Assessing the Potential Value of Using Indefinite-Delivery, Indefinite-Quantity (IDIQ) Contracts

As buyers continue to search for new ways to drive performance beyond cost reductions, new outsourcing models are emerging, and old models are being repackaged. Companies are now even looking to the U.S. government for ideas on how to create contracts that will save money and improve business results.

Companies across industries are looking at, and in some cases, adopting the Indefinite-Delivery, Indefinite-Quantity (IDIQ) contract model. The IDIQ approach, which guarantees the buyer an indefinite quantity of services or supplies over a determined period of time, is used in a similar manner as a Master Service Agreement (MSA). And although fairly new to the outsourcing industry, the IDIQ concept has been used in government contracts since the early 1990s.