UNPUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

FREQUENCY ELECTRONICS,

INCORPORATED,

Plaintiff-Appellant,

v. No. 97-1551

UNITED STATES DEPARTMENT OF THE

AIR FORCE,

Defendant-Appellee.

Appeal from the United States District Court

for the Eastern District of Virginia, at Alexandria.

Albert V. Bryan, Jr., Senior District Judge.

(CA-97-230-A)

Argued: October 31, 1997

Decided: July 1, 1998

Before WILKINSON, Chief Judge, MICHAEL, Circuit Judge,

and BUTZNER, Senior Circuit Judge.

_________________________________________________________________

Affirmed by unpublished per curiam opinion. Senior Judge Butzner

wrote a dissenting opinion.

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COUNSEL

ARGUED: Arnold S. Schickler, SCHICKLER & SCHICKLER,

L.L.P., New York, New York, for Appellant. Alisa Beth Klein,

Appellate Staff, Civil Division, UNITED STATES DEPARTMENT

OF JUSTICE, Washington, D.C., for Appellee. ON BRIEF: Harvey
S. Israelton, SCHICKLER & SCHICKLER, L.L.P., New York, New

York, for Appellant. Frank W. Hunger, Assistant Attorney General,

Helen F. Fahey, United States Attorney, Anthony J. Steinmeyer,

Appellate Staff, Civil Division, UNITED STATES DEPARTMENT

OF JUSTICE, Washington, D.C.; Lt. Col. Richard E. Prins, Deputy

Chief, Commercial Litigation Division, DEPARTMENT OF THE

AIR FORCE, Arlington, Virginia, for Appellee.

_________________________________________________________________

Unpublished opinions are not binding precedent in this circuit. See

Local Rule 36(c).

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OPINION

PER CURIAM:

Frequency Electronics, Inc. (FEI) was suspended from eligibility

for new prime contracts with the United States on December 13,

1993. After the Air Force reviewed the suspension and decided in

early 1997 not to lift it, FEI brought this action under the Administrative Procedure Act, 5 U.S.C. §§ 551-559, 701-706, seeking review of

the 1997 decision and requesting an order terminating the suspension.

The district court granted summary judgment for the government, and

FEI appeals. We affirm.

I.

FEI makes precision timing systems for use in satellites and weapons systems. In the past, much of its business involved the performance of government contracts. On November 17, 1993, a federal

grand jury in the Eastern District of New York indicted FEI and four

of its officers. The indictment charged the defendants with conspiracy

to defraud the government, making false claims to a government

prime contractor, and major fraud against the United States. The

indictment alleged that in 1988 and 1989 the defendants falsified and

inflated claims for costs, employee hours worked, and materials. Cf.

United States v. Frequency Electronics, 862 F. Supp. 834, 836-37

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(E.D. N.Y. 1994) (denying motions to dismiss indictment). In addition to the criminal charges, the government has filed a civil suit

under the False Claims Act and has joined a qui tam suit against FEI.

These civil matters are also pending in the Eastern District of New

York.

Following the indictment, FEI submitted to the Air Force a written

report addressing the allegations. The Air Force considered the report,

met with FEI, posed questions about the situation, and received FEI's

replies to these questions. By letter dated December 13, 1993, the Air

Force Suspension Officer (AFSO) informed FEI that it was suspended

from receiving new prime contracts with the government. The letter

expressly noted that the suspension "is temporary pending the outcome" of the criminal proceeding and that FEI was free to submit further information demonstrating that the suspension should be lifted.

An accompanying memorandum explained that the Air Force was

concerned that FEI did not have adequate internal procedures to

ensure ethical behavior and that Martin Bloch, FEI's former president

and one of those indicted, continued to work for FEI and "retain[ed]

responsibility regarding certain classified Government contracts."

Over the next three years, FEI submitted many documents to the

AFSO in an attempt to demonstrate that it could be entrusted with

new contracts. On January 23, 1997, the AFSO informed FEI that the

suspension could not be terminated at that time because there was not

"any basis to conclude that . . . there have been changed circumstances since the suspension, or that FEI is presently responsible."

