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GRIGSBY BRANDFORD & CO. v. UNITED STATES

November 28, 1994

GRIGSBY BRANDFORD & Co., Inc. and A.H. WILLIAMS & Co., Inc., Plaintiffs,
v.
UNITED STATES OF AMERICA, and RICHARD W. RILEY, Secretary of Education Defendants.


GLADYS KESSLER, United States District Judge


The opinion of the court was delivered by: KESSLER

I. Introduction and Procedural History

 Plaintiffs, joint venture partners Grigsby Brandford and Company, Inc. and A.H. Williams and Company, Inc. ("GB/AHW"), have brought the instant action challenging the Secretary of Education's selection of the firm of Pryor McClendon Counts & Co., Inc. ("PMC") as the Designated Bonding Authority ("DBA") for the Historically Black Colleges and Universities ("HBCU") Capital Financing Program. Plaintiffs claim that the Secretary's decision violates the Administrative Procedure Act ("APA") because it was arbitrary and capricious and an abuse of discretion. Plaintiffs also allege that the decision, and the procedures by which it was ultimately reached, violated the Competition in Contracting Act ("CICA"), the Federal Acquisition Regulations ("FAR"), and the Federal Advisory Committee Act ("FACA").

 On September 19, 1994, Plaintiffs filed Notions for a Temporary Restraining Order and a Preliminary Injunction precluding Defendants the United States of America and the Secretary of Education from implementing the September 2, 1994 selection of PMC as the DBA for the HBCU Capital Financing Program. In particular, Plaintiffs sought to enjoin the award of the Agreement to Insure to PMC, which is the contract actually establishing the DBA. Plaintiffs also requested an injunction requiring the selection of GB/AHW as the DBA and the award of the Agreement to Insure to GB/AHW, or, in the alternative, requiring a reconsideration and selection of the DBA among the three finalists. Who were Plaintiffs, PMC, and M.R. Beal.

 During a hearing before this Court on September 20, 1994, Defendants expressed their willingness to defer signing the Agreement to Insure, and, consequently, Plaintiffs withdrew their Motion for a Temporary Restraining Order without prejudice. On September 27, 1994, the parties submitted a joint briefing schedule, which set the Motion for Preliminary Injunction for bearing on October 31, 1994, and consolidated the hearing on the Preliminary Injunction with the final hearing on the merits of this case. This Court approved the parties' proposed schedule on October 4, 1994. On October 7, 1994, Defendants filed their Motion for Summary Judgment, and on October 17, 1994, Plaintiffs filed their Cross Motion for Summary Judgment. On October 31, 1994, counsel presented lengthy, and helpful, oral arguments. At that time, Defendants agreed that they would take no further action relating to the instant case until issuance of a decision on the pending Motions.

 Accordingly, this matter is now before the Court upon Plaintiffs' Motion for Preliminary Injunction (2-2); Defendants' Motion for Summary Judgment (15-1); and Plaintiffs' Motion for Summary Judgment (27-1).

 For the reasons stated below, Plaintiffs' Motions for Preliminary Injunction and for Summary Judgment shall be denied, and Defendants' Motion for Summary Judgment shall be granted.

 II. Statement of Facts1

 Congress enacted the HBCU Capital Financing Program in 1992 in recognition of the fact that "the Nation's historically Black colleges and universities have played a prominent role in American history and have an unparalleled record of fostering the development of African American youth." 20 U.S.C. § 1132(c)(2). The facilities of these institutions have, however, "suffered from neglect, deferred maintenance and are in need of capital improvements." 20 U.S.C. § 1132c(3). Congress also found that these institutions "often lack access to the sources of funding necessary to undertake the necessary capital improvements through borrowing and bond financing." 20 U.S.C., § 1132c(4). Congress determined that Federal assistance was needed to facilitate capital improvements and enable these institutions to "continue and expand their educational mission and enhance their role in American higher education." 20 U.S.C. § 1132c(6).

 The HBCU Capital Financing Program creates a designated bonding authority (DBA), chosen by the Secretary, to issue bonds and lend the proceeds to eligible institutions for capital improvements projects. Repayment of the bonds will be backed by the full faith and credit of the United States. 20 U.S.C. § 1132c-2. Congress has allocated substantial power and responsibility to the DBA, clearly envisioning that the DBA will play the central role in the development and execution of the HBCU Capital Financing Program. 20 U.S.C. § 1132c-2(b).

 To begin the process of selecting a designated bonding authority, the Department of Education published two separate solicitation notices in The Bond Buyer, a trade publication directed to professionals and others in the bond market, informing those interested that it expected to issue a request for proposals from parties interested in serving as the DBA. Administrative Record (hereinafter, "A.R.") 10001, 10002. The Department asked interested parties to submit requests for the expected solicitation package. Id. The Department received in excess of 60 requests for the solicitation package. A.R. 10003-89. Secretary of Education Richard W. Riley delegated the responsibility for selecting the DBA to David Longanecker, the Assistant Secretary for Postsecondary Education. By letter dated May 31, 1994 the Department sent the solicitation package to the various requesting parties, including Plaintiffs. A.R. 10009, 10090.

 The solicitation package provided a description of the HBCU Capital Financing Program, the services that the DBA would be expected to perform, the required contents of a proposal, and the selection criteria. A.R. 10090-99. The package informed proposers that "the Secretary will select the DBA based on the selection criteria ...


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