Amdahl Corp. v. Georgia Dept. of Administrative Services
| Decision Date | 05 December 1990 |
| Docket Number | No. S90A0570,S90A0570 |
| Citation | 260 Ga. 690,398 S.E.2d 540 |
| Parties | AMDAHL CORPORATION v. GEORGIA DEPARTMENT OF ADMINISTRATIVE SERVICES et al. |
| Court | Georgia Supreme Court |
Charles T. Lester, Jr., Richard L. Robbins, William R. Wildman, Sutherland, Asbill & Brennan, Atlanta, for Amdahl Corp.
G. Thomas Davis, Lawson & Davis, Michael J. Bowers, Atty. Gen., William A. Clineburg, Jr., Michael Eric Ross, King & Spalding, Atlanta, for Georgia Dept. of Administrative Services et al.
Terrence B. Adamson, Peter C. Canfield, Carolyn Y. Forrest, Dow, Lohnes & Albertson, Atlanta, amici curiae.
This case raises several issues regarding the rights of appellant Amdahl Corporation (Amdahl), a rejected bidder for a state contract to provide computer equipment to the Georgia Department of Administrative Services (DOAS), to sue DOAS for alleged violations of state procurement laws. One issue is whether Amdahl may seek to have the contract that DOAS entered into with the winning bidder (appellee International Business Machines Corporation (IBM)) cancelled pursuant to OCGA § 50-5-79. 1 Other issues are whether Amdahl, as a rejected bidder, has standing under general principles of law to sue DOAS for a violation of the rules and regulations that DOAS required all bidders and itself to comply with; whether, if Amdahl has standing, it is entitled to seek equitable relief; whether, if Amdahl is entitled to seek equitable relief, the trial court erred in granting summary judgment to appellees on Amdahl's request for equitable relief on the ground that Amdahl has an adequate remedy at law--a suit for money damages; and whether Amdahl can pursue a claim for relief under 42 USC § 1983 against DOAS and its commissioner.
We find that OCGA § 50-5-79 does not apply to this case; that Amdahl, as a rejected bidder, does have standing to sue DOAS under general principles of law; that Amdahl is entitled to seek equitable relief; that the trial court erred in granting summary judgment to appellees on Amdahl's request for equitable relief; and that Amdahl was not entitled to relief under 42 USC § 1983.
In November 1988, appellee DOAS issued a Request for Proposal (RFP), 2 requesting bids on two new large-scale computer mainframes to provide data-processing services to user agencies served by DOAS. The RFP provided that the DOAS reserved the "right to cancel the RFP at any time, or to reject any or all proposals submitted in response hereto"; that the terms of the Georgia Vendor Manual, which contains rules and regulations adopted by the DOAS, were included within the terms of the RFP; and that the "basis for final selection" would be determined by a price-performance formula, with the performance judged by a "benchmark"--a test simulating the state's workload--that each bidder was required to run. The best performance in the benchmark would be determined by which vendor had the fastest "run time," which would be the period from the start of the first task to the end of the final task, as measured in "wall-clock" time. Under the formula, a faster benchmark time could offset a higher bid.
Three computer vendors, International Business Machines (IBM), National Advanced Services, Inc. (NAS), and Amdahl responded to the RFP.
The benchmarks were run in January 1989. IBM ran the benchmark in the fastest time, with Amdahl second, and NAS third. DOAS awarded the contract to IBM, whose bid was higher than Amdahl's, and planned to cut over to the new system in June 1989. Amdahl sent letters to DOAS protesting the award of the contract to IBM, but after a hearing in front of the DOAS purchasing agent for the RFP, these protests were denied.
On June 21, 1989, Amdahl filed a four-count complaint against DOAS and its commissioner. IBM was subsequently allowed to intervene as a defendant. Amdahl contended that DOAS violated the benchmark rules by allowing IBM to adjust the User Time Interval ("UTI parameter") or "wait times" between tasks in the benchmark test. The UTI parameter simulated delays by computer users in responding to information on the computer screens and in entering data. Amdahl alleged that IBM, with DOAS' approval, drastically reduced the wait times, thus enabling IBM to offset the faster processing speed of Amdahl's system. Furthermore, Amdahl alleged that under the price-performance formula set forth in the RFP, IBM's faster run time offset IBM's significantly higher bid. Amdahl thus contended that DOAS' award to IBM was directly attributable to IBM's modification of the benchmark test, in violation of the rules governing the benchmark.
