J.G.B. Enterprises, Inc. v. United States

921 F. Supp. 91, 40 Cont. Cas. Fed. 76,941, 1996 U.S. Dist. LEXIS 4698, 1996 WL 172374
CourtDistrict Court, N.D. New York
DecidedApril 12, 1996
DocketNo. 95-CV-155 (RSP-GJD)
StatusPublished

This text of 921 F. Supp. 91 (J.G.B. Enterprises, Inc. v. United States) is published on Counsel Stack Legal Research, covering District Court, N.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
J.G.B. Enterprises, Inc. v. United States, 921 F. Supp. 91, 40 Cont. Cas. Fed. 76,941, 1996 U.S. Dist. LEXIS 4698, 1996 WL 172374 (N.D.N.Y. 1996).

Opinion

POOLER, District Judge.

INTRODUCTION

Plaintiff J.G.B. Enterprises, Inc. (“JGB”) and defendants United States, United States Army Aviation and Troop Command (“AT-COM”), and United States Small Business Administration (“SBA”) cross-moved for summary judgment in this government contracts action. In the alternative, JGB opposed the government’s summary judgment motion. Because there is no material issue of fact regarding the government’s reasonable award of the disputed contract, I grant the government’s motion for summary judgment and dismiss JGB’s complaint.1

BACKGROUND

The following facts are undisputed. On April 28, 1994, ATCOM issued a bid invitation for a government contract to supply six portable water storage and distribution sys[93]*93terns. Bernhardt Aff. of 4/20/95, Ex. 1. The government uses the systems to provide safe, potable water to between 3,000 and 4,000 people at a time during military exercises and disasters. Smith Aff. of 4/26/95, ¶3. The contract was subject to the requirements of the Walsh Healey Public Contracts Act (“Walsh-Healey”) as well as a small business set-aside preference. Bernhardt Aff. ¶ 4 & Ex. 1. Both JGB and Alpine submitted bids. According to plaintiff, JGB supplied similar water systems under a previous government contract. Id. ¶ 6. Alpine in 1992 won a government contract involving the manufacture and supply of 113 hypochlorination units, which are a component of the water storage and distribution systems but are not part of the instant contract. See Uptain Decl. of 4/27/95, ¶ 8 & Ex. 6; see also Bernhardt Aff. ¶ 14; Smith Aff. ¶ 4. Plaintiff stresses that the two products are distinct. PL Opp’n to Def. Statement of Material Facts, ¶ 16.

Based on the parties’ submissions, AT-COM determined that Alpine was the apparent low bidder, with a bid of $181,608, and JGB was the next lowest bidder with a bid of $225,890. Uptain Decl. ¶4. At ATCOM’s request, Alpine verified its bid amount. Id. Ex. 5. On July 15, 1994, the contracting officer for ATCOM, Howard Uptain, requested a pre-award survey, which is an investigation into Alpine’s ability to successfully complete the contract. Id. ¶ 7. ATCOM relied on a pre-award survey conducted by AT-COM’s Production Management Division on July 8, 1994, in connection with another contract. Id. ¶¶9-10 & Ex. 7. The resulting survey dated July 19,1994, found that Alpine met all production and technical requirements for the contract except that Alpine was “nonresponsible” with respect to its accounting system because the system did not permit the use of progress payments. Id. Ex. 7, at 15. JGB contends that ATCOM’s pre-award survey was merely cursory.

Uptain informed Alpine of ATCOM’s determination by letter dated August 2, 1994. Uptain Decl. Ex. 8. By letter dated August 11, 1994, Uptain referred the issue concerning Alpine’s accounting system to the SBA because “the contractor was notified of the [ATCOM] Contracting Officer’s Determination of Nonresponsibility and the contractor has requested a determination of responsibility be made by the Small Business Administration.” Id. Ex. 9.

ATCOM’s referral to the SBA is an administrative appeal. See 48 C.F.R. § 219.602-1 (1994); 48 C.F.R. § 19.602-1 (1994); 13 C.F.R. § 125.5(d) (1995). The SBA is authorized to conduct its own review of the small business and issue it a “certificate of competency” if the SBA is satisfied that the small business is a responsible bidder. 13 C.F.R. § 125.5(d) & (e). If a certificate of competency issues, then “[c]ontracting officers are directed to award a contract without requiring the firm to meet any other requirement with respect to responsibility and eligibility.” Id. § 125.5(j). See generally Ulstein Maritime, Ltd. v. United States, 833 F.2d 1052, 1054 (1st Cir.1987) (explaining conclusive effect of certificate of competency review).

In a report dated August 29, 1994, an industrial specialist working for the SBA concluded that “Alpine Industries has all the technical and financial capabilities to perform” the water system contract. Koppel Decl. of 4/26/95, Attach., at 4. In addition to reviewing and approving Alpine’s new accounting system, the SBA industrial specialist reviewed and approved Alpine’s technical capabilities, plant, facilities and equipment, material availability, quality control, and production and performance capability with respect to the water system contract. The SBA investigation included a survey visit to Alpine’s manufacturing facilities in Alpine, Utah, although the SBA’s loan officer did not visit the site. Id. At a meeting on September 6,1994, a regional committee of the SBA reviewed the industrial specialist’s investigation and concluded that Alpine was qualified to perform the ATCOM contract. The committee unanimously issued a certificate of competency to Alpine. Id.

Meanwhile, JGB performed its own investigation of its competitor and determined that Alpine could not perform the contract. JGB consequently filed two pre-award bid protests with ATCOM on August 31, 1994. Bernhardt Aff. Ex. 6. In the first protest, JGB claimed that Alpine was not a responsi[94]*94ble bidder and was unable to physically perform the contract within the time and cost stipulated. In the second protest, JGB claimed that Alpine was not qualified to receive the contract because it was not a “manufacturer” or “regular dealer” as required by Walsh-Healey but instead intended to rely on subcontractors to fulfill the contract. See 48 C.F.R. §§ 22.606-1, 22.606-2 (1994) (defining manufacturer and regular dealer). In the nearly identical protests, JGB claimed that (1) Alpine’s physical plant was too small to permit manufacture of more than one unit at a time; (2) Alpine employed too few people to perform the work unless the company subcontracted substantial portions of the job; (8) Alpine had no experience in manufacturing this complex equipment; (4) Alpine needed to purchase expensive testing and manufacturing equipment in order to complete the contract, and these costs were not reflected in Alpine’s bid price; (5) Alpine’s bid price was too low to cover the costs of material and labor;2 and (6) based on Alpine’s previous work experience, it could manufacture only 5 percent of the water systems itself and would need to subcontract for other components.

ATCOM denied both of JGB’s pre-award protests by letter dated September 23, 1994. Bernhardt Aff. Ex. 7. In the letter, ATCOM stated that it was required to award the contract to Alpine once the SBA had issued a certificate of competency in favor of Alpine. Citing 15 U.S.C. § 637

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921 F. Supp. 91, 40 Cont. Cas. Fed. 76,941, 1996 U.S. Dist. LEXIS 4698, 1996 WL 172374, Counsel Stack Legal Research, https://law.counselstack.com/opinion/jgb-enterprises-inc-v-united-states-nynd-1996.