Ameron, Inc. v. U.S. Army Corps of Engineers

• Decision Date: 27 February 1987
• Docket Number: 85-5377,Nos. 85-5226,s. 85-5226
• Citation: 809 F.2d 979
• Parties: , 33 Cont.Cas.Fed. (CCH) 74,884 AMERON, INC., Appellee, and United States Senate Thomas P. O'Neill, Speaker of House of Representatives and Bipartisan Leadership Group, and Charles A. Bowsher, the Comptroller General of the United States, Intervenors- Appellees, v. UNITED STATES ARMY CORPS OF ENGINEERS; Lt. Col. Michael K. Collmeyer, Contracting Officer, United States of America; and Spiniello Construction Company. Appeal of UNITED STATES of America.
• Court: U.S. Court of Appeals — Third Circuit

Page 979

809 F.2d 979

55 USLW 2363, 33 Cont.Cas.Fed. (CCH) 74,884

AMERON, INC., Appellee,

and

United States Senate Thomas P. O'Neill, Speaker of House of

Representatives and Bipartisan Leadership Group,

and

Charles A. Bowsher, the Comptroller General of the United

States, Intervenors- Appellees, v. UNITED STATES ARMY CORPS OF ENGINEERS; Lt. Col. Michael K.

Collmeyer, Contracting Officer, United States of

America; and Spiniello Construction Company.

Appeal of UNITED STATES of America.

Nos. 85-5226, 85-5377.

United States Court of Appeals,

Third Circuit.

Argued Oct. 29, 1985.

Reargued Sept. 15, 1986.

Decided Dec. 31, 1986.

Rehearing and Rehearing En Banc Denied Feb. 27, 1987.

Richard K. Willard, Asst. Atty. Gen., Thomas W. Greelish, U.S. Atty., Newark, N.J., William Kanter, Harold J. Krent (argued), Douglas N. Letter, Appellate Staff, Civil Div., Room 3348, Dept. of Justice, Washington, D.C., for appellant.

Edward D'Allessandro, D'Allessandro, Sussman, Jacovino & Mahoney, Florham Park, N.J., for Spiniello Const. Co.

Theodore I. Botter, Meyner & Landis, Newark, N.J., for Ameron, Inc.

Michael Davidson, Senate Legal Counsel, Ken U. Benjamin, Jr., Deputy Senate Legal Counsel, Morgan J. Frankel (argued), Asst. Senate Legal Counsel, Office of Senate Legal Counsel, Washington, D.C., for appellee, U.S. Senate.

Steven R. Ross (argued), General Counsel to the Clerk, Charles Tiefer, Deputy General Counsel to the Clerk, Janina A. Jaruzelski, Asst. Counsel to the Clerk, U.S. House of Representatives, Washington, D.C., for Appellees Speaker and Bipartisan Leadership Group of the House of Representatives.

Harry R. Van Cleve, General Counsel, Robert P. Murphy (argued), Seymour Efros, Ronald Berger, Washington, D.C., for Comptroller General of the U.S. as intervenor-appellee.

Sharon Rae Gross, David S. Cohen, Cohen & White, Washington, D.C., for Computer and Communications Industry Ass'n ("CCIA")--amicus curia on behalf of appellees.

Before BECKER and GARTH, Circuit Judges, and HUYETT, ^* District Judge.

OPINION OF THE COURT

BECKER, Circuit Judge.

This appeal from a judgment of the district court for the District of New Jersey is before us on panel rehearing in the wake of the Supreme Court's decision in Bowsher v. Synar, --- U.S. ----, 106 S.Ct. 3181, 92 L.Ed.2d 583 (1986). There the Supreme Court struck down certain provisions of the Gramm-Rudman-Hollings Act as unconstitutional because they violated the doctrine of separation of powers by giving executive powers to an officer in the legislative branch, the Comptroller General of the United States.

Here we are concerned with the constitutionality of the Competition in Contracting Act, enacted as Title VII of the Deficit Reduction Act of 1984, Pub.L. No. 98-369, 98 Stat. 494, and codified at 31 U.S.C. Secs. 3551-3556 (hereinafter "CICA" or "the Act"). CICA empowers the Comptroller General to issue recommendations to procuring agencies on protests brought by disappointed bidders for federal contracts. Plaintiff Ameron, Inc., invoked those provisions in the course of challenging a contract award by defendant Army Corps of Engineers (the Army). The Army contends that CICA violates the doctrine of separation of powers because, in aid of his power to recommend resolutions of bid protests, CICA authorizes the Comptroller General to alter the timetable under which the procuring agencies go through the procurement process. The district court disagreed and granted an injunction against the Army, enforcing the provisions of CICA that stay the procurement process. Ameron Inc. v. United States Army Corps of Engineers, 607 F.Supp. 962 (D.N.J.1985). This panel modified the scope of the injunction for reasons unrelated to the merits of the constitutional question, ¹ but otherwise affirmed the judgment of the district court. 787 F.2d 875 (3d Cir.1986).

