Exploring the world of government contracting vehicles may feel like a deep dive into an ocean of acronyms and abbreviations that you have never come across before. Don’t worry—it takes time to make sense of it all. If you are looking to sell your solutions to government customers or you are a new contractor, you should know the types of contract vehicles available to you. With this knowledge, you can take advantage of the opportunities out there and have a better understanding of how government contracts are organized.
What Are Government Contracting Vehicles?
Before we dive into the types of contracting vehicles, it's important to define what a government contracting vehicle really is. A government contracting vehicle refers to a specific method used by government agencies to procure goods and services from external suppliers or contractors. These vehicles are established to streamline and the acquisition process, ensuring efficiency, competitiveness, and compliance with applicable regulations.
Indefinite Delivery, Indefinite Quantity (IDIQ)
First, let's talk about a popular type of vehicle, Indefinite Delivery/Indefinite Quantity (IDIQ) contracts. IDIQs are exactly how they sound--they're contracting vehicles that allow for an indefinite quantity of products and/or services over an indefinite period. This type of contracting vehicle has become quite popular among government agencies when needs are great, yet exact quantities and period-of performances are unknown.
To establish an IDIQ, a Contracting Officer (CO) only needs to establish a minimum quantity, a reasonable maximum quantity, a fixed time period (i.e. usually 2-5 years), and a Statement of Work (SOW).
It’s important to note there are several different types of IDIQs, which we’ll cover below.
Single-Award IDIQs
A single-award IDIQ is awarded to a single vendor and is ideal for ongoing services where the needs of the agency are indeterminable at the time of award.
Multiple-Award IDIQs
Most IDIQs will be a multiple-award contract. This means that multiple vendors will be awarded on a single contract and these vendors will compete as task orders under the contract are released.
How IDIQ Contracts Are Organized
Additionally, an IDIQ can be either firm-fixed-price (FFP), cost plus, or time and materials (T&M).
- Firm-fixed-price (FFP) – a lump sum is awarded to a contractor which is not subject to price adjustments. An FFP contract is ideal for small projects with clear requirements and established deadlines. FFP contracts should be easy to manage because of their predictability and transparency. However, because an FFP contract has less flexibility, this type of contract carries the greatest amount of risk to a contractor’s profit.
- Cost Plus – a cost plus contract is perhaps the simplest to administer since the award is on a cost plus fixed-fee basis. This would be your labor, materials, and overhead costs plus a fixed fee. Cost plus is ideal for complex projects where the requirements are subject to change with the least amount of risk to the contractor’s profit margin.
- Time and Materials – T&M is a hybrid of FFP and cost plus. A T&M contract is awarded based on fixed rates for labor and materials that represent a contractor’s total burdened rates (which includes overhead and profit). T&M contracts should be specific in scope to limit volatility while establishing a pre-defined ceiling amount based on the maximum number of labor hours and materials needed in performance of the contract. However, as salaries and the cost of goods increase during performance of the contract, there is a greater risk to the contractor’s profit than with cost plus if the contractor did not forecast these increases when submitting a quote.
Popular IDIQs
The IDIQs listed are popular in the federal contracting world. You’ll notice that one of them is the GSA Multiple Award Schedule (MAS), which is one of the largest and most popular vehicles. Other IDIQ vehicles include:
Multi-Agency Contracts (MACs)
A Multi-Agency Contract (MAC) is a task-order or delivery-order contract established by one agency for use by government agencies to obtain supplies and services. Does this sound familiar? This is how the GSA MAS program works. GSA establishes the vehicle and allows other agencies to use it.
Multi-Agency Contracts (MACs) are also multiple-award IDIQ contracting vehicles, but they can sometimes be limited in the agencies that use it. Under MACs, government agencies can issue orders for specific goods or services to any of the pre-approved vendors. MACs promote competition and provide agencies with a pool of pre-qualified contractors.
Popular MACs
Here's an example of some popular MACs. You’ll notice the GSA Schedule is listed here—GSA Schedules are IDIQ Multiple Award Contracts and Multi-Agency contracts.
- SeaPort-NxG (Next Generation)
- GSA Human Capital and Training Solutions (HCaTS) Contract Vehicle
- CIO-SP4
- OASIS +
- GSA Multiple Award Schedule
Governmentwide Acquisition Contracts (GWACs)
Governmentwide Acquisition Contracts, or GWACs, are multiple-award IDIQs for technology products and services that are managed by a single agency but open for all government agencies to use. These contracts were created specifically to meet the government's IT needs and provide a streamlined procurement process.
Popular GWACs
- OASIS +
- CIO-SP4
- 8(a) STARS III
- Alliant 3
- NASA SEWP VI
Blanket Purchase Agreement (BPA)
A Blanket Purchase Agreement (BPA), is a vehicle that simplifies the acquisitions process by allowing a Contracting Officer to set aside a budget for a specific scope of goods or services for a specific term. These terms are typically shorter than an IDIQ, the budget is finite, and purchase orders will fall below the Simplified Acquisition Threshold (SAT). This budget is a forecast for specific quantities during the period of performance, rather than arbitrary estimates, and is ideal for repetitive purchases.
For instance, an agency may set up a BPA for office supplies, maybe their budget is $30 million. There will be an approved set of vendors who participate that the agency can purchase office supplies from under their BPA until the budget has been exhausted.
Popular BPAs
Popular BPAs include:
- 2GIT
- FSSI
- Discovery
It’s important to note that you can establish a BPA through your GSA Schedule contract as well. These BPAs follow a different section of the FAR and are generally set up for a longer period of time, but still serve the same purpose.
GSA Multiple Award Schedule
As we've mentioned a few times in this blog so far, a GSA Multiple Award Schedule is a MAC IDIQ managed by GSA. This vehicle is also referred to as the Multiple-Award Schedule (MAS) or GSA Schedules. These Schedules serve as an acquisition vehicle for government agencies. In some cases, state and local governments can also purchase from a GSA Schedules as well. This program offers federal buyers more than $11 million commercially available products and services. GSA Schedule purchases accounted for over $40 billion in federal procurement spending in the 2023 Fiscal Year.
The GSA Schedule has twelve Large Categories:
- Office Management
- Facilities
- Furniture & Furnishings
- Human Capital
- Industrial Products and Services
- Information Technology
- Miscellaneous
- Professional Services
- Scientific Management and Solutions
- Security and Protection
- Transportation and Logistics Services
- Travel
Selling to the Government
Now that you have a good handle on the contract vehicle terminology you’ll encounter when contracting with the federal government, it’s time to seek out opportunities. We recommend registering on SAM.gov so that you can set alerts for opportunities that may interest you. Lastly, in order to qualify for any federal government opportunity, you will need to be registered in SAM, which requires a Unique Entity Identifier (UEI).
Here at Winvale, we assist government contractors with obtaining and maintaining a GSA Schedule, the largest and most dynamic of all IDIQs. With a five-year base and three option periods, a GSA Schedule can give you an advantage over your competitors for the next 20 years! We can help you determine if a GSA Schedule is a good fit for your business portfolio.
