Project Management

The Peril of Partnership

Mark E. Salesky

The  federal government’s increasing use of “Indefinite Delivery, Indefinite Quantity, or “IDIQ” contracts for services, has sharpened the competition for federal contracts. IDIQ contracts are not new — both the government and industry use this type of undefinitized contract for recurring requirements, typically for commodities, which are ordered from a pre-approved price list. Over the last decade, the federal government has refined its method to use IDIQs for services of all types — from janitorial work to highly advanced scientific support. Because of its sheer size, the U.S. Department of Defense leads the way with the volume and scope of these contracts, but other federal agencies have followed rapidly behind.

IDIQ contracts always have a two-step process. The first step is qualification of the company by a formal proposal, which is often rather generic. The U.S. Federal Acquisition Regulation (FAR) requires the government to select at least two winners whenever possible, but four or five concurrent awards are not uncommon; some procurements have resulted in as many as 20 concurrent awardees.

Regardless of the number of awardees, none at this point is guaranteed any work above a minimum value specified by the base contract. Nor does the government provide a schedule of anticipated task orders. The contract is nothing more…

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