New America Shipbuilders, Inc. v. U.S.

Decision Date04 April 1989
Docket NumberNo. 88-1595,88-1595
Citation871 F.2d 1077
Parties35 Cont.Cas.Fed. (CCH) 75,640 NEW AMERICA SHIPBUILDERS, INC., Robert Brazier, individually and as President of New America Shipbuilders, Inc.; Travis Short, individually and as Vice-President of New America Shipbuilders, Inc. and Priscilla Culberson, individually and as Vice-President of New America Shipbuilders, Inc., Plaintiffs-Appellants, v. The UNITED STATES, Defendant-Appellee.
CourtU.S. Court of Appeals — Federal Circuit

William J. Huff, Pascagoula, Miss., submitted for plaintiffs-appellants.

E. Richard Southern, Commercial Litigation Branch, Dept. of Justice, Washington, D.C., argued for defendant-appellee. John R. Bolton, Asst. Atty. Gen., David M. Cohen, Director and Helene M. Goldberg, Asst. Director, Commercial Litigation Branch, Dept. of Justice, Washington, D.C., were on the brief for defendant-appellee.

Before RICH, Circuit Judge, NICHOLS, Senior Circuit Judge, and BISSELL, Circuit Judge.

NICHOLS, Senior Circuit Judge.

New America Shipbuilders, Inc. (NASI) appeals the decision of the United States Claims Court, New America Shipbuilders, Inc. v. United States, 15 Cl.Ct. 141 (1988) (Robinson, J.). The Claims Court granted the government's motion for summary judgment and dismissed NASI's claim. We affirm.

Background

The Small Business Administration (SBA) approved NASI for participation in its program for disadvantaged persons participating in the high-tech industry. Under this program, the SBA, at its discretion, may grant Business Development Expense (BDE) funds to program participants to assist in the performance of subcontracts. 15 U.S.C. Secs. 636(j) and 637(a); sections 7 and 8(a) of the Small Business Act of 1953, as amended and supplemented.

NASI entered into extensive negotiations with the SBA and the United States Coast Guard (USCG) concerning the formation of a contract for the construction of three aids-to-navigation boats, to be aided by a BDE grant without which NASI would be unable to perform. NASI's case is this: NASI is a firm with scant capitalization or ship-building experience. It claims a right to participate in government contracts which are "set-aside" for companies having "minority" ownership--in this instance, a black person--to the extent of over 50 percent. The procedural track was, that the SBA would make a prime contract with the USCG to build and deliver the required boats. SBA would subcontract the work to NASI and also would grant the BDE funds above the contract price deemed requisite for completion. The parties negotiated for a considerable period, during which the two government agencies allegedly became aware of certain weaknesses in NASI's entitlement to SBA assistance under the program, e.g., a doubt whether the alleged minority participant actually had a qualifying interest and a failure to put into NASI the modest private capital required. NASI alleges that the government agencies suppressed these doubts and allowed NASI's owners to incur various expenses in the belief that the expected contract award and BDE grant were certainties or practically so. At a late date, politically prominent persons whose names do not appear in our record intervened to obtain the award and grant for a firm located in Puerto Rico and having Hispanic ownership. Rather than resolve the touchy issue of choosing whether to favor a black or a Hispanic disadvantaged business entity, the government agencies decided to call off the whole thing and obtain the boats through the ordinary procurement methods; thus, both claimants to SBA support lost out. No contract award was made, nor any BDE grant. The long-known doubtful points in NASI's application were trotted out and made the pretext for canceling the award as a "minority" set-aside for unavowed real reasons. Thus, whatever investment the owners actually did make was put at risk and most likely lost. It is to be hoped, but not shown in this record, that the Coast Guard actually obtained three aids-to-navigation boats before the aids failed for lack of maintenance.

Such is NASI's case as revealed in the documents before the Claims Court and in its own arguments. On summary judgment the Claims Court made no findings of fact and neither do we. However, a summary judgment that the above-alleged facts did not occur could not be made, and if they were relevant they would have to be established by trial.

Discussion
I

If the government misconduct alleged was tortious, jurisdiction is not granted the Claims Court under the Tucker Act, 28 U.S.C. Sec. 1491, its sole source of jurisdiction in this case. Somali Development Bank v. United States, 508 F.2d 817, 822, 205 Ct.Cl. 741 (1974). The summary judgment below in effect held that the claim as presented, essentially to enforce an implied contract having the terms of the intended express contract and award would have had, was also not maintainable. On reviewing the summary judgment material, we believe this claim, if maintainable on a contract theory at all, was so as a claim for breach of the implied contract to give all government contract bids fair and honest consideration. See NKF Engineering, Inc. v. United States, 805 F.2d 372, 375-76 (Fed.Cir.1986); CACI, Inc.-Federal v. United States, 719 F.2d 1567, 1573 (Fed.Cir.1983); Keco Industries Inc. v. United States, 492 F.2d 1200, 1203, 203 Ct.Cl. 566 (1974); Keco Industries Inc. v. United States, 428 F.2d 1233, 1236-38, 192 Ct.Cl. 773 (1970). If the claim belonged under this rubric, the damages would be less favorable to claimants, because they would not include anticipated profits under the hoped for contract, but only a class of expenses generally lumped as "bid preparation costs." In City of Alexandria v. United States, 737 F.2d 1022 (Fed.Cir.1984), this difference was held to preclude use of these cases to support a claim to the value of the lost bargain.

Appellant elected to submit without oral argument but appellee appeared before us by counsel. Although the issue mentioned in the paragraph above was not discussed in the briefs, counsel for appellee appeared well prepared to discuss it orally. His objection was that the authorities that established the judge-made rule, whereby an implied contract is enforced, requiring fair consideration of a bid, for a contract of competitive bid procurement, does not extend to a noncompetitive claim for a discretionary grant under any case law now available. Tree Farm Development Corp. v. United States, 585 F.2d 493, 499, 218 Ct.Cl. 308 (1978), supports this view of the cases. Obviously, the equities would not be the same. While any judge-made rule extends as far as the judges say it extends, it does appear that, as applied to a grant, the rule referred to would be new. We are not willing to base a decision on a rule not urged by any party and not at all free of doubt though it might be an appellant's best hope in view of the glaring weakness of its appeal on the grounds urged.

II

NASI alleged that the negotiations culminated into an implied-in-fact contract which it seeks to enforce. The Claims Court granted the government's summary judgment motion and held that there was no implied-in-fact contract and the government is not equitably estopped from denying the contract.

To overturn summary judgment, the appellant must show that one or more of the facts that the trial court relied on was genuinely in dispute and material to the judgment. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986); Avia Group Int'l v. L.A. Gear California, Inc., 853 F.2d 1557, 1561-62, 7 USPQ2d 1548, 1551-52 (Fed.Cir.1988).

Many of the factual issues pertaining to the existence of the alleged implied-in-fact contract are disputed. However, the Claims Court found a number of fatal defects in NASI's prima facie case. One defect discussed but not resolved by the Claims Court concerns the authority of the SBA official who purportedly approved the grant of BDE funds. NASI urges that SBA approval was given, and the government argues that it was not. Both parties recognize, however, that even if...

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