National argues that TRANSCOM could not award six contracts because the RFP limited the number of awards to “approximately four.” Pl.’s Mot. at 12. The relevant solicitation language provides: “[t]he [g]overnment intends to award approximately four (4) IDIQ contracts resulting from this solicitation to provide [g]overnment shippers flexibility of choice and service coverage.” AR 14-329. In this court’s opinion denying National’s motion for a preliminary injunction, the court made the following assessment of National’s theory:

In this context, the word “approximately” generally means “nearly exact” or nearly “accurate.” Webster’s II New College Dictionary 56 (2001). It does not mean “precisely” or “exactly.” The phrase “approximately four” therefore permits the government to award more than four contracts. National appears to concede this point, because it does not challenge the fifth contract award. Instead, it challenges only the sixth award, which went to United. The question then is whether “approximately four” means “not more than five.” Plaintiff cites no authority – no definitions in the solicitation or regulations – to explain why “approximately four” should have such meaning.

National Air Cargo, 126 Fed. Cl. at 298. National’s brief on the merits has not assuaged the court’s concerns. National’s briefing makes no textual argument that “approximately four” must be interpreted as it advocates. Pl.’s Mot. at 12-13 (citing no canons of interpretation, statutes, regulations, or case law to support its argument). Instead, National concedes that this term is “admittedly ambiguous on its face.” Pl.’s Mot. at 13. National then argues that the agency’s initial June 2015 determination to award five contracts amounts to an agency determination that “approximately four” means “five,” which meant that the agency subsequently “revers[ed] itself” by making six awards during corrective action. Pl.’s Mot. at 13. But that argument is not convincing even though TRANSCOM did “reverse itself” by making six awards during corrective action; that was TRANSCOM’s prerogative so long as its decision complied with the solicitation and applicable law. Here, TRANSCOM justified its reversal by making findings that “six” awards were “approximately four” and that this number of awards was in its interest, compare AR 71-1774 (explaining why TRANSCOM was making five awards), with AR 103- 2853 (explaining why TRANSCOM was making six awards), and National has not disputed those underlying findings. As noted previously, TRANSCOM had cited congestion at CENTCOM airports as a basis for the “approximately four” awards limitation, AR 12-305, and National does not address how six awards might affect that congestion. See Henderson ex rel. Henderson v. Shinseki, 562 U.S. 428, 434 (2010) (explaining that in “our adversarial system,” the “courts are generally limited to addressing the claims and arguments advanced by the parties. . . . Courts do not usually raise claims or arguments on their own.”) (citing Sanchez– Llamas v. Oregon, 548 U.S. 331, 356–357 (2006)). The mere fact that the agency changed course does not prove that its revised action was arbitrary. See F.C.C. v. Fox Television Stations, Inc., 556 U.S. 502, 514-15 (2009).  (National Air Cargo Group, Inc. v. U. S. and United Air Lines, Inc.,  No. 16-362C, August 26, 2016)

Central to plaintiff’s case is its argument that IDIQ contracts may not be used for the acquisition of major construction projects. Plaintiff observes that IDIQ contracts have historically been used for the procurement of essentially identical “supplies or services” for which there is a recurring need at a single installation or within a small geographic area. The construction of various large-scale military projects over an eight-state region, plaintiff contends, simply does not qualify.

In support of this view, plaintiff refers us to FAR § 16.501-2(a), which identifies an IDIQ contract as a contract used “to acquire supplies and/or services when the exact times and/or exact quantities of future deliveries are not known at the time of contract award.” Plaintiff acknowledges that FAR § 16.501-2 does not identify the “supplies” or “services” that may be acquired under an IDIQ contract, but contends that numerous other provisions of the FAR make clear that “construction” is distinct from “supplies or services.” FAR § 36.101(c), for example, the section specifically relating to construction contracts, provides that “[a] contract for both construction and supplies or services shall include (1) clauses applicable to the predominant part of the work . . . or (2) if the contract is divided into parts, the clauses applicable to each portion.” Plaintiff argues that such a distinction between “construction” and “supplies or services” would be unnecessary if the phrase “supplies or services” included construction.

Similarly, plaintiff notes that FAR Pt. 37, the section dealing with service contracting, defines the term “service contract” as “a contract that directly engages the time and effort of a contractor whose primary purpose is to perform an identifiable task rather than to furnish an end item of supply.” FAR § 37.101. The regulation goes on to provide a list of some of the activities that may be performed through service contracts but does not include construction among them. According to plaintiff, then, the FAR recognizes construction as a procurement category distinct from supplies and services and identifies an IDIQ contract as appropriate for procuring only the latter.

