IDIQ Explained

Indefinite Delivery, Indefinite Quantity contract vehicles, better known by the acronym IDIQ, are a mainstay in the contracting world.  ANAMAR Environmental Consulting, like many other government contracting firms, identifies, competes for, and wins IDIQ contracts on a regular basis.  Understanding IDIQs, in both form and function, is critical to understanding our business model and how we provide high-quality environmental services to our government clients year in and year out.

What is an IDIQ?

IDIQs possess all the critical elements that define a contract (mutual assent, valid offer and acceptance, consideration, etc. – read more here).  But unlike a contract that exists to deliver a single, defined instance of a product or service, an IDIQ exists to serve as a ‘vehicle’ through which multiple future contracts (referred to as task orders for services or delivery orders for products) are awarded to a contract holder.  The key element that defines an IDIQ and differentiates it from a definitive contract is the indeterminate number and value (within prescribed limits) of future task or delivery orders at the time of contract inception (see FAR 16.504).  In other words, when the government awards an IDIQ to one or more bidders, it does not know how much of a specific product or service it will need over a defined period of time.  The IDIQ contract vehicle affords the government flexibility to order as much (or as little, above a specified minimum) of that particular product or service as it needs over the life of the contract, as long as it does not exceed pre-negotiated limits.

Types of IDIQs

IDIQs are also referred as ‘task order contracts,’ a term that is rolled in to another acronym often encountered when firms and contracting personnel discuss IDIQs: the MATOC.  A MATOC, or multiple award task order contract, is simply an IDIQ with multiple awardees.  Task or delivery orders under a MATOC are effectively competed twice: first, when the MATOC is competed and bidders are selected, and second when each task or delivery order is competed among the contract awardees.  By contrast, single award task order contracts (sometimes referred to as SATOCs), are awarded to only a single bidder, with all of the task or delivery orders for that contract being automatically awarded to the winning firm.  The Federal Acquisition Regulations (FARs) express an explicit preference for MATOCs over SATOCs (see FAR 16.504(c)) due to the additional competition for the ultimate award of task or delivery orders afforded by MATOCs.  Despite this multiple award preference, SATOCs are commonplace across government contracting, accounting for approximately 60 percent of dollars obligated governmentwide.  A 2017 Government Accountability Office report found that the primary reason for this prevalence of SATOCs across the government was the necessity for a single responsible contractor to handle multiple integrally related task orders.  In the world of small business contracting, firms like ANAMAR often find that government agencies must weigh the potential savings offered by competing task orders under MATOCs with the additional administrative burden imposed by managing that same competition.

Conclusion

IDIQs are popular across the government, come in many forms, and serve many purposes.  More importantly, IDIQs continue to evolve as government and industry find new ways to deliver efficient and cost-effective products and services to the agencies that serve the American people.  The staff at ANAMAR Environmental Consulting seek to remain well-informed on the evolution of IDIQs in contracting, and are poised to compete for and win these contract vehicles to continue to provide the same high-quality service we have delivered to the Government for the past 18 years.