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AMERICAN DIST. TEL. v. DOE

January 26, 1983

AMERICAN DISTRICT TELEGRAPH, PLAINTIFF,
v.
DEPARTMENT OF ENERGY, Et Al., DEFENDANT



The opinion of the court was delivered by: FLANNERY

 This matter comes before the court on plaintiff's motion for a preliminary injunction and defendants' motion to dismiss. Plaintiff American District Telegraph (ADT) is a disappointed bidder on a contract awarded by the defendant Department of Energy (DOE) acting through its agent, defendant Morrison-Knudsen Company. In its motion ADT seeks declaratory and injunctive relief requiring defendants to cancel the contract awarded to the successful bidder and to award the contract to ADT. The defendants have opposed plaintiff's motion. In addition, the government defendants, DOE and Paul Hodel, Secretary of Energy, have moved to dismiss the complaint. DOE argues that the Federal Courts Improvement Act of 1982 has divested the district court of jurisdiction to review post-award challenges to government contract awards.

 Background

 This action arises out of an award of a contract to design and install a fire and security alarm system in a chemical processing plant administered by the Department of Energy. The contract was awarded by the Idaho National Engineering Laboratory ("INEL"), a government installation directed and managed by the Department of Energy. Defendant Morrison-Knudsen is the prime contractor with DOE for construction at the site, and is in charge of procurement operations. As part of its tasks, Morrison-Knudsen has been participating in a research and development venture to construct a fire and evacuation system at the Idaho Chemical Processing Plant.

 In the summer of 1981, Morrison-Knudsen and DOE began to establish procedures for soliciting and reviewing bids for the design and construction of the system. The defendants first convened a Source Evaluation Board (SEB) composed of members familiar with fire and security alarm systems, to evaluate the proposals which would be received in response to the Request for Proposal (RFP). In September, 1981, the SEB met to establish evaluation criteria for reviewing the proposals, and to design a weighting scheme for the various portions of the system specifications. The SEB eventually decided that technical evaluation criteria would account for 60% of the proposal's score and price considerations would account for 40%.

 In March, 1982, Morrison-Knudsen sent the completed RFP for the system to interested offerors, along with a cover letter stating that any proposal would be evaluated against the evaluation criteria found in the RFP. The RFP also included an admonition against "brochuremanship" and unnecessarily costly proposals. It urged the offerors to prepare proposals with maximum economy consistent with the procurement at issue. In May, 1982, Morrison-Knudsen received responses to the RFP from four offerors: Seatronics Protection Systems (the eventual successful bidder); American District Telegraph (plaintiff); Wheeler Electric Inc.; and NASEC. The four proposals were opened and price information was segregated from technical data. This was done, according to Morrison-Knudsen, to ensure that the technical evaluation would be conducted without the potential contaminating influence of price considerations.

 In performing the technical evaluation, the SEB decided to establish a ten point scale. Five points were awarded to proposals that met the minimum specifications set forth in the RFP, with more than five points awarded to proposals that exceeded those specifications. On June 10, 1982, the SEB completed its initial rankings and two proposals (ADT and Seatronics) were considered competitive. The SEB then sent a series of questions to the two remaining offerors. These questions were designed to afford offerors an opportunity to upgrade their proposals, particularly in areas where the SEB had detected weaknesses. See Affi. Bernard Schroeder, para. 20; Affi, Clark Jones, para. 15.

 On July 6, 1982, ADT responded to the questions. Thereafter, the SEB afforded each bidder an opportunity to make oral presentations to the Board. On August 3, 1982, ADT made such a presentation. This proceeding provided the bidders an opportunity to "sell" their design to the SEB and to engage in a dialogue with respect to the advantages and deficiencies of their system.

 Finally, in order to complete their review of the systems, the SEB authorized some of its members to visit installations in which the remaining offerors had installed similar systems. The SEB visited the system installed by ADT at Offutt Air Force Base in Omaha, Nebraska.

 By early September, 1982, the SEB had reviewed and prepared the final draft of its evaluation report. This process involved SEB review of each proposal, with final pricing adjustments so that upgraded technical proposals would have new corresponding cost adjustments. The Secretary of the SEB then compiled all the information and computed the highest ranked offer by using the RFP formula. The SEB then announced the award to Seatronics, the highest ranking bidder.

 On October 17, 1982, at the request of ADT, Morrison-Knudsen held a debriefing conference to explain to ADT why it was not selected.

