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John C. Grimberg Co. v. United States

July 27, 1999

JOHN C. GRIMBERG COMPANY, INC., PLAINTIFF-APPELLANT,
v.
UNITED STATES, DEFENDANT-APPELLEE.



Before Newman, Plager, and Clevenger, Circuit Judges.

The opinion of the court was delivered by: Clevenger, Circuit Judge.

Appealed from: United States Court of Federal Claims Senior Judge Lawrence S. Margolis

Appellant John C. Grimberg Company, Inc. ("Grimberg") appeals from the decision by the United States Court of Federal Claims granting the government's motion for summary judgment in Grimberg's pre-award bid protest dispute. See John C. Grimberg Co. v. United States, No. 98-338C (Fed. Cl. July 20, 1998). Because we conclude that the United States Department of Agriculture's determination that Grimberg was not a responsible bidder was not arbitrary, capricious, an abuse of discretion, or otherwise not in accord with law, we affirm.

I.

In November 1997, the United States Department of Agriculture ("USDA" or "agency") published in The Commerce Business Daily its intent to renovate the USDA South Building in Washington, D.C. On December 1, the USDA issued a solicitation for sealed bids to renovate office space and building plant areas in one wing of the building (the "South Wing project"). Section L.7 of the solicitation, titled "Competency of the Bidder," announced four special standards that the USDA would use in determining whether a potential awardee was a responsible bidder. That section stated that to be eligible for the contract, a bidder had to meet four minimum requirements: (1) the bidder must have completed three projects within the past six years involving the restoration or renovation of building interiors and exteriors of historic properties that were "of the size and complexity of the proposed project"; (2) the bidder must demonstrate that it exercised project management skills on its previous projects; (3) the bidder must assign at least one individual to the South Wing project who had five years of project management experience on renovation projects; and (4) the bidder must have a plan that meets the project schedule. Solicitation No. IFB-00-98-B-808 ¶ L.7, Joint Appendix at 28 (emphasis added). The solicitation did not explicitly define the phrase "of the size and complexity of the proposed project," although the solicitation did state that the estimated price of the project was greater than $10 million and that the total construction area of the project was approximately 130,000 sq-ft. See id. ¶ 10, Joint Appendix at 24; Commerce Business Daily (Nov. 13, 1997).

Grimberg submitted a bid with an aggregate bid price of $14,326,170. On January 21, 1998, the USDA notified Grimberg by letter that it was the apparent low bidder on the project. The letter requested that Grimberg promptly submit information documenting its competency to undertake the project, as set forth in the bid solicitation. In response, Grimberg submitted its responsibility package on January 27, which included a list of fourteen projects undertaken over the prior six years that Grimberg considered comparable in size and complexity to the South Wing project. Grimberg provided detailed descriptions for four of these projects.

In order to determine whether Grimberg's detailed submissions on its four prior projects demonstrated its responsibility for the project under solicitation, a USDA evaluation committee developed a Building Comparison Chart (the "Comparison Chart") to compare the size and complexity of Grimberg's prior projects with the South Wing project, based on the following eleven criteria: (1) size of the project, (2) number of stories, (3) construction cost, (4) age of the building, (5) building occupancy or surrounding-area occupancy by tenants, (6) existing infrastructure/coordinate with the rest/other buildings, (7) historic preservation, (8) mechanical, electrical, and plumbing work, (9) multiple elevator restoration, (10) construction duration, and (11) multiple restroom renovation. See Joint Appendix at 8-9. The Comparison Chart was not disclosed to Grimberg before or during the USDA's responsibility evaluation. Grimberg also asserts, without dispute from the government, that the chart was not prepared until after it had submitted its responsibility package.

After analyzing Grimberg's four detailed project descriptions with the aid of the Building Comparison Chart, the evaluation committee determined that only one of the four projects was of the size and complexity of the proposed South Wing project and therefore that Grimberg had failed to satisfy the first special standard enunciated in section L.7 of the solicitation. In addition, the evaluation committee found that although Grimberg met the second special standard, it failed to meet both the third and fourth special standards. The contracting officer therefore determined that Grimberg was not a responsible bidder.

Grimberg filed a pre-award bid protest suit in the United States Court of Federal Claims. Upon cross motions for summary judgment, the trial court ruled in favor of the government, holding that Grimberg failed the "size and complexity" and the "project management experience" special standards. Grimberg appeals to this court, claiming first that the trial court erred by failing to find that the Comparison Chart criteria were "special standards" of responsibility under the Federal Acquisition Regulations ("FARs"), and accordingly should have been identified as such in the solicitation. See 48 C.F.R. § 9.104-2 (1998). Second, Grimberg asserts that the court erred by finding that the USDA did not act illegally when it chose not to seek additional information from Grimberg before determining that Grimberg was non-responsible on the "size and complexity" special standard, and when it decided not to afford Grimberg the opportunity to cure its defective schedule or respond to the concerns about its proposed project manager, which had caused it to fail the "project management experience" special standard. We have jurisdiction pursuant to 28 U.S.C. § 1295(a)(3).

II.

We review decisions by the Court of Federal Claims for errors of law and clearly erroneous findings of fact. See, e.g., Yancey v. United States, 915 F.2d 1534, 1537 (Fed. Cir. 1990). The USDA's determination that Grimberg was not responsible must be upheld unless it is "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law." 5 U.S.C. § 706 (1994); see 28 U.S.C. § 1491(b)(4) (1994); Keco Indus., Inc. v. United States, 492 F.2d 1200, 1203 (Ct. Cl. 1974).

A.

Grimberg first argues that the eleven factors contained in the Comparison Chart were special standards required to be provided to Grimberg and other bidders in the solicitation. See 48 C.F.R. § 9.104-2(a) (1998) (stating that any special standards for responsibility "shall be set forth in the solicitation (and so identified) and shall apply to all offerors"). Had it known of these special criteria, Grimberg argues, it could have more adequately addressed the evaluation committee's concerns in its responsibility package, or it might have chosen not to submit a bid at all. Grimberg asserts that, by withholding the responsibility criteria from Grimberg until after if had submitted its responsibility data, the USDA effectively engaged in an illegal process in which it first solicited a round of bids based on price, and then decided whether it wanted to accept the low bidder (Grimberg) for the contract. The government responds that the eleven criteria are not special standards but merely factors implicit in the "size and complexity" special standard announced in paragraph L.7 of the solicitation.

Grimberg correctly asserts that the agency may not rely on criteria used to evaluate responsibility as a means for circumventing the sealed bid procedure. In government procurement practice, sealed bidding must be used unless one of four statutory exceptions is met. See 10 U.S.C. § 2304(a)(2) (1994); 41 U.S.C. § 253(a)(2) (1994). The purpose of sealed bidding is to obtain the most advantageous contract for the government; this goal is achieved by requiring the government to define its needs with precision, conducting an open competition to maximize competition, opening bids publicly, and preventing favoritism by reducing the discretion of government employees to a minimum. See, ...


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