Enplanar, Inc. v. Marsh

11 F.3d 1284, 39 Cont. Cas. Fed. 76,613, 27 Fed. R. Serv. 3d 1469, 1994 U.S. App. LEXIS 697, 1994 WL 1403
CourtCourt of Appeals for the Fifth Circuit
DecidedJanuary 19, 1994
Docket91-3837
StatusPublished

This text of 11 F.3d 1284 (Enplanar, Inc. v. Marsh) is published on Counsel Stack Legal Research, covering Court of Appeals for the Fifth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Enplanar, Inc. v. Marsh, 11 F.3d 1284, 39 Cont. Cas. Fed. 76,613, 27 Fed. R. Serv. 3d 1469, 1994 U.S. App. LEXIS 697, 1994 WL 1403 (5th Cir. 1994).

Opinion

11 F.3d 1284

39 Cont.Cas.Fed. (CCH) P 76,613

ENPLANAR, INC., V. Keeler & Company, Inc. and Dragon
Limited, Inc., Plaintiffs-Appellants,
v.
John MARSH, In His Official Capacity as Secretary of the
Army of the United States, et al., Defendants-Appellees.

No. 91-3837.

United States Court of Appeals,
Fifth Circuit.

Jan. 19, 1994.

Louis R. Koerner, Jr., New Orleans, LA, for plaintiffs-appellants.

Harry Rosenberg, U.S. Atty., New Orleans, LA, for defendants-appellees.

Marie K. McElderry, David K. Flynn, U.S. Dept. of Justice, Civ. Rights Div. Appellate Sec., Marybeth Martin, U.S. Dept. of Justice, Employment Litigation, Civ. Rights Div., Washington, DC, Henry Black, U.S. Army Corps of Engineers, Vicksburg, MS, for Marsh, R. Page, H. Hatch, S. Page, et al.

Appeal from the United States District Court for the Eastern District of Louisiana.

Before REYNALDO G. GARZA and GARWOOD, Circuit Judges and WERLEIN,* District Judge.

GARWOOD, Circuit Judge:

This case involves the grant of summary judgment against a suit for unspecified damages from a three-month suspension of a discretionary minority set-aside program. E.J.A., Inc. (EJA); Enplanar, Inc. (Enplanar); Dragon Limited, Inc. (Dragon); and V. Keeler & Co., Inc. (Keeler) appeal the district court's grant of summary judgment in favor of the United States Army Corps of Engineers (the Corps). We affirm.

Facts and Proceedings Below

This case relates to the Corps' administration of its set-aside program for minority businesses (the 8(a) program), as described in the Small Business Act Sec. 8(a), 15 U.S.C. Sec. 637(a). The operation of the 8(a) program is delineated in Fordice Constr. Co. v. Marsh, 773 F.Supp. 867, 869-70 (S.D.Miss.1990). As noted in that opinion, Congress created the 8(a) program to encourage minority small-business enterprises. Id. at 869. Under this program, the Small Business Administration (SBA) determines which minority businesses are eligible to participate in the 8(a) program. 15 U.S.C. Sec. 637(a)(4)-(8). The SBA then acts as an intermediary between government procurement agencies--such as the Corps--and these certified minority businesses. Under this system, a procurement agency's proposed project may be placed in the 8(a) program in one of three ways, all of which are entirely at the discretion of the SBA and the procurement agency: (1) the SBA advises the procurement agency of an 8(a) firm's capabilities and asks that agency to identify and submit to the 8(a) program its proposed contracts that support the firm's business plan; (2) the SBA identifies a specific contract for a particular 8(a) firm and asks the agency to offer the contract to the 8(a) program for the firm; or (3) the agency reviews its proposed contracts and identifies and offers those which are suitable for the 8(a) program. Id. at 637(a)(1)(A); 48 C.F.R. Secs. 19.800(b), 19.803(a)-(c), 19.804.1 Once a contract has been set aside for minority businesses, the SBA then selects the minority contractor best suited to perform the contract. 15 U.S.C. Sec. 637(a)(1)(B), (a)(7)(A); 13 C.F.R. Sec. 124.307(d). The SBA, on behalf of the minority contractor, then certifies to the procurement agency that the minority contractor can perform the contract, and the SBA begins to negotiate with the agency's contracting officer upon mutually agreeable terms and conditions. 48 C.F.R. Sec. 19.800(c). Alternatively, upon mutual agreement between the SBA and the agency, the minority contractor itself may be allowed to negotiate with the agency. 48 C.F.R. Sec. 19.808-1(b). Throughout this process, it is within the procurement agency's discretion to withdraw the project from the 8(a) program before the contract is awarded. 48 C.F.R. Sec. 19.800(c). Finally, the minority contractor cannot be awarded the project if the price of the contract results in a cost to the procurement agency which exceeds a fair market price. 48 C.F.R. Sec. 19.806(b).