The AFSO again expressed concern over Bloch's involvement with

the company, stating that "there has been no bona fide change in Martin Bloch's responsibilities within FEI since the imposition of the suspension." Moreover, there was "no record evidence that [an ethics and

compliance] program has been implemented or is working" at FEI.

Meanwhile, the criminal proceeding against FEI has been stalled

for reasons that are not fully explained in the record. We do know that

the district court hearing the criminal case has held hearings under the

Classified Information Procedures Act, 18 U.S.C. app. 3 ("CIPA"),

because discovery for and trial of the case may involve the disclosure

of classified information. We also know that FEI has waived its right

to a speedy trial.

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FEI responded to the AFSO's decision not to lift the suspension by

filing this suit. It alleged that the continued suspension violated the

Federal Acquisition Regulations and deprived it of due process of

law. The district court entered summary judgment for the government, and FEI appeals.

II.

At bottom, FEI wants us to order the government to allow it to bid

on government prime contracts. We start, then, with a look at the

terms on which the government does business generally.

A private entity can ordinarily deal with whomever it likes, even

for arbitrary or whimsical reasons. A democratic government, however, must act more rationally. The Federal Acquisition Regulations1

implement a comprehensive, evenhanded procurement procedure that

both shields the government from the corruptive (and expensive) evils

of cronyism and affords equal opportunity for budding entrepreneurs

to sell it better products at better prices.

But the principles of openness and evenhandedness do not give

companies an unqualified right to compete for government contracts.

Not only must the government be a fair and rational shopper, it may

also insist on capable, impeccably honest vendors and top quality

goods and services.

To this end, the regulations command that "[p]urchases shall be

made from, and contracts shall be awarded to, responsible prospective

contractors only." 48 C.F.R. § 9.103(a)."Responsibility" requires an

affirmative showing by the prospective contractor. See id. § 9.103(c).

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1 General, government-wide acquisition regulations are found in Chapter 1 of Title 48 of the Code of Federal Regulations, 48 U.S.C. §§ 1.000

to 53.303. Each subsequent chapter of that title prescribes rules specific

to a given department or agency. Chapters 2 and 53 pertain to the Department of Defense and the Department of the Air Force, respectively, and

supplement the general regulations of Chapter 1. While the regulations

in Chapter 2 do address debarment and suspension procedures, see 48

C.F.R. ch. 2, app. H, these regulations do not affect our analysis in this

case.

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If the government's contracting officer does not possess "information

clearly indicating that the prospective contractor is responsible, [he]

shall make a determination of nonresponsibility." Id. § 9.103(b). Section 9.104-1 defines "responsibil[ity]" and, in general, requires that a

contractor must have the financial and logistical ability to perform the

contract on schedule, the technical expertise to do so, and "a satisfactory record of integrity and business ethics." See id. § 9.104-1(d).

Though a former or current contractor whose work has pleased the

government may have no difficulty in demonstrating its responsibility

for a prospective contract, it nevertheless must always make that demonstration. "Responsibility" is a present condition and not an indelible

status. Times and circumstances change.

Even the smartest, most careful shopper occasionally falls victim

to an unscrupulous vendor. He learns from this misfortune to take his

business elsewhere, and he is not easily persuaded that the vendor's

sharp dealing was aberrational. The Federal Acquisition Regulations

adopt this prudent mindset through their suspension and debarment

provisions.

A contractor may be suspended from consideration for new contracts upon "adequate evidence" of one of the seven grounds enumerated in § 9.407-2(a).2 Moreover, "[i]ndictment for one of the

enumerated causes . . . constitutes adequate evidence for suspension."

Id. § 9.407-2(b). Suspension is temporary pending the outcome of the

investigation and any legal proceedings that may ensue, see id.

§ 9.407-4(a), though the suspending officer may lift the suspension

early if the contractor demonstrates its present responsibility. See id.

§ 9.407-3(d)(3); Robinson v. Cheney, 876 F.2d 152, 160 (D.C. Cir.

1989).

