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83 NCHRP 45-09- Contractors Interview Definitions Indefinite Delivery/Indefinite Quantity (IDIQ) Contracting The Indefinite Delivery, Indefinite Quantity (IDIQ) contracting method provides for an indefinite quantity of work during a fixed period of time. The Department will place orders for individual requirements. The Contract may state quantity limits as number of units or as dollar values. Task Order Every project to be executed within an IDIQ contract is developed under the issuance of a task order. A task order becomes a contract document and determines location, contract time, and scope of work. Additionally, a task order outlines all required pay items, quantities, and unit prices (as stated in the Bid schedule). Cost Escalation Cost Escalation refers to the adjustment of unit prices over time in order to reflect price changes in the construction industry. Escalation clauses are commonly used in multi-year IDIQ contracts. Mobilization This work consists of preparatory work and operations, including the movement of personnel, equipment, supplies, and incidentals to the project to establish contractorâs offices and buildings or other facilities. This work also includes demobilization. Questionnaire 1. The following types of contracts are different names for IDIQ contracting; please check those you knew before this survey or you are familiar with. (Check all that apply.) Note: For purposes of this survey the term IDIQ will be used to refer to any type of contract mentioned below. Indefinite Delivery/Indefinite Quantity (IDIQ) Contract Task Order Contract Job Order Contract Delivery Order Contract On-Call Contract None If None, please skip to Question 6. 2. Does your company have any experience with IDIQ contracting (bid, work as subcontractor, etc.)? Yes No Don't Know If No or Donât Know are selected, please skip to Question 6. APPENDIX B Survey Questionnaire and ResultsâAGC/ARTBA Contractors
84 3. Please fill out the following chart in accordance with your experience on IDIQ contracting and the agency in charge of the contract. (Check all that apply.) Awarded a Contract Bid but not Awarded Work as Subcontractor Other No Experience State Transportation Agencies Other Types of State Agencies Municipal Agencies Federal Transportation Agencies Other Federal Agencies 4. Based on your experience with IDIQ; please rate the following factors from the contractorâs perspective in relation to traditional low bid contracting methods. Better No Change Worse No Opinion Schedule risk Cost risk Overall risk Transparency Complexity Bargaining power of suppliers Subcontracting plan Insurance requirements Staff management Ability to obtain necessary financing Resource conflicts with other ongoing contracts Ability to reach DBE, TGB or similar goals 5. If you were bidding an IDIQ contract, how would the price for the following categories change from traditional low bid contracting? Higher No Change Lower No Opinion Asphalt Concrete Steel Earthwork
85 6. Is there any factor(s) that may prevent you from bidding for future IDIQ contracts? Yes No No opinion 7. Please indicate all factors that may prevent you from bidding for future IDIQ contracts. (Check all that apply.) Lack of knowledge about IDIQ Complexity of contracting method Inherent risk in IDIQ contracts Inadequate mobilization compensation Inadequate price adjustment over time Bonding limitations Other ____________________ 8. In accordance with your knowledge and/or experience related to IDIQ contracting, please rank the following methods for compensating the contractor for MOBILIZATION. (1) Most suitable for IDIQ contracting/(4) Least suitable/(0) Not suitable. 1 2 3 4 0 Option 1: Fixed percentage of the construction cost stated by the agency (owner) and applied to each Task Order. Option 2: Fixed percentage bid by contractors to be applied to each Task Order and factored into the selection of the low bid. Option 3: Fixed price bid by contractors to be used on each Task Order. Option 4: No separate mobilization pay item. Mobilization expenses are included in the bid items. 9. Please rate the following methods (from contractorâs perspective) for compensating the contractor for MOBILIZATION (same options as previous question) in relation to the RISK from recouping the actual mobilization cost and in comparison with traditional low bid contracting methods. (1) Lower than traditional contracting methods; (2) Same as traditional contracting methods; (3) Higher than traditional contracting methods. 1 2 3 No Opinion Option 1: Fixed percentage of the construction cost stated by the agency (owner) and applied to each Task Order. Option 2: Fixed percentage bid by contractors to be applied to each Task Order and factored into the selection of the low bid. Option 3: Fixed price bid by contractors to be used on each Task Order. Option 4: No separate mobilization pay item. Mobilization expenses are included in the bid items. 10. Would you bid on an IDIQ contract with NO escalation clauses? Yes No Don't know
