IDC Contracts and Why We Seek Them Out

IDC Contracts and Why We Seek Them Out

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So what is an IDC contract? It stands for Indefinite Delivery Contract (IDC) and is a contracting vehicle that has been awarded to one or more vendors. It facilitates the delivery of supply and service orders.

Why Seek these IDC Contracts out?

For any IDC contracting vehicle one thing is certain, we know that they will be re-competed; making them great for a proactive seller. We can start getting to know the buyer and market directly to him/her.

Any type of multiple year contract is great to have! Most are a minimum of a one year guarantee, having 4 additional option years available.

The Government has 3 IDC contract types:

Requirements Contract

Provides for filling all purchase requirements for supplies or services during a specified contract period. Deliveries are to be scheduled by placing orders with the contractor.

Definite Quantity Contract

Delivery of a definite quantity of supplies, or services for a fixed period. Deliveries are to be scheduled at designated locations upon order.

Indefinite Quantity Contract

An indefinite quantity of specific supplies, or services to be furnished during a fixed period. Deliveries to be scheduled by placing orders with the contractor.

If your price is based on total units over the entire contract, and the government decides not to exercise the option years you will have lost your margins.

The contract shall require the government to order and the contractor to furnish at least a stated minimum quantity of supplies or services. If ordered, the contractor is to furnish any additional quantities not to exceed a stated maximum.

Indefinite Quantity Contracts are often referred to as Task Orders and Delivery Orders.

What is a Task Order

A contract for services that does not procure or specify a firm quantity of services, other than a minimum or maximum quantity. Task orders provide for issuance of orders for the performance of tasks during the period of the contract.

For parts, this would mean opportunities like machining and repair of government parts, metal finishing, etc.

What is a Delivery Order

A contract for supplies that does not procure or specify a firm quantity of supplies, other than a minimum or maximum quantity. Delivery orders provide for the issuance of orders against the period of the contract.

The most common IDC contract seen in the part world is usually an IDIQ (Indefinite Delivery-Indefinite Quantity). IDIQ contracts can have one or more suppliers awarded and usually have 4 option years, making them a 5 year contract.

Responding to IDC contracts

A typical response for this type of solicitation involves submitting a bid as you would a regular solicitation. Base your pricing on the guaranteed minimum for the first year – the government does not have to exercise the option years.

In Conclusion

If your price is based on total units over the entire contract, and the government decides not to exercise the option years you will have lost your margins.

Be sure to read the entire request because under certain situations they can require high volume runs and a tight delivery schedule, or even multiple delivery locations.

To gain this advantage a contractor must become proactive. In this situation, contacting a FOIA Officer before it expires allows us to use a FOIA (Freedom of Information Act) request, and obtain information ahead of the next request.

Using a set aside request can it removed from the unrestricted market and designate a set aside; allowing only those with that set aside to participate in the procurement process.

Remember, the key to being proactive in the Government market is to bid today, and position for tomorrow!