Baker v. Department of Health and Human Services, 89-3430
| Decision Date | 31 August 1990 |
| Docket Number | No. 89-3430,89-3430 |
| Citation | 912 F.2d 1448 |
| Parties | Carl L. BAKER, Petitioner, v. DEPARTMENT OF HEALTH AND HUMAN SERVICES, Respondent. |
| Court | U.S. Court of Appeals — Federal Circuit |
Louis J. Kozlakowski, Jr., Blum, Yumkas, Mailman, Gutman & Denick, P.A., of Baltimore, Md., argued for petitioner. With him on the brief was Edward J. Gutman.
Martha H. DeGraff, Attorney, Commercial Litigation Branch, Dept. of Justice, of Washington, D.C., argued for respondent. With her on the brief were Stuart M. Gerson, Asst. Atty. Gen., David M. Cohen, Director and Stephen J. McHale, Asst. Director.
Before MAYER, Circuit Judge, COWEN, Senior Circuit Judge, and ALARCON, Circuit Judge. *
Carl L. Baker appeals from the final decision of the Merit Systems Protection Board (the Board), which removed him from his position as a supervising computer specialist with the Department of Health and Human Services, Social Security Administration (the SSA), for accepting a gratuity and divulging confidential information to a potential subcontractor. 41 M.S.P.R. 363. We affirm.
Prior to his removal, Baker had been employed by the SSA for twenty-nine years. During his last nine years of service, he advanced to a GM-15 Supervisory Computer Specialist and became the Deputy Director of the Office of Computer Processing Operations. In his capacity as Deputy Director, Baker was involved in the awarding of contracts to companies eligible to participate in the Small Business Administration's business development program pursuant to section 8(a) of the Small Business Act, 15 U.S.C. Sec. 637(a) (the section 8(a) program).
The Small Business Administration's section 8(a) program is designed to promote the viability of socially and economically disadvantaged small business concerns by empowering the Small Business Administration (SBA) to enter into contracts with other federal agencies and "to arrange for the performance of such contracts by negotiating or otherwise letting subcontracts to small business concerns." Baillie Trash Hauling, Inc. v. Kleppe, 477 F.2d 696, 702 (5th Cir.1973), cert. denied, 415 U.S. 914, 94 S.Ct. 1410, 39 L.Ed.2d 468 (1974). In order to accomplish this goal, the SBA may dispense with competitive bidding. Id. at 708. In a noncompetitive contract award, the SBA awards the contract based on the technical capabilities of the company, not on price competition. 15 U.S.C. Sec. 637(a)(2)(D), (a)(7) (1988). The SBA may also provide socially and economically disadvantaged business concerns with technical and managerial assistance by advising and counseling on matters in connection with Government procurement and property disposal and on policies, principles and practices of good management, including but not limited to cost accounting, methods of financing, business insurance, accident control, wage incentives, computer security, and methods engineering, by cooperating and advising with voluntary, business, educational, and other nonprofit organizations, associations, and institutions and with other Federal and State agencies, by maintaining a clearinghouse for information concerning the management, financing, and operation of small-business enterprises, by disseminating such information, and by such other activities as are deemed appropriate by the Administration.
Id. Sec. 637(b)(1)(A).
In 1987, the SBA delegated the selection of subcontractors and the negotiation of SSA procurement contracts to the SSA. The SSA maintained a list of companies that were eligible to participate in the section 8(a) program. The SSA also maintained information regarding the technical capabilities of each company.
At this time, Baker was one of the persons responsible for reviewing the technical information in the SSA's files and for selecting five companies to make presentations to the SSA technical review committee for an annual wage reporting technical support services contract (the AWR contract). Baker was also a member of the five-person technical review committee. This committee had the responsibility of evaluating the technical capabilities of each company and making a recommendation to the Small Business Administration for the award of the AWR contract. The five companies selected to make presentations for the AWR contract award were Washington Data Systems, Information Control Systems Corporation, American Information Systems, Kenrob & Associates, Inc., and Computer Dynamics, Inc.
