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HORNE BROS. v. LAIRD

April 13, 1972

HORNE BROTHERS, INC., Plaintiff,
v.
Melvin R. LAIRD et al., Defendants


Aubrey E. Robinson, Jr., District Judge.


The opinion of the court was delivered by: ROBINSON, JR.

AUBREY E. ROBINSON, Jr., District Judge.

 On February 15, 1972, Horne Brothers, Inc. (hereinafter referred to as "Horne"), instituted this action on its claim which is, in essence, that the Defendant, John H. Chafee, the Secretary of the Navy (hereinafter referred to as "Defendant" or "the Navy"), had acted arbitrarily, capriciously, in violation of law and without rational foundation, under regulations promulgated under the authority of Defendant, Melvin R. Laird, Secretary of Defense (hereinafter referred to as "Defendant Laird" or "the Department of Defense"), in the conduct of a procurement pursuant to an Invitation and Bid N62678-72-B-0048 (hereinafter referred to as the "IFB"), in refusing to award the contract for work under the IFB to Horne, and instead awarding the contract under the IFB to Metro Machine Corporation (hereinafter referred to as "Metro"). In addition to its Complaint, Horne filed Motions for Temporary Restraining Order and for Preliminary Injunction, and Memoranda in support of the said Motions, seeking an injunction against any further action to effectuate or implement the award of the contract or the direction to proceed with work under the contract by the Defendants to Metro, pending the decision of the General Accounting Office (hereinafter referred to as "GAO") on Horne's Protest against the award of the Contract and pending Navy action in accordance with the GAO decision; the Complaint was verified by Mr. Floyd O. Culp, Jr., President of Horne, and signed by counsel, and was submitted with Exhibits A, B and C attached.

 A hearing on the Motion for Temporary Restraining Order was set for February 16, 1972. On February 16, 1972, the Plaintiff filed a Supplemental Memorandum of Points and Authorities in support of its Application for Temporary Restraining Order and Motion for Preliminary Injunction, with Exhibits A and B thereto. On February 16, 1972, counsel for Horne and for Defendants were heard in open Court on the Motion for Temporary Restraining Order. Counsel for the Defendants introduced Exhibits 1, 2 and 3, which were entered into the record.

 On February 17, 1972, the Court entered an Order denying Horne's application for a temporary restraining order. Horne moved for an Injunction Pending an Appeal from the Court's Order Denying the Temporary Restraining Order. The Court denied Horne's Motion for an Injunction Pending Appeal from the Order Denying the Temporary Restraining Order.

 On February 28, 1972, the Defendants filed an Opposition to Horne's Motion for Preliminary Injunction.

 On March 2, 1972, Horne filed an application for an Oral Hearing on its Motion for Preliminary Injunction, an Affidavit of Robert H. Turtle, and an Affidavit of Herbert V. Kelly, with Exhibits thereto.

 On March 8, 1972, Horne filed a Supplemental Memorandum of Points and Authorities in Support of its Motion for Preliminary Injunction, with Exhibits A and B, and an affidavit of Floyd O. Culp, Jr., and Philip R. Mayhew, dated March 3, 1972.

 FINDINGS OF FACT

 1. Plaintiff Horne is a corporation operating under the laws of the Commonwealth of Virginia and having its principal place of business in Newport News, Virginia.

 2. Defendant Melvin R. Laird is the Secretary of Defense, with authority over activities of the Department of Defense, including procurement matters and the promulgation of the Armed Services Procurement Regulation. Defendant John H. Chafee is the Secretary of the Navy, with authority over activities of the Department of the Navy, including procurement matters.

 3. In early December of 1971, the Navy issued the IFB and sent a copy to Horne. (Verified Complaint, para. 4.)

 4. Subsequently, on or about December 21, 1971, Horne received a letter dated December 14, 1971, from the Navy. That letter consisted of three paragraphs as follows:

 
"Based upon an investigation conducted by the Naval Investigative Service, this Command has substantial reason to believe that for a period of years including 1971, representatives of Horne Brothers, Inc. have been giving gratuities and favors to Naval personnel assigned to official contractual or inspection duties in relation to your company. These inducements or irregularities are considered to indicate a lack of business integrity and to bring into serious question the present responsibility of your company as a Government contractor. Accordingly, a decision has been made to place Horne Brothers, Inc., on the Joint Consolidated List of Debarred, Ineligible and Suspended Contractors, in a suspended status.
 
"This suspension is for a temporary period, pending the completion of the investigation and such legal proceedings which may ensue. It is effective throughout the Department of Defense. During the course thereof, bids and proposals will not be solicited from you and, if received, will be considered and awards made only if it is determined by the Secretary or his authorized representative to be in the best interest of the Government.
 
"The foregoing action has been taken by virtue of the authority of the Secretary of the Navy and in accordance with the procedures of Section 1, Part 6 of the Armed Services Procurement Regulation, two copies of which are ...

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