INTERN. ASS'N, ETC. v. US DEPT. OF THE NAVY, ETC.

• Decision Date: 02 April 1982
• Docket Number: Civ. A. No. 81-0254.
• Citation: 536 F. Supp. 1254
• Parties: INTERNATIONAL ASSOCIATION OF FIREFIGHTERS, LOCAL F-100 v. UNITED STATES DEPARTMENT OF THE NAVY, NAVAL EDUCATION AND TRAINING CENTER, NEWPORT, RHODE ISLAND.
• Court: U.S. District Court — District of Rhode Island

536 F. Supp. 1254

INTERNATIONAL ASSOCIATION OF FIREFIGHTERS, LOCAL F-100 v. UNITED STATES DEPARTMENT OF THE NAVY, NAVAL EDUCATION AND TRAINING CENTER, NEWPORT, RHODE ISLAND.

Civ. A. No. 81-0254.

United States District Court, D. Rhode Island.

April 2, 1982.

Jeffrey J. Teitz, Corcoran, Peckham & Hayes, Newport, R. I., for plaintiff.

Robert L. Gammell, Asst. U. S. Atty., Paul F. Murray, U. S. Atty., Providence, R. I., for defendant.

OPINION

FRANCIS J. BOYLE, District Judge.

This is a civil action for injunctive and declaratory relief. Jurisdiction is asserted under 28 U.S.C. §§ 1331, 1346, 1361, 2201 and 2202, and 5 U.S.C. §§ 701-706. The Plaintiff Union is the exclusive bargaining agent for federal civil service employees who perform firefighting services at the Naval Education and Training Center (NETC), Newport, Rhode Island, pursuant to a collective bargaining agreement between the Union and NETC, effective May 16, 1980. The Union is suing in its own right and on behalf of these employees. The Naval Education and Training Center is a naval installation operated by the United States Department of the Navy (Navy).

In response to a Navy directive of May 17, 1979, NETC undertook a Commercial Industrial Type Activity (CITA) study of firefighting services to determine whether they could be performed more economically by a private contractor. As part of this study, the NETC prepared an in-house estimate to determine the cost for civil service employees to continue performing the services. An Invitation for Bids (IFB) from private contractors was issued on December 1, 1980. The IFB was accompanied by specifications for contract performance.

Eight private contractors submitted bids. The bids were opened on January 8, 1981. They were adjusted, reviewed and analyzed by the Navy, and compared with NETC's in-house estimate. This analysis revealed that the apparent low bidder was RHK Services, Inc. (RHK), of Columbia, Maryland. All other private bids were higher than NETC's estimate.

On January 15, 1981, the Naval Facilities Engineering Command (NAVFAC), Northern Division, wrote RHK, advising the Company that its bid was "much lower" than the other private bids, and requesting confirmation of the bid price. At the direction of NAVFAC, Northern Division, NETC officials and the Officer-in-Charge of Construction, Naval Activities, Newport, met with representatives of RHK on February 3, 1981, to analyze RHK's bid price. Edward Charette, the NETC official who prepared the specifications accompanying the IFB, attended this meeting. After the meeting, he was of the impression that RHK's bid was inadequate in terms of fringe benefits and staffing requirements.

The staffing requirements for the firefighting contract were set forth in an instruction from the Chief of Naval Operations (OPNAV Instruction). The specifications accompanying the IFB informed contractors that staffing for firefighting services at NETC "must comply with the manpower requirements established in the OPNAV Instruction," and further informed them that "NETC has been assigned a fire protection classification of `A,'" thus directing them to a specific portion of the instruction. This portion of the instruction provided in pertinent part that "four men are considered the minimum on-duty complement required for each in-service fire company ... however, a five-man fire company response may be required at large high value activities such as shipyards, major air stations and Navy industrial complexes where Navy firefighting capability is maintained." The OPNAV Instruction did not, however, state whether NETC was in whole or in part a "high value activity," nor did it inform the bidders how to make such a determination. The OPNAV Instruction was not included in the materials provided to the private bidders along with the IFB, but the IFB informed the contractors that they could address questions concerning "the bidding or any other phase of this specification" to Joseph Tanzi, Contract Specialist, NAVFAC, Northern Division. Mr. Tanzi testified that one of the contractors did request the OPNAV Instruction while preparing its bid.

Subsequent to the meeting on February 3, 1981, RHK filed a bid protest with the General Accounting Office (GAO). In its letter to GAO dated February 9, 1981, RHK complained, inter alia, that the IFB "improperly omitted vital specific information and instruction to bidders regarding staffing requirements" (emphasis in original).

