Federal Circuit Affirms Use of IDIQ Construction Contracts

The Court of Appeals for the Federal Circuit affirmed the denial of a protest challenging use of indefinite-quantity, indefinite-delivery contracts to design and construct military housing, because no statute or regulation prohibited using IDIQ contracts to procure construction, it was within the government's discretion to conclude IDIQ contracts best served its interests, and the procurement did not violate provisions furthering small business participation. The solicitation contemplated selection of two or more contractors to design and construct housing at military bases in eight states under a multiple-award task order contract. The protester, a small business contractor, contended the use of IDIQ contracts to procure construction services violated FAR Subpart 16.5 and the anti-bundling provisions of the Small Business Act, the government should have requested a waiver of the statutory limitation on set-asides for non-disadvantaged small businesses, and the procurement was inconsistent with statutory and regulatory provisions aiding small business participation in government procurement.
Innovative Approach

However, as the Court of Federal Claims properly concluded (52 CCF 78,988), not only was there was no prohibition against using IDIQ contracts to procure construction, but the procurement "represent[ed] the sort of innovation envisioned by [FAR 1.102(d)]," which gives the government discretion to select a procurement strategy that is in its best interests. The procurement's innovative approach sought a substantial reduction of construction cost and time by emphasizing standardization and economies of scale. In addition, the government conducted extensive market research before determining consolidation of the procurement requirements was "necessary and justified," as required by 15 USC 644(e)(2)(A); the government did not abuse its discretion by not seeking a waiver of the small business limitation because a waiver would have been inconsistent with its determination to consolidate the procurement; and the procurement's 20-percent small business set-aside and subcontracting goals furthered small business participation to the extent practicable. (Tyler Construction Group v. U.S., CA-FC, 53 CCF 79,132)

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