GAO: 40% of DoD’s Contract Obligations Were Indefinite Delivery Contracts Between 2015 and 2017

A GAO report has found that 40% of DoD’s contract obligations between 2015 and 2017 were indefinite delivery contracts.

The Department of Defense (DOD) largely relies on subpart 16.5 of the Federal Acquisition Regulation (FAR) and subpart 216.5 of the Defense Federal Acquisition Regulation Supplement regarding indefinite-delivery contracts, with supporting guidance at the military department level.
Roughly 40 percent of DOD contract obligations in fiscal years 2015 through 2017 were on indefinite-delivery contracts. Of the DOD awards for the indefinite-delivery / indefinite-quantity (IDIQ) contract type during this period, about three-quarters were made to a single contractor, rather than multiple contractors.

In general, for the IDIQ contracts we reviewed, DOD included ordering provisions that contemplated competition among the contract holders for subsequent orders. However, nearly all of the contracts we reviewed contained provisions that, while not explicitly limiting competition, may have the potential, under certain circumstances, to reduce the number of contractors who are eligible to compete for the orders. Generally these provisions were in service of some other goal, such as increasing federal contracting opportunities for small businesses by setting aside certain task or delivery order competitions among these firms.

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