This newsletter is the second in a series of five newsletters about the federal government's increasing reliance on multiple award contracts.

In its simplest terms, an IDIQ contract is one used by government agencies to buy future goods and services at set prices at such time as a need arises. Once a government buyers determines he or she has a need for a good or service, an order is placed through the vendor's IDIQ. Usually multiple vendors are selected for award under an IDIQ contract, but not always.

Although the net effect of them is that they reduce competition, IDIQs are authorized under the Federal Acquisition Regulation (FAR). Full and open competition is the government's aim, as articulated throughout the FAR. However, this is only really a goal because the government would grind to a halt if it tried to meet the goal in an absolute sense.

More than 4,000 IDIQs are currently active. IDIQs come in many flavors for the following reasons.

1. IDIQs are awarded to buy products or services, or both.
2. An IDIQ can apply to a single agency, multiple federal agencies and even state and local agencies (in the case of a limited number of GSA Schedule contracts).
3. The term of an IDIQ may range from one to twenty years, the latter of which is applicable in the case of GSA Schedule contracts.
4. The planned expenditures under an IDIQ can range from several hundred thousand dollars upward to $50 billion.
   
5. An IDIQ may be awarded to one vendor, a number of vendors or, in the case of GSA Schedule contracts, to thousands of vendors. 
   

No wonder there is a good deal of confusion about the acronym "IDIQ." 

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