Aeroplate Corp. v. United States

67 Fed. Cl. 4, 2005 U.S. Claims LEXIS 237, 2005 WL 1847237
United States Court of Federal Claims·Decided August 5, 2005·No. No. 05-736C·Published·Cited by 8 cases

Opinion

OPINION

CHRISTINE O.C. MILLER, Judge.

Before the court after argument are the parties’ cross-motions for judgment on the administrative record in this post-award bid protest. Plaintiff challenges the contracting official’s ability to reject a bid as nonresponsive based upon knowledge that the apparent low bidder, which submitted a facially valid bid bond, will not be able to secure the performance and payment bonds from the original surety post award. By order dated July 15, 2005, the court granted plaintiffs request for interim injunctive relief pending this ruling. Aeroplate Corp. v. United States, No. 05-736C, 2005 WL 1840044, 67 Fed.Cl. 1 (Fed.Cl. July 15, 2005) (order granting preliminary injunction). The court addresses the merits of the parties’ contentions in light of the administrative record before the court and supplements to the record filed pursuant to RCFC 56.1.

FACTUAL AND PROCEDURAL BACKGROUND1

On April 26, 2005, the U.S. Property and Fiscal Officer for California issued Solicitation No. W912LA-05-B-0001 (the “Solicitation”) for a project entitled Repair/Construct Maintenance Hanger and Shops (the “Project”) for the Air National Guard (“ANG”) located in Fresno, California. The Project involved general construction and remodeling work of the maintenance hanger and shops and associated sitework. Work included demolishing building components and walks, paving and landscaping, and constructing a building addition and remodeling of existing buildings, as well as site improvements, such as pavement, landscaping, and replacement of roofing systems. The Project required [6]*6contractors to supply all labor, services, and materials to complete the work.

The ANG issued the invitation for bids as an unrestricted solicitation for full and fair competition to award a firm fixed-price contract. Offerors were required to submit sealed offers on June 2, 2005. The Solicitation also required offerors to submit a bid guarantee in the form of bond issued by a surety, known as a “bid bond.”

Aeroplate Corporation (“plaintiff’) was one of five bidders whose bids were opened publicly on June 2, 2005. Plaintiff submitted a bid of approximately $6.5 million for base performance and $0.8 million on fifteen options. By letter dated June 29, 2005, ANG’s Chief, Purchasing and Contracting Division, Lt. Col. Eric H. McDonald, informed plaintiff that ANG was rejecting its bid as nonresponsive. The letter recites that the bid bond plaintiff submitted was “executed improperly” because plaintiff failed to affix its corporate seal on the front of the form number SF 24. It also states that the surety that issued the bond, Arch Insurance Company (“Arch Insurance”), had notified ANG after bid opening that it did not authorize a bid bond for the amount of the bid, but, rather, that it only authorized a bid for $5.0 million not to exceed $5.5 million. Lt. Col. McDonald’s June 29 letter cites Federal Acquisition Regulation (FAR) § 14.404-2, 48 C.F.R. § 14.404-2 (2004), and ANG’s inability to “definitively determine [if] the government would receive the penal amount [of the bid bond] if circumstances forced [it] to eollectf,] as the basis for the Guard’s rejection of plaintiffs bid as nonresponsive.” ANG awarded Contract No. W912LA-05-C-0007 to R.A. Burch Construction Co., Inc., on June 29, 2005.

Lt. Col. McDonald also wrote a letter, dated June 30, 2005, to plaintiff wherein he again stated that, although plaintiff was the “apparent low bidder,” ANG rejected its bid as nonresponsive. This letter, however, adds that plaintiff was not the actual low bidder. It states that ANG granted R.A. Burch’s request to change the amount of its bid from $77.1 million to $7.1 million due to a clerical error. It also states that ANG exercised CLIN 0016 as part of the initial award.

On July 8, 2005, plaintiff filed a complaint for declaratory and injunctive relief and application for temporary restraining order, along with a motion for preliminary injunctive relief. After a hearing held on July 14, 2005, this court granted plaintiffs application and motion for interim injunctive relief pending a ruling on the parties’ cross-motions for judgment on the administrative record, which were subject to an expedited briefing schedule. See Aeroplate Corp., No. 05-736C, 2005 WL 1840044, 67 Fed.Cl. 1.

Plaintiff thereafter moved for judgment on the administrative record, arguing that ANG’s conduct in rejecting plaintiffs bid as nonresponsive was arbitrary, capricious, and/or otherwise not in accordance with the law. Plaintiff seeks a permanent injunction prohibiting ANG from issuing a notice to proceed on the Project to any entity other than plaintiff.

Defendant cross-moved for judgment on the administrative record, arguing that the administrative record substantiates ANG’s decision as reasonable; that ANG determined plaintiff as nonresponsible, in any event; that the doctrine of unclean hands should disqualify plaintiff from the relief that it seeks, given plaintiffs acknowledgment that the surety was not going to provide the payment and performance bonds if the contract were awarded to plaintiff.

Plaintiffs reply brief filed on August 2, 2005, included a separate Motion To File a First Amended Complaint, which requests a stay of proceedings on the ground that the Small Business Administration (the “SBA”) has exclusive jurisdiction to make the determination whether plaintiff is a responsible bidder.

DISCUSSION

I. Jurisdiction

Plaintiff — ostensibly exercising the highest degree of candor — alerted the court to a potential jurisdictional deficiency in its own complaint. Plaintiff draws this court’s attention to a document filed by defendant as part of the administrative record. A June 29, 2005 revised Determination of Responsibility [7]*7authored by Warrant Officer Mike D. Mitchell, the Contract Specialist (whom defendant identifies as the bid opening officer and Contract Administrator), concludes that plaintiff “does not meet the responsibility requirements of FAR [§ ] 9.104-l(a) & (b); therefore they are not qualified to receive this award. I recommend they not be awarded this contract.”

Plaintiff informs the court that jurisdiction cannot be exercised over a bid protest filed by a contractor that is determined to be nonresponsible “until after the SBA has issued, or refused to issue, a [Certificate of Competency (‘COC’) ].” Pl.’s Br. filed Aug. 2, 2005, at 2. 13 C.F.R. § 125.5(a)(2) provides: “A contracting officer must, upon determining an apparent low small business offeror to be nonresponsible, refer that small business to SBA for a possible COC, even if the next low apparently responsible offeror is also a small business.” Plaintiff asserts that, at present, jurisdiction over the complaint is premature in that the court lacks jurisdiction either to pass on the merits of plaintiff’s challenge to ANG’s nonresponsive determination or to enter a judgment for defendant. Because plaintiff deems Contract Specialist Mitchell’s June 29, 2005 memorandum “a determination that [plaintiff] was not responsible[,]” plaintiff contends that ANG was required to refer the matter to the SBA. See FAR § 19.602-1.

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Aeroplate Corp. v. United States, 67 Fed. Cl. 4, 2005 U.S. Claims LEXIS 237, 2005 WL 1847237 (uscfc 2005).

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