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2 These grounds are (1) fraud or commission of a crime in the course

of obtaining or performing a federal contract, (2) violation of antitrust

laws relating to bids, (3) various offenses involving dishonesty or moral

turpitude (e.g., embezzlement or bribery), (4) violations of the Drug-Free

Workplace Act of 1988, (5) mislabeling an article as"Made in America,"

(6) commission of an unfair trade practice, and (7) commission of any

other offense implicating integrity or honesty in a manner that seriously

and directly affects the contractor's "present responsibility." See 48

C.F.R. § 9.407-2(a).

 5
In contrast to a suspension, debarment is exclusion from government contracting for a fixed period of time. It is imposed only after

completion of the investigation or legal proceedings against the contractor. The duration of a debarment must be "reasonable" and

"[g]enerally . . . should not exceed 3 years." 48 C.F.R. §§ 9.403,

9.406-4(a); cf. id. § 9.406(b) (allowing extension of disbarment

period).

Suspended or debarred contractors are permitted to continue performance of existing contracts unless the relevant agency head directs

otherwise. See id. § 9.405-1(a). The regulations are clear that the

express purpose of both suspension and debarment is remedial. They

can be "imposed only in the public interest for the Government's protection and not for purposes of punishment." Id. § 9.402(b).

An exception to the general rule underscores the public interest

nature of these provisions. An agency head can award a suspended or

debarred contractor a new prime contract if the government has a

"compelling reason" to do so, see id.§ 9.405(a), even absent a showing of present responsibility. The regulations therefore recognize that

while a company's suspension or debarment is normally in the public

interest, it can also be in the public interest to award contracts to suspended or debarred companies in certain compelling circumstances.

FEI argues that the AFSO's decision not to lift the suspension was

erroneous under the regulations. We may disturb the decision if it is

"arbitrary, capricious, an abuse of discretion, or otherwise not in

accordance with law." 5 U.S.C. § 706(2)(A).

FEI makes three specific attacks on the AFSO's decision. First, it

asserts as a matter of law that a suspension cannot exceed three years.

The regulations do not support this argument. Only suspensions that

are unaccompanied by legal proceedings have a rigid time limit. See

48 C.F.R. § 9.407-4(b) ("In no event may a suspension extend beyond

18 months, unless legal proceedings have been initiated within that

period."). Because the regulations define "legal proceedings" to

include both criminal and civil cases and all appeals therefrom, see

id. § 9.403, the drafters of the regulations surely envisioned suspensions potentially lasting far longer than three years.

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Next, FEI contends that the suspension's length has rendered it

punitive, in violation of 48 C.F.R. § 9.402(b). We disagree. As we

discuss in more detail below, the suspension does not deprive FEI of

anything to which it is entitled. It is purely a prophylactic measure

designed to keep the government from suffering any harm at the

hands of a contractor that has been accused of wrongdoing by a credible source, namely, a grand jury. In this respect, a suspension is a

temporary measure that is used to protect the public interest until a

debarment decision can be made.

"It is the clear intent of debarment to purge government programs of corrupt influences and to prevent improper dissipation of public funds. Removal of persons whose

participation in those programs is detrimental to public purposes is remedial by definition. While those persons may

interpret debarment as punitive, and indeed feel as though

they have been punished, debarment constitutes the`rough

remedial justice' permissible as a prophylactic governmental

action."

United States v. Glymph, 96 F.3d 722, 724-25 (4th Cir. 1996) (quoting United States v. Bizzell, 921 F.2d 263, 267 (10th Cir. 1990)); cf.

United States v. Hatfield, 108 F.3d 67, 69-70 (4th Cir. 1997). As the

Supreme Court recently reaffirmed, "`revocation of a privilege voluntarily granted,' such as a debarment, `is characteristically free of the

punitive criminal element.'" Hudson v. United States, 118 S. Ct. 488,

496 (1997) (quoting Helvering v. Mitchell, 303 U.S. 391, 399 & n.2

(1938)).3 The same is true for the temporary imposition of a suspension pending the ultimate debarment decision.

Moreover, FEI's assertion that passage of time alone has rendered

this remedial sanction punitive ignores substantial case law upholding

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3 The Hudson Court acknowledged that debarment can deter future

misconduct and that deterrence is a traditional goal of criminal punishment. See 118 S. Ct. at 496. On the other hand, the mere presence of a

deterrent effect does not render a particular remedy punitive, because

deterrence can also further purely civil aims (e.g., the prevention of fraud

against the government or, as in Hudson, the protection of the integrity

of a regulated industry). See id.

