Are IDIQs All They are Made Out to Be?
Indefinite Delivery Indefinite Quantity (IDIQs) are here to stay and are going to get more and more popular. For any company doing business with the United States Government, pursuing and winning a spot on an IDIQ is not an option, it’s an absolute necessity. In fact, the government agencies are almost mandated to use Best In Class IDIQs for common procurements (OMB Memorandum M-19-13, issued March 20, 2019).
But are IDIQs all they are made out to be? Not all IDIQs are made alike — knowing which one to pursue—and why? is an important consideration for any business. What are the pros and cons of IDIQs for your business?
Increases Access to Unique Opportunities
The contracting agencies (NITAAC, GSA, etc.) are marketing the IDIQs to their internal customers, which allows the IDIQ contractors to gain access to some very unique opportunities. It is also a great way for small businesses to learn about and pursue contracts that might otherwise be too competitive.
Limited and Known Competition
Perhaps the most attractive aspect of an IDIQ is limited and known competition. IDIQ winners are part of the “winner’s circle,” generally every company gets to know who they are competing with for task orders. The number of companies you are competing against is smaller than with other procurement opportunities, and they are all known to you. This significantly propels your capture efforts and allows you to fine-tune your strategy. You can plan your win themes and differentiators and establish your unique qualifiers ahead of time. Companies that invest time to learn their competition are able to not only speak to their differentiators but also align their company’s capabilities to push forward and reap the benefits of the IDIQ. However, lately, it may appear that everyone who submits a proposal is awarded, which erodes some of the IDIQ luster. This does not mean companies should not pursue IDIQs — it only means that you need to be selective in which IDIQs to bid and win.
Increase Market Valuation
With Category Management, IDIQs fall under different Tiers, and the value of the IDIQ to your company will vary. Understand the IDIQ Tiers (Tier 0 – Tier 3) before you make a bid decision. Some companies amass IDIQs to increase their market value before getting ready to exit (sell the company). If increasing market valuation is your primary goal for pursuing IDIQs, companies should profile their ‘ideal’ buyer and focus on pursuing IDIQs that will make their company attractive to that buyer demographic. It is not always BIC (Tier 3) IDIQs that fetch the most value. Your company’s capabilities will dictate which IDIQ makes the most sense.
Stretch the Finish Line – 8(a) Category
When it comes to socio-economic privileges, IDIQs that extend your socio-economic status beyond your original graduation date (currently only applies to companies in the 8(a) category) – may be important. For example, the GSA 8(a) STARS III was recently recompeted and any 8(a) company that wins a seat at this table will likely be able to extend their 8(a) status through the life of the contract. This is especially important if your current 8(a) contract clients would like to continue working with you—with an “extended” graduation date, you will be able to offer your clients a prolonged platform to continue working with your company. On this note, GSA publicized their latest efforts to create an IDIQ just for Woman-Owned Small Business and HUBZone Small Businesses via the announcement of the latest IDIQ – GSA POLARIS.
At the end of the day, IDIQs are what companies make of them. There’s no denying that they are very popular in the world of government contracting. Oftentimes, once companies have secured the IDIQs, most let them fall by the wayside, for one of two reasons: they went after the wrong types or they have too many of them and are too overwhelmed to keep up with task orders. Bidding on IDIQs can be expensive, but the Return On Investment (ROI) will come from bidding on actual task orders. For that to be successful, companies should be prepared and have the infrastructure in place to bid on task orders, recruit key personnel, estimate and price your services competitively, and—most importantly—be prepared to successfully deliver on the contracts.
How to Take Advantage of IDIQs
Since there are many benefits of IDIQs, it’s wise for your small business to make them a priority. If you don’t, you’ll miss out on a -billion-dollar industry of tasks and orders for the government.
So how do you get started? Before you decide to pursue an IDIQ, be sure to answer the following types of questions so you can set realistic expectations:
● Why is the IDIQ important to your company?
● How will your company respond to task orders?
● How will you work with partners?
The answers to these questions should help you determine exactly why you’d like the IDIQ. Maybe your goal is to boost your company’s sales value or, perhaps, you’d like the peace of mind of having a guaranteed amount of work.
Be sure you understand the value of the IDIQ, whether or not it is used by your target audience, and the type of outcome you expect. If you’re interested in using IDIQs to your advantage, check out ProposalHelper’s IDIQ Reports and follow us on LinkedIn to learn about upcoming IDIQs every Friday.