Saco Def. Sys. Div., Maremont Corp. v. Weinberger

• Decision Date: 08 April 1985
• Docket Number: Civ. No. 85-0082-P.
• Citation: 606 F. Supp. 446
• Parties: SACO DEFENSE SYSTEM DIVISION, MAREMONT CORPORATION and Saco Defense, Inc., Plaintiffs, v. Casper WEINBERGER, Secretary, U.S. Department of Defense and John O. Marsh, Jr., Secretary, U.S. Department of the Army, Defendants.
• Court: U.S. District Court — District of Maine

606 F. Supp. 446

SACO DEFENSE SYSTEM DIVISION, MAREMONT CORPORATION and Saco Defense, Inc., Plaintiffs, v. Casper WEINBERGER, Secretary, U.S. Department of Defense and John O. Marsh, Jr., Secretary, U.S. Department of the Army, Defendants.

Civ. No. 85-0082-P.

United States District Court, D. Maine.

April 8, 1985.

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Josephine L. Ursini, Leigh S. Ratiner, Dickson Shapiro & Morin, Washington, D.C., Ralph I. Lancaster, Pierce Atwood, et al., Portland, Me., for plaintiffs.

Kevin A. Gaynor, Asst. U.S. Atty., Portland, Me., Lt. Col. Howard Curtis, Headquarters, Dept. of the Army, Washington, D.C., for defendants.

MEMORANDUM OF DECISION DENYING PLAINTIFFS' MOTION FOR A PRELIMINARY INJUNCTION

GENE CARTER, District Judge.

I. Background

Plaintiffs have filed a Complaint for Declaratory and Injunctive Relief alleging that defendants acted in violation of Federal Acquisition Regulations in evaluating their bid for the contract to produce 9mm hand guns for the Army. The Complaint seeks preliminary and permanent injunctive relief. Plaintiffs have also filed with the Complaint a Motion for Expedited Discovery and a Motion for a Temporary Restraining Order. The Court declined to act on the motion for a Temporary Restraining Order ex parte, and notice was given to the defendants and a hearing held on the pending motions on April 4, 1985. The Court will, therefore, treat the motion as one for preliminary injunction pursuant to Fed.R. Civ.P. 65(a). Dilworth v. Riner, 343 F.2d 226, 229 (5th Cir.1965). The defendants had filed, and have now withdrawn, a Motion to Transfer Venue in this case to the District of Massachusetts pursuant to 28 U.S.C. § 1404(a).

The Army has announced that the contract will be awarded to Beretta U.S.A. Corporation. Counsel for the Army indicated at hearing that the Army intended to award the contract on the day following the hearing, April 5, 1985. At the request of the Court, the Army has agreed to withhold the actual award of the contract until 5:00 p.m. on April 9, 1985 in order to give this Court an opportunity to decide the plaintiffs' request for preliminary injunctive relief. Before filing this action plaintiffs had filed a protest of the bidding process with the General Accounting Office. That protest was dismissed as untimely filed.

The plaintiffs assert that the Army, in violation of Federal Acquisition Regulation 15.610(c)(3) & (4), incorrectly applied cost evaluation factors submitted by Saco, without attempting to resolve uncertainties concerning Saco's technical proposal or to resolve any suspected mistakes in Saco's bid by calling them to Saco's attention. Plaintiffs also allege that the defendants, in violation of Federal Acquisition Regulation 15.606, knew of modifications in their requirements for the handgun but did not issue an amendment to the solicitation and allow all bidders to submit new or amended proposals on the basis of the revised requirements.

II. Preliminary Injunctive Relief

A.

In order to prevail on its request for preliminary injunctive relief, the plaintiffs must satisfy four essential requirements. This Court has had occasion in the past to set out succinctly those requirements in UV Industries, Inc. v. Posner, 466 F.Supp. 1251 (D.Me.1979) (per Gignoux, J.):

It is well settled law that, in the ordinary case, a plaintiff must satisfy four criteria in order to be entitled to a preliminary injunction. The court must find: (1) that the plaintiff will suffer irreparable injury if the injunction is not granted; (2) that such injury outweighs any harm which the granting of injunctive relief would inflict on the defendant; (3) that plaintiff has exhibited a likelihood of success on the merits; and (4) that the public interest will not be adversely affected by the granting of the motion.

Id. at 1255; see also Women's Community Health Center, Inc. v. Cohen, 477 F.Supp. 542, 544 (D.Me.1979) (per Gignoux, J.).

This formulation of these criteria has been approved by the United States Court of Appeals for the First Circuit. Planned Parenthood League v. Bellotti, 641 F.2d 1006, 1009 (1st Cir.1981) (quoting Women's Community Health Center, Inc.); Keefe v. Geanakos, 418 F.2d 359 (1st Cir.1969); Automatic Radio Manufacturing Co., Inc. v. Ford Motor Co., 390 F.2d 113 (1st Cir. 1968), cert. denied, 391 U.S. 914, 88 S.Ct. 1807, 20 L.Ed.2d 653 (1968). This Court has indicated in the recent past the continuing applicability of these requirements to a request for temporary injunctive relief. Stanton v. Brunswick School Department, 577 F.Supp. 1560 (D.Me.1984) (per Carter, J.); Sheck v. Baileyville School Committee, 530 F.Supp. 679 (D.Me.1982) (per Cyr, C.J.).

