In a novel decision, Tyler Const. Group v. U.S., No. 08-94C , __ WL___(Fed. Cl. Aug. 14, 2008), the U.S. Court of Federal Claims has allowed the use of indefinite delivery/indefinite quantity (IDIQ) contract for the procurement of construction services by the government. The plaintiff in Tyler Const. Group v. U.S., (Fed. Cl. Aug. 14, 2008) was a small business general contractor who sought to enjoin the U.S. Army Corps of Engineers from proceeding with a negotiated procurement for the award of an IDIQ contract for the design and construction of military facilities in the Southeastern United States.

Plaintiff sought to enjoin the procurement because, as plaintiff argued, the use of IDIQ procurement for major construction was not permitted by law or regulation. Pursuant to the Federal Acquisition Regulations, IDIQ contracts are used to acquire “supplies and services when the exact times and/or exact quantities of future deliveries are not known at the time of contract award.” Plaintiffs argued that because “construction” and “supplies and services” are distinct and separate under the FAR, thus, by its terms, IDIQ contracts are only appropriate for procuring “supplies and services”—not construction projects, which are distinct from “supplies and services.”

The court, however, rejected plaintiff’s arguments and found the use of IDIQ contracts for the procurement of construction services to be permissible under the FAR and other relevant law. In rendering its decision, the court noted, “[w]e are aware of no law, statute, or regulation that prohibits the use of an IDIQ contract for the procurement of construction services . . . ” and found that various FAR provisions “offer little insight into whether ‘construction’ is included in or excluded from ‘supplies or services.’” Affirming the government’s position, the court determined that, absent express prohibition, procurement officials are authorized under FAR 1.102(d) to use “innovative approaches to satisfy the government’s procurement needs so long as such approaches are not otherwise addressed in the FAR or prohibited by law.” As such, the government’s employment of IDIQ contracts for construction services with both a contract dollar value and a general scope of work constituted a permissible exercise of IDIQ contracting authority.