Companies new to the federal market often find the alphabet soup of acronyms like IDIQ to be madly confusing. As defined by Wikipedia and shortened here:

IDIQ is a contracting acronym meaning Indefinite Delivery Indefinite Quantity. An IDIQ is a type of contract that provides for an indefinite quantity of supplies or services during a fixed period of time. The legal origin of IDIQ contracts is the Federal Acquisition Regulation (FAR), section 16.501(a). IDIQ awards are usually for base years as well as option years. The government places delivery orders (for supplies) or task orders (for services) against a basic contract for individual requirements.

In essence, an IDIQ contract is a "pre-approved federal price list." Awards under an IDIQ are usually limited to a small number of companies. (Note that GSA schedule contracts are an exception.) The select list of companies receiving awards includes the only companies that are allowed to bid on task orders, using their pre-approved price list. (The pre-approved prices are maximum prices and discounts may be offered to federal buyers.) When a need arises, funded orders are then competed among the awardees only. Sometimes the competition for orders is real and at other times it is for appearances only, because of aggressive pre-selling by the companies holding the IDIQ.

Federal IDIQ contracts are almost always awarded through public procurements appearing in FedBizOpps. Exceptions include contracts awarded in the secret worlds of intelligence and counterterrorism. Federal buyers operating in those worlds seldom worry about public perceptions and in most cases they probably shouldn't have to.

This newsletter is an excerpt from Loading the Dice in DC, Legally: Learn the Politics and Realities of Federal Contracting by Fedmarket Founder and President, Richard White.
Download your complimentary copy - Click here.