For many businesses, government sales can be long term profitable work that empowers their company. Whether their operation is large or small, the true goal is landing an IDIQ contract is to set up a contractual vehicle with the government to sell products and services over a very long time period and with a minimum amount of paperwork once the contract is won.
An Indefinite Delivery/Indefinite Quantity contract means that for a certain amount of time, usually at least 3-5 years, the bidder agrees to supply goods or services to the government on-demand. The exact quantity of deliverables is not set, hence “indefinite.” However, there are often more than one company on larger IDIQ contracts capable of delivering the same thing and you still have to sell yourself and your ideas to the government buyers.
IDIQ contracts actually bring substantial benefits for both sides, so they’re extremely popular among both contracted suppliers and government project managers. Understanding why this is can help you decide if bidding on an IDIQ contract is right for your business.
For the government and their project contractors, IDIQ contracts solve one of the biggest problems: calculating orders for projects where precise estimation is difficult or impossible. This is particularly the case for larger-scale projects or those where significant research and development will be involved.
When the government knows they will need certain products and service over many years, IDIQ is perfect. They can hold a competition and choose the best supplier or team of companies. Once the contract is in place, they can order when their funding is available, and they have the need. If there is no money or no need, the contract sits in place waiting for the right time.
By the same token, IDIQ contracts also guarantee reliable services. There’s no need for project managers to look for suppliers every year- their suppliers are already under contract. This eliminates a lot of contractual overhead for project offices. Eliminating the costly bidding and approval process lowers costs for their project.
Suppliers benefit because of how reliable the business is, if they work hard to sell themselves and keep the work coming in. IDIQ contracts are rarely given out when there’s no expectation of making use of that contract. A signed IDIQ contract is about as close as a business can come to guaranteed income for the length of the contract. It sounds easy but there is also always the need to be selling to the government program offices or the “tasks” won’t keep coming in.
If your operation is looking to enter the business of government contracting, you’ll have a lot of adjusting to do. Government sales are unlike any other form of business, with a lot of specialized terminology and ideas. Due to the sheer size of the government, there is also a huge range of possible ways you can get contracts.
However, one thing remains true across all contractors: The most prized contracts are known as Indefinite Delivery/Indefinite Quantity, or IDIQ. Fundamentally, the goal for virtually any contractor is winning IDIQ contracts. So today, we wanted to discuss the basics of the IDIQ contract, for newcomers.
Government Contracting 101: Understanding the IDIQ Contract
Boiled down, what an IDIQ Contract means is this: For a pre-set amount of time, generally five years, your company will provide a certain product or service on-demand. You may not be measured according to any specific quantity of deliverables, just that you be able to deliver them as requested.
Basically, if you have the capacity to fulfill the orders when they come in, IDIQ contracts almost always mean solid profits for the term of the contract, IF you can aggressively add scope to your contract with requested work. Further, contractors who can many years.
IDIQ contracts are useful for the government because they take a lot of uncertainty out of ordering and fulfillment. As a simple example: An R&D division is developing a military hardware project, and they have no idea how many screws they’ll need to successfully complete the project. So, they set up an IDIQ contract with a provider of screws, ensuring they’ll always be able to get more screws as needed. This also means being able to budget for it ahead of time-based on the value of the contract.
IDIQ contracts are usually win-win for both sides. The government gets guaranteed supply, while minimizing administrative costs, and the contractor gets a highly lucrative contract that’s guaranteed for at least several years.
ASHER Can Provide the Training You Need to Succeed
For most in government contracting, success means winning IDIQ type contracts – and that’s exactly what Asher Government is here to help you do! Our in-depth government seminars and training courses for contractors can provide the insight you need to take your contracting operation to the next level and win more IDIQ contract bids.
If you choose to partner with Asher Government for government sales training, we can give you deep knowledge of our methods for closing contract deals, including…
Five Tips for Winning More IDIQ Contracts
1- Focus on top long-term prospects
There’s a lot of churn at government agencies, particularly at the lower levels. Focus on the players who have been there awhile and work them as long-term prospects. Even then, you’ll likely lose around 15-25% of your contacts each year, so consistent outreach, networking, and prospecting are necessary.
2- Research your contacts and their organizations
The more you know about your target and their department, the better you can precisely target their needs. There is truly no such thing as too much research, as long as you’re uncovering legitimate information. Always keep looking for new intel!
3- Find a coach
If you’re new to government sales, it can be overwhelming – and buyers won’t cut you much slack for not knowing the ropes. Finding the right coach to teach you the vocabulary, the processes, even the nonverbal signals, can make all the difference.
4- Build rapport to sell yourself
Your solution is only part of your sales pitch. What your prospects think of you can make a huge difference! If you build rapport and they genuinely like you, that could easily help you edge out the competition. Focus on making good first impressions, and always dress to impress.
5- Don’t just talk – Listen!
Too many salespeople spend too much time talking, and it only hurts their own chances. Leads and prospects want to feel like they’re being heard. Ask open-ended questions about their problems and processes, and genuinely listen to their answers. Don’t give canned sales pitches; make your pitch directly relevant to what they tell you about their needs.
Learn the Ropes from Asher Government
That’s not all – we’ve got even more tips for winning IDIQ contracts to share in the next blog. In the meantime, to set up your own government business development seminar, please contact Asher Strategies.
In theory, Indefinite Delivery/Indefinite Quantity -IDIQ- contracts are supposed to reduce competition and maximize the probability that contractors will be able to win highly lucrative contracts. In practice, of course, that is rarely the reality. Competitions for IDIQ contracts are still fierce, and many companies still fail to benefit from a move into government contracting.
Asher Government offers government sales training workshops to succeed in IDIQ contracts. We help you learn to avoid the pitfalls common to IDIQ contract bidding, and succeed while the other companies fail.
Common Pitfalls in the IDIQ Process
Asher Government is here to ensure you don’t fall prey to the same mistakes that others make. Or if you have, we’ll see that you don’t have it happen again!
A prime spends far too much money chasing down an IDIQ vehicle win… but then lacks the resources to properly exploit it. Or else they failed to do their homework, overspent, and ended up winning too little to actually justify their costs. They wallow in red ink while watching their competitors grow.
A sub on an IDIQ is initially excited to be part of a team on a large contract but later discover that they are only getting the crumbs. They only see the occasional task order requests, nothing like the orders they had expected. They might not even hear from their prime for weeks or months, putting them so far behind their competition in understanding the government customer they couldn’t hope to prepare a winning proposal.
Asher Strategies wants you to be smarter than this. We want you to win, while your competition gets left behind.
Be Prepared To Do What It Takes
Our strategies aren’t about just winning a task order or two, or always being the sub to someone else’s prime. Our government sales training workshops to succeed in IDIQ contracts prepare you to be the number one contractor in your field on your IDIQ contract. We’ll teach you the skills you need to get all the business you could possibly handle while dominating your competition.
Our training workshops show you the roadmap to mastering IDIQs and task orders. We focus on bidding as well as getting more tasks on your current contracts. With Asher training on your side, you can see greater success throughout your contracting. Contact us today to learn more.
For many government-focused businesses, the holy grail is the IDIQ contract: Indefinite Delivery/Indefinite Quantity. Use of IDIQ orders in the government have been increasing in recent years and securing one of these multi-million-dollar contracts can be the key to taking your operation to the next level. Read More