86 11. In your opinion, what would the impact be on bid prices if there were NO escalation clause in an IDIQ contract? Higher bids No impact in bids Lower bids No opinion 12. In accordance with your knowledge and/or experience related to IDIQ contracting, please rank the following ESCALATION METHODS to adjust unit prices over time. (1) Most suitable for IDIQ contracting/(7) Least suitable/(0) Not suitable at all. 1 2 3 4 5 6 7 0 Option 1. Fixed annual percentage stated by agency (owner) to adjust all bid items Option 2. Fixed annual adjustment rate (%) bid by contractors to be applied to adjust all bid items factored into the selection of the low bid. Option 3. Using a national or local existing index (ENR, BLS, RSMeans, SDDOT, CCI). Option 4. Using a regional index (by district or similar) developed and kept by each agency using its historical bid data. Option 5. Using a state index by category developed and kept by each agency using its historical bid data (asphalt, concrete, structures, etc.) Option 6. Using an index by pay item. Measure the change of a pay item by using historical bid data from that or similar items. Option 7. No escalation. Bid prices are used along the base contract period and kept during potential contract extensions. 13. Please rate the following ESCALATION METHODS to adjust unit prices over time (same options as previous question) in relation to the RISK from obtaining fair unit prices for future contracting periods and in comparison with traditional low bid contracting methods. Scale 0â3: (1) Lower than traditional contracting methods (2) Same as traditional contracting methods (3) Higher than traditional contracting methods. 1 2 3 No Opinion Option 1. Fixed annual percentage stated by the agency (owner) to adjust all bid items. Option 2. Fixed annual adjustment rate (%) bid by contractors to be applied to adjust all bid items and factored into the selection of the low bid. Option 3. Using a national or local existing index (ENR, BLS, RSMeans, SDDOT, CCI). Option 4. Using a regional index (by district or similar) developed and kept by each agency using its historical bid data. Option 5. Using a state index by category developed and kept by each agency using its historical bid data (asphalt, concrete, structures, etc.) Option 6. Using an index by pay item. Measure the change in the price of a pay item by using historical bid data for that or similar items. Option 7. No escalation. Bid prices are used along the base contract period and kept during potential contract extensions.
87 14. If a multi-year IDIQ contract uses a fixed rate (%) to annually adjust unit prices, what rate would you consider appropriate to cover the material pricing risk? It would be the rate below which your company would not bid on a contract. ___% Rate 15. Regardless of the delivery method used to execute a given contract, for how long is your company willing to maintain bid unit prices without a contract escalation clause? Answer in months. ___Months 16. Which of the below performance bond schemes would make it unlikely that your company would bid for an IDIQ contract? (Check all that apply.) Contract bond at award covering the maximum amount to be ordered under the contract. Contract bond at award covering the minimum guaranteed amount and subsequent bonds (once covered the minimum guaranteed amount) on a Task Order basis. On a Task Order basis. No contract bond at award, unless the contract is advertised along with the first Task Order. No opinion Other ____________________ 17. If bonding for the maximum amount to be ordered under the contract; how would it impact your ability to bid for other contracts? Very high impact High impact Some impact Slight impact No impact 18 Please provide any comment or question you may have about IDIQ contracting. Survey ResponsesâAGC/ARTBA Contractors 1. The following types of contracts are different names for IDIQ contracting; please check those you knew before this survey or you are familiar with. (Check all that apply.) Note: For purposes of this survey the term IDIQ will be used to refer to any type of contract mentioned below. # Answer Response % 1 Indefinite Delivery/IndefiniteQuantity (IDIQ) Contract 5 28% 2 Task Order Contract 8 44% 3 Job Order Contract 15 83% 4 Delivery Order Contract 5 28% 5 On-Call Contract 9 50% 6 None 1 6% If None, please skip to Question 6.
