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UNIVERSAL SHIPPING CO. v. UNITED STATES

February 3, 1987

Universal Shipping Company, Inc., Plaintiff,
v.
United States of America, Defendant



The opinion of the court was delivered by: RICHEY

 INTRODUCTION

 In this case plaintiff challenges the Agency for International Development's refusal to suspend a contract that is the subject of an unresolved protest before the Comptroller General. The facts of this case are undisputed, and, as they provide background necessary for a full understanding of the novel issues of the case, merit full recital.

 The Administrator of the Agency for International Development ("AID") is charged with implementing and administering the nation's program of famine relief and assistance. 7 U.S.C. § 1721 (establishing program); Exec. Order No. 12,220, 3 C.F.R. 263-66 (Sept. 10, 1980) (delegation to AID). Pursuant to that responsibility, AID solicited bids for a contract to provide freight forwarding, booking, and chartering services for transportation of food relief shipments to countries in need. On June 5, 1985, AID awarded that contract to plaintiff (the "Universal Contract").

 The Universal Contract was for a one-year term, but it gave the agency head the option of extending the contract for two additional one-year terms. After the initial one-year term ended, AID extended the contract twice, first for six months and then for an additional three-and-one-half weeks, ending January 25, 1987. During the six-month extension period, AID requested bids on a new contract for the services provided by Universal under its contract. On December 11, 1986, AID awarded the new contract to Daniel F. Young, Inc. (the "Young Contract"), a bidder that had lodged an unsuccessful protest against the original award to plaintiff. On Monday, December 22, 1986, plaintiff filed a protest of this award with the Comptroller General (Protest No. B-223905.2).

 Under the Competition in Contracting Act of 1984, a protested contract is ordinarily stayed pending resolution of the dispute. 31 U.S.C. § 3553(d)(1). The sole exception to this suspension occurs if "the head of the procuring activity responsible for the award of a contract . . . [makes] (A) . . . a written finding (i) that performance of the contract is in the best interests of the United States; or (ii) that urgent and compelling circumstances that significantly affect interests of the United States will not permit waiting for the decision of the Comptroller General . . ." Id. at § 3553(d)(2)(A).

 On January 16, 1987, Terrence J. McMahon, Director of the Office of Procurement of the Agency for International Development, certified that suspension of the Young Contract would not be in the best interests of the United States and that urgent and compelling circumstances significantly affecting United States interests mandate performance of the contract despite Universal's pending protest. On January 22, Universal filed suit in this Court, seeking to enjoin performance of the new contract and arguing that AID's "certification" did not meet the standards of § 3553 and should be set aside as contrary to law.

 On January 29, 1987, the Court held a hearing on the merits of this action and on plaintiff's motions for temporary and preliminary injunctive relief as well. The Court has carefully considered the arguments advanced in open court, the motion and opposition thereto, and all supporting memoranda and affidavits. In consequence, the Court has concluded that plaintiff has standing to bring this suit, that the decision not to suspend the Young Contract is reviewable, that CICA's stay provisions are constitutional, and that plaintiff is entitled to relief. *fn2"

 PLAINTIFF HAS STANDING TO BRING THIS SUIT.

 Plaintiff relies on two government contract cases for the proposition that it here has standing to sue. Those cases establish that an unsuccessful bidder has standing to challenge a contract award ( Scanwell Laboratories, Inc. v. Shaffer, 137 U.S. App. D.C. 371, 424 F.2d 859 (D.C. Cir. 1970)) and that a potential contractor who was denied a chance to compete for a contract may challenge the process in which the contract was awarded ( Aero Corp. v. Department of the Navy, 540 F. Supp. 180 (D.D.C. 1982)). Neither case directly extends standing to an unsuccessful bidder who challenges a failure to suspend a contract while an award protest is pending. That plaintiff's argument is not altogether convincing does not, however, decide the issue.

