California Marine Cleaning, Inc. v. United States

43 Fed. Cl. 724, 1999 U.S. Claims LEXIS 108, 1999 WL 314914
CourtUnited States Court of Federal Claims
DecidedMay 14, 1999
DocketNo. 98-636C
StatusPublished
Cited by40 cases

This text of 43 Fed. Cl. 724 (California Marine Cleaning, Inc. v. United States) is published on Counsel Stack Legal Research, covering United States Court of Federal Claims primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
California Marine Cleaning, Inc. v. United States, 43 Fed. Cl. 724, 1999 U.S. Claims LEXIS 108, 1999 WL 314914 (uscfc 1999).

Opinion

ORDER ON EAJA FEES

BRUGGINK, Judge.

Pending before the court is the application (as amended) of plaintiff California Marine Cleaning, Inc. (“California Marine”) for attorney and paralegal fees and expenses under the Equal Access to Justice Act (“EAJA”), 28 U.S.C. § 2412(d) (1994 & Supp. II 1996). California Marine was clearly the prevailing party in that it obtained injunctive relief in this bid protest proceeding. Defendant opposes the application on various grounds, including that the government’s po[726]*726sition was substantially justified. For reasons set out below, the court grants the application in part.

BACKGROUND

On October 22, 1998, the court granted California Marine’s petition for injunctive relief. See California Marine Cleaning, Inc. v. United States, 42 Fed.Cl. 281, 301 (1998). The court enjoined the United States Department of the Navy (“Navy”) from canceling the solicitation at issue and directed that it consider the bid of California Marine as timely. The facts set out in that opinion are incorporated by reference. A brief summary follows below.

The dispute arises out of a solicitation for bids to perform hazardous waste disposal for the Navy. Pacific Tank Cleaning Services, Inc. (“Pacific Tank”), the defendant-interve-nor here, protested with the agency the initial proposed award to the apparent low bidder, California Marine. The Navy denied Pacific Tank’s protest, and Pacific Tank subsequently filed a .protest with the General Accounting Office (“GAO”).

The GAO sustained Pacific Tank’s protest on July 1, 1998 and recommended that the Navy reject California Marine’s bid as late and award the contract to Pacific Tank. See Pacific Tank Cleaning Servs., Inc., 98-2 C.P.D. ¶ 2 at 5 (1998). Applying the late bid rules set out in the Federal Acquisition Regulations (“FAR”), see 48 C.F.R. § 14.304-1 (1997), GAO concluded that the time and date stamp on California Marine’s bid could not be accepted because the time/date stamp device was accessible to the public. Having discarded that evidence, the GAO concluded:

On this record, the scenario posited by the protester is no less plausible than the agency’s position that the technician overlooked a bid while sorting through very few bids in the bid box.
In short, there is no acceptable evidence which establishes that Cal Marine’s bid was received at the installation prior to bid opening____

Pacific Tank, 42 Fed.Cl. at 289, 98-2 C.P.D. ¶ 2 at 4-5.

The Navy did not adopt immediately the GAO’s recommendation. On July 13, 1998, California Marine filed a request for reconsideration with the GAO. California Marine alleged that the GAO had misapplied the FAR late bid rule by concluding that the time and date stamp on its bid was not acceptable evidence to establish the timeliness of its bid. It asserted that the GAO on reconsideration should find that its bid was timely and direct award of the contract to California Marine as the lowest responsive bidder. Alternatively, it argued that if the GAO had correctly determined that the bidding procedure was not secure, the proper remedy was to cancel the solicitation, secure the bid stamp device, and then resolicit.

Later in July, the Navy conducted a pre-award survey of Pacific Tank’s facility in preparation for an award to that company. At that point in time, the agency had apparently decided to adopt the GAO’s recommendation that the contract should be awarded to Pacific Tank.

On August 6, 1998, California Marine filed this bid-protest action to enjoin the award of the contract to Pacific Tank or any bidder other than itself. The complaint alleged that the Navy intended to follow the GAO recommendation, reject California Marine’s bid, and award the contract to Pacific Tank. California Marine asserted that the GAO decision was irrational and thus the Navy’s decision to follow that recommendation was arbitrary, capricious, and an abuse of discretion. Plaintiff sought preliminary and permanent injunctive relief.

In reaction to California Marine’s bid protest, the Navy decided not to award the contract to Pacific Tank. On August 7, 1998, in a telephone status conference with chambers, defendant informed the court that the agency had decided not to accept the GAO recommendation and, instead, would seek a settlement with the two contractors.

Settlement discussions were not successful. On August 17,1998, the Navy issued its final decision to date, notifying Pacific Tank that it was canceling the solicitation and would later issue a new solicitation. As grounds for its decision, the Navy stated:

[727]*727The Government’s final decision regarding the subject solicitation is to cancel in accordance with the [FAR] 14.404-1(a)(1) and 14.404 — 1(c)(10)....
In its decision of July 1,1998, the General Accounting Office (GAO) implicitly found the agency’s practice of placing the bid box in the reception area and allowing bidders to date stamp their own bids undermined the integrity of the bid system. If the system lacks integrity then the entire system is tainted by that lack of integrity. In the Contracting Officer’s view there is then only one appropriate remedy, resolicitation.

Contracting officer’s letter of Aug. 17, 1998, at 1.

California Marine subsequently amended its complaint to add a second count, which asserted that the Navy’s decision to cancel the procurement did not comply with FAR 14.404-1(a)(1) and 14.404-1(c)(10), which prohibit agencies from canceling solicitation after opening of bids unless there is a “compelling reason to reject all bids” and “cancellation is clearly in the public interest.” 48 C.F.R. §§ 14.404-1(a)(1), 14.404-1(c)(10) (1997). Plaintiff asserted that because no such compelling reason existed, the Navy’s decision to cancel the solicitation was arbitrary, capricious, without rational basis, and an abuse of discretion. Defendant-intervenor joined in the attack on the cancellation but urged the court to adopt the GAO’s recommendation to award the contract to Pacific Tank.

The court ultimately held that the Navy’s decision to cancel the solicitation was arbitrary and capricious and not in accordance with law, and enjoined its implementation. We held that the agency misinterpreted the GAO decision as implying that the agency’s practice of placing the bid box in the reception area and allowing bidders to time and date stamp their own bids undermined the integrity of the bid system and thus compelled resolicitation. We pointed out that at least five bidders, including Pacific Tank, had submitted timely bids, as the GAO itself had recognized. Consequently, the court held that the cancellation decision lacked any rational basis. In addition, the court held that the GAO decision granting Pacific Tank’s protest was erroneous as a matter of law in applying the late bid rule to determine whether California Marine’s bid was late. We also held that the GAO had misapplied the late bid rule and its own precedent interpreting the rule. Accordingly, the court directed the Navy to consider California Marine’s bid as timely submitted.

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43 Fed. Cl. 724, 1999 U.S. Claims LEXIS 108, 1999 WL 314914, Counsel Stack Legal Research, https://law.counselstack.com/opinion/california-marine-cleaning-inc-v-united-states-uscfc-1999.