Indefinite Delivery Contract

An Indefinite-Delivery Contract (Federal Acquisition Regulation (FAR) Subpart 16.5) provides various possible combinations of indefinite elements that provide the desired flexibility to best meet the Governments needs. The appropriate type of indefinite-delivery contract may be used to acquire supplies and/or services when the exact times and/or exact quantities of future deliveries are not known 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 order contracts or task order contracts.

Website: FAR Subpart 16.5 “Indefinite-Delivery Contracts”

Website: DFARS Subpart 216.5 “Indefinite Delivery Contracts”

Types of Indefinite-Delivery Contracts

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

Definite-quantity contracts
Requirements contracts
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

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.

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

Other Contract Types

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

AcqLinks and References:

Updated: 7/10/2021

Rank: G5.6

Contracts & Legal