Clark Const. Co., Inc. v. Pena
| Decision Date | 26 June 1995 |
| Docket Number | Civ. A. No. 95-D-447-N. |
| Citation | 895 F. Supp. 1483 |
| Parties | CLARK CONSTRUCTION COMPANY, INC., Plaintiff, v. Federico PENA, Secretary, United States Department of Transportation, Rodney Slater, Administrator, Federal Highway Administration, James F. Butts, Director, State of Alabama Department of Transportation, Defendants. |
| Court | U.S. District Court — Middle District of Alabama |
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James H. Anderson, Montgomery, AL, Keith J. Harrison, and Jeffrey L. Poston, Washington, DC, for plaintiff.
Redding Pitt, U.S. Attorney, Montgomery, AL, for defendants.
DE MENT, District Judge.
Before the court is plaintiff Clark Construction Company, Inc.'s (hereafter "Clark Construction") motion for preliminary injunction filed March 30, 1995. The plaintiff seeks to enjoin the Federal Highway Administration (hereafter "FHWA"), the U.S. Department of Transportation (hereafter U.S. DOT), and the Alabama Department of Transportation (hereafter ADOT) from depriving it of a construction contract which the State of Alabama originally proposed to award Clark Construction. The plaintiff's low bid was rejected by the FHWA after the agency discovered that the project plans and specifications that it approved and submitted to prospective bidders contained an error relating to a traffic control note. Upon discovering the omitted term, the FHWA directed ADOT to reject all of the then public bids and solicit bids a second time. Two bids, one of which belonged to the plaintiff, were submitted in the second let. Both bids were significantly lower than the bids submitted in the first let, notwithstanding the fact that the previously omitted traffic control note appeared to increase the cost of the project in the view of the FHWA. The plaintiff was underbid in the second let by its competitor APAC Construction and presently, ADOT has requested that the FHWA concur in the proposed award to APAC. The plaintiff seeks in its motion for preliminary injunction to prevent the FHWA from concurring in the proposed award to APAC. Furthermore, the plaintiff has asked in its complaint that this court direct the defendants to recognize the plaintiff's original low bid as the only lawfully obtained low bid and award the construction contract accordingly. In support of its motion, the plaintiff asserts that the defendants had no statutory or legal authority to reject the originally proposed award based on an insignificant mistake that the parties agree was entirely the fault of the defendants. Furthermore, the plaintiff argues that the defendants' decisions with respect to the proposed award were both arbitrary and capricious.
On May 22, 1995, the court held an evidentiary hearing on the plaintiff's motion for preliminary injunction, the transcript of which is a part of the record. Subsequent to that hearing, the parties were given the opportunity to file additional briefs in support of, and in opposition to, the plaintiff's motion. After careful consideration of the record as a whole and the applicable law, the court finds that the plaintiff's motion for preliminary injunction is due to be granted.
This is an action arising under the United States Constitution, the Administrative Procedure Act, 5 U.S.C. §§ 551 et seq. and the Federal Highway Act, 23 U.S.C. §§ 101 et seq. Subject matter jurisdiction is proper pursuant to 28 U.S.C. § 1331. Venue is properly founded upon 5 U.S.C. § 8912 and 28 U.S.C. § 1391(e).
The plaintiff's legal standing to appeal the actions of the respective agency defendants lies in the Administrative Procedure Act. Section 702 of that Act provides that "a person suffering legal wrong because of agency action, or adversely affected or aggrieved by agency action within the meaning of a relevant statute, is entitled to judicial review" thereof. The court finds that the plaintiff, as an unsuccessful bidder, has standing to challenge the defendants' proposed plan to award the contract to a third party. See Choctaw Mfg. Co., Inc. v. United States, 761 F.2d 609 (11th Cir.1985).
The construction contract in question arose out of a Federal Aid Project operating under the Federal Highway Act.2 The project involves a joint effort by the FHWA and the State of Alabama to widen a portion of U.S. Highway 280, which is located in Jefferson County, Alabama. The terms of the State and Federal relationship in this matter are set forth in an operating agreement generated by the FHWA and the State of Alabama. The "Agreement" incorporates the statutory and regulatory requirements set forth in the Federal Highway Act and the Intermodal Surface Transportation Efficiency Act of 1991.
