Caddell Const. Co., Inc. v. Lehman

• Decision Date: 02 January 1985
• Docket Number: Civ. A. No. 284-223.
• Citation: 599 F. Supp. 1542
• Parties: CADDELL CONSTRUCTION CO., INC., Plaintiff, v. John F. LEHMAN, Jr., Secretary of the Navy; Captain Greenwall; Captain Wells; Commander John C. Elkins; L. Sparks and Lorraine Rhoden, Defendants.
• Court: U.S. District Court — Southern District of Georgia

599 F. Supp. 1542

CADDELL CONSTRUCTION CO., INC., Plaintiff, v. John F. LEHMAN, Jr., Secretary of the Navy; Captain Greenwall; Captain Wells; Commander John C. Elkins; L. Sparks and Lorraine Rhoden, Defendants.

Civ. A. No. 284-223.

United States District Court, S.D. Georgia, Brunswick Division.

January 2, 1985.

Michael A. Caddell, Bracewell & Patterson, Houston, Tex., for plaintiff.

Lawrence B. Lee, Asst. U.S. Atty., Savannah, Ga., for defendants.

ORDER

ALAIMO, Chief Judge.

Before the Court is the Government's motion to dismiss for lack of subject matter jurisdiction. The Government asserts that exclusive jurisdiction as to plaintiff's claim for injunctive relief is vested in the United States Claims Court pursuant to § 133(a)(3) of the Federal Courts Improvement Act ("FCIA") of 1982, 28 U.S.C. § 1491(a)(3) (1982 & Supp. II 1984). After an exhaustive review of the relevant case precedent and legislative history, the Court is of the opinion that the motion should be sustained.

BACKGROUND

On September 21, 1984, the United States Navy issued an invitation for bids ("IFB") for the construction of a new administration and communications building at the Navy Submarine Base in Kings Bay, Georgia. The Navy office issuing the bid invitations was the Office in Charge of Construction ("OICC"). Prior to issuing this bid, and in furtherance of the federal governmental policy of promoting small business, 50 U.S.C.App. § 2151(a), (d), the Navy determined that only small business concerns¹ would be eligible for award of the contract to construct the facilities.

The Navy sent out IFB's to more than 800 firms which it believed would be interested in bidding on the project and later sent out copies of the IFB plans and specifications to companies which subsequently requested them. Shortly thereafter, however, the Navy issued two amendments which resulted in significant alterations to these plans. In particular, the amendments affected provisions concerning liquidated damages, the fiber optics transmission system, the borrow site, the contractor quality control program and the interior telephone system.

On November 1, 1984, the sealed bids were opened and, to the Navy's surprise, it was discovered that only two companies had submitted bids on the construction of the project. Plaintiff's bid of $8,310,000 was lower than Robert Gay Construction Company's bid of $8,520,000. The Government's publicly announced estimate of $7,300,000 was some 13.8% below the plaintiff's bid and 16.7% below the higher bid.

After reviewing the IFB for errors and ambiguities, the Navy discovered a "serious error in the provision concerning liquidated damages for unexcused delays in completing the project." Government's Proposed Findings of Fact, at 5. In the original IFB, the amount of damages estimated by the Navy was about $1,600 per day. Then, sometime in the autumn of 1984, the Navy decided in several instances to substitute an actual damage estimate of $4,700 per day for liquidated damages. The actual damage figure inserted in the amendments, however, was in excess of $11,000 per day, or seven times the amount originally included in the IFB.

After completing further review of the IFB, the Navy uncovered additional errors, including "omissions and ambiguities in the specifications for the irrigation system, vault, borrow site, and the chilled water system." Government's Proposed Findings of Fact, at 6-7. Also, Navy personnel discovered IFB provisions which either were in excess of the Government's needs in installing the Trident facilities or were inappropriate at that time. Id. at 7. As a result of these various errors, omissions, ambiguities and excessive IFB requirements, Navy supervisors, including defendants Greenwall, Wells, Elkins and Sparks, decided to reject both bids, cancel the IFB and readvertise the project using a new package and a new bid invitation.² Apparently, the Navy hopes that these new plans will "result in the submission of lower bids by a larger number of qualified small business concerns." Id. at 8.

Three weeks later, on November 28, 1984, plaintiff filed the case at bar alleging that the Navy's action in rejecting its bid and canceling the IFB was arbitrary and capricious. Plaintiff contends that the rights of the parties can best be determined by a declaratory judgment pursuant to 5 U.S.C. § 701 et seq. and 28 U.S.C. §§ 2201, 2202. More specifically, plaintiff requests that this Court issue: (1) a preliminary injunction preventing the resolicitation of the bids; (2) a declaration that the actions taken by the Navy were arbitrary and capricious and in violation of the statutes regulating the distribution of defense contracts to small business concerns; (3) a declaration that plaintiff submitted the lowest responsive bid; and, (4) a permanent injunction requiring the Navy to award the project to plaintiff at its bid in accordance with the provisions of the original IFB.

