Federal Construction Contracting Lawyer & Attorney : Payne Hackenbracht & Sullivan : Construction Law, Dredging and Claims

A protest was filed recently in the United Stated Court of Federal Claims by our firm on behalf of a small business construction contractor challenging a solicitation issued by the Fort Worth District of the U.S. Army Corps of Engineers. The solicitation, No. W9126G-07-R-0123, is one of four similar solicitations for the construction of military projects described as Advanced Individual Training (AIT), Basic Training (BT) Barracks, and Warrior in Transition (WIT) facilities. The construction is being solicited through the use of a negotiated Indefinite Delivery/Indefinite Quantity (“IDIQ”) procurement on a Single Award Task Order (“SATOC”) basis.  Under the terms of the solicitation a single contractor will be selected to perform task orders, without competition, amounting to as much as $330 million over the next three years in an eight state area. The other three similar solicitations contain similar dollar values and apply to similarly extensive geographic areas.

The protest seeks an injunction to prevent the Corps of Engineers from proceeding with the solicitation because of our contention that it is unduly restrictive of competition; it violates the laws prohibiting “bundling” by unlawfully consolidating smaller projects that would have been suitable for small business prime contracting; and, it illegally employs supplies and services indefinite delivery contracting methods under FAR 16.5 to procure large military complexes. There has been a growing outcry from both the small and large business construction communities in recent months regarding the expanded use by the Department of Defense of Indefinite Delivery/Indefinite Quantity solicitations to procure construction, seemingly ignoring the fact that indefinite delivery contracts are typically used to acquire supplies and services on a much smaller scale. It is our opinion that Single Award Task Order Contracts and Multiple Award Task Order Contracts are illegally limiting competition and that they may not be appropriately applied to the procurement of major construction projects. 

It is also disturbing that the amount of construction work that is available for sealed bidding is declining to the point that many construction contractors are being closed out of the federal market. (See our earlier article).  The use of sealed bidding provides the greatest opportunity for competition and ultimately results in the lowest prices to the government. This was confirmed by a recent decision of the Court of Federal Claims that held that sealed bidding was the preferred method for the procurement of maintenance dredging and shore protection work.

Although we cannot predict the outcome of the pending protest, we believe that it is important for the Court to review whether there is legal and rational basis for the use of the IDIQ format to procure major construction. The Corps of Engineers has indefinitely postponed the date for receipt of proposals while this matter is under consideration.

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The Corps of Engineers responded to the recent Order of the United States Court of Federal Claims dated November 1, 2007, granting a permanent injunction against the issuance of a MATOC solicitation for dredging, by taking four proposed task orders included in the MATOC solicitation and reissuing them as separate negotiated procurements.  (See the article posted on November 5, 2007).  The Plaintiff, Weeks Marine, Inc., filed a motion asking the Court to find that the Corps of Engineers had violated the November 1 Order.  Weeks argued that the injunction of the MATOC solicitation was based upon a finding that there was no legal or rational basis for the Corps to employ contracting by negotiation instead of sealed bidding.  The re-issuance of those same projects as individual RFPs violated the spirit, intent, and the letter of the Court’s Order.

Weeks requested that the Court amend its November 1, 2007 Order to make it clear that the projects addressed by the task orders could only be procured by sealed bidding.   Judge Thomas C. Wheeler of the United States Court of Federal Claims responded by issuing a new Order on November 16, 2007, stating that “. . . the Court must fashion a remedy to address an agency’s conduct that the Court regards as an ‘end run’ to a judicial order and injunction.”  The Court decided to allow one of the four projects to proceed as an RFP because it involved dredging of the entrance channel to the Naval Submarine Base at Kings Bay, Georgia, and was considered to be urgent. The other three RFPs were not allowed to proceed as RFPs, however, because the agency “did not provide any legal or factual justification to use negotiated procurement methods.”  The Court was also concerned about the Corps’ unilateral decision to attempt to circumvent the earlier injunction and stated that “the prudent approach would have been for Defendant to seek relief from the injunction to issue this solicitation, rather than for the agency to decide unilaterally that the injunction did not cover the proposed action.”

In the hearing that was conducted on November 15, 2007, the Judge reiterated that “if sealed bidding is not used for dredging contracts, you may as well read FAR Part 14 right out of the regulation. I mean, when else is it going to apply if not to dredging contracts?”  The decision is a welcome recognition by the Court that sealed bidding is still the preferred method for procuring federal construction contracting, and the decision will hopefully help to stem the continuing move by the Corps of Engineers to unnecessarily employ IDIQ, MATOC, and contracting by negotiation in more of its construction procurements.

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