Delivery Contracts

An indefinite delivery contract is used when there is uncertainty as to the exact time and exact quantity of future deliveries. Indefinite delivery contracts have been used traditionally by the Department of Defense to furnish its ongoing supply needs. A contractor who is awarded an indefinite delivery contract should be prepared for a longterm commitment to the work and some level of uncertainty with regard to time and/or amount for deliveries. Indefinite delivery contracts can be separated into three categories: definite quantity contracts, requirement contracts, and indefinite delivery indefinite quantity contracts.

Definite Quantity Contracts
Definite quantity contracts are those which require “delivery of a definite quantity of specific supplies or services for a fixed period.” The time of delivery is the variable left up to the government. This contract is typically used when the government knows that a certain amount will be needed during the contract period and that the product can be provided on short notice.

Requirement Contracts
As the name implies, a contractor who agrees to a requirement contract is obligated to provide all that the agency might require in a specified area during a definite time period. This contract is appropriate when the government knows it will need an item on a regular basis but cannot accurately forecast exactly how much it will need for each delivery.

IDIQ Contracts
Indefinite delivery, indefinite quantity contracts allow the government the greatest latitude and are best suited for situations in which the government cannot say exactly when it will want the goods or services or how many it will order. The quantity is usually fixed at a certain maximum and minimum. Unlike requirements contracts, the government is not obligated to make all of its purchases from the contractor and meets its contractual duty so long as it orders the minimum amount required.