An IDIQ contract allows the government to order an indefinite quantity of goods or services from a contractor over a fixed period. The government commits to a minimum order but the maximum is open-ended, providing flexibility for both parties.
IDIQ contracts are one of the most common contract types in federal procurement because they solve a real government problem: agencies don't always know exactly what they'll need, how much they'll need, or when they'll need it. An IDIQ contract locks in pricing and terms while allowing the government flexibility to issue task orders or delivery orders as needs arise.
The structure works like this: You win an IDIQ contract with agreed-upon rates and terms. The government then issues individual task orders under that contract whenever they need your services or products. You're guaranteed a minimum dollar amount (the floor), but the government can order up to the contract ceiling without re-competing.
Why it matters: IDIQ contracts are gold for contractors because they provide recurring revenue and eliminate the need to re-compete for every single order. Once you win the IDIQ, follow-on orders are typically awarded based on past performance rather than full re-competition. This creates a stable revenue stream and reduces bid and proposal costs.
In practice, winning an IDIQ is competitive, but then managing it well is critical. Your performance on the first few task orders heavily influences future orders. One common misconception is that an IDIQ guarantee means the government will order the full ceiling—in reality, the government may order only the minimum and nothing more. Your win strategy should focus on delivering exceptional performance to encourage more orders.
IDIQ contracts appear frequently in professional services (IT, engineering, consulting) and supply contracts. They're heavily used by the General Services Administration (GSA Schedule) and by individual agencies.