Arrowhead Metals, Ltd. v. United States

33 Cont. Cas. Fed. 74,026, 8 Cl. Ct. 703, 1985 U.S. Claims LEXIS 917
CourtUnited States Court of Claims
DecidedSeptember 19, 1985
DocketNo. 291-85C
StatusPublished
Cited by19 cases

This text of 33 Cont. Cas. Fed. 74,026 (Arrowhead Metals, Ltd. v. United States) is published on Counsel Stack Legal Research, covering United States Court of Claims primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Arrowhead Metals, Ltd. v. United States, 33 Cont. Cas. Fed. 74,026, 8 Cl. Ct. 703, 1985 U.S. Claims LEXIS 917 (cc 1985).

Opinion

OPINION

LYDON, Judge:

This contract case involves the cancellation of a solicitation by the Department of the Treasury, United States Mint (Mint) subsequent to the opening of sealed bids. Plaintiff, claiming it was the low bidder at bid opening, challenges the legal viability of the cancellation action by the Mint. Plaintiff has filed a complaint for declaratory and injunctive relief and concurrently filed a motion for a preliminary injunction. Plaintiff requests the court: to declare the cancellation of the solicitation in question to be invalid; to order the Mint to reinstate the solicitation and award the contract to the lowest bidder; to enjoin the Mint from awarding the contract to anyone other than plaintiff; and to award plaintiff litigation and bid preparation costs and reasonable attorney fees. Defendant has responded to plaintiff’s request for declaratory and in-junctive relief by moving for summary judgment. After rather extensive discovery, both parties have provided the court with briefs supported by substantial documentation. Neither party sought a hearing on the matter. After oral argument, the court concludes that plaintiff is not entitled to the equitable remedy of in-junctive relief, nor is plaintiff entitled to any legal relief.

I.

A. Background Statement

In order to place this case in proper perspective, the following information regarding coinage production is deemed helpful. Article 1, Section 8, clause 5 of the United States Constitution confers on Congress the power “To coin money.” Thus, it is not unreasonable to view broadly the coining of money to be a government function. The actual process of coining money involves a series of steps. As a first step, virgin metal must be transformed into coinage “strip” through the use of a melting furnace and rolling mill. These strips are processed as continuous sheets of metal rolled into coils weighing thousands of [707]*707pounds. Each strip is over a foot wide and is approximately as thick as the coins that will be made from it.

The second step in the production of coinage is called “blanking.” This operation involves cutting circular discs of the appropriate coinage diameters out of the strips. These blanks are then annealed (treated with heat) in order to soften the metal. While the annealed blanks are still soft, edges are specifically shaped to aid the coining operation. This process is called “upsetting.”

Blanks that have been annealed and upset are ready to be minted into coins. The appropriate coinage design is impressed onto the blanks through the use of coin discs, applied under heavy pressure, a process known as to “strike” the coinage blanks.

The United States Mint was created in 1792. Up until 1965, the Mint produced its own coinage strip. After the metal content of the nation’s coinage was altered in 1965, the Mint began to purchase varying amounts of coinage strips for cupro-nickel coins (5 cents) and cupro-nickel clad coins (10 cents, 25 cents, 50 cents) from the private sector through competitive bidding. Since 1982, when the Mint closed its only rolling mill, it has purchased all of its strip requirements for cupro-nickel and cupro-nickel clad coins from private firms.

From its creation in 1792, the Mint has performed its own blanking, annealing and upsetting for coins in the above denominations. In 1982, the Mint began to study the possibility of contracting out the blanking of cupro-nickel and cupro-nickel clad coins. Also in 1982, the Mint began to contract out the blanking, annealing, and upsetting operations for pennies. Because of cost factors, the Mint decided to continue performing the nickel operations in-house.

After the President’s Private Sector Survey on Cost Control, known as the “Grace Commission Report,” was submitted to Congress on July 13, 1983, and in accord with Office of Management and Budget (OMB) policy, as expressed in Circular A-76, the Mint decided to re-evaluate its present practice of performing its own blanking, annealing and upsetting. The Director of the Mint ordered that a study be undertaken, pursuant to Circular A-76 (revised August 4, 1983) which stated it was government policy to use private sources for government commercial activities in appropriate circumstances. Circular A-76 also stated, however, that: “Certain functions are inherently Governmental in nature, being so intimately related to the public interest as to mandate performance only by Federal employees. * * * ” At the time the Director of the Mint ordered the study, she was of the view that blanking was sufficiently distinct from the actual stamping of the coins such that it would not be considered part of an inherently Governmental function and thus not contrary to the above language of Circular A-76. As part of this study, solicitation USM 85-03 was issued. The solicitation’s basic purpose, according to the Director of the Mint, was to gauge the savings that might be generated if the Mint, turned the blanking, annealing and upsetting processes over to the private sector. Prior to the time the solicitation was issued, there is no indication in the materials at hand that the Mint had undertaken to publicize its intent to contract out coinage blanking function, nor had it informed its congressional overseer subcommittee of its intentions in this regard.

B. Operative Facts

Plaintiff is a Canadian corporation with its principal place of business in Toronto, Canada. It is in the business of processing copper and copper alloys. Presently, plaintiff processes and provides coinage strip for 1-cent and 5-eent coins to the Royal Canadian Mint.

On January 14, 1985, the Mint issued an Invitation For Bids (IFB or solicitation), USM 85-03, for the processing and fabrication and delivery to the Denver, Colorado Mint of certain coinage blanks, i.e., performing the blanking, annealing and upsetting processes on cupro-nickel and cupro-nickel clad strip. Bids were to be sub[708]*708mitted on the base price for cut blanks for the initial period (fiscal year 1986) and two option periods (fiscal years 1987 and 1988). Plaintiff was fully qualified to process, fabricate and deliver coinage blanks. Under the solicitation, Mint supplied metal was to be processed into coinage blanks. The solicitation provided that if the contractor’s plant was located outside the United States, the Mint would “provide the virgin metal f.o.b. vessel, port of shipment.” These blank coins were then to be returned to the Denver Mint where the Mint was to “strike” the coinage blanks to make 5 cent cupro-nickel and 10, 25 and 50-cent cupro-nickel clad United States coins. The solicitation specifically advised of the possibility that the solicitation might be cancelled if it turned out to be cheaper to produce blank coins “in-house” within the Mint rather than having it done by an outside contractor. The solicitation, as amended, also advised bidders that pursuant to Section 302 of the Trade Agreements Act of 1979, 19 U.S.C. § 2512(a) (1982), and applicable Federal Acquisition Regulations, bids offering eligible products of countries which are not designated under the Trade Agreements Act, 19 U.S.C. § 2511(b) (1982), would not be considered and would be rejected as nonresponsive.

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Bluebook (online)
33 Cont. Cas. Fed. 74,026, 8 Cl. Ct. 703, 1985 U.S. Claims LEXIS 917, Counsel Stack Legal Research, https://law.counselstack.com/opinion/arrowhead-metals-ltd-v-united-states-cc-1985.