The director of the contracts division at NAVFAC Headquarters in Virginia, Paul Buonaccorsi, was informed of the GAO protest. He requested a report on the bidding process from NAVFAC, Northern Division, requesting documentation and recommendations so that his office could prepare a response to the protest. On February 19, 1981, NAVFAC, Northern Division, sent Mr. Buonaccorsi this report, which was prepared by Mr. Tanzi.

The report stated that although RHK was the apparent low bidder, RHK had failed to provide for adequate staffing. Moreover, it noted that even with inadequate staffing, RHK could not perform the contract at the bid price because it had failed to compute wages correctly. The report acknowledged that "it would have been more desirable to have included the OPNAV Instruction with the bid package," but pointed out that RHK could have obtained the instruction from Mr. Tanzi, as one of the other bidders had done. The report recommended that the RHK bid be rejected.

In the alternative, the report requested authority to cancel the IFB, citing "an ambiguity regarding the staffing requirements." The report noted that the OPNAV Instruction could be interpreted as requiring a minimum of four persons at all fire stations on the base, but that the NETC in-house cost comparison provided for a five-person complement at two of the stations which it regarded to be "high value areas."

In a letter dated March 2, 1981, NAVFAC general counsel William H. Speck informed GAO that NAVFAC "proposes to reject all bids, set forth clear requirements as to manning level and readvertise." As authority for this procedure, Mr. Speck cited the Defense Acquisition Regulations (DAR), 32 C.F.R. §§ 1.100 et seq., which provide that an IFB may be cancelled if "inadequate or ambiguous specifications were cited in the invitation." DAR, 32 C.F.R. § 2-404.1(b)(i). Mr. Speck conceded that this procedure "does have the effect of exposing bids, including the government estimate," but concluded that "manning level is such a material requirement going to the very heart of the life and property saving features of the proposed performance that it constitutes a compelling reason to reject all bids."

Because of the proposal to reject all bids, RHK withdrew its GAO protest. By letter of April 1, 1981, NAVFAC, Northern Division, directed NETC to cancel the original IFB and readvertise within sixty days. NAVFAC stated that it would notify bidders that the IFB was being cancelled because of a "change in Government Requirements,". It also recommended that NETC review the staffing requirements to determine whether "it is essential to have a 5 man complement."

In a telegram received by NAVFAC, Northern Division, on April 8, 1981, NETC requested "urgent reconsideration" of NAVFAC's decision to readvertise. NETC denied that there was an ambiguity in the specifications, asserting that:

Although finite manning requirements were not delineated in the specifications, the solicitation stated clearly that manning for a Class A firefighting activity must comply with the OPNAV Instruction (available to all bidders upon request). At issue appears to be whether a four or five-man complement should be used in high value areas. As provided for by the OPNAV Instruction, that manning option was left to the discretion of each competitive bidder. The government chose to use a five-man complement for two high value areas and accept the higher costs. Each bidder had equal opportunity of choice. Accordingly, the implication that the specifications lacked specificity which could necessitate cancellation of the solicitation is not valid.

In addition, the NETC telegram contended that all private bidders had seen its in-house cost estimate when bids were opened in January. NETC argued that "to readvertise the subject invitation when the confidentiality of the government estimate has been compromised, is tantamount to negating further competitive bidding." Therefore, NETC requested NAVFAC to award the contract to the lowest competent bidder — i.e., NETC — "in order to maintain credibility of the competitive bidding process."

In a telegram to NETC dated April 13, 1981, NAVFAC reaffirmed its decision to cancel all bids and readvertise. NAVFAC stated that the private bids and government estimate must be based on the same staffing requirements, and directed NETC to identify more precisely the staffing requirements for the second IFB. NAVFAC concluded that more precise identification "should result in revised bids by all concerned," thus minimizing the adverse effects of exposure of the prior bids.

The second IFB was issued July 7, 1981. The specifications accompanying this IFB require four-person firefighting complements. Fifteen private bids were submitted in response to this IFB. According to Mr. Tanzi, five of these apparently are below the government's in-house estimate. The Navy has not yet awarded a contract on the basis of this solicitation.

The Union initially requested this Court to prevent the Navy from opening the bids received in response to the new IFB, awarding any contract based on the second IFB, or taking any other action that would have the effect of setting aside the cost comparison prepared by NETC in conjunction with the first IFB. In addition, the Union sought to restrain Defendant from retaining a private contractor to perform firefighting services at NETC until May 16, 1983, the expiration date of the collective bargaining agreement between the...