In Count One of its complaint, Amdahl sought declaratory relief, alleging that DOAS violated the state procurement laws; the rules and regulations promulgated thereunder; and the terms of the RFP. Amdahl alleged that DOAS acted arbitrarily and capriciously by failing to require IBM to comply strictly with the RFP and the rules applying thereto. Because of these alleged violations, Amdahl contended that DOAS' contract with IBM was void under either § 50-5-79, the Georgia Vendor Manual, or applicable rules of Georgia law.
In Count Two Amdahl sought injunctive relief, seeking to prevent DOAS from proceeding further with its contract with IBM, and requesting that the court order DOAS to re-bid the contract or re-run the benchmark. Amdahl alleged that without injunctive relief it would suffer irreparable harm; that there was a substantial probability that Amdahl would prevail in the lawsuit; and that Amdahl did not have an adequate remedy at law.
In Count Three, Amdahl prayed for damages of not less than $1,000,000.
In Count Four, Amdahl alleged that DOAS had violated Amdahl's civil rights under 42 USC § 1983 by unconstitutionally and intentionally applying different rules to competing vendors and by permitting IBM to modify the rules to its benefit, in violation of state procurement laws. Amdahl also asserted that DOAS failed to provide adequate due process, because DOAS had an allegedly biased person--the purchasing agent for this RFP--act as the hearing officer on Amdahl's protest. Amdahl requested compensatory and punitive damages, as well as attorney fees and injunctive relief.
Following its answer, DOAS moved for summary judgment on Counts One, Two, and Four of Amdahl's complaint. DOAS contended, inter alia, that § 50-5-79 only applied to contracts entered into by state agencies required to purchase through DOAS and not to contracts made by DOAS for its own purchases, and that, even if § 50-5-79 did apply, only the state had standing to sue under the statute; that Amdahl, as a rejected bidder, did not have standing to sue DOAS for violations of procurement laws; that Amdahl was not entitled to seek equitable relief; that, even if Amdahl was entitled to seek equitable relief, Amdahl's claims for equitable relief were barred either because the claims were moot, as DOAS had already installed the two mainframe computers that were the subject of the contract with IBM, or because Amdahl had an adequate remedy at law; and that DOAS and its commissioner are not "persons" within the meaning of 42 USC § 1983, and thus are not subject to a § 1983 claim.
On October 16, 1989, the court held a hearing on DOAS' motion for summary judgment. At the end of the hearing, the court stated that it would grant DOAS' motion. The court orally ruled that only the state had standing to invoke the provisions of § 50-5-79; that Amdahl was not entitled to equitable relief, as a suit for damages was an adequate remedy at law; 3 and that the state and its commissioner were not "persons" within the meaning of 42 USC § 1983. That same day, the court entered its written order granting DOAS' motion. 4 The order contains no findings of fact or conclusions of law.
Amdahl appealed to this court. We now affirm in part and reverse in part.
1. Amdahl first contends that the trial court erred in granting summary judgment to appellees, because, Amdahl argues, § 50-5-79 applies to contracts made by DOAS for its own purchases, and permits Amdahl, as a rejected bidder, to have the contract with IBM cancelled.
As previously noted, OCGA § 50-5-79 provides that
Whenever any department, institution, or agency of the state government required by this part [OCGA Title 50, Ch. 5, Art. 3, "State Purchasing," Pt. 1, "General Authority, Duties, and Procedure"] and the rules and regulations adopted pursuant thereto applying to the purchase of supplies, materials, or equipment through the Department of Administrative Services shall contract for the purchase of such supplies, materials, or equipment contrary to this part or the rules and regulations made hereunder, such contract shall be void and of no effect. If any such department, institution, or agency purchases any supplies, materials, or equipment contrary to this part or the rules and regulations made hereunder, the executive officer of such department, institution, or agency shall be personally liable for the cost thereof; and, if such supplies, materials, or equipment are so unlawfully purchased and paid for out of the state funds, the amount thereof may be recovered in the name of the state in an appropriate action instituted therefor.
Amdahl argues that the DOAS is a "department, institution, or agency" of the state, and that the statute thus voids any contract DOAS enters in violation of Title 50, Chapter 5, Article 3, Part 1, or of any rules and regulations made thereunder. Amdahl further argues that, as a frustrated bidder, it is entitled to maintain an action under § 50-5-79. Appellees counter that the statute only applies when state agencies that are required to purchase through the DOAS enter contracts in violation of state purchasing rules, and that the plain language of the statute only permits the state to bring suit to enforce the provisions of the statute.
We first address whether § 50-5-79 applies to contracts that...
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