Constructores Civiles de Centroamerica, SA v. Hannah

• Decision Date: 14 March 1972
• Docket Number: No. 24357.,24357.
• Citation: 459 F.2d 1183
• Parties: CONSTRUCTORES CIVILES de CENTROAMERICA, S. A. (CONCICA), Appellant, v. John HANNAH et al.
• Court: U.S. Court of Appeals — District of Columbia Circuit

459 F.2d 1183 (1972)

CONSTRUCTORES CIVILES de CENTROAMERICA, S. A. (CONCICA), Appellant, v. John HANNAH et al.

No. 24357.

United States Court of Appeals, District of Columbia Circuit.

Argued November 3, 1971.

Decided March 14, 1972.

COPYRIGHT MATERIAL OMITTED

Mr. Roger M. Dougherty, Washington, D. C., with whom Miss Frances Clark Barrie, Messrs. James M. O'Neill and Francis T. O'Donnell, Washington, D. C., were on the brief, for appellant.

Mr. Philip L. Cohan, Asst. U. S. Atty., with whom Messrs. Thomas A. Flannery, U. S. Atty. at the time the brief was filed, John A. Terry and Miss Mary E. Folliard, Asst. U. S. Attys., were on the brief, for appellees. Mr. Leonard W. Belter, Asst. U. S. Atty., also entered an appearance for appellees.

Before WRIGHT, TAMM and ROBINSON, Circuit Judges.

TAMM, Circuit Judge:

In this case we are once again confronted with questions of standing, sovereign immunity and preclusion of judicial review in relation to government contracts. Appellant, Constructores Civiles De Centroamerica, S. A. (hereinafter "CONCICA"), a Honduran corporation, filed a complaint in the District Court seeking a mandatory injunction and declaratory judgment against appellees, the Administrator, and several subordinate officials of the Agency for International Development (hereinafter "AID"). Accompanying the complaint were motions for a temporary restraining order and a preliminary injunction. Upon denial of these motions, an appeal was lodged with this court which was eventually dismissed on appellant's motion. Thereafter appellees filed in the District Court a motion to dismiss the complaint for lack of jurisdiction and for failure to state a claim upon which relief could be granted. Appellees' motion was granted, whereupon this appeal was noted. Several issues were raised in the motion to dismiss including standing, sovereign immunity and preclusion of judicial review. Unfortunately, we are unable to determine the precise basis for the decision below, the dismissal being rendered sans opinion or findings. Since the complaint was dismissed as a matter of law for insufficiency under Fed.R. Civ.P. 12 we must view the allegations therein in the light most favorable to CONCICA.

I. Facts

On January 23, 1968, the United States, acting through AID, as authorized by the Foreign Assistance Act of 1961, 22 U.S.C. § 2151 et seq. (1970), entered into a loan agreement with the Central American Bank for Economic Integration (hereinafter "CABEI"), a development bank and intermediate credit institution. The purpose of the loan was to stimulate the economic independence of the peoples of Latin America in furtherance of the Alliance for Progress. The loan agreement specified that the loan was to be used to continue CABEI's program of making subloans to member countries of the Central American common market to finance the cost of infrastructure projects, primarily in the public sector, such as road construction. Under the terms of the loan, AID and CABEI were to jointly approve contracts and contractors.¹

In accordance with the aforementioned loan agreement the government of Nicaragua obtained financing from CABEI for certain capital development projects and invited bids for construction of the "Rama Road" Project, the lowest of which was from appellant.² The local government and AID officials found CONCICA a qualified bidder,³ however, AID/Washington did not, on the ground that CONCICA failed to meet the specific AID requirement that the firm have had experience on similar projects.

CONCICA alleges two errors on appeal. First, it asserts that AID/Washington used improper standards in determining whether CONCICA was a qualified bidder. Second, appellant urges that AID's disqualification from the "Rama Road" Project and oral declaration of disqualification for future projects constitutes actual blacklisting or de facto debarment which necessitates a hearing.

II. Standing

In Ballerina Pen Co. v. Kunzig, 140 U.S.App.D.C. 98, 433 F.2d 1204 (1970), cert. denied, National Industries for Blind v. Ballerina Pen Co., 401 U.S. 950, 91 S.Ct. 1186, 28 L.Ed.2d 234 (1971), we indicated that a party has standing to challenge the government's award of a contract in the absence of specific "person aggrieved" language in the statute under which the contract was formed if a three-part test is satisfied.

