Northeast Construction Company v. Romney, 71-1650
Decision Date | 06 March 1973 |
Docket Number | No. 71-1650,71-1891 and 71-1893.,71-1650 |
Citation | 485 F.2d 752 |
Parties | NORTHEAST CONSTRUCTION COMPANY v. George ROMNEY, Secretary of Housing and Urban Development, and Elmer B. Staats, Comptroller General of the United States. BIRD ASSOCIATES, INC., Appellant. NORTHEAST CONSTRUCTION COMPANY v. George ROMNEY, Secretary of Housing and Urban Development, et al. BIRD ASSOCIATES, INC., Appellant. NORTHEAST CONSTRUCTION COMPANY v. George ROMNEY, Secretary of Housing and Urban Development, et al., Appellants, Bird Associates, Inc. |
Court | U.S. Court of Appeals — District of Columbia Circuit |
Roger K. Zuker, Oxon Hill, with whom Gary R. Alexander, Marlow Heights, Md., was on the brief, for appellant in Nos. 71-1650 and 71-1891.
Eloise E. Davies, Atty., Dept. of Justice, with whom L. Patrick Gray, III, Asst. Atty. Gen. at the time the brief was filed, Harold H. Titus, Jr., U. S. Atty., and Alan S. Rosenthal, Atty., Dept. of Justice, were on the brief, for appellants in No. 71-1893. Thomas A. Flannery, U. S. Atty. at the time the record was filed and Morton Hollander, Atty., Dept. of Justice, also entered appearances for appellants in No. 71-1893.
Before BAZELON, Chief Judge, and TAMM and LEVENTHAL, Circuit Judges.
This appeal is from a preliminary injunction enjoining the Secretary of Housing and Urban Development (HUD) from awarding a contract, for the rehabilitation of certain public housing units in the Anacostia section of Washington, D. C., to anyone other than the plaintiff, Northeast Construction Company.1 We reverse.
The invitation for bids issued in January 1971 incorporated the provisions of the "Washington Plan," which requires a prospective contractor to complete an "Appendix A" specifying his estimated total employment under the contract in designated trades over a four year period and the percentage of minority group employees to be included ("minority" being Negro, Spanish surname American, Oriental and American Indian), within prescribed ranges established by the Secretary of Labor. The execution of Appendix A, or its equivalent, is made prerequisite to eligibility for a contract award for federal construction projects costing in excess of $500,000 by an order promulgated by the Secretary of Labor on June 1, 1970, implementing Executive Order 11246, as amended, requiring equal employment opportunity by federal contractors.2
When the bids were opened on March 11, 1971, the two low bidders were found to be Northeast with a bid of $1,047,500 and Bird Associates, with a bid of $1,094,645. The plaintiff was thus the low bidder by $47,145. However, upon examining Northeast's bid, HUD's contracting officer noted that the company had failed to supply its goals for minority manpower employment in Appendix A. When the omission was called to the attention of Northeast's president, who was present at the opening, he pointed out that he had signed the Appendix in the two places provided thereon for signature.3 He stated that, by signing Appendix A on its 4th and 12th pages, he had thereby intended to commit himself to employ at least the minimum percentage of minority workmen specified by the Government.4 Two days later, by letter to the Government he reduced this oral commitment to writing. On April 6, 1971, HUD advised Northeast that it was ineligible for the contract award, since its bid was not deemed responsive to the bid invitation.
Northeast immediately protested the rejection to the Comptroller General. On June 7, 1971, the Comptroller General advised Northeast that its failure to submit specific goals for minority manpower utilization made it ineligible for the contract award.
The Comptroller General noted that the invitation in terms expressly requires that the bid as filed contain a completed Appendix A, with specific goals for minority manpower utilization,5 and even provides blanks to be filled out by the bidder, by trade and time period. He concluded that under 41 C.F.R. § 1-2.405,6 this omission was not a deviation that could be waived or corrected.
On June 10, HUD sent a notice of intent to award the contract to Bird Associates. On the following day, Northeast filed this action, naming as defendants both the Secretary and the Comptroller General.
The District Court granted a preliminary injunction on June 21, 1971, stating:
The Court does not agree that plaintiff\'s bid was not responsive. The signatures of plaintiff\'s president on Appendix A was sufficient to bind it to employ the minimum percentage of minority workmen. The failure to copy these figures in the blanks provided was at most a minor irregularity covered by the provisions of 41 C. F.R. § 1-2.405, which allows for their correction. It should be noted in this context that the requirement that bids be responsive and that no modifications are allowed after opening is to protect the integrity of the bidding system. It is to prevent a bidder from gaining an unfair advantage over other bidders by altering or withdrawing his proposal after other bids have been revealed. Exceptions to the strict responsiveness rule are allowed so that the government can accept advantageous bids that deviate only in minor detail, such as in form. Here plaintiff\'s bid was non-responsive only in the form in which it indicated that it intended to employ at least the specified minimum percentages of minority workers.
In a Memorandum opinion of August 23, 1971, denying reconsideration, Judge Gasch stated:
We conclude that the preliminary injunction should be reversed. We are mindful of the broad latitude and discretion vested in the trial court, and do not predicate our reversal on any difference of approach as to such matters as its finding that plaintiff was threatened with irreparable injury, and that grant of injunctive relief is responsive to the balancing of the equities and conveniences of all parties. But a preliminary injunction must be reversed even where no abuse of discretion exists as to such matters, when the trial court has proceeded upon a premise as to the rule of law which the appellate court deems erroneous.7 We conclude that underlying the District Court's conclusion of law, that plaintiff is likely to succeed on the merits, is an erroneous legal premise that requires reversal.
1. The District Court's memorandum adverts to certain matters that, on reflection, we find to be not material. We refer, for example, to the fact that plaintiff's bid was opened first. If it was sufficient in law as a bid, it would make no difference whether it were opened first or last, and counsel for plaintiff-appellee agreed, when pressed at oral argument.
2. Similarly as to the statements of plaintiff's representatives, at the bid opening and later in writing, that its intention in signing Appendix A was to commit plaintiff to hire the minimums in the range of percentages set forth in Appendix A. The question is, at best, the effect of the bid as signed and submitted. Certainly if it did not bind plaintiff, the later statements could not cure the omission. The effect of such an approach would be to permit a bidder who repented his bid — perhaps on seeing that his bid was too far below the next bidder to be economically sound — to step away from the matter by simply failing to supply the omission.
3. A legal question arose whether a...
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