Examining the Growth in Federal IDIQ Contracts

Indefinite Delivery/Indefinite Quantity (IDIQ) contracts, like Job Order Contracting (JOC) and Simplified Acquisition of Base Engineering Requirements (SABER), have been growing in popularity as a necessary construction procurement tool in the toolbox for the Sustainment, Renovation and Modernization (SRM) of Federal facilities over the last two decades. These methods now comprise a considerable portion of total domestic Military and Federal contracts, and it seems likely that Federal IDIQ contract use will continue to grow at a notable rate, as spending for SRM projects continues to rise.

Here is a brief look at statistics demonstrating why SABER, JOC and other IDIQ procurement methods are growing in popularity among Federal and Military contracts. Let’s take a look:

Background of Federal IDIQ Contracts

Federal contract spending grew 6% from 2019-2020, and a large portion of that spending went toward facilities maintenance and construction. Over the past decade, increasing levels of Federal contract spending for construction work has been dedicated to IDIQ contracts.

Construction work completed through Federal IDIQ contracts:

Here’s why Federal agencies are turning to IDIQ contracts.

IDIQ Administrative and Labor Savings

There are opportunities for improvement in government construction procurement and execution. It’s estimated that inefficient processes have resulted in $270 billion of waste in public construction spending​, some of which can be attributed to inefficient procurement processes and slow administrative workflows.

These inefficiencies are amplified by a severe deficiency of procurement-related staff in Federal spaces. The DoD alone is experiencing a 4,400 shortage of procurement personnel. All this has created a large margin for potential cost savings.

IDIQ contracts help agencies get the most out of their staff’s limited bandwidth. Studies have found IDIQ programs can boost construction productivity by 50-60%, with an additional 8% boost when best practices are followed during IDIQ program execution. To that end, owners in an independent study estimated an average of 24% administrative cost savings during IDIQ use as opposed to traditional delivery methods and procurement cycle as low as 45 days.

IDIQ Project Performance

Administrative savings alone can’t account for the continued increase in Federal IDIQ spending. There also need to be satisfactory results for projects completed through IDIQ contracts. A year-long study conducted by Arizona State University found that IDIQ programs performed extremely well.

Of the IDIQ projects surveyed throughout the study, 96% were completed to the owner’s satisfaction. Additionally, 91% were completed within the original project budget, and 87% were delivered on time. IDIQ contracts also helped owners track their spending and compliance better. Compared to other delivery methods, IDIQ contracts increase spending transparency by 30%​.

In the end, 99% of facility owners recommend IDIQ contracts for construction procurement​. Gordian is an expert in implementing high-performing IDIQ programs for government clients, and we can help you begin your agency’s program at gordian.com/federal.

Research on Federal IDIQ Contracts

Interested in reading more about the benefits of IDIQ contracts for Federal agencies? Check out this recent report published by the Government Business Council. You can also view more findings Arizona State University’s year-long study on JOC.

Or, if you’re ready to talk with a Gordian expert about how a JOC program could help your agency save time and money, head to our Federal page and click the Get More Info button.