Defendants responded with a motion to dismiss for lack of subject matter jurisdiction asserting that the FCIA vests exclusive jurisdiction for all pre-award contract claims with the United States Claims Court. Defendants urge this Court to adopt the plain and literal meaning of this statutory provision and reject the liberal construction that some courts have reached after reviewing the legislative history.

In its reply brief, plaintiff has put forth many arguments in an effort to save this Court's jurisdiction over the matter. First, plaintiff contends that, because the Navy canceled the bid solicitation prior to the time in which this action was filed, the parties are not in a "pre-award" posture. Plaintiff asserts, therefore, that this Court must retain jurisdiction here because the Claims Court's jurisdiction "extends only to those cancelled solications sic where legal action was instituted before cancellation." Plaintiff's Response to Defendant's Motion to Dismiss, at 3 (emphasis in original) (citations omitted). Second, plaintiff contends that it initiated this action to enforce its statutory rights under the Administrative Procedure Act ("APA" or "Act"), 5 U.S.C. § 701 et seq., and the Federal Acquisition Regulation ("FAR"), 48 C.F.R. § 14.404-1(a)(1) (1984), and not its contractual rights pursuant to the bid solicitation. Plaintiff thus argues that the jurisdictional prerequisites of the FCIA are not applicable in this case and that this Court is obligated to enforce plaintiff's rights under the APA and the FAR. Finally, plaintiff relies on particular language in the legislative history to suggest that Congress intended the Claims Court and the district courts to share concurrent jurisdiction over pre-award contract claims when it enacted the FCIA. These contentions will be dealt with seriatim.

The Federal Courts Improvement Act of 1982

On October 1, 1982, § 133(a) of the FCIA became effective, providing in relevant part:

(3) to afford complete relief on any contract claim brought before the contract is awarded, the Claims court shall have exclusive jurisdiction to grant declaratory judgments and such equitable and extraordinary relief as it deems proper, including but not limited to injunctive relief. In exercising this jurisdiction, the court shall give due regard to the interests of national defense and national security.

Pub.L. 97-164, 96 Stat. 25, 28 U.S.C. § 1491(a) (emphasis added). A number of courts which have reviewed this provision have concluded that the clear and unambiguous language of the statute vests exclusive jurisdiction in the Claims Court to hear pre-award contract claims seeking declaratory and injunctive relief. See, e.g., American Coastal Line Joint Venture v. U.S. Lines, 580 F.Supp. 932, 935 (D.D.C.1983); Inter-Con Securities Systems, Inc. v. Orr, 574 F.Supp. 250 (D.D.C.1983); American District Telegraph v. Department of Energy, 555 F.Supp. 1244, 1247 (D.D.C.1983); Opal Manufacturing Co. v. UMC Industries, Inc., 553 F.Supp. 131, 133 (D.D.C. 1982); see also B.K. Instrument, Inc. v. United States, 715 F.2d 713, 721 n. 4 (2d Cir.1983) (dictum).

Several other courts, however, have analyzed the legislative history of the FCIA and reached a contrary result. See Coco Brothers Inc. v. Pierce, 741 F.2d 675, 677 (3d Cir.1984); Acme of Precision Surgical Co., Inc. v. Weinberger, 580 F.Supp. 490 (E.D.Pa.1984). These courts have relied on specific passages of legislative history in concluding that Congress did not intend to take away the district court's power to hear pre-award cases when it enacted the FCIA. See The Report of the House Judiciary Committee, H.R.Rep. No. 312, 97th Cong. 1st Sess. 43-44 (1981); The Report of the Senate Judiciary Committee, S.Rep. No. 275, 97th Cong., 1st Sess., 22-23 (1981), reprinted in 1982 U.S.Code Cong. & Admin.News 11, 33.

The parties disagree as to the role these committee reports should play in the Court's interpretation of § 1491(a)(3). Plaintiff asserts that resort to this legislative history is necessary in order to understand fully the meaning of the word "exclusive." Moreover, plaintiff avers that the "surest way to misinterpret a statute or a rule is to follow its literal language without reference to its purpose." Coco Bros., Inc., supra, at 679, quoting Viacom International, Inc. v. Federal Communications Commission, 672 F.2d 1034, 1040 (2d Cir.1982) (citations omitted). Defendants retort that "where the language of a statute is clear ... congressional committee reports may not be considered as an aid construction of the statute." Defendants' Reply Brief, at 5. See United States v. Missouri P.R. Co., 278 U.S. 269, 49 S.Ct. 133, 73 L.Ed. 322 (1929); George Van Camp & Sons Co. v. American Can Co., 278 U.S. 245, 49 S.Ct. 112, 73 L.Ed. 311 (1929); Standard Fashion Co. v. Magrane-Houston Co., 258 U.S. 346, 42 S.Ct. 360, 66 L.Ed. 653 (1922); Railroad Commission v. Chicago B. & O.R. Co., 257 U.S. 563, 42 S.Ct. 232, 66 L.Ed. 371 (1922). Defendants further rely on Black's Law...