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Coco Brothers Inc. v. Pierce

August 27, 1984

COCO BROTHERS, INC., APPELLANT
v.
SAMUEL PIERCE, SECRETARY OF U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT, AND THE ALLEGHENY COUNTY HOUSING AUTHORITY, APPELLEES



Appeal from the United States District Court for the Western District of Pennsylvania.

Weis and Becker, Circuit Judges, and Ackerman, District Judge.*fn*

Author: Weis

Opinion OF THE COURT

WEIS, Circuit Judge

In this government contract case, the district court denied a preliminary injunction requested by a disappointed bidder. The suit was brought after another builder was selected but before a contract was executed. Whether the dispute is viewed as a pre or post-award case, we hold that the United States Claims Court is not the exclusive forum and the district court had jurisdiction. Concluding that on the merits the plaintiff failed to show illegality or irrationality in the defendants' decision, we will affirm the district court's order.

Plaintiff contractor sought declaratory relief and an order enjoining defendants from awarding a housing construction contract to another builder. The district court concluded that plaintiff failed to show irreparable harm and denied the preliminary injunction.

The Allegheny County Housing Authority, in conjunction with the Department of Housing and Urban Development, proposed the construction of an apartment building for the elderly in Penn Hills, Pennsylvania. The project is authorized by the United States Housing Act of 1937, 42 U.S.C. ยง 1437 et seq. (1982).

A number of developers, including plaintiff, submitted bids in response to the County Housing Authority's July 2, 1982 request for proposals. The Authority initially accepted the plaintiff's proposal but, on review, HUD rejected the bid as nonresponsive. On February 14, 1983, the Authority approved the proposal submitted by another bidder, Crossgates, Inc., and HUD concurred with that selection on March 4, 1983.

On March 3, 1983, plaintiff was notified that HUD had found its bid nonresponsive because of "insufficient storage space." The plaintiff's request for withdrawal of HUD's objection was denied by the agency on April 11, 1983.

Plaintiff filed its complaint in the district court on June 9, 1983. A contract between Crossgates and the Authority was not executed until December 21, 1983, although the contractor had done some preliminary work before that date.

At a hearing on the request for a preliminary injunction, defendants argued that, because suit was commenced before execution of a contract, exclusive jurisdiction was in the United States Claims Court. Plaintiff wavered in its approach to whether the dispute was a pre or post-award case. In its complaint and opening remarks at the hearing, plaintiff argued this was a pre-award case, but that position began to shift as testimony was taken.

In reviewing the record, the court concluded that "the selection of another developer does constructively constitute an award of the contract even without a formally executed document." Because the plaintiff's action was filed after the selection of another bidder's proposal, the district judge characterized this as a post-award case and therefore held the court had jurisdiction. Hence, it was not necessary to reach the defendants' contention that the Claims Court has exclusive jurisdiction in pre-award cases.

On the merits, the court first reviewed the stringent standards applicable when a disappointed bidder attempts to set aside the award of a government contract. However, the district judge chose to deny the injunction on another ground. The plaintiff's alleged loss was compensable in damages and, therefore, the irreparable injury necessary for a preliminary injunction had not been demonstrated.

On appeal, plaintiff contends that it has suffered irreparable harm because it cannot recover its anticipated profits under the contract. Plaintiff also reasserts its position that HUD's actions were illegal and irrational. Defendants renew their challenge to the jurisdiction of the district court, contending that this is a pre-award case for which exclusive jurisdiction rests in the Claims Court. They argue ...


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