88 2. Does your company have any experience with IDIQ contracting (bid, work as subcontractor, etc.)? # Answer Response % 1 Yes - Experience with IDIQ 16 94% 2 No - NO Experience with IDIQ 1 6% 3 Don't Know if Have Experience 0 0% Total 17 100% If No or Donât Know are selected, please skip to Question 6. 3. Please fill out the following chart in accordance with your experience on IDIQ contracting and the agency in charge of the contract. (Check all that apply.) # Question Awarded a Contract Bid but not Awarded Work as Subcontractor Other No Experience Total Responses 1 State TransportationAgencies 6 3 2 2 2 15 2 Other Types of State Agencies 1 1 2 2 5 11 3 Municipal Agencies 1 1 0 0 7 9 4 Federal Transportation Agencies 0 1 0 0 7 8 5 Other FederalAgencies 3 1 1 0 6 11 4. Based on your experience with IDIQ; please rate the following factors from the contractorâs perspective in relation to traditional low bid contracting methods. # Question Better No Change Worse No Opinion Total Responses Mean 1 Schedule risk 6 4 3 1 14 1.93 2 Cost risk 5 4 5 0 14 2.00 3 Overall risk 3 7 3 0 13 2.00 4 Transparency 2 7 5 0 14 2.21 5 Complexity 4 7 3 0 14 1.93 6 Bargaining power of suppliers 0 4 9 1 14 2.79 7 Subcontracting plan 1 4 8 1 14 2.64 8 Insurance requirements 0 12 1 1 14 2.21 9 Staff management 0 7 6 0 13 2.46 10 Ability to obtain necessary financing 0 13 0 1 14 2.14 11 Resource conflicts with other ongoing contracts 0 6 6 2 14 2.71 12 Ability to reach DBE, TGB or similar goals 0 6 6 2 14 2.71 5. If you were bidding an IDIQ contract, how would the price for the following categories change from traditional low bid contracting? # Question Higher No Change Lower No Opinion Total Responses Mean 1 Asphalt 7 5 0 0 12 1.42 2 Concrete 4 8 0 0 12 1.67 3 Steel 6 5 0 1 12 1.67 4 Earthwork 4 6 2 0 12 1.83
89 6. Is there any factor(s) that may prevent you from bidding for future IDIQ contracts? Answer Response % 1 Yes - Factors Prevent from Bidding 5 36% 2 No - NO Factors Prevent from Bidding 8 57% 3 Don't Know 1 7% Total 14 100% 7. Please indicate all factors that may prevent you from bidding for future IDIQ contracts. (Check all that apply.) # Answer Response % 1 Lack of knowledge about IDIQ 1 20% 2 Complexity of contracting method 1 20% 3 Inherent risk in IDIQ contracts 0 0% 4 Inadequate mobilization compensation 1 20% 5 Inadequate price adjustment over time 2 40% 6 Bonding limitations 0 0% 7 Other 3 60% 8. In accordance with your knowledge and/or experience related to IDIQ contracting, please rank the following methods for compensating the contractor for MOBILIZATION. (1) Most suitable for IDIQ contracting/(4) Least suitable/(0) Not suitable # Question 1 2 3 4 0 TotalResponses Mean 1 Option 1: Fixed percentage of the construction cost stated by the agency (owner) and applied to each Task Order. 2 2 5 2 2 13 3.00 2 Option 2: Fixed percentage bid by contractors to be applied to each Task Order and factored into the selection of the low bid. 4 5 3 0 1 13 2.15 3 Option 3: Fixed price bid by contractors to be used on each Task Order. 7 3 2 0 1 13 1.85 4 Option 4: No separate mobilization pay item. Mobilization expenses are included in the bid items. 1 1 1 6 5 14 3.93 9. Please rate the following methods (from contractorâs perspective) for compensating the contractor for MOBILIZATION (same options as previous question) in relation to the RISK from recouping the actual mobilization cost and in comparison with traditional low bid contracting methods. (1) Lower than traditional contracting methods; (2) Same as traditional contracting methods; (3) Higher than traditional contracting methods. # Question 1 2 3 No Opinion Total Responses Mean 1 Option 1: Fixed percentage of the construction cost stated by the agency (owner) and applied to each Task Order. 1 4 7 0 12 2.50 2 Option 2: Fixed percentage bid by contractors to be applied to each Task Order and factored into the selection of the low bid. 3 3 5 1 12 2.33 3 Option 3: Fixed price bid by contractors to be used on each Task Order. 4 4 4 1 13 2.15 4 Option 4: No separate mobilization pay item. Mobilization expenses are included in the bid items. 1 2 9 0 12 2.67
90 10. Would you bid on an IDIQ contract with NO escalation clauses? # Answer Response % 1 Yes 10 71% 2 No 4 29% 3 Don't Know 0 0% Total 14 100% 11. In your opinion, what would the impact be on bid prices if there were NO escalation clause in an IDIQ contract? # Answer Response % 1 Higher bids 11 92% 2 No impact in bids 1 8% 3 Lower bids 0 0% 4 No opinion 0 0% Total 12 100% 12. In accordance with your knowledge and/or experience related to IDIQ contracting, please rank the following ESCALATION METHODS to adjust unit prices over time. (1) Most suitable for IDIQ contracting/(7) Least suitable/(0) Not suitable at all. # Question 1 2 3 4 5 6 7 0 TotalResponses Mean 1 Option 1. Fixed annual percentage stated by agency(owner) to adjust all bid items 2 3 1 1 3 1 1 1 13 3.92 2 Option 2. Fixed annual adjustment rate (%) bid by contractors to be applied to adjust all bid items factored into the selection of the low bid. 4 0 2 2 3 1 1 1 14 3.86 3 Option 3. Using a national or local existing index (ENR, BLS, RSMeans, SDDOT, CCI). 