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SARATOGA DEV. CORP. v. UNITED STATES

October 31, 1991

SARATOGA DEVELOPMENT CORPORATION, Plaintiff,
v.
UNITED STATES OF AMERICA, et al., Defendants


John H. Pratt, United States District Judge.


The opinion of the court was delivered by: PRATT

Before the Court are plaintiff Saratoga Development Corporation's motion for partial summary judgment, defendant United States' motion for summary judgment, their respective replies, and defendant-intervenor Delta Partnership's opposition to plaintiff's motion.

 I.

 The parties do not dispute the following facts. This is a "disappointed bidder" case in which plaintiff Saratoga Development Corporation ("Saratoga") challenges the decision of the Pennsylvania Avenue Development Corporation ("PADC") selecting Delta Partnership ("Delta") to develop the Federal Triangle site.

 The PADC is a wholly-owned government corporation created by Congress. 40 U.S.C. §§ 871-85. Its mandate is to ensure the suitable development, maintenance, and use of Pennsylvania Avenue and the area adjacent to the Avenue between the Capitol and the White House. The Federal Triangle Development Act, 40 U.S.C. § 1101-09, added the Federal Triangle site to the PADC development area and directed the PADC to prepare a proposal for development of that site in consultation with the General Services Administration ("GSA") and the International Cultural and Trade Center Commission ("ICTCC"). The Act authorized the construction on the Federal Triangle site of a new federal office building, second in size only to the Pentagon, to house an International Cultural and Trade Center ("ICTC") and to consolidate a number of agencies currently scattered in various locations throughout the Washington Metropolitan area. In addition, the Federal Triangle Project is expected to house exhibits, performing arts theatres, retail space, and conference areas.

 On October 18, 1989, the PADC Board convened to select the development team for the Federal Triangle Project. It initially met in executive session with its staff, the Mayor of the District of Columbia, the Administrator of the GSA, and the Chairman of the ICTCC. After the executive session was concluded, the Board opened its meeting to the public. Before it proceeded to vote on which proposal to select, however, the Board adopted two resolutions concerning the Federal Triangle Project. First, a resolution eliminating the financial experience, resources, and commitment criteria from the Prospectus was proposed. *fn1" AR, tab 16. Without discussion, the resolution was adopted. AR, tab 40 at 126.

 The second resolution which the Board considered before the selection vote concerned affirmative action. The resolution called for the following: (1) incorporation into the development agreement with the PADC of documented evidence that the selected developer will reach all affirmative action goals required by the Prospectus; (2) the PADC's encouragement of the selected developer to enhance minority participation by recruiting minorities listed in unsuccessful proposals; (3) an agreement for so-called "first source" employment with the District of Columbia Department of Employment Services; and (4) the establishment of a quarterly affirmative action reporting system. AR, tab 17. The resolution was passed unanimously. AR, tab 40 at 130.

 The Board then proceeded to the vote on whom to select for the Federal Triangle Project. After brief discussion, the Board, voting by secret ballot, selected the defendant-intervenor Delta. AR, tab 18. The tally was Delta, seven votes; BPT, three votes; Great Plaza, two votes; and Prentiss, one vote. *fn2" AR, tab 40 at 142. Delta having received the necessary majority, the Board then formally adopted a resolution selecting it as the developer for the Federal Triangle Project. AR, tab 18.

 Ultimately, on March 1, 1990, Saratoga filed this cause of action seeking judicial review of the PADC's actions in connection with the award of the Federal Triangle Project.

 II.

 As a preliminary matter, defendants raise numerous procedural defenses. Defendants assert that plaintiff lacks constitutional and prudential standing, that plaintiff has failed to join an indispensable party, that the complaint is barred by laches, and that the PADC's action in this case is unreviewable as a matter of law. We will discuss these in turn.

 A. Constitutional Standing

 Defendants assert that plaintiff lacks constitutional standing because it was not a bidder in this instance. While defendants admit that it is well-settled that a disappointed bidder who can show injury in fact can have standing to challenge the award of a government contract, Scanwell Laboratories, Inc. v. Shaffer, 137 App. D.C. 371, 424 F.2d 859 (D.C. Cir. 1970), defendants analogize the instant dispute to the facts of Control Data Corp. v. Baldrige, 210 App. D.C. 170, 655 F.2d 283, 292 (D.C. Cir.), cert. denied, 454 U.S. 881, 70 L. Ed. 2d 190 , 102 S. Ct. 363 (1981), where the plaintiff was not a bidder.

 Defendants argue that plaintiff in this cause of action does not satisfy the test for constitutional standing because plaintiff did not submit a bid for the development. Instead, plaintiff was merely half of a team (along with James Crozier & Company) that submitted a bid as co-developers. Control Data does not so limit Scanwell Laboratories. In Control Data, plaintiff was not part of a bid team; it was a non-bidder claiming the right to challenge rules promulgated by the Secretary of Commerce. Indeed, Control Data was not a "disappointed bidder" case at all because there was no contract at issue being bid upon. Saratoga, unlike the plaintiff in Control Data, was a bidder. Control Data does not stand for the proposition that every member of a bid team must be a party to an action for constitutional standing to exist, nor have defendants cited to any cases which so hold. Plaintiff here has constitutional standing as a "disappointed bidder" under Scanwell Laboratories.

 B. Prudential Standing

 Defendants also argue that plaintiff lacks standing on prudential grounds because it was not within the "zone of active consideration." National Fed'n of Fed. Employees v. Cheney, 280 App. D.C. 94, 883 F.2d 1038 (D.C. Cir. 1989), cert. denied, 110 L. Ed. 2d 662, 110 S. Ct. 3214 (1990). The court in National Federation stated that

 Not every bidder in a solicitation may assert disappointed bidder standing, otherwise nuisance suits could handicap the procurement system. Rather, standing is conferred only to those bidders who are "'within the zone of active consideration' for the bid's award."

 Id. at 1053 (quoting National Maritime Union of Am. v. Commander, Military Sealift Command, 263 App. D.C. 248, 824 F.2d 1228, 1237-38 n.12 (D.C. Cir. 1987); other citations omitted).

 The language of National Maritime makes it apparent that this doctrine should be invoked sparingly. It is designed to weed out those cases where the "bidder . . . believed that it would have no significant likelihood of obtaining the bid," but nonetheless brings suit "for its nuisance value." National Maritime, 824 F.2d at 1237 n.12. As the Federal Circuit stated in an opinion cited to approvingly in National Maritime, a disappointed bidder need not show that the activity it complains about was the but for cause of its failure to procure the contract, only that it had a "substantial chance" of receiving the award. CACI, Inc.-Federal v. United States, 719 F.2d 1567, 1574 (Fed. Cir. 1983). In CACI, the Court found that the plaintiff was within the zone of active consideration (having satisfied the "substantial chance" test) where it was one of six companies that qualified to submit a best and final offer, and its score on the offer placed it second to the awardee. Id. at 1575.

 In determining if a bidder falls within the zone of active consideration, a court is not concerned with which bidder had the "best" proposal, or who "should" have won the contract. Such determinations are best left to the expertise of agencies like the PADC. The question when deciding whether to invoke this prudential standing doctrine is merely whether the ...


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