Synar established that the Comptroller General is a member of the Legislative branch for separation of powers purposes because Congress has the power to remove him by following a procedure less demanding than impeachment. See 106 S.Ct. at 3191. Given the Court's holding in Synar, the issue now before us is whether CICA authorizes the Comptroller General to perform functions that constitute "execution of the law in constitutional terms." Synar, 106 S.Ct. at 3192. For the reasons that follow we hold that it does not, and again, albeit on grounds different from those we relied upon when the case was first before us, we affirm the district court's conclusion that CICA is constitutional.

I. THE FACTS GIVING RISE TO THIS LITIGATION

The facts which gave rise to this case are set out in detail in the district court's opinion, 607 F.Supp. at 964-65, and in this panel's earlier opinion, 787 F.2d at 879-80. We review them briefly here for the convenience of the reader.

Plaintiff Ameron, Inc. submitted a bid in response to the Army's "Invitation for Bids" on a sewer repair and cleaning project to be completed at the U.S. Military Academy at West Point. Ameron's bid was the lowest submitted, but the Army did not award Ameron the contract because it believed Ameron's bid bond did not comply with the requirements set out in the "Invitation." Ameron believed that its bid was in compliance, and after the award was announced but before execution had begun, Ameron filed a bid protest with the Comptroller General.

Although CICA requires the executive to stay execution on challenged contracts until the Comptroller General's recommendation is issued, the Army proceeded with execution because it believed the stay provisions unconstitutional. Ameron filed suit in the United States District Court for the District of New Jersey, seeking, inter alia, an order that the Army obey CICA's stay provisions. The Army defended by asserting CICA's unconstitutionality.

The district court found that CICA was constitutional, and it accordingly held that Ameron was entitled to a preliminary injunction enforcing CICA's stay provisions. 607 F.Supp. at 974. The Army then appealed to this court, which affirmed. 787 F.2d at 891. A majority of the panel held in that opinion that the Comptroller General was not an agent of the legislative branch and therefore that it was permissible for Congress to delegate to the Comptroller the power to decide when CICA's stay should be lifted. See 787 F.2d at 885-87. ² A motion for panel or in banc reconsideration was then filed by the Army. By that time certiorari had been granted in Bowsher v. Synar. The court deferred action on the motions pending the Supreme Court's decision in Synar.

The Supreme Court's decision in Synar was contrary to the reasoning of the panel majority in the first Ameron opinion: the Supreme Court held that for separation of powers purposes the Comptroller General must be regarded as an agent of the legislative branch, and therefore that the Comptroller may not exercise any power which Congress itself may not possess. We therefore granted panel rehearing, and received further briefs and oral argument. We now reconsider the Army's challenge to CICA in light of those developments.

II. CICA'S STRUCTURE AND OPERATION

As the federal procurement process is currently structured, Congress appropriates funds for a wide variety of purposes and delegates to executive branch officials the authority to make certain decisions regarding how those funds are to be spent. This discretion is exercised by procurement officers in each federal agency which makes purchases.

The discretion thus delegated is not completely unstructured. In two statutes, the Armed Services Procurement Act, See 10 U.S.C. Secs. 2301-2324, and the Federal Property and Administrative Services Act, codified in Title 41 of the United States Code, Congress has established procedures which must be followed by procuring agencies, and standards the agencies must adhere to, when they decide what to purchase and on what terms. These procedures and standards are designed to ensure that the government satisfies its needs at prices as low as possible. See 41 U.S.C. Sec. 401(2) (declaring that "[i]t is the policy of the Congress to promote economy, efficiency and effectiveness in the procurement of property and services by the executive branch of the Federal Government by ... (2) establishing policies, procedures, and practices which will provide the government with property and services of the requisite quality, within the time needed, at the lowest reasonable cost"); Part III of House Comm. on Government Operations, H.Rep. No. 97-71 Accompanying H.R. 3519 (subsequently passed as the Department of Defense Authorization Act of 1982. P.L. 97-86, 95 Stat. 1099) at 9, reprinted in 1981 United States Code Cong. & Admin.News 1801 at 1806 (procurement process relies on "competition as the predominant means of getting the most value from federal expenditures").

Among the most important of the policies implemented by these statutes and regulations is the principle that competitive bidding is the favored method of identifying least-cost suppliers. These statutes and regulations permit sole-source contracting (i.e. the letting of a government contract to a supplier picked by the Government without competitive bidding) under some circumstances. See 41 U.S.C. Secs. 5, 253(c)-(f); 10 U.S.C. Sec. 2304(a)-(f). But for most procurements competitive bidding is required. 41 U.S.C. Sec. 253; 10 U.S.C. Sec. 2304(a).

Although competitive bidding is supposed to be the way most government purchases are made, Congress has found procuring officials extremely--and increasingly--reluctant to use competitive bidding as the method of choosing sellers. This reluctance to use competitive bidding has been accompanied by rapid growth in the budgets for procuring agencies. In Congressional discussions regarding CICA Representative Brooks, one of CICA's sponsors, observed that

[w]hile Federal procurement regulations require agencies to award contracts on a competitive basis, inventive...