Nor, in plaintiff’s view, can the present solicitation be construed as seeking supplies or services. Plaintiff points out that the procurement is not for a quantity of buildings (the solicitation only specifically identifies the first task order—the construction of a single basic training barracks) and does not intend the price offered for the first task order to apply to future barracks projects, much less to the other projects identified in the solicitation. Indeed, plaintiff argues that the solicitation fails to comply with FAR § 16.504(a)(4), the regulation identifying the requirements that must be included in an IDIQ solicitation and contract, by failing to specify a “minimum and maximum quantity of supplies or services the Government will acquire under the contract” and “a statement of work, specifications, or other description, that reasonably describes the general scope, nature, complexity, and purpose of the supplies or services the Government will acquire under the contract.” In plaintiff’s view, then, the contract contemplated here is totally foreign in concept to the traditional use of an IDIQ contract.

Defendant responds that plaintiff’s basic premise—that the use of an IDIQ contract to acquire construction services is unlawful absent explicit legal authorization—ignores a fundamental tenet of the procurement regulations, namely, that in meeting the government’s needs, a procuring activity is free to use innovative strategies, even though not specifically addressed in the FAR, so long as such strategies are not otherwise prohibited by law. FAR § 1.102(d) sets forth this principle as follows:

In exercising initiative, Government members of the Acquisition Team may assume if a specific strategy, practice, policy or procedure is in the best interests of the Government and is not addressed in the FAR nor prohibited by law (statute or case law), Executive order or other regulation, that the strategy, practice, policy or procedure is a permissible exercise of authority.

According to defendant, then, the real issue is not whether the use of an IDIQ contract to procure construction services is expressly authorized by the FAR, but whether such use is prohibited by law. And the answer to that question, asserts defendant, is no. Indeed, defendant maintains that rather than prohibiting the use of IDIQ contracts in the acquisition of construction services, the existing FAR structure may in fact be read explicitly to permit it.

In support of this view, defendant notes that FAR § 2.101(b)(2) defines the term “acquisition” as “the acquiring . . . of supplies or services (including construction) . . . whether the supplies or services are already in existence or must be created, developed, demonstrated, and evaluated.” That section goes on to define “construction” as the “construction . . . of buildings, structures, or other real property.” Finally, FAR § 16.500 describes the “types of contracts that may be used in acquisitions” including “indefinite-delivery contracts.” Defendant argues that these regulations, taken together, provide authority for the use of “indefinite-delivery contracts” in “acquisitions” for the “construction . . . of buildings” that must be “created” or “developed.” In short, defendant maintains that the Corps’ solicitation represents a permissible exercise of the agency’s authority.

Defendant additionally notes that while FAR § 36.101(c) indeed appears to distinguish between “construction” and “supplies or services” (referring to “[a] contract for both construction and supplies or services”), plaintiff’s inference that the phrase “supplies or services” does not therefore include construction is undercut by the multiple references in the FAR containing such phrasing as “supplies and services (except construction)” (FAR § 19.202-1), “services (except construction)” (FAR §§ 52.219-3, 52.219-4, 52.219-14, 52.219-27, 52.226-5), and “supplies or services other than construction” (FAR § 42.1102). Under plaintiff’s reasoning, defendant argues, such references indicate that the phrase “supplies or services” should be interpreted as including construction unless the limitation “except construction” is included. Defendant thus contends that plaintiff’s argument does not resolve the problem at hand, but merely sets the stage for competing inferences that can provide no meaningful guidance. Defendant therefore urges the court to rely on the express terms defined in FAR Pt. 2 and used in FAR Pt. 16, authorizing the use of IDIQ contracts for the construction of buildings.

Nor does defendant agree with plaintiff’s assertion that the solicitation fails to satisfy the requisite elements of an IDIQ contract as set forth in FAR § 16.504(a)(4)(ii), (iii). Defendant maintains that the identification of the quantity limits mandated by that section may, under FAR § 16.504(a), be stated “as number of units or as dollar values,” a requirement defendant contends is satisfied by the solicitation’s inclusion of a minimum contract dollar value ($10,000), a maximum contract dollar value ($301 million), and a dollar value for a typical task order ($31.25 million). Similarly, defendant argues that the solicitation’s 252-page statement of work identifying the facilities to be acquired satisfies FAR § 16.504(a)(4)(iii)’s requirement of providing “a statement of work . . . that reasonably describes the general scope” of the project.

Defendant, we conclude, is correct on all counts. We are aware of no law, statute, or regulation that prohibits the use of an IDIQ contract for the procurement of construction services, and the various provisions of the FAR offer little insight into whether “construction” is included in or excluded from “supplies or services.” We must therefore conclude that FAR § 1.102(d)—providing procurement officials with the authority 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—governs the instant procurement. We find that the solicitation represents the sort of innovation envisioned by that section and, with its identification of both a contract dollar value and a general scope of work, constitutes a permissible exercise of IDIQ contracting authority.

