NCLN20, Inc. v. United States
| Decision Date | 21 July 2011 |
| Docket Number | No. 02-1282C,02-1282C |
| Parties | NCLN20, INC., Plaintiff, v. THE UNITED STATES, Defendant. |
| Court | U.S. Claims Court |
TO BE PUBLISHED
Contracts; Affirmative Defense, RCFC 8(c); Contract Disputes Act of 1978, 41 U.S.C. §§ 601-13, 41 U.S.C. §§ 7101-7109;
Federal Acquisition Regulation, 48 C.F.R. §§ 14.407-3(a) (mistake in bid), 14.407-3(g)(2) (verified bid), 14.408-1 (method of contract award), 49.402-3(j) (), 52.214-10 (contract award—sealed bidding), 52.249-8 (default termination and notice to cure), 52.449-8(c) (); Interest On Disputed Amount Due Contractor, 41 U.S.C. § 611;
Michigan Private Security Guard Licenses, Mich. Comp. Law §§ 338.1053, 338.1065; Motion In Limine;
Prompt Payment Act, 31 U.S.C. §§ 3901-07; Qualifying Small Business, 13 C.F.R. § 124.108;
Request for Equitable Adjustment; Small Business Act of 1958, 15 U.S.C. § 637(a)(1)(C) (2006) (); RESTATEMENT (SECOND) OF CONTRACTS § 251(2) (1981).
Clarence B. Tucker, Sr., Clarence B. Tucker, Sr., PLLC, Detroit, Michigan, for Plaintiff.
Douglas K. Mickle, United States Department of Justice, Washington, D.C., for Defendant.
This case concerns two contracts between NCLN20, Inc. ("NCLN20"), and the Federal Protective Service of the General Services Administration ("GSA"). One concerned security guard services for federal facilities in the State of Michigan ("the Michigan Guard Contract"); the other concerned alarm monitoring and public-safety related telecommunications services in the State of Michigan ("the Battle Creek Contract").1
To facilitate review of this Memorandum Opinion and Order, the following outline is provided:
I. RELEVANT FACTS.
II. PROCEDURAL HISTORY.
III. DISCUSSION.
IV. CONCLUSION.
* * *
On July 31, 2001, GSA issued an Invitation For Bid on Solicitation No. GS05PO1GCD0009 ("the Solicitation") for an indefinite delivery, fixed-price requirements service contract for armed and unarmed uniformed security guard labor, services, and supporting equipment and supplies in GSA-controlled and GSA-supported buildings in the State of Michigan. JX 1 at 1-3. GSA set aside the Solicitation for award under the Small/Disadvantaged Business Development Program of the Small Business Administration ("SBA").3 JX 1 at 1. Arthur S. Dobbs was designated as the Contracting Officer ("CO") and Roger R. Pinnau was designated as the Alternate Administrative Contracting Officer ("AACO").4 JX 1 at 153-54.
The Michigan Guard Contract had a one-year base term with four consecutive one-year option periods. JX 1 at 1-2, 22. Performance was to commence either on October 1, 2001, or 30 calendar days from the date of award, whichever was later. JX 1 at 22. The contractor, however, was authorized to commence performance in less than thirty days after award, "if that is mutually agreed to in writing by both the Contractor and the Contracting Officer." JX 1 at 39.
On August 16, 2001, NCLN20, a registered SBA "minority business enterprise," submitted an offer. JX 2 at 1-35. In the offer, NCLN20 did not identify any joint venturepartner. JX 2 at 31. On August 20, 2001, the CO issued a Memorandum For The Record, stating that NCLN20 submitted the lowest priced complete and responsive bid, having proposed a total price of $32,962,000 for five years. JX 3 at 1-2.
On August 21, 2001, NCLN20 agreed to enter into a relationship with B&C Service Co. ("B&C") and its principal, Mark Zerefos, to obtain a security guard license. PX 1083 at 2. NCLN20's Board adopted a resolution whereby NCLN20 would operate as a security guard service company using B&C's license. PX 1083 at 2; PX 1005; 1/27/09 TR 293 (Thibault testifying that Mr. Zerefos "had a security license for that state and [we] were basically acting on his license.")
On August 22, 2001, the AACO faxed a Notification of Apparent Low Bidder to NCLN20, together with a request to verify that there was no Mistake in Bid ("MIB").5 JX 5 at 1-2.
On August 23, 2001, NCLN20's accountant advised the CO that there was a $923,000.00 mistake in NCLN20's offer. AC1, Tab E at 1 (). On that same day, a series of telephone conversations took place between NCLN20's President and the CO. AC3, Tab 46 at 3 (7/9/04 Dobbs Decl.). After consulting with GSA's counsel, the CO advised NCLN20 that the apparent failure to check the accuracy of its offer was a "mistake in judgment," not a clerical error, so the offer could not be corrected. Id.
On the same day, NCLN20's President signed and returned that letter. Id.
On August 24, 2001, the CO sent a preliminary notice to advise NCLN20 that the company was awarded the Michigan Guard Contract, a "formal notice of award" would be forthcoming within two business days, and a "post-award" meeting would be scheduled during the week of August 27, 2001. JX 6 at 1.
On the same day, NCLN20 was advised that counsel had represented other guard companies in disputes with GSA involving the same CO, and that no FAR provision disallowed MIBs for a mistake in business judgment. JX 63 at 4 (10/11/04 Jones Decl.). On August 27, 2001, based on this advice, NCLN20's President informed the CO that the Michigan Guard Contract should be "recalculated" based on the MIB. Id. The CO responded that he would consult again with GSA's Legal Department. Id.
On August 29, 2001, GSA and NCLN20 participated in a "post-award" meeting by teleconference, even though NCLN20 had not yet received formal notice of award. JX 63 at 5 (10/11/04 Jones Decl.); JX 84 at 4 (6/30/09 Dobbs Dep.). NCLN20 stated that it would be prepared to perform on October 1, 2001. AC3, Tab 46 at 4 (7/9/04 Dobbs Decl.). The CO advised NCLN20 that the incumbent contractor, Unlimited Security, Inc. ("USI"), was interested in selling weapons, equipment, and uniforms. JX 8 at 2; JX 84 at 6 (6/30/09 Dobbs Dep.); JX 63 at 5 (10/11/04 Jones Decl.). The CO also recommended that NCLN20 hire Randy McKay as Contract Manager because he served in that position for USI. JX 63 at 5 (10/11/04 Jones Decl.). NCLN20 offered Mr. McKay a position and he accepted. JX 8 at 2.
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