Contracts & Legal

Indefinite Delivery Contract

An Indefinite-Delivery Contract (IDC) (Federal Acquisition Regulation (FAR) Subpart 16.5) provides various possible combinations of indefinite elements that provide the desired flexibility to best meet the Government needs. The appropriate type of indefinite-delivery contract may be used to acquire supplies and/or services when the exact times and/or quantities of future deliveries are unknown at the time of contract award. Pursuant to 10 U.S.C. 2304d and section 303K of the Federal Property and Administrative Services Act of 1949, requirements contracts and indefinite-quantity contracts are also known as delivery or task order contracts.

Definition: An Indefinite-Delivery contract is a type of contract used by government agencies to procure goods or services when the exact quantity or timing of deliveries is uncertain.

Purpose of an Indefinite-Delivery Contract (IDC)

The purpose of an Indefinite-Delivery contracts streamline the procurement process by establishing pre-negotiated terms and conditions, enabling government agencies to quickly acquire goods or services as needed without the need for lengthy procurement procedures.

When to Use an Indefinite-Delivery Contract (IDC)

Indefinite-delivery contracts are commonly used for projects with recurring requirements or when the government’s needs are difficult to predict. They provide flexibility to both the government and the contractor, allowing for variations in quantity, delivery schedule, and pricing over the contract’s life. Task orders are typically issued under the IDIQ contract to specify the quantity, delivery schedule, and other terms and conditions for each specific requirement.

Types of Indefinite-Delivery Contracts (IDC)

There are three (3) types of indefinite-delivery contracts:

  1. Definite-quantity contracts
  2. Requirements contracts
  3. Indefinite-quantity contracts

(1) Definite-quantity Contracts

Description: A definite-quantity contract (FAR 16.502) provides for the delivery of a definite quantity of specific supplies or services for a fixed period, with deliveries or performance to be scheduled at designated locations upon order.

(2) Requirements Contracts

Description: A requirements contract (FAR 16.503) provides for filling all actual purchase requirements of designated Government activities for supplies or services during a specified contract period, with deliveries or performance to be scheduled by placing orders with the contractor.

(3) Indefinite-quantity Contracts (IDIQ)

Description: An indefinite-quantity (IDIQ) contract (FAR 16.504) provides for an indefinite quantity, within stated limits, of supplies or services during a fixed period. The Government places orders for individual requirements. Quantity limits may be stated as number of 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.

Service contracts and architect-engineering services are the most common uses of indefinite delivery, indefinite quantity (IDIQ) contracts. Base years and option years typically receive awards. The government issues task orders for services or delivery orders for materials based on a baseline contract for specific needs. The basic contract specifies the minimum and maximum quantity restrictions in terms of dollars or units (for supply) (for services).

Multiple Award Contracts

Multiple Award Contracts (FAR 16.504c) occur when a contracting agency awards two or more contracts from one solicitation for comparable supplies and services where the award to a single supplier would be impractical or fail to satisfy the total requirements.  The awards are for the same generic types of items at various points. However, the following must be true:

  • There are two or more contractors able to provide the supply or service
  • The terms will be more favorable than a single contracts
  • It’s more cost-effective considering the administrative cost
  • The requirements is severable, and more than one contractor can accomplish the separate parts

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Other Contract Types

– See Firm-Fixed Price Contract
– See Incentive Contract
– See Cost-Reimbursement Contract
– See Time and Materials Contract

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Updated: 3/4/2024

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