San Francisco Drydock, Inc. v. Dalton

131 F.3d 776, 42 Cont. Cas. Fed. 77,245, 97 Daily Journal DAR 13917, 97 Cal. Daily Op. Serv. 8593, 1997 U.S. App. LEXIS 31786, 1997 WL 700941
CourtCourt of Appeals for the Ninth Circuit
DecidedNovember 12, 1997
DocketNo. 96-15549
StatusPublished
Cited by19 cases

This text of 131 F.3d 776 (San Francisco Drydock, Inc. v. Dalton) is published on Counsel Stack Legal Research, covering Court of Appeals for the Ninth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
San Francisco Drydock, Inc. v. Dalton, 131 F.3d 776, 42 Cont. Cas. Fed. 77,245, 97 Daily Journal DAR 13917, 97 Cal. Daily Op. Serv. 8593, 1997 U.S. App. LEXIS 31786, 1997 WL 700941 (9th Cir. 1997).

Opinion

NOONAN, Circuit Judge.

San Francisco Drydock, Inc., (SFD) and Service Engineering Co. (SECO), collectively [777]*777the plaintiffs, appeal the judgment of the district court in favor of John H. Dalton, Secretary of the Navy, and Dennis P. Dren-nan, Real Estate Contracting Officer, (collectively the Navy) and Astoria Metal Corporation (Astoria). The gravamen of the plaintiffs’ complaint is that the Navy invited proposals to lease a drydock located at Hunters Point,- San Francisco on one basis and then unfairly changed that basis. The issue presented is whether the Navy was bound by the Federal Property and Administrative Services Act, 40 U.S.C. § 484(e) (“the Federal Property Act”), to award a lease of a drydock in a closed base by fair and full competition or whether a congressional enactment specifically governing leases at closed bases, 10 U.S.C. § 2667(b), freed the Navy to lease such drydoeks, pending their final disposal, without regard to the Federal Property Act. We are bound to harmonize the statutes Congress has written. The Navy proceeded ' under § 2667(b); it was still bound by the Federal Property Act. Therefore, the judgment of the district court must be reversed and the case remanded for further proceedings.

THE PROPERTY AND THE PARTIES

The Property: Drydock No. 4 is located at Hunters Point Annex, San Francisco. Dry-dock No. 4 is a graving dock, that is, a permanent structure on land with gates that allow vessels to enter and that then can be closed to drain out the water. In other words it is a dry drydock. Drydock No. 4 is large, over 1,000 feet long and capable of accommodating most vessels now in existence. It is located in a naval shipyard that has been closed. The surrounding community is poor and largely African-American.

The Plaintiffs: SFD is the operator of a shipyard at the foot of 20th Street, San Francisco. It has floating drydoeks but no graving docks and would like to acquire Drydock No. 4. SFD and its corporate predecessors have engaged in the repair and overhaul of Navy and commercial vessels since 1978. SECO and its predecessors have been engaged in the repair and overhaul of Navy and commercial vessels in the San Francisco Bay area since 1955. It currently operates a ship repaii' yard at Pier 50. It neither owns nor leases a drydock and would like to acquire Drydock No. 4.

The Defendants: The lessor, the Secretary of Navy and the contracting officer, in their official capacities, and the lessee, Astoria, which had operated a ship repair business since 1988 in Portland, Oregon are co-defendants.

PROCEDURE

On November 17, 1993, the Navy issued a Request for Proposals or RFP for the lease of Drydock No. 4. The RFP, inter alia, said that the successful bidder must provide a $5 million performance bond. On December 8, 1993 the Navy held a Pre-Proposal Conference at which SFD objected to this requirement and was told by the Navy that it would not be changed. In the light of this response, and receiving no further communication from the Navy, SFD did not bid for the lease.

On February 16, 1994, SECO, Astoria and one other company subriiitted proposals for the lease. The third company was rated as lacking in experience by the Source Selection Board that evaluated the proposals. SECO and Astoria were both rated good as to experience; good as to the financial information provided; good as to their waste management plans; and good as to their plans for local and minority hiring. SECO was rated good as to use of a drydock for ship repair; Astoria was rated excellent because it would use the dock for “ship-breaking operations.” SECO offered the required performance bond and $50,000 in annual rent. Astoria did not submit the performance bond required by the RFP and offered $240,000 annual rent. Astoria was selected and given' a five year lease with options to renew for five years and then another five years.

SECO called, Foul! and, with SFD, on February 4,1995 brought this suit.

On cross-motions for summary judgment, the district court ruled for the Navy and Astoria. In a carefully-reasoned opinion that court- held that the Navy had proceeded under 10 U.S.C. § 2667(f) and that this statute did not provide for judicial review; nor did [778]*778the court find any other basis for the plaintiffs’ case. Citing Armstrong & Armstrong, Inc. v. United States, 514 F.2d 402 (9th Cir.1975) and CACI, Inc. Federal v. United States, 719 F.2d 1567 (Fed.Cir.1983), the court noted that the plaintiffs might have a claim under an “implied contract” created by the RFP: the court dismissed this claim without prejudice so that the plaintiffs might, if they chose, pursue it in the Court of Claims. The court entered judgment for the Navy and Astoria.

SFD and SECO appeal.

ANALYSIS

Standing. The plaintiffs assumed that they had standing to bring this suit; the defendants did not deny it; and the district court accepted the case. It is, however, our obligation to be sure that standing exists and to raise, sua sponte if need be, any deficiency. In some circumstances, as where a party neither participated in the bidding process nor protested afterward and could not qualify as an actual or “prospective” bidder under 31 U.S.C. § 3551, a non-bidder lacks standing to sue. Waste Management of North America, Inc. v. Weinberger, 862 F.2d 1393, 1398 (9th Cir.1988). SFD was not such a party and has standing in this case. The RFP provided for a category of what it termed “prospective offerors” who were to come to a “pre-proposal conference” to comment on the RFP. SFD came to the pre-proposal conference and was a “prospective offeror.” The RFP said that “this solicitation will remain unchanged unless it is amended in writing.” SFD asked for a change in the $5 million performance requirement - and was turned down. This rejection of its request for deleting the bond requirement is what kept it from bidding. The RFP said that any information given to any “prospective offeror” would be given promptly “to all prospective offerors” if it was “necessary for submitting offers”, or “lack of it would be prejudicial to other prospective offerors.” Yet the information that the $5 million performance bond requirement would be waived was not given to SFD as promised, and the solicitation was in effect changed without a written change circulated to all prospective offerors. Unlike the plaintiff in Waste Management, SFD participated fully in the bidding process as a “prospective offeror,” and participated in the “pre-proposal conference” where the performance bond requirement was put at issue. The Navy’s breach of its promise to advise SFD of its change in the performance bond requirement is rederessable, because the project could be resubmitted for bidding with SFD having the same information that Astoria took advantage of. SFD, as well as SECO, has standing.

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131 F.3d 776, 42 Cont. Cas. Fed. 77,245, 97 Daily Journal DAR 13917, 97 Cal. Daily Op. Serv. 8593, 1997 U.S. App. LEXIS 31786, 1997 WL 700941, Counsel Stack Legal Research, https://law.counselstack.com/opinion/san-francisco-drydock-inc-v-dalton-ca9-1997.