First, the party must allege that the challenged action has caused him injury in fact, in order to satisfy the Article III requirement that he possess "the personal stake and interest that impart the concrete adverseness" necessary to the existence of a case or controversy. Barlow v. Collins, supra, 397 U.S. 159 at 164, 90 S.Ct. 832 at 836 25 L.Ed.2d 192; cf. Ass\'n of Data Processing Service Organizations v. Camp, supra, 397 U.S. at 150, 90 S.Ct. 827 25 L.Ed.2d 184. The plaintiff must further allege that the agency has acted arbitrarily, capriciously, or in excess of its statutory authority, so as to injure an interest that "is arguably within the zone of interests to be protected or regulated by the statute or constitutional guarantee in question." Id. at 153, 90 S.Ct. at 830; cf. Barlow v. Collins, supra, 397 U.S. at 164, 90 S.Ct. at 836. Finally, there must be no "clear and convincing" indication of a legislative intent to withhold judicial review. See generally Scanwell Laboratories v. Shaffer, supra (137 U.S.App.D.C. 371 at 381, 387, 424 F.2d 859 at 869, 875 n. 10, 19).

140 U.S.App.D.C. at 101, 433 F.2d at 1207 (footnotes omitted).⁴ Application of these criteria to the case at bar compels the conclusion that appellant has standing to challenge the instant agency action.

A. Injury in Fact

The first requirement of standing is clearly satisfied by appellant, an unsuccessful bidder on a $2.9 million contract, allegedly barred from participation in future capital development projects in Central-America financed by AID. As we indicated in Scanwell Laboratories, Inc. v. Shaffer, 137 U.S.App. D.C. 371, 424 F.2d 859 (1970)

If there is arbitrary or capricious action on the part of any contracting official, who is going to complain about it, if not the party denied a contract as a result of the alleged illegal activity?

137 U.S.App.D.C. at 378-379, 424 F.2d at 866-867.

B. Allegations of Arbitrary, Capricious or Illegal Agency Action

The second criterion of standing is equally met by appellant. Citing "arbitrary, capricious and illegal" action (Appellant's Brief at 15), CONCICA alleges that "AID/Washington without authority, in contradiction to their own published rules and regulations, and without due process of law has denied CONCICA from engaging in the very activities for which it was formed." (Appellant's Brief at 8.) We shall briefly set forth the arguments on the two issues raised by appellant without a foray into the merits of the dispute since we need not reach such determinations in the present posture of the case.

AID found CONCICA unqualified when measured against the standard set forth in the "Capital Projects Guidelines" (hereinafter "Guidelines") published by AID.⁵ The "Guidelines" provide "that qualifying experience must be the experience of the firm itself and not merely of individuals."⁶ A.I.D. Capital Projects Guidelines § 2.24(ii). Since CONCICA was a newly formed corporation without any previous construction contract awards, it was disqualified by AID. CONCICA, however, argues that the "Guidelines" do not apply since CABEI is an intermediate credit institution specifically exempted from the coverage of the "Guidelines," citing § 1.5 of the "Guidelines" which provides that "these guidelines do not apply to procurement of goods and services financed by loans made to or with respect to development banks or other intermediate credit institutions. . . ."

AID responds that under § 1.7 of the "Guidelines" it is expressly provided that individual contract and implementing letters must be consulted in determining the rules governing a specific loan agreement. "Accordingly, paragraph IV(B)⁷ . . . of Implementation Letter No. 1 dated January 23, 1968, which provides for joint approval of contractors, and paragraph VI(A),⁸ which incorporates the Capital Projects Guidelines, are controlling." (Appellee's Brief at 5). Furthermore, AID insists that § 1.5 merely precludes automatic application of the "Guidelines," but does not prevent the parties from independently adopting the "Guidelines" as they allegedly did in paragraph VI(A) of Implementation Letter No. 1.

The second claim of error raised on appeal is that the action of AID in disqualifying CONCICA and AID's oral declaration of disqualification for future projects is actual blacklisting or de facto debarment⁹ which requires a hearing under the Code of Federal Regulations.¹⁰ AID's response is that since CONCICA has never been awarded a construction contract, commenced operations, nor found more than contingently qualified pending final determination by AID/Washington, it could not possibly have been debarred. Transcript at 23, 25, 27, 28.

We express no comments upon the merits or viability of these contentions, but only indicate that CONCICA should at least have an opportunity to present them. Should they appear insubstantial, the District Court can of course enter summary judgment in accordance with the principles espoused in Blackhawk Heating & Plumbing Co. v. Driver, 140 U.S.App.D.C. 31, 433 F.2d 1137 (1970).

C. Arguably within the Zone of Interests. . .

Although the Supreme Court's requirement of injury to an interest "arguably within the zone of interests to be protected or regulated" has been the subject of much critical comment,¹¹ and some of our decisions indicate that injury in fact alone may suffice to establish standing,¹² we note that under either standard appellant must prevail.

In order to divine the Congressional intent we must examine the statutory indicia as mandated by the Supreme Court in Barlow v. Collins, 397 U.S. 159, 167, 90 S.Ct. 832,...