The opinion of the court was delivered by: GASCH
Oliver Gasch, United States District Judge
On January 29, 1988, the Court entered an order temporarily restraining the United States from awarding any contract on bids received in response to solicitation number 7PRT-53157/K3/75B.
Plaintiff Abel Converting ("Abel") sought such relief upon allegations that the General Services Administration ("GSA") had failed to mail to Abel a copy of the solicitation in violation of the Competition in Contracting Act ("CICA"), 41 U.S.C.S. § 251 et seq. (Law. Co-op. 1987), the Federal Acquisition Regulations ("FAR"), 48 C.F.R. §§ 14.203-1 & 14.205 (1986), and the General Services Acquisition Regulations ("GSAR"), 48 C.F.R. § 514.203-1(b) (1986). Because GSA admitted that it did not send a solicitation to Abel the holder of the existing contract and could offer no explanation for the omission, the Court determined that Abel was likely to succeed on the merits of a later request for preliminary and permanent injunctive relief. Further, the harm to Abel flowing from a contract award to another was obvious and irreparable; Abel was precluded from bidding upon or winning the proposed two-year contract which represents a substantial portion of its entire business.
The case is now before the Court on Abel's motion for a preliminary injunction.
Since the hearing on Abel's application for a TRO, the litigative postures of GSA and Fort Howard have changed. Apparently in response to the January 29 order, Abel, GSA, and Fort Howard began negotiating to settle this case. Deliberation had proceeded almost to completion when defendant-intervenor Kimberly-Clark discovered that the proposed settlement provided for resolicitation of items as to which it had been the low bidder but award of other items to Fort Howard. While Kimberly-Clark was aware of this case from its inception, the proposed settlement provoked its request to intervene. Consequently, the settlement negotiations were frustrated, and GSA announced its intention to resolicit all thirty-three line items included in the previous solicitation.
While Abel and Kimberly-Clark are satisfied with GSA's new posture, Fort Howard objects strenuously. To prevent any resolicitation of the six items as to which it was low bidder, Fort Howard has applied for a temporary restraining order. Thus, the hearing on Abel's motion for a preliminary injunction also addressed Fort Howard's request for a TRO.
On July 27, 1987, GSA distributed solicitation number 7PRT-53157/K3/75B to invite bids for a two-year, firm fixed price requirements contract for six varieties of paper towel products in the class 7920 industrial category. Because the solicitation called for delivery to several different locations, a total of thirty-three line items appears in the solicitation. Although Abel is the incumbent contractor on twenty-eight of these line items, and requested on at least two occasions that its name be added to GSA's bidder mailing list ("BML"), and appears as an interested contractor on the BML,
Abel did not receive a copy of the July 27 solicitation. On August 28, 1987, GSA opened bids from the six companies that responded to the solicitation. Abel did not learn of the bid opening until September 1, 1987, and filed a protest with the General Accounting Office ("GAO") on September 8, 1987.
Prior to distributing solicitation 7PRT-53157/K3/75B, GSA published a synopsis of the solicitation in the Commerce Business Daily ("CBD")--a compendium of all federal government contracting opportunities. Abel is a subscriber to the CBD. In addition, the procurement was advertised by posting copies in GSA Regional Office Business Service Centers.
A tabulation of the submitted bids revealed that on fourteen items there was only one bidder, on seventeen items there were two bidders, and on two items there were three or more bidders. Kimberly-Clark was the sole bidder on all fourteen items as to which no other bids were received and was low bidder on six other items. Fort Howard was also low bidder on six items. The approximate value of the fourteen items is $ 1,500,000, and the entire solicitation would generate almost $ 9,700,000 in revenue.
Relying, in part, on the absence of any competing bids on fourteen items, the GAO sustained Abel's protest and recommended that bids for these items be resolicited. Abel Converting Co., GAO No. B-229065 (Jan. 15, 1988). Noting GSA's violation of procurement regulations, the GAO concluded that one bid does not satisfy the "full and open competition" requirements of CICA. 41 U.S.C.S. §§ 253 & 403(7). The GAO also rejected GSA's contention that publication in the CBD constitutes constructive notice of a solicitation.
GSA acknowledged the recommendation and announced that it would follow the GAO's advice, despite the conclusion of its contracting officer that all bid prices were reasonable. Dissatisfied with this partial relief, Abel initiated the instant action for injunctive and declaratory relief and requested a temporary restraining order against award of any contracts. At the hearing on Abel's motion for a TRO, Fort Howard was permitted to intervene.
