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February 28, 1990


John Garrett Penn, United States District Judge.

The opinion of the court was delivered by: PENN


 The plaintiff, Ace-Federal Reporters, Inc. (Ace-Federal), filed this action for declaratory and injunctive relief to enjoin the Federal Energy Regulatory Commission (FERC) from awarding a contract for stenographic services to any entity other than the plaintiff, and if a contract has already been awarded, to enjoin FERC from implementing the performance of that contract by any entity other than the plaintiff.

 The case comes before the Court on plaintiff's motion for a preliminary injunction. The motion is opposed by FERC and Ann Riley & Associates, Ltd. (Ann Riley), a defendant-intervenor who was allowed to intervene in this action on February 22, 1990. Ann Riley has filed an opposition to the motion as well as a motion for summary judgment, and FERC has filed a motion for summary judgment and relies upon that motion as its opposition to the motion for a preliminary injunction. FERC's motion for summary judgment was filed on February 22, 1990 and Ann Riley's motion was filed on February 23, 1990. Neither motion is ripe. The Court heard arguments on the motion for a preliminary injunction on February 26, 1990.


 Very briefly, the underlying facts are as follows. FERC, acting through its Division of Procurement, issued Solicitation No. DE-FB89-RC-00001 (the "First Solicitation") for stenographic services on August 25, 1989. The First Solicitation was issued as an Invitation for Bids (IFB) to provide stenographic reporting services at FERC for one year, from October 1, 1989 through September 30, 1990, with four one-year option periods thereafter. The stenographic services contractor receives revenue from the sale of transcripts to the public. Such sales fully defray the cost of performance and FERC has not made any payment for stenographic services in, at least, the last eight years. Plaintiff represents that FERC expected that the First Solicitation would result in "no charge" bids, and in fact four of the six bids from five vendors responding to the First Solicitation offered "no charge" to FERC. Plaintiff submitted two bids, one bid offering to make payments in the amount of $.05 per page for the life of the contract, this bid being a so-called "bonus bid" and the alternative bid was one offering "no charge". Plaintiff alleges that its "bonus bid" offered the price most advantageous to the government and that as a result plaintiff expected to receive the award. Instead, the Contracting Officer cancelled the First Solicitation by issuing Amendment No. 2 on September 27, 1989. The amendment stated that the First Solicitation was "cancelled in its entirety due to ambiguities in the Invitation for Bids."

 Plaintiff contends that FERC's determination to cancel the First Solicitation lacked any compelling justification and did not meet any of the criteria set forth in the applicable statutes and regulations governing the cancellation of a solicitation. It asserts that the action cancelling the solicitation was arbitrary and capricious and an abuse of discretion. On October 12, 1989, the plaintiff filed a timely protest with the General Accounting Office (GAO) objecting to the cancellation of the First Solicitation. GAO denied the protest on February 2, 1990.

 On November 30, 1989, while the GAO protest was still pending, FERC issued a Second Solicitation for the same services, Solicitation No. DE-FB90-RC-00009 (the "Second Solicitation"). The plaintiff contends that the Second Solicitation did not prohibit bids offering payments to the Government and specifically encouraged creative alternatives through its Provision L.12. Prior to amendment, Provision L.12 read: "Alternate bids submitted within the scope of this solicitation will be considered." By Amendment No. 1, plaintiff alleges that FERC changed its position and refused to consider "bonus bids" offering payments to the government. That amendment reads as follows:

Under Section L, Instructions Conditions and Notices to Offerors, page 63 of the basic solicitation, Item L.12, Alternate Bids, add to the heading " and Bonus Bids ". At the end of the sentence under the heading add the following new sentence: "Bonus bids, including offers of additional sums to be paid to the Government, will not be considered."

 Plaintiff thereupon filed a second protest with the GAO based upon its contention that FERC violated the statutory and public policy requirements in that it included provisions in the Second Solicitation that among other things refused to consider bonus bids. That protest is still pending.

 Amendment No. 4 to the Second Solicitation was published and plaintiff contends that Amendment No. 4 removed the prohibition against submitting bonus bids. Amendment No. 4 reads as follows:

The purpose of this amendment is to delete provision L.12, entitled Alternative Bids, and substitute the provisions L.12, entitled Alternate Proposal Information. In addition, this amendment will incorporate 90 days in Block 12 of the Standard Form 33, which was inadvertently left out. Accordingly.
1. Provision L.12 shall read:
L.12 - ALTERNATE PROPOSAL INFORMATION, Alternate proposals are not solicited, are not desired, ...

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