A U.S. Government agency uses indefinite-delivery, indefinite quantity ("IDIQ")* contracts to purchase supplies and/or services when it does not know the precise quantities of goods, or times/amounts of services at the time of IDIQ award. Under the IDIQ, the agency does not promise to purchase all of its needed supplies and/or services from the awardee. Instead, the agency only agrees to, generally, purchase a minimum amount that is identified in the IDIQ document. This amount may be small, but it must be more than "de minimis. "**
Most importantly, contractors must recognize that an IDIQ is not considered a contract until a task order or delivery order has been placed against it. In fact, an IDIQ is often called a "hunting license" that gives contractors only the right to hunt and trap task or delivery orders. Contractors also should be aware that an IDIQ may not be fully funded so that it may be the case that no task or delivery orders are ever placed against it. Accordingly, IDIQ contractors should recognize that their ability to obtain remedies through submission of claims under the Contract Dispute Act may be very limited unless those claims relate to task or delivery orders.
This limitation also extends to bid protests. While GAO has jurisdiction over bid protests concerning the initial IDIQ procurement, under 41 USC 4106(f), its jurisdiction over IDIQ task or delivery order competitions is limited to situations where: (1) the protest challenges the scope, period, or maximum value of the underlying contract; or (2) the task or delivery order is valued at more than $10 million.
*IDIQ contracting is governed by Subpart 16.5 of the Federal Acquisition Regulation ("FAR").
** "De minimis," as used in regard to IDIQ contracts, means a small amount, but not so small as to be inconsequential.
Ms. Benton is a partner with Benton Potter & Murdock, P.C. She may be reached via jb(at)bpmlawyers.com.
