C.S. McCrossan Construction, Inc. v. Minnesota Department of Transportation

946 F. Supp. 2d 851, 2013 WL 2278037, 2013 U.S. Dist. LEXIS 74236
CourtDistrict Court, D. Minnesota
DecidedMay 6, 2013
DocketCiv. No. 13-923 (RHK/JSM)
StatusPublished
Cited by10 cases

This text of 946 F. Supp. 2d 851 (C.S. McCrossan Construction, Inc. v. Minnesota Department of Transportation) is published on Counsel Stack Legal Research, covering District Court, D. Minnesota primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
C.S. McCrossan Construction, Inc. v. Minnesota Department of Transportation, 946 F. Supp. 2d 851, 2013 WL 2278037, 2013 U.S. Dist. LEXIS 74236 (mnd 2013).

Opinion

MEMORANDUM OPINION AND ORDER

RICHARD H. KYLE, District Judge.

INTRODUCTION

This action arises out of Minnesota State Project No. 8214-114 (the “Project”) for the design and construction of the “approach” (described in more detail below) to the future bridge connecting Oak Park Heights, Minnesota, to St. Joseph, Wiscon[853]*853sin, over the St. Croix River.1 Plaintiff C.S. McCrossan Construction, Inc. (“McCrossan”) submitted a proposal to the Minnesota Department of Transportation (“MNDOT”) to undertake the Project for approximately $52 million. MNDOT rejected the proposal and selected a different contractor, a joint venture between Ames Construction, Inc. and Lunda Construction Company (“Ames/Lunda”), because McCrossan did not make good-faith efforts to meet MNDOT’s goal for participation by disadvantaged business enterprises (“DBEs”)2 as subcontractors on the Project. McCrossan then filed the instant action, asserting that MNDOT had violated federal law and its constitutional rights by rejecting its proposal and selecting Ames/Lunda. Presently before the Court is McCrossan’s Motion for a Temporary Restraining Order or Preliminary Injunction (Doc. No. 6), seeking an order enjoining performance of the contract pending resolution of its claims. For the reasons that follow, its Motion will be denied.3

BACKGROUND

I. The legal and regulatory framework

Congress has established a national goal that at least ten percent of federal highway funds be spent with DBEs. See Surface Transportation Assistance Act of 1982, Pub. L. No. 97-424, § 105(f), 96 Stat. 2097, 2100 (1983); Transportation Equity Act for the 21st Century, Pub. L. No. 105-178, § 1101(b)(1), 112 Stat. 107, 113 (1998). This goal was intended to remedy “decades” of “race discrimination in government highway contracting [and] barriers to the formation of minority-owned construction businesses.” Sherbrooke Turf, Inc. v. Minn. Dep’t of Transp., 345 F.3d 964, 970 (8th Cir.2003).

Pursuant to these congressional directives, the United States Department of Transportation (“DOT”) has issued regulations, found in Part 26 of Title 49 of the Code of Federal Regulations, that are intended to help achieve that goal. One such regulation requires recipients of federal highway funds to “set an overall goal for DBE [subcontractor] participation in ... DOT-assisted contracts.” 49 C.F.R. § 26.45(a)(1). Such a contract goal may not be a rigid quota. 49 C.F.R. § 26.43(a). Instead, the recipient must ensure that the primary (main) contractor awarded a DOT-assisted contract has either (1) met the goal for DBE subcontractor participation or (2) if unsuccessful in doing so, has made a good-faith effort to achieve it. 49 C.F.R. § 26.53(a). Determining wheth[854]*854er a contractor has made a good-faith effort turns on several factors listed by the DOT in an Appendix to the regulations entitled “Guidance Concerning Good Faith Efforts.” 49 C.F.R. pt. 26 app. A. The inquiry is a flexible one, based on (among other things) the means used by the contractor to obtain DBE participation, the scope of its negotiations with DBE subcontractors, and whether it undertook efforts to divide subcontracted work into smaller units (if feasible) to facilitate participation. 49 C.F.R. pt. 26 app. A § IV. A contracting authority must consider these factors when assessing good-faith efforts. 49 C.F.R. pt. 26 app. A § II (“In any situation in which you have established a contract goal, part 26 requires you to use the good faith efforts mechanism of this part.”) (emphasis added).

II. McCrossan and the Project here

The Project here involves, inter alia, grading, surfacing, and other road work to build the “approach to the new St. Croix River Crossing,” including the construction of a new interchange at the intersection of Minnesota Highways 36 and 95 in Oak Park Heights. (Eastburn Aff. Ex. 1 § 1.2.) The Project is partially federally funded (id. § 1.1) and, hence, subject to the legal requirements set forth above. MNDOT set a goal for the Project at 16.7% participation by DBE subcontractors. (Id. § 1.8.)

McCrossan is a highway contractor that “routinely performs work on large projects for the State of Minnesota and its political subdivisions.” (McCrossan Aff. ¶ 2.) In late 2012, it responded to MNDOT’s “request for qualifications,” asking contractors to advise MNDOT of their interest in participating in the Project. (Id. ¶ 5.) From those responses, MNDOT would then compile a “shortlist” of contractors that would be asked to submit proposals to undertake the Project, from which the winning contractor would be selected. (East-burn Aff. Ex. 1 § 1.3.) Three contractors ultimately made the “shortlist”: McCrossan, Ames/Lunda, and a joint venture between Hoffman Construction Company and Shafer Contracting Company (“Hoffman/Shafer”). (Id. Ex. 2.)

All three contractors then submitted proposals for the design and construction of the approach, per requirements contained in a MNDOT document entitled “Instructions to Proposers” (the “Instructions”). (Id. Ex. 1.) Several provisions of the Instructions have critical importance here. First, the Instructions provided that proposals would be evaluated, among other things, on whether they “meet the requirements of the DBE federal regulations at 49 C.F.R. Part 26.” (Id. § 5.3.2; accord id. § 4.4.4 (incorporating DBE and good-faith-effort standards from 49 C.F.R. Part 26).) Second, they provided that a contractor’s DBE commitments and good-faith efforts had to be established and documented at the time the contractor’s proposal was submitted to MNDOT. (Id. §§ 4.4.1.2-.7.)4 Third, they provided that a contractor asserting that “any aspect of the procurement process ... is contrary to legal requirements” was required to file a protest with MNDOT “as soon as the basis for the protest is known,” but in no event later than 10 days before the proposal was due. (Id. § 3.10.1.) “The failure of a [con[855]*855tractor] to raise a ground for a protest ... within the applicable period shall constitute an unconditional waiver of the ... protest ... and shall preclude consideration of that ground.” (Id.) Finally, the Instructions provided that any contractor submitting a proposal agreed to be bound by all of the Instructions’ terms. (Id. § 3.10.)

The Instructions also spelled-out the process by which MNDOT would select the winning proposal. Each was to be given a “technical score” — a number between zero and 100 — based on its conformity with the Project’s specifications and the ability to address potential areas of concern, such as mitigation of environmental hazards and maintenance of traffic flow during construction. (Id.

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Bluebook (online)
946 F. Supp. 2d 851, 2013 WL 2278037, 2013 U.S. Dist. LEXIS 74236, Counsel Stack Legal Research, https://law.counselstack.com/opinion/cs-mccrossan-construction-inc-v-minnesota-department-of-transportation-mnd-2013.