3 6 1 1 1 1 0 1 14 2.93 4 Option 4. Using a regional index (by district or similar) developed and kept by each agency using its historical bid data. 3 0 5 1 2 2 0 0 13 3.38 5 Option 5. Using a state index by category developed and kept by each agency using its historical bid data (asphalt, concrete, structures, etc.). 2 1 2 4 3 1 0 0 13 3.62 6 Option 6. Using an index by pay item. Measure the change of a pay item by using historical bid data from that or similar items. 2 1 0 3 2 3 1 1 13 4.54 7 Option 7. No escalation. Bid prices are used along the base contract period and kept during potential contract extensions. 0 0 0 2 1 0 5 6 14 6.86 13. Please rate the following ESCALATION METHODS to adjust unit prices over time (same options as previous question) in relation to the RISK from obtaining fair unit prices for future contracting periods and in comparison with traditional low bid contracting methods. Scale 0â3: (1) Lower than traditional contracting methods (2) Same as traditional contracting methods (3) Higher than traditional contracting methods. # Question 1 2 3 No Opinion Total Responses Mean 1 Option 1. Fixed annual percentage stated by the agency (owner) to adjust all bid items. 4 5 5 0 14 2.07 2 Option 2. Fixed annual adjustment rate (%) bid by contractors to be applied to adjust all bid items and factored into the selection of the low bid. 3 6 5 0 14 2.14 3 Option 3. Using a national or local existing index (ENR, BLS, 4 7 3 0 14 1.93 RSMeans, SDDOT, CCI).
91 14. If a multi-year IDIQ contract uses a fixed rate (%) to annually adjust unit prices, what rate would you consider appropriate to cover the material pricing risk. It would be the rate below which your company would not bid on a contract. % Rate 2 5% 8 5% 4.0 4 4 5 5% 4 0% 15. Regardless of the delivery method used to execute a given contract, for how long is your company willing to maintain bid unit prices without a contract escalation clause? Answer in months. Months 12 12 60 6 24 12 6 12 12 3 12 48 12 16. Which of the below performance bond schemes would make it unlikely that your company would bid for an IDIQ contract. (Check all that apply.) # Answer Response % 1 Contract bond at award covering the maximum amount to be ordered under the contract. 4 31% 2 Contract bond at award covering the minimum guaranteed amount and subsequent bonds (once covered the minimum guaranteed amount) on a Task Order basis. 2 15% 3 On a Task Order basis. No contract bond at award, unless the contract is advertised along with the first Task Order. 1 8% 4 No Opinion 5 38% 5 Other 1 8% 4 Option 4. Using a regional index (by district or similar) developed and kept by each agency using its historical bid data. 3 4 5 1 13 2.31 5 Option 5. Using a state index by category developed and kept by each agency using its historical bid data (asphalt, concrete, structures, etc.). 3 6 4 1 14 2.21 6 Option 6. Using an index by pay item. Measure the change in the price of a pay item by using historical bid data for that or similar items. 5 3 5 1 14 2.14 7 Option 7. No escalation. Bid prices are used along the base contract period and kept during potential contract extensions. 2 3 9 0 14 2.50
92 Other Bonding does not impact a decision to bid or not bid a IDIQ Contract 17. If bonding for the maximum amount to be ordered under the contract; how would it impact your ability to bid for other contracts? # Answer Response % 1 Very high impact 0 0% 2 High impact 1 8% 3 Some impact 5 38% 4 Slight impact 1 8% 5 No impact 6 46% Total 13 100% 18 Please provide any comment or question you may have about IDIQ contracting. Text Response Many of the questions are too generic to have real validity. The answers depend on factors such as contract size, actual scope of work, duration, and any special requirements. For example, when asked below what percentage escalation would we not bid an IDIQ contract the answer is zero because we would simply include whatever escalation we believed appropriate in our base bid. The question of escalation needs to focus on the type and scope of work; i.e., asphalt paving, steel, concrete and excavation. Also mobilization needs to be evaluated on the scope of work to be awarded per contract and the amount of equipment required. Also mob could be bid on a unit price; i.e., engineering $/hour, lowboy tractor to move in and out of the contract, etc. In general, IDIQ contracting is less efficient, higher risk, and more expensive than other methods. My company has participated in 2 separate JOC projects for NYSDOT. The prices listed in the âcatalogâ typically do not cover all job costs. We experience profitability on these projects when the Owner recognizes and agrees to pay for additional items of work which are not included in the âCatalog.â The Contractor is reliant upon a âpartneringâ relationship with the Owner to recognize these issues and for that reason there is high risk of the tasks being performed at a cost exceeding reimbursement.
