (USACE), and the DoD.
IDIQs can be in the form of multi-agency contracts under the Government-Wide Acquisition Contracts (GWAC) system, or they may be government agency-specific contracts.
IDIQ Proposal Responses
- At first glance, it would appear that IDIQ-type proposal response requirements require less new and creative content from your professional and/or technical staff. Unless a response to a sample or actual task or delivery order(s) is a part of the IDIQ requirements and evaluation process, there is minimal, if any, technical response or requirement to designate any key personnel.
- Past Performance and Previous Experience are, like most government contract opportunities, one of the most important evaluation criteria. IDIQs require a much more rigorous mapping of a contractor’s past performance and experience to the oftentimes long list of IDIQ tasks or functional areas and their many subcategories. It is in this area of the IDIQ proposal response where a company’s professional personnel and technical/Subject Matter experts are most valuable, but many times are not a part of the IDIQ response process.
- Historically almost all IDIQ responses included requirements for a Management Plan (contract management, task order management, subcontractor management, marketing the IDIQ vehicles, and employee management including recruiting, training, and retention).
- For the past several years, many larger IDIQs and GWACs issued by the General Services Administration (GSA) and other federal agencies (Health and Human Services CIO-SP4) have transitioned from a dominantly narrative-type proposal response with traditional evaluation criteria to a points-based system that requires minimal writing – in the Information Technology sector these include Alliant 2, OASIS, POLARIS, and others.
- These point-based IDIQs/GWACs require the contractor’s collection, highlighting, and submission of numerous documents, reports, audits, certifications, CPARS/Past Performance Questionnaires, and other information – and each of these document submissions earns the contractor points based upon a pre-predetermined evaluation scoring process. The requisite proposal generated by these points-based proposal responses is generally dozens of documents and associated verifications that are uploaded into an online portal.
- At first glance, these point-based solicitations with their lack of requirement for the writing of multi-page technical and management plans appear to reduce the burden/workload on and cost to the small business contractor. The truth is that the points-based proposal response methodology results in dozens of ever-changing, moving parts – each of which requires a sizeable resource and management effort on the part of a company’s proposal, contracts, human resources, pricing, and senior management teams.
- Pricing for the traditional or points-based IDIQ proposal is often quoted at a ceiling/not-to-exceed rate that allows for (and anticipates) the reduction of pricing at the Delivery Order or Task Order level.
IDIQs – Reduced Competition
If you win an IDIQ contract, you benefit from competing against only a small subset of the total number of companies that submitted proposals in response to the IDIQ opportunity. Some IDIQs are awarded to a single company – others have hundreds of awardees. Regardless of the number of awardees, an IDIQ contract win reduces the odds of winning future business from one in several hundred to as small as one in five or one in ten. Marketing/capture management-aggressive awardees will discover quickly that there are oftentimes only a few respondents to a task or delivery order opportunity and at times you may be the only bidder.
Does Your Firm Need to be on an IDIQ?
Very simply, YES! You need to plan for, bid on, and win every IDIQ for which your firm is qualified