The legitimacy of the approach the Corps has adopted here is reinforced by 10 U.S.C. § 2304a (2006), the statute codifying the government’s IDIQ contracting authority, enacted as part of the Federal Acquisition Streamlining Act of 1994, Pub. L. No. 103-355, §§ 1004, 1054, 108 Stat. 3243, 3249–54, 3261–65. Section (a) of the statute sets forth the basic authority to award an IDIQ contract as follows: “[T]he head of an agency may enter into a task or delivery order contract . . . for procurement of services or property.” If plaintiff were correct that construction falls outside the scope of IDIQ contracting authority, then the phrase “services or property” would necessarily exclude construction. The difficulty with this interpretation, however, is that the phrase “services or property” also occurs in the immediately preceding statute, 10 U.S.C. § 2304(a)(1), which directs that “the head of an agency in conducting a procurement for property or services . . . shall obtain full and open competition through the use of competitive procedures.” Plaintiff’s argument, then, not only would exempt construction from the general grant of IDIQ contracting authority, but also would remove it from the statutory requirement of full and open competition. Such an interpretation cannot stand: competition is the bedrock principle of procurement law. In sum, then, we hold that the Corps’ use of an IDIQ contract to acquire construction services was not arbitrary, capricious, an abuse of discretion, or otherwise contrary to law.  (Tyler Construction Group, v. U. S., No. 08-94C, August 14, 2008)  (pdf)

Like the Court of Federal Claims, we conclude that the proper inquiry is not whether the FAR authorizes the use of IDIQ contracts for a procurement of construction, but whether there is any statutory or regulatory provision that precludes such use. Again, like that court, we are unaware of any such provision, and Tyler has not pointed to any. Indeed, it appears that Tyler does not challenge that conclusion.

The reason that this is the appropriate inquiry is explained in FAR § 1.102(d), 48 C.F.R. § 1.102(d), which states:

The role of each member of the Acquisition Team is to exercise personal initiative and sound business judgment in providing the best value product or service to meet the customer’s needs. In exercising initiative, Government members of the Acquisition Team may assume if a specific strategy, practice, policy or procedure is in the best interests of the Government and is not addressed in the FAR nor prohibited by law (statute or case law), Executive order or other regulation, that the strategy, practice, policy or procedure is a permissible exercise of authority.

In other words, government officers are authorized, indeed, encouraged, in exercising personal initiative in procurement matters, to assume that “a specific strategy, practice, policy or procedure” that is not “addressed in the FAR nor prohibited by law (statute or case law), Executive order or other regulation” and that “is in the best interests of the Government,” “is a permissible exercise of authority.”

We agree with the Court of Federal Claims that the Corps’ use of IDIQ contracts to effect this procurement of military housing “represents the sort of innovation envisioned by that section and, with its identification of both a contract dollar value and a general scope of work, constitutes a permissible exercise of IDIQ contracting authority.” Tyler Constr. Group, 83 Fed. Cl. at 99.

The Corps was faced with an unusually large and novel procurement that had to meet the Army’s unusual and demanding standards and requirements. The Army was seeking what the Corps viewed as “a fundamental change in military construction strategy designed” to make the Army “a more modular expeditionary and effective fighting force.” Tyler Constr. Group., 83 Fed. Cl. at 95. The Army’s new approach to housing construction required a 20% reduction in cost and a 30% reduction in the time required until the facilities could be occupied.

Prior to deciding to use IDIQ contracts for this procurement, the Corps carefully studied, analyzed and evaluated the situation. It conducted a research program which included a nationwide forum, four regional fora, and “a specialized forum with representatives of the pre-fabricated/pre-engineered/modular construction industry, as well as the implementation of an internet-based research questionnaire.” Tyler Constr. Group, 83 Fed. Cl. at 96. The Corps concluded that there was “an industry consensus that the successful execution of its construction program would require an emphasis on standardization and economies of scale. Based on this conclusion, the Corps decided to pursue a flexible acquisition strategy ‘composed of primarily local and regional contracts with a possibility of national contracts, in order to execute an estimated $40 Billion dollar Military Construction . . . Program.’” Id.

The Corps, like other federal procurement entities, has broad discretion to determine what particular method of procurement will be in the best interests of the United States in a particular situation. Cf. E.W. Bliss Co. v. United States, 77 F.3d 445, 449 (Fed. Cir. 1996) (in negotiated contracts “[p]rocurement officials have substantial discretion to determine which proposal represents the best value for the government”); Lockheed Missiles & Space Co. v. Bentsen, 4 F.3d 955, 958 (Fed. Cir. 1993) (“Effective contracting demands broad discretion.”). The Corps did not abuse that discretion in concluding that in the situation here, the use of IDIQ contracts to obtain this large military construction was the most appropriate method of proceeding and therefore best served the interests of the United States. Nor did the Corps violate or ignore any statutory or regulatory requirements, prohibitions or standards in so acting.  (Tyler Construction Group, v. U. S., No. 2008-5177, June 25, 2009) (pdf)