Report | Feb. 1, 2018

Navy’s Single-Award Indefinite-Delivery Indefinite‑Quantity Contracts DODIG-2018-069


We determined whether the U.S. Navy’s single-award, indefinite-delivery indefinite-quantity (IDIQ) contracts were properly justified. In addition, we determined whether internal processes for developing, approving, and evaluating determination and findings (D&F) documents were sufficient, based on Federal and DoD policies.1

The Navy awarded 35 single-award IDIQ contracts each greater than $112 million, with a combined value of $37.6 billion, from October 1, 2014, through December 20, 2016. IDIQ contracts are used when the exact quantity and times of future deliveries are not known at the time of the contract award. We selected a nonstatistical sample of 14 single-award IDIQ contracts, with combined base and all options valued at $7.7 billion, to review at Naval Air Systems Command (NAVAIR), Naval Sea Systems Command (NAVSEA), Space and Naval Warfare Systems Command (SPAWAR), Office of Naval Research (ONR), and Marine Corps Installations National Capital Region-Regional Contracting Office (MCINCR-RCO).


Contracting personnel at NAVAIR, NAVSEA, SPAWAR, ONR, and MCINCR-RCO properly justified all 14 contracts, valued at $6.1 billion, as single-award IDIQ contracts.

However, Navy personnel did not prepare or report the supporting D&Fs for all 14 contracts in accordance with requirements. Specifically:

  • Contracting personnel at NAVAIR, NAVSEA, SPAWAR, and ONR did not detail the circumstances, facts, and reasoning essential to use a single-award IDIQ contract or did not include other content elements, such as the contracting activity or available options, in the D&F for 12 contracts, valued at $5 billion.2
  • Deputy Assistant Secretary of the Navy (Acquisition and Procurement) (DASN[AP]) officials did not notify Congress as required after a D&F was approved for one contract, valued at $192.7 million, that cited the public interest exception.
  • DASN(AP) officials and contracting personnel at NAVAIR, SPAWAR, ONR, and MCINCR-RCO did not submit an approved D&F to the Director, Defense Procurement and Acquisition Policy (DPAP), for 11 contracts, valued at $5.1 billion.

This occurred because DASN(AP) officials and Navy contracting personnel were either unaware of, misinterpreted, or did not follow existing policy when preparing, reviewing, or reporting on a D&F, and the level of available guidance varied at each activity. As a result, Congress and DPAP officials may not have all the available information they need to make informed decisions on single-award IDIQ contracts, such as the supporting rationales for specific FAR exceptions. Properly completed D&Fs contain all the necessary information, including the rationales. Furthermore, incomplete D&Fs can increase the likelihood that improper single-award IDIQ contracts are approved, which could increase contract costs and may not ensure that future single-award IDIQ contract awards are well supported and justified.

Additionally, a consistent underreporting of D&Fs from the Navy, Army, and Air Force to DPAP may indicate a need for DPAP officials to assess their use of D&Fs, and revise and communicate D&F reporting requirements to the Military Services, as necessary.


We recommend that DASN(AP) submit D&Fs for 11 contracts to the Director, DPAP, as required by Defense Federal Acquisition Regulation Supplement (DFARS) 216.504.3  In addition, DASN(AP) should review existing policies and procedures and take necessary action to ensure that the processes used to prepare, review, and report on D&Fs meet Federal and DoD requirements. Based on the results of the review, DASN(AP) should provide updated instructions through training or updated guidance on any areas requiring clarification to ensure the application of Federal and DoD requirements. Finally, we recommend that the Director, DPAP, perform an assessment to determine the adequacy and necessity of the procedures and requirements for the submission of D&Fs by the Military Services to mandatory stakeholders and implement procedures to verify that the Military Services are submitting all approved D&Fs.

Management Comments and Our Response

As of January 30, 2018, DASN(AP) and DPAP had not responded to our December 7, 2017, request for formal comments on our draft report recommendations. Therefore, we are issuing our final report without their comments and the recommendations are unresolved. We request that DASN(AP) and DPAP provide comments on this final report.

1 A D&F is a special form of written approval by
an authorized official that is required by statute
or regulation as a prerequisite to taking certain
contract actions.

2 A D&F may include more than one deficiency.

3 DFARS Subpart 216.5, “Indefinite-Delivery Contracts,” 216.504,
“Indefinite-quantity contracts.”

This report is a result of Project No. D2017-D000CN-0088.000.