Indefinite Delivery/Indefinite Quantity Contract Spending Trends, FY 2019-2022

Federal agencies make extensive use of Indefinite Delivery/Indefinite Quantity (IDIQ) contracts to fulfill requirements. More often than not IDIQ contracts are multiple award, which makes them similar to Government-Wide Acquisition Contracts (GWACs) only smaller and, typically, more limited in scope.

Congress and the General Services Administration have in recent years been attempting to shift competition from the level of master contract awards, such as GWACs, to the task/delivery order level. This has meant that bidders do not submit pricing data, for example, when the award of master contracts is being evaluated. Last year’s ASTRO GWAC and pending final awards of GSA’s Polaris contracts both use an approach like this.

It remains to be seen if agency contracting shops begin competing more IDIQ contracts this way. If they do, the effect will be felt across the federal marketplace because federal agencies have been spending more on multiple award IDIQs in recent years.

The data shown below charts the rise in IDIQ spending since FY 2019.

Spending on IDIQs rose by $1.3B from FY 2019 to 2020. It surged again in FY 2022 after a hiccup in FY 2021 took spending down by $800M. Readers should keep in mind that the total shown for FY 2022 includes primarily the civilian sector thanks to a 90 day delay in reporting contracting data by the Department of Defense. Once that data comes in around the middle of January we will see the final FY 2022 IDIQ spending total skyrocket.

As for total IDIQ spending by agency, here are the numbers for the top 10 departments.

Why IDIQ spending declined in FY 2021 does not appear to be attributable to any single reason as the drop is noticeable across several large agencies. The Department of Health and Human Services, for instance, spent $4.95B via IDIQ contracts in FY 2020. In FY 2021 this number fell to $3.98B. The National Aeronautics and Space Administration and Department of Transportation also notched declines, from $3.5B in FY 2020 to $3.4B in FY 2021 for NASA, and from $963M to $888M for DOT, respectively.

The recovery of IDIQ spending in FY 2022 across the civilian sector is striking because it surpassed the $11.1B agencies (including the DOD) spent in FY 2020. Spending recovered strongly at HHS ($5.4B) and at NASA ($4.3B), for example, despite the completely different mission profile of these agencies. Even the Department of Energy notched $1.7B in IDIQ spending in FY 2022 despite reporting growing spending from FY 2020 to FY 2021.

The increase in IDIQ spending in FY 2022 could mean that FY 2021 was just an anomaly. If that is the case then competing for spots on IDIQ contracts should remain an important part of the business development strategy for firms of all sizes.