Multiple Award Indefinite Quantity Indefinite
Delivery Acquisition Strategy
Roundtable Discussion for
2014 AFSPC/NDIA Executive Forum
Vice President, Serco Business Development
Bill Ramey
September 26, 2014
Overview
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What is MA IDIQ?
How is the MA IDIQ approach applied?
What are the MA IDIQ strengths and weaknesses?
Things to consider when using the MA IDIQ approach
Summary
What is Multiple Award Indefinite Delivery
Indefinite Quantity (MA IDIQ)?
• A government Acquisition Strategy
• One of many government acquisition concepts used for purchasing
materials and services from industry
• An acquisition approach that relies on multiple contract award
winners for the same overall scope of work, which allows indefinite
quantities of services and materials be delivered through individual
task orders
• The multiple awarded contracts typically do not come with
work/funding
– Work and funding is specified in task orders and competed across all multiple
contract award winners for each task order award
• The total ceiling value of the MA IDIQ contracts tend to be very large
• Sometimes referred to as “Enterprise Contracts”
How is the MA IDIQ approach applied?
• In past years:
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It was primarily applied to service and material contracts where the service/material could be
clearly specified in task orders with minimal dependencies or integration with other task
orders. These multiple contracts were most often sized in $100s of millions
• In recent years:
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Mission Support, Weapons Systems and Intel systems have also become candidates for MA
IDIQ contracts. However, these systems usually come with dependencies and integration
elements that make desired performance problematic. Government cost pressures have
pushed MA IDIQ contract sizes into the billions of dollars
• This has become one of the most commonly used acquisition
approaches with 21% in 2013*
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Increasingly combined with Lowest Price Technically Acceptable (LPTA) evaluation
approach and Firm Fixed Price (FFP)* contract type
It has strengths and weaknesses so is not a universal solution
Understanding these differences will enable the best application of the MA IDIQ tool to the
right situation and will maximize its strengths and minimize its weaknesses
*Bloomberg – Federal Contracting Trends and Challenges (2014)
MA IDIQ Strengths
Strengths that Benefit the Government
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Increases number of companies that can
be leveraged through a single contract
Increases government purchasing power
by consolidating buys across the enterprise
(potentially reduces cost)
Reduces government costs through
competition and by consolidating Contracts
Improves small business Prime and sub
opportunities by breaking work into small
independent task orders. 32% in 2013*
Usable by large numbers of government
organizations across an enterprise (shared
costs)
Provides wide scope of work and task
flexibility
Well suited to commodity services*
Strengths that Benefit Industry
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Increases number of companies that can
be leveraged through a single contract
Increases Contract PWIN due to multiple
awards
Typically well funded across a large “end
customer” base (i.e. the Air Force, DHS,
etc.). $94B in 2013*
Industry encouraged to bring work to the
contract
*Bloomberg – Federal Contracting Trends and Challenges (2014)
MA IDIQ Weaknesses
Weaknesses that Negatively Impact the
Government
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Increases “total cost of Ownership”
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Backlogs due to not enough government
contracting and proposal staff for Task Order
proposal reviews
Difficult to manage work loads within budgets
especially when supporting TOs from outside
organizations
Increases risk of protest. Companies afraid of
being “locked out” of a given market. 2400
protests in both 2012 and 2013*
Requires duplicative skills, equipment, & facilities
required from all Primes (more potential indirect
cost)
Integration issues with multiple Prime contractors
working on related parts of the same system
Majority of task order work tends to be performed
by a small number of awardees (Top 1% do 62% in
2013)*
Decreases “Return on Investment”
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Slow response times for new tasks to be competed
and awarded
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Increased contracting & proposal evaluation
costs
Increased contract management resources
needed
Significantly increased contractor proposal costs
(indirect charges)
Weaknesses that Negatively Impact
Industry
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Too many contract awards and too few Task wins
Significantly increased contracting & proposal
costs (may increase indirect rates)
Opportunity loss for existing staff and/or increased
resources needed
Must win a significant number of TOs to break
even
Low fees and revenue streams
Difficult to support cross TO integration
Duplicative skills, equipment, & facilities required
from all Primes (more cost and less return)
Not well suited for complex highly technical TOs
that require R&D, development facilities, specialized
skills or equipment, cross task integration, quick
response, etc. (Weapon Systems, Mission
Systems, and Intel systems typically fall into these
categories)
Low customer intimacy for “new” TO customers
drives down PWIN
*Bloomberg – Federal Contracting Trends and Challenges (2014)
Things to consider when using MA IDIQ approach
• There are no free lunches
– This includes spending “Other Peoples Money” (OPM) – There is always a cost
to you!
– Businesses must make a profit to survive and reasonable ROI to grow
• Use the right tool for the job
– Every toolbox has a hammer but that doesn’t mean it is the only tool you should
use
– Balance acquisition strategy elements to ensure both industry and government
success
• The Government and Industry are co-dependent partners.
Acquisition strategies should be a win-win
– For optimal results, the solution must be good for both of us
– Leverage what we each do best
– Driving most of the risk to industry at low costs does not benefit anyone. If a
company fails, so does the government
– Contracting and Program Management officials need to talk more with Industry*
*Bloomberg – Federal Contracting Trends and Challenges (2014)
Summary
• The MA IDIQ approach is well suited for work where task orders
don’t require cross task integration or require substantial technical
infrastructure
– Good fit for commodity products and services
– Leverages government buying power
– Be smart about contract type to ensure Industry and Government success
• Many types of work are not a good fit for MA IDIQ
– Cross task integration, R&D, quick response, development, substantial technical
infrastructure, etc.
– Expends significant government and industry resources, not efficient
– Low ROI for industry. Increased protests result in delays to government
programs and additional cost for all