Honeywell, Inc. v. United States

35 Cont. Cas. Fed. 75,611, 16 Cl. Ct. 173, 1989 U.S. Claims LEXIS 5, 1989 WL 2245
CourtUnited States Court of Claims
DecidedJanuary 13, 1989
DocketNo. 698-88C
StatusPublished
Cited by11 cases

This text of 35 Cont. Cas. Fed. 75,611 (Honeywell, 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
Honeywell, Inc. v. United States, 35 Cont. Cas. Fed. 75,611, 16 Cl. Ct. 173, 1989 U.S. Claims LEXIS 5, 1989 WL 2245 (cc 1989).

Opinion

OPINION

FUTEY, Judge.

This pre-award contract action is before the court on plaintiff’s motion to enjoin the Department of the Army from awarding a contract to Haz-Tad, Inc. to produce and deliver Digital Group Multiplexers and related hardware. The contracting officer found Haz-Tad, Inc.’s bid ambiguous as to the bidder’s identity and therefore non-responsive. However, on protest to the Government Accounting Office, a recommendation was issued which concluded that the bid was responsive. The Army thereafter adopted the General Accounting Office’s recommendation. Plaintiff asserts, inter alia, that Haz-Tad, Inc.’s bid is ambiguous as to the identity of the bidder and a determination to the contrary violates Federal procurement practices and the government’s obligation to consider Honeywell’s bid fairly and honestly. For the reasons stated hereinafter, plaintiff’s motion for a permanent injunction of the award of the subject contract to Haz-Tad, Inc. is granted.

Factual Background

On July 1, 1987, the United States Army Communications Electronic Command (Army) issued a request for technical proposals, No. DAAB07-87-R-J042, for the first step of a two-step sealed bid procurement1 for the production and delivery of Digital Group Multiplexers (DGMs) and related hardware.2 Six bidders submitted step one technical proposals. Upon review, the Army determined that five of. the; six proposals were technically acceptable, including that of plaintiff and third-party defendant Haz-Tad, Inc. (Haz-Tad). On March 18, 1988, the Army issued invitations to these five companies to submit the second step of the bid. In response, the Army received four sealed bids.

Bid opening was conducted on April 18, 1988. Haz-Tad was found to have submitted the lowest bid, with a total bid price of $69,120,064.00. The second lowest bidder, Honeywell Inc. (Honeywell), submitted a total bid price of $69,618,646.00.

Honeywell filed a pre-award protest with the Army contracting officer on May 11, 1988, alleging that Haz-Tad’s bid failed to present an unqualified offer to perform the contract as a regular dealer or manufacturer as required by the Solicitation and the Walsh-Healey Public Contracts Act (Walsh-Healey Act).3 Haz-Tad, Hazeltine Corporation (Hazeltine) and Tadiran Ltd. (Tadiran), responded to Honeywell’s protest on June 3, 1988, alleging that the three companies had bid as a joint venture, thus qualifying under the Walsh-Healey Act. In a letter dated June 10, 1988, Honeywell additionally protested the award of the contract to Haz-Tad on the ground that the bid was non-responsive because the identity of the bidder was ambiguous.

The Defense Contract Administration Service informed the contracting officer on June 20,1988, that Haz-Tad did not qualify under the Walsh-Healey Act, however, a joint venture among Haz-Tad, Hazeltine and Tadiran would qualify. Three days later the Defense Investigative Service reported to the contracting officer that HazTad, the corporation, met the necessary security clearances required under the contract, but that a joint venture among Haz[175]*175Tad, Hazeltine and Tadiran could not be granted the necessary clearance because Tadiran was an Israeli Company.

On July 6, 1988, the contracting officer rejected the bid, finding it ambiguous as to the identity of the bidder, and therefore non-responsive. The contracting officer also stated that the bid was nonresponsible if the bidder was Haz-Tad, the corporation, alone, because it did not qualify under the Walsh-Healey Act. Additionally, the bid was nonresponsible if the bidder was a joint venture, because it did not have the required security clearance.

Haz-Tad, Hazeltine and Tadiran filed a protest on July 20, 1988, with the General Accounting Office (GAO),4 alleging that the bid was that of a joint venture consisting of Haz-Tad, Hazeltine and Tadiran. In a letter to the GAO dated September 16, 1988, these companies asserted in the alternative that if the bid was not construed as being offered by a joint venture between the companies, their proposal could reasonably be interpreted as having been submitted by Haz-Tad, the corporation.

The GAO issued a recommendation on November 17, 1988, which determined that the bid was submitted by Haz-Tad, the corporation, and not a joint venture. Additionally, the GAO recommended that the record be forwarded to the Department of Labor for a determination as to the status of Haz-Tad as a regular dealer or manufacturer. The GAO held that “[i]f that determination is affirmative, and if otherwise appropriate, the contract should be awarded to Haz-Tad, Inc.”5

Plaintiff filed a “Complaint for Injunctive Relief and Declaratory Judgment” in this court on December 6, 1988, requesting that the Army be enjoined from awarding the contract to Haz-Tad. The government represented to this court in a telephone conference held on the same date this action was filed that the Army decided to abide by the recommendation of the GAO and award the contract to Haz-Tad, but would not award the contract until after December 19, 1988.6

On December 8,1988, the defendant filed a “Motion for the Issuance of Notice to Third Parties ...” providing for notice to Haz-Tad, Hazeltine and Tadiran to appear as parties in this action and assert their interest. On December 14, 1988, Haz-Tad filed a “Memorandum of Points and Authorities in Opposition to Plaintiffs Motion for Preliminary Injunction.” Trial was held on December 16, 1988.

In the present action Honeywell asserts that Haz-Tad’s bid (1) is ambiguous as to the identity of the bidder, and (2) does not satisfy the requirements of the WalshHealey Act. Therefore, such an award would violate Federal procurement law, regulations and policies, and constitute a breach of the Army’s contractual obligation to consider Honeywell’s bid fairly and honestly.

Discussion

Jurisdiction to review pre-award contract decisions of a government agency is conferred on this court pursuant to 28 U.S.C. 1491(a)(3) (1982), of the Federal Courts Improvement Act of 1982. United States v. John C. Grimberg Co. Inc., 702 F.2d 1362, 1366-72 (Fed.Cir.1983). This section provides:

To afford complete relief on any contract claim brought before the contract is awarded, the court shall have exclusive jurisdiction to grant declaratory judgments and such equitable and extraordinary relief as it deems proper, including but not limited to injunctive relief. In exercising this jurisdiction, the court [176]*176shall give due regard to the interests of national defense and national security.

Pre-award contract claims under this statute are founded upon an implied-in-fact contract which arises by virtue of the bid solicitation process which obligates the government to consider offers fairly and honestly. Keco Indus., Inc. v. United States, 192 Ct.Cl. 773, 784, 428 F.2d 1233, 1237 (1970); Heyer Prod. Co. Inc. v. United States, 135 Ct.Cl. 63, 69, 140 F.Supp. 409, 413 (1956); Paxson Elec. Co. Inc. v. United States, 14 Cl.Ct.

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Bluebook (online)
35 Cont. Cas. Fed. 75,611, 16 Cl. Ct. 173, 1989 U.S. Claims LEXIS 5, 1989 WL 2245, Counsel Stack Legal Research, https://law.counselstack.com/opinion/honeywell-inc-v-united-states-cc-1989.