Orion Technical Resources, LLC v. Los Alamos National Security, LLC

2012 NMCA 97, 2012 NMCA 097, 2 N.M. 599
CourtNew Mexico Court of Appeals
DecidedAugust 6, 2012
DocketDocket 30,928
StatusPublished
Cited by9 cases

This text of 2012 NMCA 97 (Orion Technical Resources, LLC v. Los Alamos National Security, LLC) is published on Counsel Stack Legal Research, covering New Mexico Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Orion Technical Resources, LLC v. Los Alamos National Security, LLC, 2012 NMCA 97, 2012 NMCA 097, 2 N.M. 599 (N.M. Ct. App. 2012).

Opinion

OPINION

VANZI, Judge.

{1} Plaintiff Orion Technical Resources, LLC (Orion) appeals from the district court’s order dismissing its claim for breach of implied contract against Defendant Los Alamos National Security, LLC (LANS) and for denying its motion for injunctive relief against LANS and Defendant COMPA Industries, Inc. (COMPA) (collectively, Defendants). We address two issues on appeal: (1) whether an implied-in-fact contract can ever existbetween a disappointed bidder and the solicitor of bids in the private procurement process and (2) whether the district court erred when it concluded as a matter of law that injunctive relief is never available to a disappointed bidder. Here, Orion filed a complaint alleging that there was an implied-in-fact contract between it and LANS that arose within the context of LANS’s solicitation for bids. Specifically, Orion alleged that the implied-in-fact contract required LANS to follow certain procedures in evaluating the proposals of the prospective bidders and selecting the winner of the subcontract. We first hold that a disappointed bidder is not barred as a matter of law from bringing a claim based on an implied-in-fact contract in the context of the private solicitation process, and we reverse the district court on that issue. In addition, although we conclude that the district court properly denied Orion’s request for injunctive relief, we reverse its decision that injunctive relief is never available to a disappointed bidder under any circumstances. Finally, because we conclude that expectancy damages can be a possible remedy in this type of case, we reverse the district court’s ruling that Orion’s only available remedy is limited to reliance damages.

BACKGROUND

{2} LANS is the management and operating contractor at the Los Alamos National Laboratory (LANL). In 2007, LANS issued a request for proposals (RFP) for a subcontract to provide vendor management and staff augmentation services (service contract) to LANL. Orion and COMPA were two of the three companies that submitted bids and were selected as finalists. After providing their best and final offers, LANS awarded the contract to COMPA.

{3} Shortly after COMPA executed the service contract with LANS, Orion filed a complaint for injunctive relief and damages claiming that LANS breached an implied-in-fact contract with Orion that arose out of the RFP bid selection process. The twenty-three-page complaint set out detailed factual allegations regarding the process by which LANS solicited and selected bids for the service contract. For example, it alleged that

[pjursuantto LANS’s [RFP], Source Selection Plan[,] and custom and norms for [management and operations] procurements, LANS was obligated to ensure that the bid selection process followed basic principles of fairness and competition. LANS violated its obligation to ORION to conduct a fair and competitive procurement process by failing to follow[] its own RFP, including the Source Selection Plan, its Procurement Policies and Procedures, and the well-established customs and norms for [management and operations] procurement bids.

The complaint also alleged that LANS assured bidders that the solicitation process would be fair, competitive, and negotiated; that LANS deviated from the selection process and criteria set out in its RFP and Source Selection plan by engaging in discussions with only one bidder and awarding the service contract to a bidder that did not meet the requirements of the RFP; and that LANS failed to follow “well-established customs and norms in procurement and acquisition practices that are necessary for a full, open and competitive process.” In these ways, Orion claimed that LANS breached the alleged implied-in-fact contract that required LANS to give fair consideration to Orion and to strictly comply with the representations it made in its RFP and Source Selection Plan.

{4} Based on the allegations in the complaint, Orion filed a motion for preliminary injunction and an application for a temporary restraining order requesting that the district court restrain and permanently enjoin LANS and COMPA from proceeding with the performance of the service contract, order LANS to reimburse Orion for the cost of preparing the bid, award Orion other costs, damages, and attorney fees, and provide any other relief deemed appropriate. The district court initially granted Orion’s application for a temporary restraining order and prohibited Defendants from continuing to process any transition-related documentation for current employees of Orion until Orion’s motion for a preliminary injunction was heard. Thereafter, in a memorandum opinion and order dated June 29, 2009, the district court vacated the temporary restraining order and denied Orion’s motion for a preliminary injunction. At this point, COMPA had already begun to transition to full operation on the service contract and expected to start full performance within days of the district court’s order.

{5} In March 2010, LANS filed a motion for judgment on the pleadings for failure to state a claim under Rule 1-012(C) NMRA. LANS argued that Orion’s claim for breach of implied-in-fact contract required dismissal because New Mexico does not recognize that cause of action in the private procurement context. LANS filed a separate motion for judgment on the pleadings on Orion’s request for permanent injunctive relief, arguing that, because the service contract had already been awarded, an injunction would not remedy improper conduct but would only serve to punish LAN S. COMP A filed a similar motion pursuant to Rule 1-056 NMRA and asked the district court to grant partial summary judgment to COMPA on Orion’s request for injunctive relief. The district court granted both of LANS’s Rule 1-012(C) motions and COMPA’s Rule 1-056 motion. Orion timely appealed.

DISCUSSION

{6} In this appeal, we first address whether an implied-in-fact contract may arise between parties in the private bid solicitation and selection process. Because we answer that question in the affirmative, we then discuss whether injunctive relief is ever available to a disappointed bidder if the solicitor of bids breaches such an implied-in-fact contract. Although we conclude that injunctive relief may be appropriate under certain circumstances, it is not available to Orion under this set of facts. However, the district court erred when it limited recovery to reliance damages incurred by a bidder based upon the preparation and submission of its bid.

An Implied-In-Fact Contract May Exist in the Private Procurement Context

{7} Orion argues that the district court erred in finding that an implied-in-fact contract to follow certain procedures in evaluating and selecting bids can never exist between private companies in the bidding and procurement context. Here, the district court ruled that the only time an implied contract can be found in the procurement process is when a governmental entity is soliciting bids. The court reasoned that in the public procurement context, there are statutes governing the bid selection process that may give rise to an implied contract. Those statutes specifically provide that public entities will consider all bids fairly and equitably. Private solicitors of bids, on the other hand, are not bound by such statutes.

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Bluebook (online)
2012 NMCA 97, 2012 NMCA 097, 2 N.M. 599, Counsel Stack Legal Research, https://law.counselstack.com/opinion/orion-technical-resources-llc-v-los-alamos-national-security-llc-nmctapp-2012.