 Although perimeter issues involving standing may increasingly be murky, the central elements of the doctrine are clear. Standing encompasses both constitutional and statutory concerns. See Control Data Corp. v. Baldrige, 210 U.S. App. D.C. 170, 655 F.2d 283, 288 (D.C. Cir.), cert. denied, 454 U.S. 881, 102 S. Ct. 363, 70 L. Ed. 2d 190 (1981). First, in accordance with Article III's case or controversy requirement, a court must focus on "'whether the plaintiff has alleged such a personal stake in the outcome of the controversy' as to warrant his invocation of federal court jurisdiction and to justify exercise of the court's remedial powers on his behalf.'" Simon v. Eastern Kentucky Welfare Rights Organization, 426 U.S. 26, 38, 48 L. Ed. 2d 450, 96 S. Ct. 1917 (1976)(quoting Warth v. Seldin, 422 U.S. 490, 498-99, 45 L. Ed. 2d 343, 95 S. Ct. 2197 (1975)) (emphasis in original); see also, Valley Forge Christian College v. Americans United for Separation of Church and State, Inc., 454 U.S. 464, 70 L. Ed. 2d 700, 102 S. Ct. 752 (1982); Center for Auto Safety v. National Highway Traffic Safety Administration, 253 U.S. App. D.C. 336, 793 F.2d 1322, 1330 (D.C. Cir. 1986). In other and more oft-invoked words, plaintiff must demonstrate "injury-in-fact."

 In addition, a plaintiff must show that the interest he or she asserts is "at least . . . 'arguably within the zone of interests to be protected or regulated' by the statutory framework within which his claim arises." Simon, 426 U.S. at 39 n. 19 (quoting Association of Data Processing Service Organizations v. Camp, 397 U.S. 150, 153, 25 L. Ed. 2d 184, 90 S. Ct. 827 (1969). But, as the Supreme Court has recently made clear, arguable inclusion within a broad "zone of interests" is not enough; a court must also inquire as to whether congressional intent, divined from all possible sources, supports the particular plaintiff's claimed ability to challenge the particular action at issue. Clarke v. Securities Industry Association, 479 U.S. 36, , 55 U.S.L.W. 4011, 4014, 93 L. Ed. 2d 216, 107 S. Ct. 353 (1987).

 Plaintiff in this case passes both elements of the standing inquiry. First, plaintiff has asserted, and demonstrated, sufficient injury-in-fact. The evidence before the Court, as well as common sense, suggests that an interim contractor would have been appointed, if available, had the Young Contract been suspended. See Plaintiff's Exhibit D, July 3, 1985 Finding on Necessity of Continuation of Performance of Contract, at 2. By failing to suspend the Young Contract, defendant denied plaintiff at least the chance to compete for the interim contractor position. Moreover, since AID had once extended plaintiff's contract because Young could not begin performance, see Plaintiff's Statement of Points and Authorities at 5, it is plausible to conclude that a stay of the Young Contract would automatically have led to an extension of plaintiff's contract. Regardless of which is the more likely scenario, AID's failure to suspend the contract obviously caused plaintiff a specific injury "that fairly can be traced to the challenged action of the defendant" and thus passes the injury-in-fact test. Simon, 426 U.S. at 41; see also, Northwest Airlines v. Federal Aviation Administration, 254 U.S. App. D.C. 150, 795 F.2d 195, 201 (D.C. Cir. 1986); Block v. Meese, 253 U.S. App. D.C. 317, 793 F.2d 1303, 1309 (D.C. Cir.), cert. denied, 478 U.S. 1021, 106 S. Ct. 3335, 92 L. Ed. 2d 740 (1986).

 There is equally little doubt that plaintiff's interest in this action falls within the zone of interest that Congress intended to protect. The legislative history quite clearly establishes that the stay provisions of the Competition in Contracting Act were designed to prevent protested procurement contracts from becoming faits accomplis ; Congress intended to prevent such protests, in all but extraordinary circumstances, from becoming moot by virtue of contract performance. See Ameron Inc. v. United States Army Corps of Engineers, 787 F.2d 875, ...


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