GWACS, MACS and Other IDIQ Contracts: What Contractors Need to Know
June 22, 2023
At a glance
- The main takeaway: Indefinite Delivery, Indefinite Quantity (IDIQ) contracts are becoming more prevalent, yet are not always well understood by government contractors.
- Assess the impact: For many contractors, growth is dependent on winning spots on Government-wide Acquisition Contracts (GWACS), Multiple Award Contracts (MACS) or stand-alone IDIQ contracts.
- Take the next step: Aprio’s Government Contracting team can help answer all your questions regarding GWACS, MACS or other IDIQ contracts.
Contact Aprio’s Government Contracting Team today for help and training.
The full story:
Indefinite Delivery, Indefinite Quantity (IDIQ) contracts are becoming more prevalent, especially for services. For many contractors, growth is dependent on winning spots on Government-wide Acquisition Contracts (GWACS), Multiple Award Contracts (MACS) or stand-alone IDIQ contracts.
IDIQ Contracts Defined
Yet IDIQ contracts are not always well understood by government contractors. IDIQ contracts are defined in FAR Part 16 and include:
- Indefinite Delivery contracts, which include a specified quantity to be acquired with the delivery times and locations to be specified in orders.
- Requirements contracts where the government commits to fulfil all their requirements through the contract. Amount and timing are determined by orders.
- Indefinite Quantity contracts do not contain a definitive quantity or a “requirements” commitment, which means such contracts need to include a guaranteed minimum.
The effort to bid and win an Indefinite Delivery or Requirements IDIQ contract usually pays off for the winner in new business. However, these contracts are rarely used for services.
The winner of a stand-alone Indefinite Quantity IDIQ contract is not guaranteed any work but, as the only contractor, is likely to receive work. Contract vehicles like OASIS, Alliant, and Polaris merely provide the contractor with the opportunity to win work via task orders.
Many contractors spend the time and effort to win a spot on a GWAC and never win any work. Therefore, when making a bid decision regarding a GWAC, the contractor should consider:
- Whether their primary customers intend to use the GWAC
- Whether they have the business development infrastructure to market, bid and win task orders.
Pricing Indefinite Delivery and Requirements IDIQ Contracts
These contracts contain pricing for the required deliverable. Until recently, pricing needed to be evaluated for each contract. Historically, GWACS have contained ceiling labor rates which cannot be exceeded on the task orders but can be discounted.
The challenge for the contractor is to propose labor rates low enough to be deemed fair and reasonable at the GWAC stage but high enough to attract the talent necessary to perform task orders.
This challenge was temporarily eliminated when GSA, relying on a new law, released the Polaris and OASIS+ RFPs without requiring pricing. However, a court determined that pricing is still required, so those RFPs are now on hold while GSA determines how to require and evaluate pricing.
Self-Scoring of GWAC Contracts
Self-scoring is another phenomenon solely associated with GWAC contracts. It allows contractors do determine, with a high degree of accuracy, their chances of getting an award.
If a contractor can score enough points on their own, Aprio recommends that they bid as a prime. If not, the contractor should consider forming a prime-sub teaming agreement arrangement with another contractor that can collectively score enough points. Small businesses also have the option of increasing their self-scoring points by forming a mentor-protégé joint venture with a large business, though Aprio recommends the prime – sub teaming agreement as the preferable option.
Aprio’s Government Contracting team can help answer all your questions regarding GWACS, MACS or other IDIQ contracts. Connect with us today for answers and assistance.
Stay informed with Aprio.
Get industry news and leading insights delivered straight to your inbox.
About the Author
Clint has more than 20 years of experience in a highly-regulated operating environment, providing a wide range of financial compliance advisory services for Federal Government contractors. Clint serves as a corporate subject matter expert, bringing his extensive knowledge on all activities involving CAS, FAR, GAAP and more. He focuses on internal and external rate restructuring associated with acquisitions, divestitures or other organizational changes, and supports contractors throughout cost, claim or business system audits by the government.