District of Columbia v. Group Insurance Administration

633 A.2d 2, 1993 D.C. App. LEXIS 261
CourtDistrict of Columbia Court of Appeals
DecidedOctober 28, 1993
Docket92-CV-437, 92-CV-942 and 92-CV-477
StatusPublished
Cited by39 cases

This text of 633 A.2d 2 (District of Columbia v. Group Insurance Administration) is published on Counsel Stack Legal Research, covering District of Columbia Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
District of Columbia v. Group Insurance Administration, 633 A.2d 2, 1993 D.C. App. LEXIS 261 (D.C. 1993).

Opinion

FERREN, Associate Judge:

The District of Columbia and Quality Dental Plans, Inc. (QDP) appeal from a trial court order, issued in favor of appellee Group Insurance Administration, Inc. (GIA), that preliminarily enjoined the District and QDP from performing a contract under which QDP was to administer the District's dental *8 and vision care benefits program for nonunion employees. The District also appeals the trial court’s order holding it in contempt and assessing fines for failure to comply with this injunction.

Because the preliminary injunction has since expired, appellants’ direct challenge to the injunction is moot. Nevertheless, we examine the injunction’s validity in the course of considering whether the trial court abused its discretion in holding the District in contempt. In doing so, we must determine whether the Superior Court has the authority to order emergency relief forcing the rebidding of a public contract while the underlying bid protest is still pending before the Contract Appeals Board (CAB or Board). Although we conclude that the Superior Court has this authority, this is an extraordinary power that should only be exercised in rare instances. The particular circumstances of this case did not warrant such extraordinary action. Accordingly, having determined that the underlying injunction was invalid, we reverse and remand this case for vacation of the civil contempt order against the District.

I. Factual and Procedural History

A. The Contract Award Process

Since 1985, the District of Columbia government has provided dental and vision care benefits to all non-union employees. The District awarded the first contract to administer this program to GIA. On October 7, 1991, near the expiration of this first contract, the District issued a request for proposals (RFP) from qualified minority contractors 1 for a new one-year contract to administer the benefits program during calendar year 1992. The proposed contract also provided renewal options for four one-year extensions. The deadline for the submissions was November 12, 1991.

Only two firms bid on the contract: GIA and QDP. A four-person committee, headed by the District Controller, evaluated GIA’s and QDP’s proposals, rating them on a 110-point scale that took into account company and staff qualifications, proposed service, quality of oral presentation, and contract price. The Committee gave GIA and QDP substantially similar ratings for their qualifications, proposed services, and oral presentations. There was, however, a significant difference between the two firms’ price proposals. QDP offered a price of $2.00 per participant for the first year of operation, while GIA’s proposed price was $3.35 per participant. The evaluation committee recommended that the District award the contract to QDP. As a result, on January 7,1992, the District entered into a letter agreement with QDP, authorizing QDP to begin service in accord with the terms of its proposal and providing for the parties to enter into a definitive contract within 183 days. On the same day, the District notified GIA that it had not been selected.

B. GIA’s Bid Protest and Suit for Injunc-tive Relief

Ten days later, on January 17, 1992, GIA filed a bid protest with the CAB requesting the Board to cancel the District’s contract with QDP. The protest alleged that: QDP lacked the required expertise to perform the contract; the District had failed to apply the evaluation criteria properly; QDP had a potential conflict of interest because it was also a provider of dental services; QDP intended to subcontract most of its vision services to non-minority businesses; the District had ignored GIA’s proposed 20 percent discount *9 and therefore had misinterpreted GIA’s actual price proposal.

On January 27, 1992, GIA filed an amended protest containing the additional claim that QDP was not a “responsible contractor” within the meaning of 27 DCMR § 2200.1 (1988) because QDP’s Vice President, Thomas A. Parnham, had recently pled guilty to charges of conspiracy and failing to maintain proper records as required by the Employee Retirement Income Security Act, in violation of 18 U.S.C. § 371 (1988) and 29 U.S.C. §§ 1027, 1131 (1988). 2 Consequently, GIA alleged, the District’s contract with QDP violated the District’s own requirement that “[t]he contracting officer shall ... award contracts only to responsible contractors.” 27 DCMR § 2200.1.

The District responded with an agency report to the CAB in which the District denied all of GIA’s allegations and moved the Board to dismiss as untimely GIA’s claim in its amended protest that QDP was not a responsible contractor. In an amended report, the District subsequently withdrew its motion to dismiss and submitted an affidavit from the District Controller stating that he had not become aware of Parnham’s convictions until January 24, 1992, after he had entered into the letter agreement with QDP. The Controller averred that he had reviewed the government’s statement of fact in support of Parnham’s guilty pleas and had discussed the situation with QDP’s president (Dr. Milton Bernard), Parnham, and Parn-ham’s attorney. After this review, the Controller said, he had concluded that Parnham’s guilty plea should not be imputed to QDP and that QDP remained a responsible contractor. In reaching this conclusion, the Controller had taken into account the following facts: (1) the convictions were for misdemeanors, not felonies; (2) the misdemeanors only involved a failure to disclose information; (3) Parnham had not been involved in taking or accepting illegally obtained funds; and (4) the convicting court had specifically informed Parnham that the convictions did not bar him from continuing with QDP in an administrative position.

While GIA’s bid protest was pending before the CAB, GIA also filed a complaint in the Superior Court on February 13, 1992, requesting declaratory and injunctive relief, including a temporary restraining order, against the District. This complaint repeated most of the allegations set forth in GIA’s bid protest to the CAB. In response, the District asserted that the trial court lacked jurisdiction to hear the complaint because GIA had failed to exhaust its administrative remedies in failing to wait for the CAB to render a decision on its bid protest. The District also claimed that, even if the court had jurisdiction to hear the case, GIA had failed to make the required showing of irreparable harm. Additionally, the District submitted the same affidavit from the Controller that it had filed with the CAB. QDP joined the District and moved for leave to intervene.

After a hearing, the trial court denied GIA’s request for a temporary restraining order on February 28, 1992. Expressing his reluctance to interfere with the administrative process, the trial judge ruled that GIA should instead seek a stay of the contract from the CAB.

GIA then filed with the CAB an emergency motion for a stay of the contract.

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Bluebook (online)
633 A.2d 2, 1993 D.C. App. LEXIS 261, Counsel Stack Legal Research, https://law.counselstack.com/opinion/district-of-columbia-v-group-insurance-administration-dc-1993.