Excavation Construction, Inc. v. United States

494 F.2d 1289, 20 Cont. Cas. Fed. 82,974, 204 Ct. Cl. 299, 1974 U.S. Ct. Cl. LEXIS 124
CourtUnited States Court of Claims
DecidedApril 17, 1974
DocketNo. 408-71
StatusPublished
Cited by50 cases

This text of 494 F.2d 1289 (Excavation Construction, Inc. 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
Excavation Construction, Inc. v. United States, 494 F.2d 1289, 20 Cont. Cas. Fed. 82,974, 204 Ct. Cl. 299, 1974 U.S. Ct. Cl. LEXIS 124 (cc 1974).

Opinion

Per Curiam :

This case comes before the conrt on plaintiff’s exceptions to a recommended decision filed September 28, 1973, by Trial Judge Saul R. Gamer, Chief of the Trial Division, pursuant to Rule 134(h). The court has considered the case on the briefs and oral argument of counsel. Since the court agrees with the recommended decision, as hereinafter set forth, it hereby affirms and adopts the same as the basis for its judgment in this case. Therefore, plaintiff is not entitled to recover and the petition is dismissed. [See Keco Industries. Inc. v. United States, 203 Ct. Cl. 566, 492 F. 2d 1200 (1974).]

OPINION OF TRIAL JUDGE

Gamer, Trial Judge:

The Architect of the Capitol invited bids for the performance of the excavation and foundation work on the James Madison Memorial Building, Library of Congress project, and plaintiff was the second lowest bidder. Contending that the low bidder’s bid contained disqualifying irregularities which made plaintiff entitled to the award, that plaintiff apprised the Architect of such defects in the low bid, but that the Architect nevertheless arbitrarily and capriciously proceeded to award the contract to the low bidder, plaintiff sues to recover its damages, including loss of profits, in the alleged amount of $950,000.

It is settled that in cases of this kind this court will not award recovery of lost profits. The damages cannot exceed bid preparation costs. Heyer Products Co. v. United States, 135 Ct. Cl. 63, 69, 140 F. Supp. 409, 412 (1956); Keco Industries, Inc. v. United States, 192 Ct. Cl. 773, 784, 428 F. 2d 1233, [302]*3021240 (1970). And, while “[f]inal decisions should be based on the particular circumstances of each case” (Keco Industries, Inc. v. United States, 192 Ct. Cl. at 784, 428 F. 2d at 1240), even such recovery by the aggrieved bidder is dependent upon a showing of arbitrary and capricious action by the Government in awarding the contract to another and thus failing to give honest consideration to the disappointed bidder’s bid. Keco Industries, Inc. v. United States, supra. Furthermore, “the standard of proof to be applied in cases where arbitrary and capricious action is charged should be a high one.” Keco Industries, Inc. v. United States, 192 Ct. Cl. at 784, 428 F. 2d at 1240. “[X]n order to establish that the decision was arbitrary and capricious,” the aggrieved bidder “must show that there was no reasonable basis for the decision” of the responsible Government official to award the contract to someone else. Continental Bus. Enterprises, Inc. v. United States, 196 Ct. Cl. 627, 637-38, 452 F. 2d 1016, 1021 (1971); cf. M. Steinthal & Co. v. Seamans, 455 F. 2d 1289 (C.A.D.C.1971).

In this case plaintiff, in its attempt to establish such arbitrary and capricious action, has not been able to meet this high standard of proof.

The bid invitation in question was the second issued for this project. The first was issued on December 1, 1970, the project thereunder being identified as “Job No. 7093,” and the requirements of the Davis-Bacon Act1 concerning minimum wages to be paid to laborers and mechanics being made applicable to the project. Plaintiff submitted a bid pursuant to this invitation. However, no award was made. The low bidder was Henry A. Knott, Inc., but upon the bid opening on January 15, 1971, the second low bidder (not the plaintiff) filed a protest against the award of the contract to Knott, resulting in the award being held up pending the resolution of the protest. Furthermore, on February 23, 1971, the President issued a Proclamation 2 suspending the application of the Davis-Bacon Act to Federal contracts. Since the bids that had been submitted were based upon the application of the Act, the Architect of the Capitol de[303]*303cided that no award would be made on Job No. 7093 and that the invitation would be reissued, with the Davis-Bacon Act specifically being made inapplicable to the proposed contract.

Accordingly, on March 8,1971, the Architect invited new bids for the excavation and foundation work. Such project this time was designated as “Job No. 7117.” Bids were to be opened on April 22,1971.

However, on March 29, 1971, the President, by another Proclamation,3 revoked the suspension of the application to Federal projects of minimum wage rates required by the Davis-Bacon Act.

Thereupon, the Architect, on April 5, 1971, amended the outstanding invitation by issuing “Addendum No. 1,” which served to make the Act applicable to the project, and, on April 13, 1971, issued “Addendum No. 2,” which made certain additions to the Davis-Bacon Act provisions added by Addendum No. 1.

On Thursday, April 22,1971, the bids were opened. Three bids were submitted and again Knott was the low bidder. This time plaintiff was the second low bidder.

On the morning of the following day, Friday, April 23, 1971, an official of the plaintiff was permitted to examine the bids of the other two bidders. He was particularly desirous of ascertaining whether there were such defects in Knott’s bid as to cause its disqualification, thus resulting in plaintiff’s advancing to the position of low bidder. The examination was made in the office of Mr. Robert W. Kneesi, the Head of the Contracts and Specifications Division, Office of General Counsel.

Upon completing his examination, plaintiff’s official informed Kneesi that he had discovered two defects in Knott’s bid. The first related to Addendum No. 1. The cover sheets on the two addenda issued required bidders, in submitting their bids, to acknowledge their receipt, “giving the addendum number and its date.” Knott’s bid did acknowledge receipt of both addenda, but its acknowledgment of the first referred to it as “Addendum No. 1 dated March 8, 1971.” However, its proper date was, as above shown, April 5,1971. [304]*304March 8, 1971, was, instead, the date of the Invitation for Bids. The Addendum had also referred to the March 8,1971 date since it was such invitation (and the documents issued together therewith) that the Addendum was amending.

The second error related to the bid bond. Bidders were required to submit with their bids a guaranty, which could take the form of a bid bond of at least 10 percent of the bid, to insure execution of the contract and of performance and payment bonds. Knott had submitted such a bond, executed by itself as principal and the Planet Insurance Company as surety. The form on which the bond was executed contained a space, under the heading “Bid Identification,” in which the “Invitation No.” was to be inserted. In this space, there had been inserted “7093.” As above shown, however, that had been the job number by which the first Invitation for Bids had designated the project. The correct designation of the project under the reissued second invitation was, as stated, Job No. 7117.

In response to an inquiry by Kneesi, who expressed the opinion that the two errors mentioned were minor informalities that would constitute an insufficient basis upon which to predicate a protest, plaintiff’s representative stated that he intended to report his findings to other officials of plaintiff and that he did not know what, if any, action plaintiff would take with respect to the matter.

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494 F.2d 1289, 20 Cont. Cas. Fed. 82,974, 204 Ct. Cl. 299, 1974 U.S. Ct. Cl. LEXIS 124, Counsel Stack Legal Research, https://law.counselstack.com/opinion/excavation-construction-inc-v-united-states-cc-1974.