Horne Brothers, Inc. v. Laird, 72-1392.

CourtUnited States Courts of Appeals. United States Court of Appeals (District of Columbia)
Citation463 F.2d 1268
Docket NumberNo. 72-1392.,72-1392.
PartiesHORNE BROTHERS, INC. v. Melvin R. LAIRD, Secretary, Department of Defense, et al., Appellants.
Decision Date17 May 1972

463 F.2d 1268 (1972)

Melvin R. LAIRD, Secretary, Department of Defense, et al., Appellants.

No. 72-1392.

United States Court of Appeals, District of Columbia Circuit.

Argued May 8, 1972.

Decided May 17, 1972.

463 F.2d 1269

Messrs. Robert E. Kopp, Atty., Dept. of Justice, and Joseph M. Hannon, Asst. U. S. Atty., with whom Mr. Walter H. Fleischer, Atty., Dept. of Justice, was on the motion, for appellants. Messrs. Harold H. Titus, Jr., U. S. Atty., John A. Terry and Robert M. Werdig, Jr., Asst. U. S. Attys., also entered appearances for appellants.

Mr. Robert H. Turtle, Washington, D. C., for appellee.

Before LEVENTHAL, ROBINSON and WILKEY, Circuit Judges.

LEVENTHAL, Circuit Judge:

The appellee, Horne Brothers, Inc.,1 was suspended in December, 1971, as a bidder on Department of Defense contracts. Soon thereafter Horne brought an action alleging that the Secretaries of Defense and Navy had acted in violation of law by issuing the suspension and by refusing to award to Horne a repair contract on the naval vessel U.S.S. Francis Marion. The District Court, 342 F.Supp. 703, issued to a preliminary injunction which directed the defendants2 to order the cessation of performance by another of work on the contract.3 On motion of the Government, this court stayed the injunction so as to give the Government a meaningful opportunity to appear before this Court, and continued the stay pending the determination of its motion. We find Horne's particular case is such that it is not likely to prevail on the merits and reverse the injunction as granted. However, we make clear that we agree with the premise of the District Court that there are serious and fundamental questions regarding the fairness of procedures utilized by the Government in suspending contractors. We bring this out in order to avoid misunderstanding, and

463 F.2d 1270
because it may affect further orders in the lawsuit

While the matter is before us as a preliminary injunction, and focuses on the probability of success on the merits, the parties agree that the legal issues are ripe for resolution if the court does not require further briefs.

We respond by outlining the state of our thinking on the legal issues, while reserving the possibility of modifying our conclusions on the basis of supplementary submissions.


We begin by saying that we agree with the trial court's thoughtful analysis of the problems presented by the suspension procedures authorized under Armed Services Procurement Regulations (hereinafter ASPR). ASPR provide that the Secretary of Defense may suspend a bidder, upon a finding of adequate evidence of improper or unlawful activities,4 from participating in Government contract awards.5

This procedure does not require that the suspended contractor be offered an opportunity to confront his accusers and to rebut the "adequate evidence" against him. Yet the suspension may be continued for eighteen months or more.6 While we may accept a temporary suspension for a short period, not to exceed one month, without any provision for according such opportunity to the contractor, that cannot be sustained for a protracted suspension. As we pointed out

463 F.2d 1271
in Gonzalez v. Freeman, 118 U.S.App.D. C. 180, 188, 334 F.2d 570, 578 (1964)
On this record there is neither the appearance nor the reality of fairness in the process by which debarment of appellants was accomplished. Disqualification from bidding or contracting for five years directs the power and prestige of government at a particular person and, as we have shown, may have a serious economic impact on that person. Such debarment cannot be left to administrative improvisation on a case-by-case basis. The governmental power must be exercised in accordance with accepted basic legal norms. Considerations of basic fairness require administrative regulations establishing standards for debarment and procedures which will include notice of specific charges, opportunity to present evidence and to cross-examine adverse witnesses, all culminating in administrative findings and conclusions based upon the record so made.

The Government's regulations draw a distinction between "debarment," which is concededly governed by Gonzalez, and "suspension." The debarment procedure provides for "a notice to the contractor affording him an opportunity to be heard and invokes temporary debarment pending that hearing; a favorable decision lifts the temporary debarment."7

While Gonzalez related to a five year disqualification, we think an action that "suspends" a contractor and contemplates that he may dangle in suspension for a period of one year or more, is such as to require the Government to insure fundamental fairness to the contractor whose economic life may depend on his ability to bid on government contracts. That fairness requires that the bidder be given specific notice as to at least some charges alleged against him, and be given, in the usual case, an opportunity to rebut those charges.


Our remarks should not be taken to mean that in every suspension action the Government must offer the contractor a proceeding within one month of his suspension. There may be reasons why the Government should not be required to show any of its evidence to the contractor, particularly reasons of national security, or, more likely, the concern that such a proceeding may prejudice a prosecutorial action...

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37 cases
  • S.E.C. v. Dresser Industries, Inc., s. 78-1702
    • United States
    • United States Courts of Appeals. United States Court of Appeals (District of Columbia)
    • 17 Noviembre 1980
    ...defense(.)" United States v. Kordel, supra, 397 U.S. at 12 n.27, 90 S.Ct. at 770 (citations omitted); see Horne Brothers, Inc. v. Laird, 463 F.2d 1268, 1271-1272 (D.C.Cir.1972). The court must make such determinations in the light of the particular circumstances of the Other than where ther......
  • Kirkpatrick v. White, CIV.A.01-JEO-2942-NE.
    • United States
    • United States District Courts. 11th Circuit. United States District Court of Northern District of Alabama
    • 12 Agosto 2004
    ...the suspensions. See 24 C.F.R. §§ 24.313, 24.314 (1995). Many years ago, in Horne Brothers, Inc. v. Laird, 150 U.S.App. D.C. 177, 463 F.2d 1268 (D.C.Cir.1972), Judge Leventhal had occasion to construe what it means for an agency to have "adequate evidence" to justify the "suspension" of a g......
  • Crown Zellerbach Corp. v. Marshall, Civ. A. No. 77-1833.
    • United States
    • United States District Courts. 5th Circuit. United States District Court (Eastern District of Louisiana)
    • 25 Octubre 1977
    ...of law or fact . . . to the extent that a hearing is . . . required . . ." 10 In Horne Bros., Inc. v. Laird, 1972, 150 U.S. App.D.C. 177, 463 F.2d 1268, the court held that a party suspended from government contracting for a period of one year or more was entitled to a hearing within thirty......
  • Capitol Mortg. Bankers, Inc. v. Cuomo, MJG-99-2907.
    • United States
    • United States District Courts. 4th Circuit. United States District Court (Maryland)
    • 25 Octubre 1999
    ...providing for procedural safeguards in debarment actions by giving another label to its action); Horne Brothers, Inc. v. Laird, 463 F.2d 1268, 1270-71 (D.C.Cir.1972) (agency suspending contractor for more than one month must offer an opportunity to confront his accusers and rebut the "adequ......
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1 books & journal articles
  • Creative Collateral Claims Against Public Entities and Their Agents
    • United States
    • ABA General Library The Construction Lawyer Nbr. 40-1, January 2020
    • 1 Enero 2020
    ...those charges, and, under most circumstances, a hearing. Gonzales v. Freeman , 334 F.2d 570 (D.C. Cir. 1964); Horne Brothers [ v. Laird , 463 F.2d 1268 (D.C. Cir. 1972)]; THE CONSTRUCTION LAWYER 36 Winter 2020 Published in The Construction Lawyer, Volume 40, Number 1 Winter 2020. © 2020 Ame......

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