You are correct sir. It is a series of Indefinite Delivery Indefinite Quantity (IDIQ) contracts that are standard in government purchasing that establish minimum and maximum ranges for purchases over several years (in this case, five years). The 1.6 billion is a summation of the maximums from all IDIQ contracts over five years. It's pretty clear that DHS has NOT even ordered that amount, much less paid for it and had it delivered. The point of an IDIQ bid is that by creating the possibility of large purchasing ranges, you get the best possible price from the supplier.
In the case of the 450 million round maximum contract, the minimum guarantee purchase is for 10,000 rounds in the first year only. Any further purchases and all extension years are optional.
All of this information is public knowledge and has been discussed in the press and here on FR many times, but folks continue to rant about it.