Delivery Order

A delivery order is a contract action placed against an existing IDIQ or supply vehicle that specifies the quantity of supplies required, the delivery date, and the delivery destination, the supply equivalent of a task order for services.

What is a Delivery Order?

A delivery order is defined in FAR 16.501-1 as an order placed against an indefinite-delivery contract for the delivery of a definite quantity of supplies during a specified period. It is the supply counterpart to the task order used for services.

Under an IDIQ supply contract, the master vehicle establishes: unit prices for each item, maximum and minimum order quantities, contract terms, and FAR clauses. Individual delivery orders then specify:

• Item description and contract line item number
• Quantity ordered
• Requested delivery date
• Delivery destination (ship-to address or installation)
• Funded amount
• Any special handling or marking requirements

Delivery orders are the primary ordering mechanism under federal supply schedules, GWAC supply vehicles, and agency IDIQ supply contracts. Most routine government equipment purchases, computers, furniture, vehicles, laboratory equipment, are placed through delivery orders against existing supply contracts rather than through new standalone procurements.

The fair opportunity requirement (FAR 16.505) applies to delivery orders for supplies in the same way it applies to task orders for services, all vehicle holders with the applicable supply items must be given consideration for orders above the micro-purchase threshold.

Why Delivery Orders matter for government contractors

For product companies, delivery orders are the lifeblood of government sales. A company with a GSA Schedule contract (which is a form of IDIQ supply vehicle) receives delivery orders whenever a government customer purchases their products from GSA Advantage or GSA eBuy. Revenue tracking, inventory planning, and customer relationship management for product-focused GovCon firms are all built around delivery order volume. Tracking delivery order patterns, which agencies order what quantities in which quarters, reveals seasonal buying patterns, agency budget cycles, and opportunities to grow wallet share through expanded product listings or pricing adjustments.

Example

The Department of Homeland Security places a delivery order against its IDIQ computer supply contract for 500 laptop computers, each meeting specified technical requirements (processor, RAM, storage, display size). The delivery order specifies: 500 units at $1,450 each ($725,000 total), delivered to DHS headquarters (Washington, DC) within 30 days, FOB Destination. The IDIQ vehicle holder fulfills the order from existing inventory, ships within 30 days, and invoices against the delivery order number. The entire process from delivery order issuance to payment takes less than 60 days.

Frequently Asked Questions

Can a delivery order specify different delivery locations for different quantities?

Yes. A single delivery order can specify multiple ship-to addresses: "300 units to Denver Federal Center, 200 units to DHS headquarters." This flexibility is one of the advantages of IDIQ-based supply contracting, a single order can address the needs of multiple agency locations.

Is there a minimum value for a delivery order?

There are generally no regulatory minimum order values for delivery orders, but IDIQ contracts may specify a minimum order quantity (e.g., "minimum order: 1 unit"). Many IDIQ contracts also specify a minimum administrative order value to avoid the administrative burden of processing orders for very small quantities.

How are delivery orders tracked in government spending data?

Delivery orders are recorded in the Federal Procurement Data System (FPDS) and reported to USAspending.gov. The delivery order record includes the IDIQ vehicle contract number, the delivery order number (PIID), the amount obligated, the supplier, and the agency. This data is publicly available and useful for competitive intelligence on supply market trends.

What happens if the contractor cannot fulfill a delivery order?

If the contractor cannot deliver the specified quantities by the specified date, they may be in default on the delivery order. The government can terminate the delivery order for default and reprocure from another source. For IDIQ vehicles where multiple contractors hold positions (multiple award contracts), the government may award the next delivery order to a different vehicle holder rather than waiting for the defaulting contractor to recover.