Thinking Outside the Box: Construction ID/IQ Contracts?
The United States Court of Appeals for the Federal Circuit affirmed a ruling from the Court of Federal Claims that an ID/IQ contract is an appropriate vehicle for construction of military housing. Rejecting assertions that ID/IQ contracts apply only to acquisition of supplies and services, which excludes construction, and that using an ID/IQ contract for construction constituted improper bundling in violation of the Small Business Act, the court held that use of ID/IQ contracts for new construction projects does not violate any procurement regulations.
ID/IQ Construction Contracts Are Not Prohibited by the FAR
Plaintiff argued that the FAR authorized use of ID/IQ contracts only for supplies and services, and that “services” did not include construction. Plaintiff identified several regulations that applied to “supplies, services and construction” arguing that a reading of “services” to include “construction” rendered the addition of the word “construction” as superfluous in other regulations. The court was not convinced. Instead it took an entirely different view of the issue finding that because there are no regulations that specifically prohibit the use of ID/IQ contracts for construction projects, such use is proper. In fact, the court praised the Corps’ approach finding its approach “innovative.”
Construction Does Not Constitute Improper Bundling
Plaintiff further argued that use of ID/IQ contracts to procure new construction constituted improper bundling in violation of the Small Business Act. In rejecting this argument, the court first noted that the Small Business Act only prohibited “unnecessary and unjustified” bundling. Furthermore, the court found that the cited provisions of the Small Business Act did not apply to contracts for new construction. Finally, the court went on to examine the small business subcontracting requirements in the solicitation and found the anticipated ID/IQ contracts very beneficial to small businesses.
Tyler Construction Group v. U.S., 2009 WL 1796702 (Fed. Cir. June 25, 2009)
