584 F.2d 1074 (D.C. Cir. 1978), 77-1530, Barrier Industries, Inc. v. Eckard

Docket Nº:77-1530.
Citation:584 F.2d 1074
Party Name:BARRIER INDUSTRIES, INC., Appellants, v. Jack M. ECKARD et al., Appellees.
Case Date:August 15, 1978
Court:United States Courts of Appeals, Court of Appeals for the District of Columbia Circuit

Page 1074

584 F.2d 1074 (D.C. Cir. 1978)

BARRIER INDUSTRIES, INC., Appellants,

v.

Jack M. ECKARD et al., Appellees.

No. 77-1530.

United States Court of Appeals, District of Columbia Circuit

August 15, 1978

Argued June 13, 1978.

Page 1075

Allen M. Hutter, Washington, D. C., with whom Hugh H. Lewis, Washington, D. C., were on the brief for Barrier Industries, Inc.

Earl J. Silbert, U. S. Atty., Washington, D. C., with whom John A. Terry, David R. Schlee, Kenneth M. Raisler, Asst. U. S. Attys., Washington, D. C., were on the brief for Jack M. Eckard, et al.

Before TAMM and MacKINNON, Circuit Judges, and MARKEY, [*] Chief Judge, United States Court of Customs and Patent Appeals.

Opinion for the court filed by MARKEY, Chief Judge.

MARKEY, Chief Judge:

Appeal from an order of the district court granting appellees' (Eckard's) [**] motion for summary judgment in an action involving General Services Administration contracts to purchase liquid floor wax. We affirm.

FACTS

We adopt the pertinent portions of Judge Howard F. Corcoran's excellent presentation of the facts: 1

This action * * * challenges a determination by the Committee for Purchase from the Blind and other Severely Handicapped (the Committee) to add certain water emulsion floor wax 1 (floor wax) to the Procurement List 1976 for mandatory Government purchase in five General Services

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Administration (GSA) Regions 2 from qualified blind workshops, pursuant to the Javits-Wagner-O'Day Act. 41 U.S.C. §§ 46-48 (the Act).

The plaintiff, Barrier Industries, Inc. (Barrier), is a New Jersey corporation with principal manufacturing facilities located in Port Jervis, New York. From December 2, 1974 until October 31, 1976, Barrier had been a successful competitive bidder for and supplier of floor wax on the GSA Qualified Products List (QPL) for Regions 1 through 8, inclusive.

Jack M. Eckard, Administrator of GSA, is named as a defendant. * * *

Defendant Charles W. Fletcher is the Executive Director of the Committee. The Committee was created pursuant to the Act for the purpose of increasing employment opportunities for the blind and other severely handicapped individuals and, wherever possible, preparing such persons to engage in normal competitive employment. 41 U.S.C. § 47(e). The Committee's functions under the Act include responsibility for determining what products are suitable for procurement by the Government from qualified workshops for the blind and other severely handicapped, 41 U.S.C. § 47(a), and for establishing the fair market prices which the Government should pay for those products. 41 U.S.C. § 47(b). When a determination has been made by the Committee that a commodity is suitable for Government procurement, it is then added to the current procurement list and * * * entities of the Federal Government in all or certain specified GSA Regions are then required to purchase that item through GSA from the designated source. 41 U.S.C. §§ 47-48.

Defendant W. Harold Bleakley is President of the Center for the Blind (the Center) a private nonprofit corporation established under the laws of Pennsylvania in 1874 and located in Philadelphia where it operates a sheltered workshop for the employment and rehabilitation of sightless and multihandicapped persons. The Center has been engaged in the manufacture of various products for the past 102 years.

On November 9, 1976, the National Industries for the Blind 4 (N.I.B.) requested that the Committee assign three items of floor wax 5 for development by one of its workshops for possible addition to the Committee's Procurement List 1976. * * * . (T)he Committee on March 17, 1976 assigned the floor wax to N.I.B. for development by the Center's blind workshop.

