Morgan Business Associates, Inc. v. United States

619 F.2d 892, 27 Cont. Cas. Fed. 80,313, 223 Ct. Cl. 325, 1980 U.S. Ct. Cl. LEXIS 122
CourtUnited States Court of Claims
DecidedApril 2, 1980
DocketNo. 274-78
StatusPublished
Cited by58 cases

This text of 619 F.2d 892 (Morgan Business Associates, 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
Morgan Business Associates, Inc. v. United States, 619 F.2d 892, 27 Cont. Cas. Fed. 80,313, 223 Ct. Cl. 325, 1980 U.S. Ct. Cl. LEXIS 122 (cc 1980).

Opinion

DAVIS, Judge,

delivered the opinion of the court:

In response to a request by the Government, plaintiff Morgan Business Associates, Inc. (Morgan) submitted a proposal concerning the development and management of certain conferences for the Energy Research and Development Administration (ERDA).1 After the proposal was received by ERDA, it was somehow lost, and was never considered by the contracting officer. Plaintiff brought this suit for its bid preparation costs, asserting that the defendant was arbitrary and capricious in failing to consider the proposal.2 The case is before us on cross-motions for summary judgment, based on a stipulation of facts. We conclude that the stipulated facts fail to establish that plaintiff was injured by the defendant’s breach of duty, and we therefore hold for the Government.

In October 1976, the San Francisco Operations Office of ERDA issued a request for proposals on development and management of ERDA conservation research and technology conferences. Contract award was to be by negotiated procurement. Morgan submitted its proposal by certified mail. This proposal was received by the designated office before the deadline, but thereafter it was misplaced or lost. Accordingly, it was never evaluated by the Technical Advisory Board convened to consider the proposals submitted, nor was it appraised by the contracting officer. After [328]*328negotiation with other proposers, four contracts were awarded to others than Morgan.

In January 1977, after an exchange of communications between plaintiff and ERDA, the failure to consider the Morgan proposal was discovered. On the suggestion of the agency, plaintiff submitted a copy of its proposal for informal evaluation. Gail Garbarini, then employed at Department of Energy headquarters, reviewed the proposal under the evaluation criteria of the request for proposals, and determined that plaintiff would not have been chosen for negotiation leading to an award.

Morgan’s claim raises issues not settled in the decisions in which the court has considered a party’s right to recover bid preparation costs. See Heyer Products Co. v. United States, 135 Ct. Cl. 63, 140 F. Supp. 409 (1956); Keco Industries Inc. v. United States, 192 Ct. Cl. 773, 428 F.2d 1233 (1970) (Keco I); Keco Industries Inc. v. United States, 203 Ct. Cl. 566, 492 F.2d 1200 (1974)(Neco II); Burroughs Corp. v. United States, ante at 53. There the Government had invited bids or proposals and had actually considered and rejected the plaintiffs submission. The focus of the controversy was on how the Government had treated that bid. The complaint was either that the consideration of plaintiffs bid or proposal had been arbitrary, capricious, or in bad faith, Heyer Products, supra, see also Continental Business Enterprises Inc. v. United States, 196 Ct. Cl. 627, 452 F.2d 1016 (1971), or that the consideration and acceptance of a competitor’s bid or proposal was arbitrary, capricious, or in bad faith, with resulting detriment to the plaintiff, Keco II, supra, Burroughs Corp., supra, see also McCarty Corp. v. United States, 204 Ct. Cl. 768, 499 F.2d 633 (1974).

In this case, however, plaintiffs proposal, though received by ERDA, was never considered by the contracting officer or the Technical Advisory Board. We must decide whether, under the facts given to us, the Government’s total failure to consider the proposal submitted in response to its invitation creates a claim for bid preparation costs enforceable in this court.

