The Trend Towards Multiple Award Contracting Escalates

The multiple award contract is becoming a way of life in the federal government. Many large, federal multiple award contracts have been awarded this year; several of them carrying ceilings of more than $1 billion. And that is only the tip of the iceberg. Federal contacting offices are severely understaffed so the government is necessarily awarding more multiple award contracts to make purchasing quicker and less staff intensive. Multiple award contracts are becoming so prevalent that it is almost a prerequisite to have one or more to do business with the federal government.

For companies new to the federal market, the concept of a multiple award contact can be confusing. This type of contact is called an Indefinite Delivery/ Indefinite Quantity (IDIQ) contract and the liberal use of the acronym "IDIQ" adds to the confusion. The following describes a typical scenario:

A large (often several billion dollar) multiple award contract opportunity is posted.  The result is a number of  "pricing only" awards to from 3 to 100 companies for periods ranging from 3 to 10 years. Meaning that the government agency agrees on each vendor's pricing but does not commit to future purchases.The contract with each individual contract holder is not funded until individual orders are competed among all or a select group of the companies holding the contract (a "mini competition"). The winner of the mini competition is then funded to perform the order in what could be called a "mini contract."

Multiple award contracts reduce competition. Free and open competition (a public bid) is inefficient and the government would grind to a halt without multiple award contracts. Public bids typically take an average of 270 days to award while purchasing under a multiple award contract can be achieved in a matter of weeks or days. In some cases, a subgroup of awards under a particular multiple award contract is set aside for small businesses while other opportunities are open to businesses of all sizes. As a practical matter, large businesses usually win the open, public bids, particularly the multiple billion dollar deals. This is not necessarily true with multiple award contracts.

Many types or flavors of multiple award contracts exist as a result of the following factors: the types of products or services being purchased, the number of vendors selected, the master contract's duration, the restrictions on which agencies can use them, the sizes of businesses that are eligible for award, and how competitions are held among the winners for individual orders. There are approximately 3,000 multiple award contracts currently active for the acquisition of everything from military material to professional services. They are particularly popular for the acquisition of information technology products and services. Such contracts may be available for use by a single agency, several selected agencies, or all federal agencies.

GSA Schedules

The granddaddy of all multiple award contracts is a GSA Schedule. GSA Schedules have the following features that make them unique:

  1. GSA Schedules are designed to bring commercial products and services into the federal market (as opposed to, say, military goods). 
  2. They are always open for bid. Other multiple award contracts are only open for bid for a set window of time.
  3. GSA Schedule contracts are available for most products and services.
  4. Selected Schedules can also be used by state and local governments.

Thousands of companies currently hold GSA schedules with the number growing every day. Get on the bandwagon!

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