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INDEFINITE DELIVERY/INDEFINITE QUANTITY CONTRACTING PRACTICES Indefinite Delivery/Indefinite Quantity (IDIQ) contracting is a method that âprovides for an indefinite quantity, within stated limits, of supplies or services during a fixed period.â So whatâs in a name? IDIQ contracting has been in use by public transportation agencies for several decades under a myriad of different names: job order contracts, push-button contracts, on-call contracts, master contracts, stand-by contracts, and the list goes on. However, all of these seemingly diverse procurement vehicles have one factor in common. They all provide a con- tractual vehicle to deliver more than one project using only one procurement transaction to advertise, evaluate, and award a contract that provides the capacity to deliver a quantity of services or products that is not known at the time the contract is executed. As will be shown in this synthesis report, this procurement method provides the public agency with a consider- able flexibility to utilize the IDIQ contractor as much or as little as needed, depending on the requirements of the agency and the availability of funds. The objective of this report is to identify and synthesize current effective practices that comprise the state of the practice related to the use of IDIQ contracting by public transporta- tion agencies for highway design, construction, and maintenance contracts. The synthesis covers multiple aspects of IDIQ practice, including contracting techniques, terminology in use by transportation agencies, contract advertising and award practices, successful contract- ing procedures, pricing methods, risk management issues, and effective contract administra- tion practices. Information contained in the report was drawn from the literature and a content analysis of IDIQ procurement documents, policy and procedure manuals from 32 different state departments of transportation (DOTs), two local transportation agencies, and 20 federal agencies. This was supplemented by an analysis of 76 legal cases related to IDIQ contracts in order to identify trends in court decisions under different types of conflicts and common sources of disputes between contract participants. Information was also derived from a survey of state DOTs from which 43 responses were received; an 84% response rate. The industry perspective was derived from 18 contractor sur- vey responses plus four face-to-face structured interviews. In addition, IDIQ contracts were analyzed from the Florida, Minnesota, Missouri, and New York State DOTs, and the Central Federal Lands Highway Division. Although this synthesis is primarily focused on the procurement of IDIQ construction and maintenance services, the report also presents a short analysis and discussion on the state of practice of IDIQ contracting to procure design and other professional engineering services in the transportation industry. In addition, specific legal cases of disputes from four single award IDIQ engineering consultant design IDIQs were conducted and a multiple award IDIQ design contract in South Carolina was reviewed. The study found IDIQ contracts in use in conjunction with design-bid-build, design-build, and construction manager/general contractor project delivery methods; combining the flex- ibility of IDIQ and its multiple project capacity with the benefits accrued by alternative project delivery. IDIQ contracts were awarded using low-bid, best-value, and qualification-based selection. The size of the contracts ranged from less than $100,000 to large-scale federal SUMMARY
2 contracts in excess of $1 billion. Thus, it appears that there are no functional or technical constraints on the method and that agencies will only be constrained by their own statutes, preferences, and ability to tolerate risk. The synthesis reached two primary conclusions. First, IDIQ contracting can be applied to any form of procurement that an agency may choose to secure the capacity to deliver needed services and products across the life cycle of a typical DOT project delivery program. Evi- dence was found of successful application of IDIQ contracts in planning, design, construc- tion, and maintenance. Therefore, IDIQs have shown the potential to become a useful tool in the DOT procurement toolbox. The second major conclusion is that IDIQ contracts consolidate the need to conduct mul- tiple procurement actions to deliver small, repetitive projects to a single transaction. Upon award, the agency gains the capacity to access contractor services by issuing individual work orders for each project. This capacity has been used by a number of DOTs as a means to efficiently obligate unused year-end funds to complete minor construction and maintenance backlog projects whose priority was too low to be funded in the fiscal yearâs budget. There- fore, IDIQ contracts enhance the efficient use of available capital by creating a mechanism to quickly fund needed work. This is especially valuable in the event of an emergency, because the IDIQ contractor is on board before the emergency occurs and was selected on the basis of competitive pricing. Thus, the need to acquire authorization for expedited procedures or sole source procurements is eliminated. Chapter six details 11 lesser conclusions and 19 effec- tive practices found during the course of the study; it also makes four suggestions for future research to fill gaps in the body of knowledge and, more importantly, develop guidance for public agencies interested in implementing IDIQ contracting to shorten project delivery periods and provide the flexibility to complete as many projects as it can afford. Major IDIQ future research needs as stated in this synthesis report are associated with four principal aspects: (1) the development of an integral framework that allows public transporta- tion owners to implement appropriate IDIQ techniques throughout the project life cycle; (2) the development of an implementation guidebook related to the use of multiple award IDIQ contracts with competitive work orders by state DOTs; (3) an analysis of the use of construc- tion task catalogs and adjustment factors (also referred as multipliers) and their impact on IDIQ contracting in the transportation industry; and (4) a complete analysis on the current use of IDIQ contracting to procure architectural/engineering, research, and other professional services. In summary, IDIQ contracts were found to be effective means for maximizing the efficient use of available funding. The comprehensive analysis of IDIQ protests and claims found that the agency prevailed roughly 70% of the time. Therefore, in these days of deteriorating infrastructure and intense pressure to repair it, IDIQ contracting appears to be a promising approach for public engineering agencies to use to address requirements both large and small.