 Procedural History

 On November 24, 1982, ADT filed a formal protest of the award to the Department of Energy. On December 14, 1982, Morrison-Knudsen issued a "Statement of Findings and Recommendations" responding to ADT's protest. After an exhaustive examination of each of ADT's allegations of bidding improprieties, Morrison-Knudsen found that the bidding process had been conducted in compliance with applicable regulations and that the ADT proposal was simply less desirable than that of Seatronics. Morrison-Knudsen recommended that the protest be rejected. Plaintiff's Ex. F. On December 15, 1982, the Department of the Energy also reviewed plaintiff's protest and conducted a careful review of plaintiff's claims of error. The DOE concluded that "no arbitrary selection or abuse of discretion by the Board or the Contracting Officer occurred." Plaintiff's Ex. D.

 On December 28, 1982, ADT filed the present action and included a request for a preliminary injunction. ADT alleges that the procedures used by defendants to review the bids violated DOE's procurement regulations at 41 C.F.R. 9-3.805-1(a). That section requires that the RFP contain the criteria for measuring proposals. ADT states that the RFP criteria were unclear and that it read the RFP to solicit proposals that met the minimum specifications of the system at the lowest possible cost. ADT further states that it was inappropriate for the SEB to award additional points for proposals with superior performance features unless the RFP made the computation formula explicit. In Count II of their complaint, ADT alleges that Morrison-Knudsen violated federal procurement regulations found at 41 F.P.R. § 1-3.805-1(b). That provision guarantees that offerors submitting bids be afforded equal opportunity to participate in bid negotiations. Finally, ADT alleges that the defendants violated 41 C.F.R. § 9-3.805-1(c) by failing to point out weaknesses in the plaintiff's proposal prior to award.

 Discussion

 On January 7, 1983, the federal defendants filed an opposition to plaintiff's motion for preliminary injunction. The defendants also filed a motion to dismiss this action for lack of this court's jurisdiction over the subject matter. Defendants, citing Section 133(a) of the Federal Courts Improvement Act of 1982, effective October 4, 1982, state that the district court does not have jurisdiction over post-award contract actions seeking injunctive relief.

 Defendant's motion marks the first time in this proceeding at which the jurisdictional issue has arisen. Plaintiff's moving papers did not address the issue of jurisdiction. The plaintiff has, however, been afforded several days within which to file such further papers as they desire, addressing that issue. It has exercised that opportunity, and additional submissions have been carefully considered.

 The court finds that it must consider the issue of jurisdiction before it turns to plaintiff's motion for preliminary injunction. See American Fire & Casualty Co. v. Finn, 341 U.S. 6, 17-18, 95 L. Ed. 702, 71 S. Ct. 534 (1951). On October 1, 1982, Section 133(a) of the Federal Courts Improvement Act of 1982, Pub. L. 97-164, 96 Stat. 25, 28 U.S.C. § 1491, became effective, providing in relevant part:

 
(3) To afford complete relief on any contract claim brought before the contract is awarded, the [Claims] court shall have exclusive jurisdiction to grant declaratory judgments and such equitable and extraordinary relief as it deems proper, including but not limited to injunctive relief. In exercising this jurisdiction, the court shall give due regard to the interests of national defense and national security.

 The government is able to refer the court to some support for its first principle. In Opal Manufacturing Co. v. UMC Industries, Inc., 553 F. Supp. 131 (D.D.C. 1982), Judge Richey read Section 133(a) as vesting exclusive jurisdiction in the Claims Court to review pre-award contract claims. Additionally, in John C. Grimberg Co., Inc. v. United States, No. 510-82 C, 30 C.C.F. P 70,338 (Ct. Cl. Oct. 7, 1982), the Claims Court likewise found that Section 133(a) vested exclusive jurisdiction in that court in pre-award contract cases.

 However, this is a post-award case. The cited section of the FCIA applies to "any contract claim brought before the contract is awarded," and not to cases, such as this one, that involving claims for injunctive relief after a contract has been awarded. The statute contains no language that would purport to give the Claims Court exclusive jurisdiction over post-award injunctive cases. The government provides no support for its proposition that Section 133(a) divests the district court of jurisdiction to hear post-award contract disputes. In fact, the two cases cited by the defendants hold that the district court retains jurisdiction to hear post-award contract disputes. In Opal Manufacturing, Judge Richey held that the district court did not have jurisdiction to hear a pre-award contract dispute. However, he stated, "The Court's ruling that there is no jurisdiction . . . is premised on the fact that the crossclaim is a pre-award contract claim. Jurisdiction is proper over post-award contract claims." Opal Manufacturing, supra, 553 F. Supp. ...


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