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09/17/70 M. Steinthal & Co., Inc. v. Robert J. Seamans

September 17, 1970

M. STEINTHAL & CO., INC

v.

ROBERT J. SEAMANS, JR., SECRETARY OF THE AIR FORCE, PIONEER PARACHUTE CO., INC., APPELLANT



Wright, Tamm and Leventhal, Circuit Judges.

UNITED STATES COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA CIRCUIT

September 17, 1970, Order

Opinion October 14, 1971. 1970.CDC.210

APPELLATE PANEL:

DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE LEVENTHAL

This case involves a protest by a bidder for a government contract. Plaintiff-appellee Steinthal & Co. contests a determination by the Air Force rejecting what Steinthal alleges was the lowest bid on a contract to supply parachutes and directing a readvertisement of bids. The District Court granted a permanent injunction restraining the Secretary of the Air Force from opening bids submitted pursuant to the readvertisement and from awarding a contract for the parachutes to any bidder other than Steinthal. At the oral argument, on the application of intervenor-appellant Pioneer Parachute Co. for a stay pending appeal, the parties agreed that this court could proceed to dispose of the merits of the appeal. In view of the urgency of the situation, we issued an order within a few days after oral argument, reversing the ruling of the District Court and dissolving the permanent injunction in order to allow the Air Force to open the resolicited bids and to award a contract for the parachutes.

In Scanwell Laboratories, Inc., v. Shaffer *fn1 we held that a bidder for a government contract had standing under the Administrative Procedure Act to obtain judicial consideration of a claim of illegality in the award of the contract to another. *fn2 In this opinion we consider the approach that is appropriate when an action under Scanwell, claiming that procurement officials have acted arbitrarily or capriciously, confronts the court with technical and complex issues of interpretation of procurement regulations. It is being issued simultaneously with the opinion in Wheelabrator Corp. v. Chafee, #24705, 147 U.S. App. D.C. 238, 455 F.2d 1306, which involves related considerations. I. THE PRESENT CONTROVERSY

A. The Background

On May 1, 1970, the Secretary of the Air Force, Robert Seamans (appellee), issued an invitation for bids [IFB#1] through the Department of Procurement and Production , Kelly Air Force Base, San Antonio, Texas. The IFB covered a contract involving the production and delivery of 1040 parachutes. *fn3 The delivery schedule of IFB#14 provided:

Part III Desired Delivery

Delivery is desired as follows:

140 Days 170 Days 200 Days

40 40 80 and contin-

ue at the rate

of 80 each per

month there-

after

This schedule was made subject to a slippage provision:

If the bidder is unable to meet the above delivery schedule, he may, without prejudice to the evaluation of his bid, set forth below the delivery schedule he is prepared to meet, provided, in no event shall the bidder's delivery schedule [extend beyond 30 days] after completion date of each increment specified above, as bids proposing delivery after that period will be considered non-responsive to the invitation and will be rejected. If the bidder does not state a different delivery schedule, the Government's desired delivery schedule will apply.

The brackets surrounding the phrase "extend beyond 30 days" were not in slippage clause as issued. They have been used to signify the fact that this phrase was deleted by an amendment issued June 1 [amended IFB]. This amendment also revised the delivery schedule by providing that the first shipment5 would be due 120 days after the award. The bid opening was extended from June 2 to June 30 in order, as the record shows,6 to allow a third manufacturer to qualify for the bidding by satisfying the Air Force's requirements.

The intention of those drafting the amendment of the slippage clause, as the record indicates, was to respond to the delay occasioned by the deferral of the opening of bids from June 2 to June 30, and to the need of the buyer for the first 40 parachutes by January 15, 1971, by deleting the entire slippage provision. The intent was to provide for a mandatory schedule of delivery of the parachutes.

Although none of the prospective bidders questioned the provisions of the amended IFB, each of the three bids opened on June 30 reflected a different interpretation of its provisions. Pioneer Parachute Co., Inc., interpreted the amended IFB to establish a required delivery of the first shipment of parachutes within the stated 120 day period. M. Steinthal and Co. concluded that the amendment called for a desired delivery schedule and submitted a bid providing for ...


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