Howell Construction, Inc. v. United States

34 Cont. Cas. Fed. 75,297, 12 Cl. Ct. 450, 1987 U.S. Claims LEXIS 94
CourtUnited States Court of Claims
DecidedMay 26, 1987
DocketNo. 107-87 C
StatusPublished
Cited by21 cases

This text of 34 Cont. Cas. Fed. 75,297 (Howell 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
Howell Construction, Inc. v. United States, 34 Cont. Cas. Fed. 75,297, 12 Cl. Ct. 450, 1987 U.S. Claims LEXIS 94 (cc 1987).

Opinion

OPINION

HORN, Judge.

This matter originally came before the Court on a Complaint for Preliminary Injunction, Permanent Injunction, and Declaratory Judgment, filed by plaintiff, Howell Construction, Inc., on February 27, 1987, to restrain the defendant from awarding a contract resulting from Invitation for Bids No. F2260087B0002 to any bidder other than the plaintiff.

Plaintiff’s complaint seeks a finding of the Court that Howell is entitled to award of the subject contract because plaintiff submitted the lowest, responsive bid to the solicitation, and because the Air Force violated its regulations when it rejected Howell’s bid as materially unbalanced. Plaintiff also requests the Court to restrain the defendant from awarding the contract to any other bidder or from cancelling the solicitation.1

Defendant contends, however, that plaintiff’s bid was properly rejected by the contracting officer because it is both materially and mathematically unbalanced. Defendant, therefore, urges the Court to uphold the findings of the contracting officer, as supported by a ruling of the General Accounting Office (GAO), issued on April 30, 1987, that there is reasonable doubt [451]*451that acceptance of plaintiffs bid would ultimately prove to be in the best interests of the Government.

At a status conference on May 12, 1987, both parties and the Court agreed that given the current posture of the case and in the interests of expediency due to the Government’s stated need to award the contract quickly, the Court should proceed to address only the requests for a permanent injunction and for declaratory relief. Moreover, the parties agreed that no factual evidence would be necessary, beyond written materials, including briefs and supporting affidavits, to be submitted to the Court.

Based upon the papers filed with the Court and a review of the findings of the contracting officer, supported by the decision of the GAO, the Court finds that defendant’s decision not to award the contract to plaintiff, constituted a reasonable exercise of the contracting officer’s discretion. Consequently, plaintiff’s motion for injunctive relief and declaratory judgment is denied.

Background

On October 22, 1986, the United States Air Force issued Invitation for Bids No. F2260087B0002 (solicitation), to procure services for miscellaneous and major annual exterior maintenance painting of Keesler Air Force Base in Mississippi. The solicitation proposes a five-month base period, with two one-year options and provides that the winning bid will be determined by adding the total price for all options to the total price for the basic requirement. The solicitation states that the Government may reject a bid as nonresponsive if it is found to be materially unbalanced in its pricing of the base and option periods.

When the bids were opened on January 6, 1987, the Air Force received five responses to the solicitation.2 An analysis of the total amounts for each bid (i.e. the base and the two one-year option periods, taken together) shows that plaintiff’s bid reflects the lowest, total cost and that Fasco Construction Company’s bid reflects the second lowest, total cost. Plaintiff’s proposal, however, reflects the lowest offer of all five responses only if the Government exercises the second option year. When considering only the base period offers, Fasco’s bid reflects the lowest response.

Shortly after the bids were opened, based upon the price differential in the base and -optional periods in the bids, as submitted, Fasco filed a protest against Howell’s bid, alleging it to be materially unbalanced in its pricing structure. In response to Fasco’s protest, the contracting officer met with plaintiff to discuss the seemingly low cost it allocated to the second option year. Neither with its bid, nor at the meeting, did plaintiff offer any written documentation to the contracting officer to support the validity of its mathematical calculations. The contracting officer, after reviewing plaintiff’s figures, found [452]*452the bid to be nonresponsive because it was materially unbalanced and, therefore, not necessarily in the best interests of the Government.

Plaintiff then filed a bid protest with the GAO in February 1987, requesting a review of the contracting officer’s decision. On February 27, 1987, plaintiff also filed this action with this Court. Based upon plaintiff’s petition, defendant filed a motion (which plaintiff joined) to suspend this proceeding pending issuance of a GAO decision. Defendant's suspension request was granted and the Court issued a call to the GAO, pursuant to 28 U.S.C. § 2502(a) and Rule 34(d)(1) of the Rules of the Claims Court, to issue a prompt decision. On April 30, 1987, the GAO denied plaintiff’s protest.

The GAO opinion contains a detailed mathematical analysis which shows the following discrepancies in numbers:

[P]ainting services to be performed are generally the same in each contract period, we observe that Howell’s price for the 5-month base period represents some 25 percent of its total bid, whereas the base period prices for the other bids and the government’s estimate range from 15 to 18 percent of those offers. (The base period is itself some 17 percent of the total possible contract period.) Moreover, Howell’s combined price for the base period and the first option year—elements which together comprise only 59 percent of the anticipated 29-month total performance period—represents some 74 percent of its total bid price. In contrast, the respective percentages in the other bids range from 57 to 61 percent. Most significantly, the differential between Howell’s first and second option year prices is approximately 85 percent, a differential which by its magnitude alone indicates that the bid is mathematically unbalanced.

Pursuant to the above calculations, the GAO, found that the agency’s doubt that acceptance of the bid would result in the lowest overall cost to the Government, was a proper reason to reject plaintiff’s bid as materially unbalanced.

Discussion

It is clearly understood that frustrated bidders have a right to seek redress in the Federal Courts for alleged arbitrary or capricious actions on the part of contracting officers, Scanwell Laboratories, Inc. v. Shaffer, 424 F.2d 859 (D.C.Cir.1970).

Elaborating on Scanwell, in M. Steinthal & Co. v. Seamans, 455 F.2d 1289 (D.C.Cir.1971), the same Court addressed the deference Federal Courts should give to agency decision making in contract matters, and articulated the test for review of a contracting officer’s decision. In order to succeed in a request for injunctive relief, a plaintiff must meet the heavy burden of showing that there was no rational basis for the agency’s decision, Steinthal, supra, at 1301, 1306; Southwest Marine, Inc. v. United States, 3 Cl.Ct. 611, 613 (1983); AABCO, Inc. v. United States, 3 Cl.Ct. 109, 113 (1983); Baird Corp. v. United States, 1 Cl.Ct. 662, 664 (1983).

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Bluebook (online)
34 Cont. Cas. Fed. 75,297, 12 Cl. Ct. 450, 1987 U.S. Claims LEXIS 94, Counsel Stack Legal Research, https://law.counselstack.com/opinion/howell-construction-inc-v-united-states-cc-1987.