On April 23, 1976, pursuant to Section 2(a)(2) of the Act, 41 U.S.C. § 47(a) (2), the Committee published in the Federal Register a notice of the proposed addition to the Procurement List of floor wax and five other groups of chemical compounds and cleaners which the Center was interested in producing. * * * . 8

The Committee staff, on April 30, 1976, requested GSA to inspect the Center to determine its technical capability to produce the floor wax. On May 10, the Federal Supply Service, GSA, informed the Committee staff that the type of floor wax

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under consideration was a QPL item and that the Center's product would be subject to GSA approval (as meeting all applicable QPL requirements) before GSA could procure the product from the Center.

On May 11, 1976, N.I.B. requested Committee approval of proposed prices for the floor wax, See 41 U.S.C. § 47(b), and, on the following day, it submitted a completed initial justification recommending that the floor wax and five other types of chemical compounds and cleaners be added to the Procurement List. The Committee staff completed its analysis of the proposed prices for the floor wax on May 13, 1976, and determined that the prices were fair market prices, except for the 5-gallon container price which was thereafter reduced. However, the staff determined that N.I.B.'s initial justification was unacceptable because it appeared that the potential economic impact on Barrier and another firm could be severe and that the proposed coverage of GSA Regions was inconsistent with GSA's method of procurement. Defendant Fletcher informed N.I.B. of the Committee staff's objections and recommended that the proposal be limited to approximately one third of the Government requirement for the floor wax and be otherwise consistent with GSA's method of procurement.

On May 21, 1976, N.I.B. responded to Fletcher's suggestions by submitting a revised page 2 to its initial justification proposing that the addition of the floor wax be limited to GSA regions 1, 2, 3, 5 and 10. The revision left nearly 64 percent of the Government's requirements for the floor wax available for competitive procurement. At the same time, N.I.B. withdrew its proposal for the addition of three NSN's of non-buffing floor finish, one of the groups of commodities included in the April 23 notice of the Federal Register. 9

N.I.B.'s revised justification was reviewed by the Committee staff, critical information contained therein was verified, and a staff analysis of industry impact was prepared. On May 28, 1976, the staff sent a so-called vote letter to each Committee member requesting consideration of the proposed addition of the floor wax to the Procurement List. Copies of the N.I.B. justification with two addenda and the staff analysis of industry impact were enclosed with the vote letters. ( 2

By June 23, 1976, the Committee members had unanimously approved the addition of floor wax to the Procurement List for production by the Center, contingent only upon the approval of the Center's product by GSA as meeting all QPL requirements. On August 2, 1976, GSA informed the Committee that the Center's floor wax satisfied all QPL requirements and that the Center was considered an authorized QPL supplier. 11

Accordingly, on August 6, 1976, the Committee published in the Federal Register a notice of the addition of floor wax to the

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Procurement List for GSA Regions 1, 2, 3, 5, and 10. 41 Fed.Reg. 32943. 12 On the same date, the Committee sent notice to GSA and N.I.B. officially informing them that the floor wax had been added to the Procurement List and specifing (sic) the prices at which the commodity would be available for government purchase.

On September 20, 1976, attorneys representing Barrier contacted the Committee staff by telephone, alleging that the Center was engaged in a violation of the zoning regulations of the City of Philadelphia, Pennsylvania. It was further asserted that a Barrier investigator had visited the Center's plant facilities and reported that the Center was not capable of manufacturing the floor wax. 13

This telephone call was followed by a series of letters from attorneys for the plaintiff (Barrier) requesting reconsideration of the Committee's determination to add floor wax to the Procurement List on the grounds, Inter alia, that the Center could not qualify as a non-profit agency capable of producing the floor wax; that the Center's blind workers would be subjected to hazardous operations in the manufacturing process; that the Center's manufacturing facilities were operating for violation of city zoning ordinances; that the Center would purchase the basic wax emulsion from another manufacturer and, therefore, would not be making an appreciable contribution to manufacture of the floor wax; and that severe economic impact would result to Barrier if the commodity remained on the Procurement List.

The Committee thereupon requested verification or denial of the Barrier charges from N.I.B. and the Center, and directed its staff industrial engineer to visit the Center (1) to verify the manufacturing process...

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