SAI Industries Corp. v. United States

60 Fed. Cl. 731, 2004 U.S. Claims LEXIS 128, 2004 WL 1179341
CourtUnited States Court of Federal Claims
DecidedMay 26, 2004
DocketNo. 03-2698C
StatusPublished
Cited by26 cases

This text of 60 Fed. Cl. 731 (SAI Industries Corp. v. United States) is published on Counsel Stack Legal Research, covering United States Court of Federal Claims primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
SAI Industries Corp. v. United States, 60 Fed. Cl. 731, 2004 U.S. Claims LEXIS 128, 2004 WL 1179341 (uscfc 2004).

Opinion

OPINION

REGINALD W. GIBSON, Senior Judge.

INTRODUCTION

This pre-award bid protest case was filed by SAI Industries Corp., a metalworking firm based in San Antonio, Texas. Here at bar, SAI seeks a permanent injunction to prevent the government from awarding solicitation SPO475-04-R-0397 for the production of T-37 aircraft tailpipes. SAI belatedly learned that it was not a pre-approved source for said T-37 tailpipes, on or about October 21, 2003, through the Defense Logistics Agency’s (“DLA”) Defense Supply Center— Richmond (“DSCR”) facility. Previously, SAI had supplied DSCR with such tailpipes under three prior contracts, contract SP0475-98-M-3765 (awarded in March 1998), contract SP0475-00-M-NC96 (awarded in May 2000), and contract SPO475-01-C1906 (awarded in August 2001), and during which time(s), it was on the DSCR’s preapproved source list. In subject complaint, SAI alleges herein that (i) DSCR’s decision to remove it (SAI) as an approved source was arbitrary and capricious, and otherwise in violation of applicable law, (ii) DSCR’s tardy notification of SAI of its removal is in violation of applicable law, (iii) DSCR violated FAR § 9.205 because it failed to urge SAI to qualify, as required, for future contracts for T-37 tailpipes, and (iv) SAI suffered actionable prejudice directly attributable to one or more of the aforementioned allegations. For reasons to follow, we GRANT SAI’s motion for permanent injunction because we find that SAI was in fact prejudiced by DSCR’s failure to timely notify SAI of SAI’s removal from the approved source list for the production of T-37 aircraft tailpipes in violation of FAR § 9.207(b), and also by DSCR’s failure to comply with FAR § 9.205, which requires the government to make a bona fide effort to encourage competition when a solicitation is restricted to approved sources.

PROCEDURAL POSTURE

This pre-award bid protest arises out of the Defense Supply Center Richmond (DSCR) solicitation SPO-475-04-R-0397 for the manufacture of T-37 military aircraft tailpipes. Plaintiff, SAI Industries Corp., filed this action with the court on November 20, 2003.1 As the closing date for the instant solicitation was scheduled for November 20, 2003, and the award date noted in the solicitation was on or before February 17, 2004,2 plaintiff requested neither a TRO nor a preliminary injunction. Instead, plaintiff seeks only permanent injunctive relief to prevent the government from awarding the instant solicitation without considering SAI for the award. At a status conference with the parties held on November 25, 2003, the court inquired of the government whether it would consider withholding the award of said contract until the court was able to rule on the propriety of plaintiff’s motion for a permanent injunction. The government, heeding the court’s advice regarding the difficult position it would be placed in if it awarded the contract and was subsequently enjoined by this court, agreed to stay the award of the instant solicitation until the court’s ruling on this bid protest. On March 22 and 23, 2004, [734]*734oral argument was heard in open court on plaintiffs motion for permanent injunction, at which time additional evidence was received by the court to supplement the administrative record.3

JURISDICTION

Pursuant to 28 U.S.C. § 1491, the United States Court of Federal Claims has jurisdiction to hear pre-award bid protest claims of interested parties,4 and “may award any relief that the court [deems just and] proper, including [but not limited to] declaratory and injunctive relief.” 28 U.S.C. § 1491(b)(2).

FACTUAL BACKGROUND

A. The Instant Solicitation

As previously noted, plaintiff, SAI, is a metalworking firm based in San Antonio, Texas. Since 1998, it had supplied T-37 tailpipes to the DLA. In fact, SAI supplied three of the previous four such contracts, specifically contract SP0475-98-M-3765 (awarded in March 1998), contract SP047500-M-NC96 (awarded in May 2000), and contract SP0475-01-C-1906 (awarded in August 2001). The parties agree that the T-37 tailpipe is a flight-safety critical part,5 and that the government has maintained a list of qualified sources of supply (“pre-approved list”) since at least 1990 to ensure the quality of the T-37 tailpipes it procures.

On or about October 3, 2003, the government posted a notice that it would issue solicitation SPO475-04-R-0397 for the production of T-37 aircraft tailpipes on October 17, 2003. This notice was posted on the internet on the Federal Business Opportunities website, and on the DLA Procurement Gateway. In view of the pre-solicitation posting on the internet, SAI learned of the forthcoming issuance of the subject solicitation on or about October 3, 2003. The presolicitation notice, and the subsequently issued solicitation, listed two vendors as approved sources,6 to wit: Barnes Group Inc. and Senior Operations Inc. Barnes Group has not previously supplied T-37 tailpipes to DLA, but it completed a Source Approval Request (SAR) that was forwarded to Hill Air Force Base (“AFB”), to the attention of Jacob McCreakon (sic),7 and was subsequently qualified as a pre-approved source on November 26, 2002. Mr. McReaken is a Mechanical Systems Engineer attached to Hill AFB in Ogden, Utah. He is part of the Engineering Support Activity (“ESA”) for T-37 tailpipe procurements.8 The vendor Senior Operations has, on the other hand, supplied a prior contract for T-37 tailpipes in 1999. All other vendors seeking to bid on this solicitation were required to complete a [735]*735SAR package by the closing date of the solicitation (i.e., November 20, 2003) in order to qualify as a source for the product specified, pursuant to FAR § 9.202(c).9 The government, however, need not delay the award of a contract in order to provide a potential offeror with an opportunity to qualify. FAR § 9.202(e).

When SAI became aware of the instant solicitation on or about October 3, 2003, it noted that it was not listed as an approved source. Upon the issuance of the solicitation on October 17, 2003, SAI emailed the buyer noted thereon, Mr. Charles Hall, and asked him why SAI was not listed as an approved source. Mr. Hall’s non-responsive reply via email informed SAI only that it was not preapproved to bid on this solicitation. Mr. Hall failed to provide SAI with any reasons why it was removed from the pre-approved source list. Mr. Hall did, on the other hand, inform SAI that it could complete a SAR package and, if successful, could qualify for the contract. Upon further questioning by the petitioner as to why it was not pre-approved, Mr. Hall informed SAI only that the ESA determined that SAI was no longer an approved source for T-37 tailpipes, and that SAI should get in contact with the ESA for specific information regarding the reason(s) for its removal. SAI was further informed that, while it could submit a SAR, the solicitation’s November 20, 2003 closing date would not be postponed in order to give SAI time to successfully qualify. Thereupon, SAI submitted its bid, but did not submit a SAR until December 5, 2003. Following thereon, SAI brought this pre-award bid protest action.

B.

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Bluebook (online)
60 Fed. Cl. 731, 2004 U.S. Claims LEXIS 128, 2004 WL 1179341, Counsel Stack Legal Research, https://law.counselstack.com/opinion/sai-industries-corp-v-united-states-uscfc-2004.