Prior to the case sub judice, three nonminority small-business contractors challenged the Corps' joint administration of the 8(a) program with the SBA. Specifically, these contractors challenged the Corps' submission practice whereby it set aside one-hundred percent of its small-business contracts for minority businesses. These contractors contended that in setting aside one-hundred percent of the contracts, the agencies failed to consider the effect a minority enterprise set-aside would have on competing nonminority small-business contractors. The district court initially dismissed the suit on mootness grounds, and we reversed. Valley Constr. Co. v. Marsh, 714 F.2d 26 (5th Cir.1983) (Valley I ). On remand, the district court held that the Corps' administration of the 8(a) program impermissibly excluded the nonminority small-business contractors in violation of 42 U.S.C. Sec. 2000d, and that the SBA ignored its statutorily directed policy pursuant to 15 U.S.C. Sec. 637(d)(1) requiring it to consider the economic impact on these contractors. Fordice, 773 F.Supp. at 882. The government initially appealed the decision, but it withdrew its appeal on October 23, 1990.

In early November 1990, in response to the Fordice decision and the withdrawal of the government's appeal, the Corps sought legal guidance from Army Headquarters concerning the continuing legality of its administration of the 8(a) program, and the possible personal liability of the contracting officers in submitting contracts to the SBA under the program. While awaiting advice, the Corps continued to abide by previously awarded 8(a) contracts, and exercised the options on all 8(a) contracts for extending performance by the minority contractor into later years. Although the Corps did not terminate any pre-existing 8(a) contracts, it did hold in abeyance any ongoing activity in reference to 8(a) contracts not yet awarded. This abeyance continued until January 22, 1991, when the Corps received guidance from Army Headquarters notifying it that, as to the currently administered 8(a) program, there existed no legal impediment to awarding contracts to the SBA through the 8(a) program.2

On January 8, 1991, EJA, Enplanar, Dragon, and Keeler (collectively, the Contractors) brought suit in Louisiana seeking injunctive and declaratory relief against, inter alia, the Corps and its personnel in their official capacities, and the SBA (collectively, the Defendants), claiming that the Corps' suspension of their 8(a) referrals to the SBA discriminated against the Contractors in violation of 42 U.S.C. Secs. 1981, 1985(3), 2000d. The Contractors also argued that the suspension was an unconstitutional taking of their property rights without due process.

Specifically, EJA alleged that, prior to the abeyance, the Corps failed to renew the Southwest Pass program even though EJA had worked on the project during the previous year. The Corps did not dispute that in April of 1990, it had decided not to place the project in the 8(a) program because it already had four of its ten small-business projects in the program, and was concerned about the potential legal liability of adding more small-business projects to the 8(a) program.

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11 F.3d 1284, 39 Cont. Cas. Fed. 76,613, 27 Fed. R. Serv. 3d 1469, 1994 U.S. App. LEXIS 697, 1994 WL 1403, Counsel Stack Legal Research, https://law.counselstack.com/opinion/enplanar-inc-v-marsh-ca5-1994.