IDIQ contracts and task orders, explained

An indefinite-delivery, indefinite-quantity (IDIQ) contract buys an indefinite quantity of supplies or services, within stated limits, during an ordering period, with the Government placing orders as needs arise. Orders for services are task orders and orders for supplies are delivery orders. The Department of Defense (DoD) has applied the FAR Overhaul's Part 16 since March 16, 2026, under class deviation 2026-O0045, in place of the codified Federal Acquisition Regulation (FAR) text. The rules below cite the overhaul numbering, with codified FAR sections where they differ.

Three kinds of indefinite-delivery contract

Overhaul section 16.501-2 names three types: definite-quantity, requirements, and indefinite-quantity. Requirements and indefinite-quantity contracts are also called task-order or delivery-order contracts. A requirements contract fills all actual purchase requirements of designated activities from one contractor and states a realistic estimated total quantity, which is not a guarantee. An indefinite-quantity contract fits when the Government knows what it needs and a minimum amount, but not how much more or when.

For DoD, NASA, and the Coast Guard, a task or delivery order contract may cover up to five years and be extended by options or modification. The total may not exceed 10 years unless the head of the agency determines in writing that exceptional circumstances require more. Every order must be within the contract's scope, ordering period, and maximum value.

Minimums, maximums, and the single-award limit

The contract must require the Government to order, and the contractor to furnish, at least a stated minimum. That minimum must be more than a nominal quantity but should not exceed what the Government is fairly certain to order. The maximum should rest on market research, recent contract trends, user surveys, or another rational basis. The contract may also cap individual orders.

Overhaul section 16.504-3 tells contracting officers to prefer multiple awards to the maximum extent practicable and to document the decision. Codified FAR 16.504(c) and the overhaul text both bar a single award of a task or delivery order contract estimated above $150 million, including options, unless the head of the agency determines in writing that one of four conditions applies. The DoD deviation gives that authority to the senior procurement executive. When the determination rests on integrally related orders, the deviation cites 10 U.S.C. 3403(d)(3) and requires a finding that only one source can "efficiently perform the work," not merely reasonably perform it.

The overhaul adds a section with no counterpart in codified 16.504. Section 16.504-4 allows on-ramps to add contractors during open seasons and off-ramps to remove them. When a multiple-award contract has an ordering period over five years, it must provide on-ramps unless the contracting officer documents why not.

Fair opportunity for each order

Under 10 U.S.C. 3406(c), every awardee on a multiple-award contract gets a fair opportunity to be considered for each order in excess of $2,500, with five exceptions. The overhaul text sets tiers:

• At or below the micro-purchase threshold: any awardee that can meet the need.
• Above that, up to the simplified acquisition threshold: all awardees fairly considered, sometimes without further solicitation.
• Above that, up to $7.5 million: fair notice to all awardees, by solicitation or notice of intent.
• Above $7.5 million: a notice with a clear statement of requirements, a reasonable response period, and the significant factors and their relative importance, followed by postaward notices and debriefings.

The statute's enhanced-competition line is $5,000,000. FAR 1.109 explains one reason the numbers differ: 41 U.S.C. 1908 requires the FAR Council to adjust statutory acquisition-related dollar thresholds for inflation, calculated every five years.

Ordering is not subject to the part 6 competition rules or subpart 15.3, but price or cost must be a factor in every order decision. Sole-source orders need a written justification, approved above $150 million in DoD by the senior procurement executive. DoD adds a debriefing requirement for orders of $10 million or more.

Rule	Codified FAR	Overhaul text
Fair opportunity and exceptions	16.505(b)	16.507-2 to 16.507-6
DoD order protest threshold	16.505(a)(10): above $25 million	16.508: above $35 million

The statute, section 3406(f), says $35,000,000.

How small firms get on vehicles

Section 644(r) of the Small Business Act authorizes three tools: setting aside part or parts of a multiple-award contract, setting aside orders notwithstanding the fair opportunity requirement, and reserving one or more awards in a full and open competition. The overhaul's Part 19 implements them. Under 19.111-2, a decision to set aside an order or not is discretionary and "not a basis for protest." Under 19.112, a reserve fits when market research rules out both a total and a partial set-aside. The limitations on subcontracting do not apply to a reserve at the contract level but do apply to set-aside orders.

Two further rules matter to newcomers. For DoD, NASA, and the Coast Guard, a solicitation above the simplified acquisition threshold for multiple-award contracts for the same or similar services may leave price out of the award decision if it states an intent to award to each and all qualifying offerors. Price is then considered on every order. And on-ramps give a firm that missed the first competition a later way on.

What to check

• Which text governs the contract: codified FAR subpart 16.5 or the overhaul text DoD has used since March 16, 2026?
• Is the guaranteed minimum more than nominal, and does every order fit within scope, ordering period, and maximum value?
• For a single award estimated above $150 million, is the head-of-agency or, in DoD, senior procurement executive determination on file?
• For an order above $7.5 million, did the notice state requirements, response time, and significant factors with their relative importance?
• Was a sole-source order justified under a listed exception and posted within 14 days when above the simplified acquisition threshold?
• Does the vehicle offer reserves, set-aside orders, or on-ramps for small businesses, and which subcontracting limits apply to each?

Sources

1. 1FAR Overhaul - Part 16 · Acquisition.gov, FAR Overhaul (Part 16 issued September 30, 2025, updated July 1, 2026)
2. 2Class Deviation - Revolutionary Federal Acquisition Regulation (FAR) Overhaul Part 16, Defense FAR Supplement (DFARS) Part 216 (DARS Tracking Number 2026-O0045) · Defense Pricing, Contracting, and Acquisition Policy, effective March 16, 2026
3. 3FAR 16.504 Indefinite-quantity contracts · Acquisition.gov, FAC 2026-01, effective March 13, 2026
4. 4FAR 16.505 Ordering · Acquisition.gov, FAC 2026-01, effective March 13, 2026
5. 510 U.S.C. 3406: Task and delivery order contracts: orders · Office of the Law Revision Counsel, current through Public Law 119-124 (October 15, 2026)
6. 6FAR 1.109 Statutory acquisition-related dollar thresholds-adjustment for inflation · Acquisition.gov, FAC 2026-01, effective March 13, 2026
7. 7FAR Overhaul - Part 19 · Acquisition.gov, FAR Overhaul (Part 19 issued September 26, 2025, updated February 20, 2026)
8. 815 U.S.C. 644: Awards or contracts · Office of the Law Revision Counsel, current through Public Law 119-124 (October 15, 2026)

Where this shows up in our work

• LEDGER, auditable Army acquisition decisions turns a trade study into a package where every number cites its source and AI drafts but never decides.
• ELLMENT, the offline LLM for E-2D crews answers a crew's question from the aircraft's own manuals and cites the page, with no network.
• TRACE, the offline S1000D and IETM viewer opens S1000D, MIL-STD-3001 and PDF technical manuals on a tablet with every marking intact.