Overview
FAR Subpart 16.5 prescribes the policies and procedures for Indefinite-Delivery contracts, including definite-quantity, requirements, and indefinite-quantity (IDIQ) types. It establishes a strong statutory preference for multiple-award contracts to foster ongoing competition and provides the specific "Fair Opportunity" framework for issuing task and delivery orders.
Key Rules
- Three Contract Types:
- Definite-Quantity: Provides a specific quantity for a fixed period.
- Requirements: The government fills all actual purchase requirements from one contractor; requires a realistic total estimate.
- Indefinite-Quantity (IDIQ): Provides for an indefinite quantity within stated limits (minimum and maximum) during a fixed period.
- Multiple-Award Preference: Contracting Officers (COs) must, to the maximum extent practicable, award multiple contracts for the same or similar supplies/services under a single solicitation.
- The $150 Million Threshold: Single-source task or delivery order contracts exceeding $150 million (including options) are generally prohibited unless the agency head determines in writing that the requirements are so integrally related that only one source can perform them.
- Fair Opportunity to Be Considered: For multiple-award contracts, COs must provide every awardee a "fair opportunity" to be considered for any order exceeding the micro-purchase threshold, unless a specific statutory exception applies (e.g., urgent need, unique/specialized capability, or logical follow-on).
- Protest Restrictions: Protests are generally not authorized for orders under these contracts, except for those that increase the scope, period, or maximum value, or for orders exceeding specific dollar thresholds ($10M for civilian agencies; $25M for DoD, NASA, and the Coast Guard).
- Minimum Quantity: In an IDIQ, the government is legally required to order a stated minimum quantity that must be "more than a nominal quantity" to ensure the contract is binding.
Responsibilities
- Contracting Officer (CO):
- Determines whether a single or multiple-award approach is appropriate during acquisition planning.
- Establishes realistic estimates for requirements contracts and reasonable maximums for IDIQs based on market research.
- Develops streamlined "Fair Opportunity" procedures and includes them in the solicitation.
- Justifies and approves the use of "brand-name" specifications if a requirement is peculiar to one manufacturer.
- Ensures orders remain within the original scope, period, and maximum value of the base contract.
- Head of the Agency:
- Responsible for written determinations for single-award contracts exceeding $150 million.
- Must notify Congress within 30 days of any single-award determination made based on "exceptional circumstances" in the public interest.
- Program Managers/Designated Officials:
- Provide the technical requirements and justifications for "unique or highly specialized" services when seeking to bypass multiple-award requirements.
Practical Implications
In real-world federal procurement, Subpart 16.5 is the foundation for "Agile" contracting. It allows the government to establish a pool of pre-qualified vendors (a "Contract Vehicle") without committing to a specific volume of work upfront.
- For Contractors: Winning a spot on a multiple-award IDIQ is only a "license to hunt." The real competition happens at the task-order level. Contractors must remain competitive on price and performance throughout the life of the contract to win actual work.
- For Agencies: These contracts reduce administrative lead time. Once the base contract is awarded, the agency can issue orders rapidly—often in weeks rather than months—because the overarching terms and conditions are already negotiated, and "Fair Opportunity" procedures are typically more streamlined than Part 15 negotiated procurements.
- Risk Management: The "Minimum Guarantee" is a critical fiscal protection for the government; COs must ensure they have the funds available to cover the minimum at the time of the base contract award to create a valid legal obligation.