Prior to consideration of the merits of the requests for injunctive relief, the Court notes that Kimberly-Clark's motion to intervene was granted at the hearing. While the company was dilatory in entering the fray, its presence does not impede the Court's ability to address in a timely manner the issues raised; Kimberly-Clark agrees with GSA and Abel that all thirty-three items should be resolicited. Furthermore, by intervening, Kimberly-Clark becomes bound by the decisions of this Court, thereby accomplishing a more complete resolution of the dispute.
The constitutional premise for the requirement of standing is the "case or controversy" provision of article III. The requirement is satisfied in this case if the plaintiff can "show that [it] has suffered injury as a result of the defendant's putatively illegal conduct and that [its] injury both may be traced to the challenged conduct and is likely to be redressed by the judicial relief he seeks." National Maritime Union of America AFL-CIO v. Commander, Military Sealift Command, 263 U.S. App. D.C. 248, 824 F.2d 1228, 1234 (D.C. Cir. 1987).
Challenging Abel's standing, Fort Howard contends that an injunction requiring GSA to resolicit the paper towel contracts is not likely to redress Abel's injury because Abel is unlikely to win award of the items as to which Fort Howard is presently the low bidder.
As the Court clearly articulated at the preliminary injunction hearing, the injury from which Abel suffers is not failure to underbid Fort Howard. Instead, the injury is the denial of an opportunity to bid at all. Clearly, GSA's failure to follow its regulations caused this injury, and an order by this Court directing resolicitation would redress that injury. Abel has constitutional standing to seek relief from GSA's failure to mail it a solicitation.
As a matter of judicial prudence, standing to challenge a government contracting decision requires (1) an allegation of injury in fact, (2) a claim that the agency's action "arguably" caused injury intended to be prevented by the statute in question, and (3) the absence of congressional intent to withhold judicial review. Gull Airborne Instruments Inc. v. Weinberger, 224 U.S. App. D.C. 272, 694 F.2d 838 (D.C. Cir. 1982) (citing Control Data Corp. v. Baldridge, 655 F.2d 283, 288-89 (D.C. Cir.), cert. denied, 454 U.S. 881, 70 L. Ed. 2d 190, 102 S. Ct. 363 (1981)). Satisfaction of the first factor is clear from the preceding discussion, and there is no clear and convincing congressional intent to withhold judicial review. Furthermore, because CICA requires that "all responsible sources [be] permitted to submit sealed bids or competitive proposals," 41 U.S.C. § 403(7), GSA's failure to send a solicitation to Abel is "arguably" within the zone of interests intended to be protected by CICA. Thus, prudential considerations permit Abel's access to this judicial forum.
Finally, Fort Howard insists that as a nonbidder, Abel is precluded from challenging a government procurement decision. Citing Scanwell Laboratories, Inc. v. Shaffer, 137 U.S. App. D.C. 371, 424 F.2d 859 (D.C. Cir. 1970), Fort Howard argues that only bidders are within the zone of interest to be protected by CICA. However, Fort Howard ignores the basis for the standing of bidders -- the "right to a legally valid procurement process." National Maritime, 824 F.2d at 1237. In National Maritime, the court noted that the right is founded in the "mandatory language" of federal procurement statutes and the "contractual invitation to bid embodied in the solicitation." Id. (citing 10 U.S.C. §§ 2304, 2305 (Supp. III 1985)).
While Abel enjoys no rights stemming from the "contractual invitation to bid" -- an invitation that GSA negligently failed to send, the "mandatory language" of federal procurement statutes applies equally in the case at bar. Moreover, as discussed below, Abel, as an incumbent contractor, has a right to expect that it will be solicited for follow-on contracts. See United States v. Thorson Co., 806 F.2d 1061, 1065 (Fed. Cir. 1986). Thus, Abel's standing as a nonbidder is as compelling under the circumstances of this case as the standing of a bidder in the circumstances faced by the Scanwell court.
B. GSA's Obligations Under CICA, the FAR, and the GSAR
Following a careful review of federal government procurment procedures, Congress determined that at the time a majority of such procurement was achieved by noncompetitive procedures to the detriment of the government. S. Rep. No. 98-50, 98th Cong., 1st Sess. 7 (1984) [hereinafter "Senate Report"]. To correct this imbalance, Congress enacted CICA, Pub. L. No. 98-369, Division B, Title VII, 98 Stat. 1175 (1984), and established a statutory preference for the use of competitive procedures. Senate Report at 1. While Congress recognized the benefits to the government derived from competitive procurement, it commented that "possibly the most important . . . benefit of competition is its inherent ...