Further, it is well established general law with respect to equitable injunctive relief that the Court is to bear constantly in mind that an "injunction is an equitable remedy which should not be lightly indulged in, but used sparingly and only in a clear and plain case." Plain Dealer Publishing Co. v. Cleveland Type. Union # 53, 520 F.2d 1220, 1230 (6th Cir.1975), cert. denied, 428 U.S. 909, 96 S.Ct. 3221, 49 L.Ed.2d 1217 (1977). The Court's hesitation to utilize so drastic an aspect of its prerogative should be heightened where the relief requested is only temporary in nature. Kass v. Arden-Mayfair, Inc., 431 F.Supp. 1037, 1047 (C.D.Cal.1977).

B.

When injunctive relief is sought in the area of Government procurement contracts, the Court must apply these precepts of judicial restraint more stringently, especially with respect to the factor of the likelihood of plaintiffs' success on the merits. Princeton Combustion Research Laboratories, Inc. v. McCarthy, 674 F.2d 1016, 1019 (3d Cir.1982). In Princeton Combustion Research Laboratories the Court noted that in spite of the fact that the bidder has a legitimate interest in being treated fairly under the applicable statutes and regulations, "the strong public interest in efficient procurement and cost minimization mandates that the procurement contract not be set aside at the behest of a single `disappointed bidder' unless the awarding agency's decision was irrational or clearly illegal." Id. The district court is not to substitute its judgment for that of the contracting authority and "should not overturn any procurement determination unless the aggrieved bidder demonstrates that there was no rational basis for the agency's decision." Id. (quoting Sea-Land Service, Inc. v. Brown, 600 F.2d 429, 434 (3d Cir.1979). In the effort to demonstrate a likelihood of success on the merits the plaintiffs must overcome the "presumption of administrative regularity." See, id., at 1021.

Even when the Court concludes that a showing of irrationality in the decision has been made, "prudent judicial discretion may still refuse declaratory or injunctive relief because of overriding public interest." Sea-Land, 600 F.2d at 434; Acme of Precision Surgical Co., Inc. v. Weinberger, 580 F.Supp. 490, 503 (E.D.Penn. 1984). In the exercise of that discretion the district court is to be guided by the balancing of three factors: (1) the practical considerations of efficient procurement of supplies for continuing government operations; (2) the public interest in avoiding excessive costs; and (3) the bidder's entitlement to fair treatment through adherence to statutes and regulations. Id. In performing this weighing judgment, the Court must keep the following admonition constantly in mind:

The court is obligated to restrict its inquiry to a determination of whether the procurement agency's decision had a reasonable basis. This inquiry must fully take into account the discretion that is typically accorded officials in the procurement agencies by statutes and regulations. Such discretion extends not only to the evaluation of bids submitted in response to a solicitation, but also to determination by the agency with respect to the application of technical, and often esoteric, regulations to the complicated circumstances of individual procurements .... If the court finds a reasonable basis for the agency's action, the court should stay its hand even though it might, as an original proposition, have reached a different conclusion as to the proper administration and application of the procurement regulations. Otherwise the courts would become the forum for all manner of objections to procurement decisions—objections that counsel can readily relate to the language of some provision or other in some procurement regulation—and would be propelled without adequate preparation into a tangle of complex statutory and decisional rules.

M. Steinthal & Co. v. Seamans, 455 F.2d 1289, 1301-02 (D.C.Cir.1971).

The controlling principle is that while contracting officers are not free to act in disregard of the provisions of pertinent statutes, rules and regulations, they are entitled to exercise discretion upon a broad range of issues which confront them, including "considerations of price, judgment, skill, ability, capacity and integrity" in the solicitation and evaluation of business proposals from those persons and firms with whom the Government chooses to enter into contracts. Kinnett Dairies, Inc. v. Farrow, 580 F.2d 1260, 1277 (5th Cir.1978) (quoting Scanwell Laboratories, Inc. v. Shaffer, 424 F.2d 859, 869 n. 10 (D.C.Cir.1970)).

To put it succinctly, the question before the Court is not whether the contracting authority's decision to award the contract was the right policy decision in the view of this Court. Rather, the Court must determine "whether or not the contracting officer's decision was `the result of a considered process, rather than an arbitrary and capricious choice based on factors lacking any intrinsic rational basis or relationship to the questions at issue.'" Keene Corp. v. United States, 584 F.Supp. 1394, 1401 (D.Del.1984) (emphasis in original) (quoting Kinnett Dairies, 580 F.2d at 1277).

III. The Plaintiffs' Likelihood of Success On the...