The parties ask us to adopt opposite approaches which have broad sweep and are by their nature outcome determi[329]*329native. Defendant urges a two-part test. It contends that plaintiff must first show that the loss of the proposal was a result of more than simple negligence. It suggests this is mandated by our conclusion in Keco II, supra, that in that instance simple negligence was not enough to establish a right to recover bid preparation costs. The argument continues that plaintiff must also show that the Government’s failure to consider its bid properly was the cause of its failure to receive a contract. In other words, Morgan must show that, but for the Government’s breach of duty, it would have received a contract. Defendant analogizes this to the requirement that a plaintiff show "proximate cause” to recover in a negligence action.

Plaintiff, on the other hand, asserts that the failure to consider a proposal is a per se violation of 10 U.S.C. § 2304(g)(1976),3 and governing procurement regulations,4 and that this alone is sufficient to establish a right to bid preparation costs. It argues that to require plaintiffs whose bids are lost to prove that the loss was due to gross negligence or bad faith would impose an insurmountable burden of proof and create an enormous opening for covert misconduct by federal officials.

We think that the parties’ approaches are each too broad in that they ignore the general teaching of the Heyer line of decisions that each bid-preparation claim must be judged in the circumstances forming the basis of the challenge. Defendant misreads our opinion in Keco II, supra, to say that a negligent action by the Government can never be the basis of a recovery of bid preparation costs. The holding in that case was quite narrow, as the pertinent language shows:

The mere failure to exercise due diligence in the appraisal of the advantageousness of a competitor’s bid, when that omission amounts to simple negligence, is not a [330]*330sufficient showing of arbitrary and capricious conduct to warrant recovery of bid preparation expenses. The Government’s duty to exercise care in evaluating the 'price and other factors’ of a bid runs first to the proponent of that bid and to the public and its representatives, and only thén to another bidder. The responsibility to the latter is too attenuated to justify assessing damages for simple negligence, especially in light of the broad discretion of procurement officials in that aspect of the bid process. [Id. at 579, 492 F.2d at 1206-07.]

The facts in this case are significantly different from the context of Keco II. The challenge here is not to the manner of the Government’s consideration of a bid or a proposal, but to a complete failure to give any consideration. Moreover, the challenge concerns plaintiffs own proposal, not that of a competitor. The duty to evaluate proposals runs directly to the proponent of that proposal — Morgan in this instance. Finally, the contracting officer has no discretion as to whether to give initial consideration to a proposal which is submitted in a timely manner. He must do so. In Heyer Products, supra, we held that when the Government issues an advertisement for bids it creates an implied promise to give fair and honest consideration to the bids submitted in response. Id. at 69, 140 F. Supp. at 412-13.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Hvf West, LLC v. United States
Federal Claims, 2020
Stg LLC v. United States
Federal Claims, 2020
Novak Birch, Inc. v. United States
132 Fed. Cl. 578 (Federal Claims, 2017)
Palantir Technologies Inc. v. United States
128 Fed. Cl. 21 (Federal Claims, 2016)
Diaz v. United States
127 Fed. Cl. 664 (Federal Claims, 2016)
Universal Protection Service, Lp v. United States
126 Fed. Cl. 173 (Federal Claims, 2016)
Prescient, Inc. v. United States
125 Fed. Cl. 475 (Federal Claims, 2016)
American Auto Logistics, Lp v. United States
117 Fed. Cl. 137 (Federal Claims, 2014)
Caddell Construction Co., Inc. v. United States
111 Fed. Cl. 49 (Federal Claims, 2013)
Red River Communications, Inc. v. United States
109 Fed. Cl. 497 (Federal Claims, 2013)
Contracting, Consulting, Engineering LLC v. United States
104 Fed. Cl. 334 (Federal Claims, 2012)
GTA Containers, Inc. v. United States
103 Fed. Cl. 471 (Federal Claims, 2012)
Linc Government Services, LLC v. United States
96 Fed. Cl. 672 (Federal Claims, 2010)

Cite This Page — Counsel Stack

Bluebook (online)
619 F.2d 892, 27 Cont. Cas. Fed. 80,313, 223 Ct. Cl. 325, 1980 U.S. Ct. Cl. LEXIS 122, Counsel Stack Legal Research, https://law.counselstack.com/opinion/morgan-business-associates-inc-v-united-states-cc-1980.