In November 1987, after the five companies had been selected to appear before the technical review committee, but prior to the date of their presentations, Baker accepted an invitation to join Jack Wicklein, the marketing manager for Rehabilitation Group, Inc. (RGI), for lunch. Prior to resigning to work in the private sector, Wicklein had served as the SSA Associate Commissioner for Systems Operations. In that capacity, Wicklein was Baker's superior. Baker and Wicklein had developed a personal friendship that endured after Wicklein left government service. Baker was aware that Wicklein was then employed by RGI. Baker also knew that RGI was a subcontractor to one of the five companies that had been selected to appear before the technical review committee.
Several days before the luncheon, Wicklein asked Baker if Richard Quigg could attend. Notwithstanding his misgivings because he knew that Quigg was the president of RGI, Baker agreed.
On November 27, 1987, Baker met Quigg and Wicklein for lunch. Baker gave the following description of the lunch in his sworn affidavit:
Eventually, Quigg asked me how the Annual Wage Report (AWR) contract was going. After I responded by saying that it was going along fine, Quigg asked me how I would rate the five corporations that were in the running for the contract. I told Quigg that at the present I would probably have to rate:
Washington Data Systems # 1
Kenrob and Associates # 2
Information Control Systems # 3
American Information Systems # 4
I did not think that my numerical rating of the corporations would present a problem to Quigg because I knew that RGI had teamed with Washington Data Systems on a previous contract. Also, I felt at that time that my appraisal of the corporations was reasonably accurate based on my knowledge[ ] of their abilities.
I was surprised to hear Quigg say that he had a problem with Washington Data Systems being number one because RGI was teamed with Kenrob and Associates for the AWR contract. Quigg then asked me how I could make number two (Kenrob and Associates) number one.
At that point, I reached to Jack Wicklein, touched him on the chest and asked, "Are you wired?"
"You can't ask me those questions!" Jack immediately excused himself and went to the men's room where he stayed for approximately 10 minutes. While Jack was away, I told Quigg in no uncertain terms how upset I was that he tried to compromise my integrity. However, when Jack returned, Quigg again asked me how I could make number two number one. I then said, "Are you sure you guys aren't wired?"
After saying that, I told Jack and Quigg that that was it and that I was leaving. I offered to pay the bill, but they said that they would take care of it.
After the companies' presentations to the technical review committee, the committee decided to recommend Washington Data Systems, Inc. for the AWR contract. During the week of December 21, 1987, more than three weeks after Baker's meeting with Quigg and Wicklein, the other companies were notified of the technical review committee's recommendation.
On December 24, 1987, Wicklein told Baker during a telephone conversation that Quigg was considering filing a lawsuit because Baker had expressed his preference for Washington Data Systems, Inc., prior to the presentations to the technical review committee. Four days later, Baker met with Bert Reid, Director of the Division of ADP and Telecommunications Contracts, and reported to him that he had had lunch with Wicklein and Quigg prior to the presentations. Thereafter, on May 17, 1988, the SSA canceled the AWR solicitation.
On July 18, 1988, Baker's employment with the SSA was terminated for accepting a gratuitous meal and for divulging confidential information to the representatives of a company teamed with another company involved in competing for an SSA contract. On November 1, 1988, the administrative law judge (the ALJ) sustained the charges against Baker. The ALJ ordered the SSA to cancel Baker's removal, however, and to demote him to a non-supervisory position.
Baker filed a petition for review of the ALJ's decision. The SSA filed a cross-petition challenging that portion of the order regarding the reduced penalty imposed by the ALJ. The Board denied Baker's petition pursuant to 5 C.F.R. Sec. 1201.115. The SSA's petition was granted. The Board concluded that the removal penalty should not have been mitigated by the ALJ. Baker timely appealed.
Baker presents the following contentions in his appeal:
1. The Department of Health and Human Services Standards of Conduct (the HHS Standards) do not apply to section 8(a) contracts.
2. The Board's decision is not supported by substantial evidence.
3. The ALJ erred in imposing pre-hearing sanctions.
4. The Board erred in failing to reverse the SSA's removal decision because the SSA committed harmful error in applying its oral reply procedure.
5. The sanction of removal has not been imposed on similarly situated SSA officials.
We address each of these arguments in turn.
45 C.F.R. Sec. 73.735-307 sets forth the HHS Standard governing the use of official information. Section 73.735-307 provides in pertinent part:
(a) The public interest requires that certain information in the possession of the Government be kept confidential, and released only with general or specific authority under Department or operating component regulations. Such...
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