Related Industries, Inc. v. United States

31 Cont. Cas. Fed. 71,228, 2 Cl. Ct. 517, 1983 U.S. Claims LEXIS 1736
CourtUnited States Court of Claims
DecidedMay 26, 1983
DocketNo. 237-83C
StatusPublished
Cited by38 cases

This text of 31 Cont. Cas. Fed. 71,228 (Related Industries, 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
Related Industries, Inc. v. United States, 31 Cont. Cas. Fed. 71,228, 2 Cl. Ct. 517, 1983 U.S. Claims LEXIS 1736 (cc 1983).

Opinion

[519]*519OPINION

MILLER, Judge:

In this suit plaintiff seeks a declaratory judgment that plaintiff is the properly qualified low bidder for a contract for sleeping bags for which bids were solicited by the Defense Personnel Support Center (DPSC) and an injunction restraining the United States, the Secretary of Defense, the Director of the Defense Logistics Agency, the Director of the Defense Personnel Support Center, the contracting officer and their subordinates from awarding the contract to any other bidder and requiring its award to plaintiff.

The complaint, filed April 13,1983, alleges the following: On or about February 11, 1983, DPSC formally advertised for competitive bids for 150,000 sleeping bags, with bid opening to be on March 10, 1983. Plaintiff was low bidder with a total aggregate bid price of $7,027,350. On or about March 23, 1983, the contracting officer notified plaintiff that he intended to reject its bid as non-responsible and that he planned to reject any and all of plaintiff’s future bids. Its bid was rejected on the ground that its president and sole shareholder is a consultant to another former contractor, Cecile Industries, Inc., which had been rejected on previous solicitations for lack of integrity, tenacity and perseverance and poor performance record. Plaintiff asserts that the contracting officer’s action was taken without a preaward survey required by the Department of the Army regulations and was arbritrary, capricious and contrary to law, and that the award of the contract to a bidder other than plaintiff will cause immediate and irreparable loss, injury and damage to plaintiff.

The government having agreed to postpone its award of the contract long enough to enable trial on the merits, plaintiff waived its motion for temporary restraining order, and the case was set for trial on May 12, 1983.

On May 4,1983, defendant filed a motion to dismiss the complaint. Shortly before trial the court notified both parties of the denial of the motion to dismiss and that the grounds therefor would be included in the opinion filed after trial. The case was tried on May 12 and 13, 1983. Award of the contract has now been postponed until May 31, 1983.

I

Defendant’s Motion to Dismiss Complaint

The motion to dismiss alleges that the proposed contract is set aside for small business, and under such circumstances by statute and regulation the Small Business Administration (SBA) is required to make a responsibility determination; that under the applicable statute the SBA’s determination is conclusive; and, further, that under such statute neither the SBA nor the Department of Defense acting pursuant to the SBA determination, may be enjoined.

In its brief in support of its motion, defendant reprints and incorporates the decision in Speco Corp. v. United States, 2 Cl.Ct. 335 (1983) (MAYER, J.). However, for the reasons set forth hereinafter I respectfully disagree with that decision and decline to follow it.

A. The Contention that the Small Business Administration Determination is Final

Defendant and the Speco decision rely upon two statutory sections, 15 U.S.C. §§ 637(b)(7) (Supp. V 1981) and 634(b)(1) (1976). The first of these sections is in pertinent part as follows:

§ 637. Additional powers
******
(b) Procurement and property disposal powers; determination of small business concerns
It shall also be the duty of the [Small Business] Administration and it is empowered, whenever it determines such action is necessary—
******
(7)(A) To certify to Government procurement officers * * * with respect to [520]*520all elements of responsibility, including, but not limited to, capability, competency, capacity, credit, integrity, perseverance, and tenacity, of any small business concern or group of such concerns to receive and perform a specific Government contract. A Government procurement officer * * * may not, for any reason specified in the preceding sentence preclude any small business concern or group of such concerns from being awarded such contract without referring the matter for a final disposition to the Administration.
******
(C) In any case in which a small business concern or group of such concerns has been certified by the Administration pursuant to (A) or (B) to be a responsible or eligible Government contractor as to a specific Government contract, the officers of the Government having procurement * * * powers are directed to accept such certification as conclusive, and shall let such Government contract to such concern or group of concerns without requiring it to meet any other requirement of responsibility or eligibility.

It is contended that because the statute gives “final disposition” of the competency certification to the SBA, this court may not review the propriety of plaintiff’s rejection. However—

1. The final disposition to which the statute refers is only final with respect to a decision certifying a contractor to the procurement officer as responsible. The procurement officer is required to refer the matter to the SBA only after he has decided to preclude a small business concern from being awarded a contract for lack of responsibility. Thus, if the SBA’s decision reverses the procurement officer and certifies the small business concern as responsible, such disposition is made final as to the procurement officer so as to protect the concern from such officer’s refusal to follow the SBA decision. The procurement officer is “directed to accept such certification as conclusive, and shall let such Government contract to such concern.” There is no rational basis for construing this protective provision to deny to the small business concern access to a court which is otherwise available to all other business concerns, for relief from adverse actions by the procurement officer or the SBA, or both, which are in violation of the concern’s rights under the Constitution, are contrary to statutes or regulations, or are otherwise arbitrary or capricious.

2. The focus of Defense Acquisition Regulations (DAR)1 1-705.4 is also consistent with this construction. Subparagraph (a) reads: “Contracting officers shall accept SBA certificates of competency as conclusive of a prospective contractor’s responsibility * * * unless the contracting officer has substantial doubt as to the concern’s ability to perform,” in which event he is to refer the matter back to the SBA. Subpar-agraph (f) then provides:

Following an appeal, the determination, if affirmative, made by the SBA Associate Administrator relative to Certificate of Competency action shall be considered conclusive, and the contracting officer shall award the contract to the concern without requiring the concern to meet any other requirement of responsibility.

3. The text or legislative history of a statute must provide “ ‘clear and convincing’ evidence of congressional intent * * * before a statute will be construed to restrict access to judicial review.” Johnson v. Robison, 415 U.S.

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31 Cont. Cas. Fed. 71,228, 2 Cl. Ct. 517, 1983 U.S. Claims LEXIS 1736, Counsel Stack Legal Research, https://law.counselstack.com/opinion/related-industries-inc-v-united-states-cc-1983.