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GEO-CON, INC. v. UNITED STATES

May 31, 1994

Geo-Con, Inc., Plaintiff,
v.
United States of America, et al., Defendants.



The opinion of the court was delivered by: STANLEY SPORKIN

 This is an action by a disappointed bidder arising from plaintiff Geo-Con's non-selection for a solicitation issued by the Army Corps of Engineers. Plaintiff was the low bidder but was not selected after a determination of nonresponsibility. Pursuant to the Administrative Procedure Act ("APA"), 5 U.S.C. ยง 701 et seq., Plaintiff challenges the Army Corps of Engineers' nonresponsibility determination and the decision to not award the contract to Geo-Con as arbitrary and capricious, an abuse of discretion, and not in accordance with law.

 The matter comes before the Court on plaintiff's motion for a preliminary injunction and defendants' motion for summary judgment. The Court has considered the motions, all opposition thereto, and heard argument by the parties. Plaintiff's motion for a preliminary injunction will be denied. Defendant's motion for summary judgment will be granted.

 The Undisputed Facts

 On December 7, 1993 the Army Corps of Engineers, Kansas City District issued solicitation DACW41-94-0020 for the construction of a project known as the "Lang Superfund Site, Groundwater Redemption System, Pemberton Township, New Jersey." The solicitation described the work to be performed as "the construction of a groundwater extraction, treatment, and reinjection system for remediating contaminated groundwater on the site." Complaint P 9. The solicitation invited sealed bids on a firm fixed-price basis. Applicable acquisition procedures provided that the contract was to be awarded to the lowest responsive and responsible bidder.

 Twelve firms bid on the solicitation. The bid opening was held on February 10, 1994. Geo-Con, the plaintiff in this action, was the lowest bidder at $ 4,995,825.00. R.E. Wright was second lowest at $ 5,401,653.00. The government estimate had been $ 7,351,980.00. The day of the bid opening Geo-Con was advised that it was the apparent low bidder and was asked to submit certain information in support of a pre-award survey. On February 11, 1994, Geo-Con was asked to submit additional information required by the solicitation. Geo-Con sent the requested pre-award survey information on February 14 and the additional solicitation information on February 17, 1994.

 On February 25, 1994, the Corps of Engineers' Project Engineer, David Ohsiek, wrote a memorandum for the record setting forth his pre-award survey of Geo-Con as a prospective contractor. This memorandum contained positive information about Geo-Con's financial and organizational resources. In addition, the memorandum noted that Geo-Con had completed contracts for the Corps of Engineers for the construction of slurry trenches, and for the removal of underground storage tanks, receiving satisfactory performance evaluations.

 The memorandum also contained negative information. One of Geo-Con's references for the Lang bid was the Weyerhauser Company, for whom Geo-Con had completed 95 percent of the work on a $ 5 million contract to develop a system for tapping groundwater in the area of an Arkansas papermill. Weyerhauser's representative for this contract was contacted by the Corps' Project Engineer for a recommendation concerning Geo-Con's work. As the Project Engineer wrote in the memorandum, the Weyerhauser official gave a negative reference:

 
[Weyerhauser's representative] stated several of the pumps and pipes in the system had become clogged with sand and silt from the ground in which the trenches were excavated. Geo-Con has refused to correct the problems under warranty and will do nothing unless Weyerhauser will pay them additional money. Weyerhauser is very dissatisfied and is about to begin legal litigation with Geo-Con.

 Administrative Record, Ex. 3, P 6.a.

 The Project Engineer also detailed Geo-Con's prior work on a $ 4 million contract in 1991 for the Corps of Engineers at the Bruin Lagoon Superfund Project in Pennsylvania. The primary work of that project was to stabilize hazardous sludge materials in an industrial waste pond. A smaller part of the work was the decontamination and disposal of residual water in the pond. The residual water contained dangerous acid and sulphur dioxide which were to be removed via a temporary treatment plant. Geo-Con was then to test the water for purity before dumping it in a nearby creek. Geo-Con also had responsibility for preventing hazardous amounts of the acid and sulfur dioxide from contaminating the air at the site. As related in the Lang pre-award survey memorandum, Geo-Con's performance was unsatisfactory at the Bruin Lagoon Project:

 
According to the Corp's Project Engineer, Geo-Con had little, if any, experience in this kind of work and consequently bid too low for the [Bruin Lagoon] contract. In order to keep the work moving and increase contract earnings, Geo-Con's Site Superintendent and Site Safety and Health Officer falsified daily reports on water and air purity. They allowed contaminated water to be dumped into the creek, and toxic gases to be released into the air. Residents of houses near the work site were endangered by these irresponsible acts. The superintendent also inflated his payment estimates for water that had been decontaminated, by pumping air through the meter which measured water.
 
Geo-Con and two of their employees were indicted for fraud after investigation by the U.S. Army CID and the Department of Justice. An agreement was reached with Geo-Con whereby they paid $ 300 thousand restitution to the U.S. Government. They were restricted from receiving one future contract with the U.S. Government, and the indictment against them was dismissed. . . . Geo-Con's Site Superintendent was convicted and sentenced to one year in prison and several months of house arrest; the Safety and Health Officer was convicted and sentenced to five months house arrest.

 Administrative Record, Ex. 3 P 7a-b. Project Engineer Oshiek concluded that Geo-Con's failure on the Bruin Lagoon Project did not bode well for Geo-Con's success on the Lang Project, because the two projects involved similar work:

 
Geo-Con has no previous satisfactory experience in the type of work that is required for the Lang Superfund Site Groundwater Treatment. Their only similar experience was in the Bruin Lagoon Superfund Project, for which the Corps of Engineers rated their performance unsatisfactory. . . . The Corps Project Engineer has stated that the Geo-Con organization was implicated all the way to the ...

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