Under the law incorporated in the above mentioned Agreement, the State is required to prepare a document setting forth the specifications of the project.3 The document itself is referred to as the Plans, Specifications & Estimates or "PS & E". The PS & E's specific purpose is to describe the location and design features and the construction requirements in sufficient detail so as to facilitate construction, contract control, and the estimation of construction costs. 23 C.F.R. § 630.205(b). Upon completion, the PS & E is submitted to the Division Administrator of the FHWA for approval. 23 C.F.R. § 630.205(c). The State's plan must be approved by the FHWA before the State will be allowed to proceed with soliciting bids.4 Upon approval of the plan, the State may then begin the sealed-bidding process used to select a contractor. The Federal Highway Act provides that a contract be "awarded only on the basis of the lowest responsive bid submitted by a bidder meeting the criteria for responsibility as may have been established by the SHA Applicable State Highway Authority in accordance with Section 635.110."5
In the present case, ADOT and the FHWA spent a considerable amount of time discussing the construction specifications which would be included in the ADOT PS & E. One of the points that was discussed and eventually agreed upon related to the project "construction sequence." Among other things, the construction sequence in this PS & E was to include a note limiting when traffic lanes could be closed for construction work. Both the FHWA and ADOT agreed that the note would alert prospective bidders that traffic lanes could not be closed from 6:30 a.m. to 7:00 p.m. on weekdays. Apart from that restriction, lane closures were to be permitted for construction purposes on weeknights and weekends.
Notwithstanding the Agencies agreement as to that particular note, the PS & E that was ultimately drafted by ADOT and submitted to the FHWA for approval did not contain the above mentioned restriction. Instead, the PS & E traffic control note simply prohibited lane closures on weekdays from 6:30 a.m. to 8:30 a.m. and from 3:30 p.m. to 6:30 p.m. ADOT submitted its PS & E, which included the traffic control note error, to the FHWA for approval. The FHWA formally approved the PS & E in its entirety and allowed the State to begin soliciting bids.
Four companies submitted bids in response to ADOT's contract advertisement. The Plaintiff company was among that group. All of the prospective bidders had been pre-qualified as directed by state law. The Plaintiff was the low bidder at $7,879,999.92. The second lowest bid was submitted by APAC construction company. APAC's bid was $7,906,508.82 (a difference of only $26,000.00).
ADOT reviewed the Plaintiff's low bid and found that it met all requirements and specifications. Accordingly, the Plaintiff's bid was accepted by ADOT and it was selected as the proposed contract awardee. After notifying the Plaintiff on December 5, 1994, the ADOT Bid Review Committee submitted its selection to the FHWA for its official concurrence as called for by the Agreement and the Federal Highway Act. 28 U.S.C. § 112. However, Joseph Wilkerson, Division Administrator for the FHWA, refused to concur in the proposed award. Wilkerson rejected the award upon discovering that the PS & E that his office had approved did not contain the correct traffic control note regarding lane closures.6
When ADOT was informed of the FHWA's rejection of its proposed awardee, it contacted the Plaintiff to ask whether their bid reflected an intent to close traffic lanes only on weekday nights and on weekends. The Plaintiff informed ADOT that it did so reflect, and that the change in the PS & E would have no effect on its bid.7 The Plaintiff further explained to ADOT that it would have been impractical for its construction crews to have attempted any day time work during weekdays as allowed under the incorrect traffic control note because the erection of barriers and other safety devices would have left virtually no time to work before the next "rush hour" period.8 Therefore, after changing the PS & E to specifically include the corrected traffic control note as suggested by Wilkerson, ADOT resubmitted the Plaintiff's name to the FHWA as its proposed awardee.
Again, Wilkerson rejected the proposed award to the Plaintiff. Furthermore, Wilkerson directed ADOT to resolicit bids for the project. According to the Plaintiff, this action by the FHWA seriously impaired its chances of being the low bidder for a second time because its original bid, which was then public knowledge, served as a "bid ceiling" for its competitors. Because of this, Clark Construction began to pursue administrative remedies. Clark Construction formally requested that ADOT appeal the decision by the Montgomery Federal Highway Administration Office to the Regional Federal Highway Administration in Atlanta. ADOT refused to do so. Next, Clark Construction filed a bid protest with the General Accounting Office ("GAO"). However, the GAO dismissed the bid protest claiming that it lacked jurisdiction over the matter.
Having failed to obtain relief before the second solicitation of bids, Clark Construction submitted...
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