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indefinite and even permanent debarments from government programs or regulated activities against assertions that such debarments

inflict punishment. See, e.g., Hudson , 118 S. Ct. at 493-96 (neither

civil monetary sanctions nor indefinite debarment from banking

industry constituted punishment under Double Jeopardy Clause);

United States v. Borjesson, 92 F.3d 954 (9th Cir.) (indefinite debarment from participating in HUD-sponsored housing programs not

double jeopardy punishment), cert. denied, 117 S. Ct. 622 (1996);

United States v. Stoller, 78 F.3d 710 (1st Cir. 1996) (indefinite debarment from banking industry not punitive for double jeopardy purposes); DiCola v. Food & Drug Admin., 77 F.3d 504 (D.C. Cir. 1996)

(permanent debarment from providing services to applicants for FDA

approval of drugs not punitive under Double Jeopardy Clause); Bae

v. Shalala, 44 F.3d 489 (7th Cir. 1995) (same for Ex Post Facto

Clause). Like disbarments, the imposition of a temporary, yet indefinite, suspension is remedial rather than punitive in nature.

Finally, FEI directly attacks the AFSO's decision on its own merits. Our review of an agency determination resting on resolution of

disputed facts is highly deferential: we may set the determination

aside only if it is "arbitrary and capricious." Marsh v. Oregon Natural

Resources Council, 490 U.S. 360, 377-78 (1989). Under this standard,

the scope of review is a narrow one. A reviewing court must

"consider whether the decision was based on a consideration

of the relevant factors and whether there has been a clear

error of judgment. . . . Although this inquiry into the facts

is to be searching and careful, the ultimate standard of

review is a narrow one. The court is not empowered to substitute its judgment for that of the agency." Citizens to Preserve Overton Park v. Volpe, [401 U.S. 402, 416 (1971)].

The agency must articulate a "rational connection between

the facts found and the choice made." Burlington Truck

Lines v. United States, 371 U.S. 156, 168 (1962).

Bowman Transp., Inc. v. Arkansas-Best Freight Sys., Inc., 419 U.S.

281, 285 (1974).

The AFSO articulated two rationales for his decision, neither of

which is arbitrary and capricious on its face: (i) Bloch, one of the

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individuals indicted, continues to play a key role in FEI's management and its performance of existing government contracts, and (ii)

FEI has not implemented an effective internal ethics program. We

conclude that the AFSO's decision is rationally connected to the facts

and hence was not arbitrary or capricious.

As for Bloch, FEI does not seriously contest the facts found by the

AFSO. Instead, it argues that his knowledge and ability are vast and

essential to FEI's work, including its work on existing government

contracts and subcontracts. That may well be, but it is of no moment.

Knowledge is not honesty, and ability is not virtue. Bloch's indictment provides the government with a sufficient reason to protect itself

from dealings with him, and the government may choose to avoid

business with him to the extent the public interest permits.4

The adequacy of FEI's internal ethics program is a somewhat different story. In December 1996, amidst settlement negotiations aimed

at ending the suspension, the AFSO asked the Defense Logistics

Agency to audit FEI's ethics program. This audit would involve interviews of FEI employees. FEI agreed to submit to the audit, but it

insisted that its lawyer be present at the employee interviews. Fearful

that the presence of FEI's counsel might dampen the candor of the

employees, rendering the "audit" worthless, the AFSO insisted that

FEI's counsel remain silent during the interviews and leave if any

employee wished to be interviewed privately. FEI would not agree to

these terms, and the audit was canceled.

In light of the pending criminal case, we can understand FEI's

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4 In this regard, FEI asserts that it has been awarded 740 contracts for

government work since the suspension began. It does not specify how

many of these are subcontracts, to which different-- and more lenient

-- rules apply. See 48 C.F.R. § 9.405-2. The record shows only one

instance in which FEI received a prime contract, and this award followed

certification that the government had a "compelling need" to make the

award. Whether one contract or 740, the government's need does not

imply FEI's present responsibility. FEI may simply have the government

over the barrel as to certain high technologies; indeed, it touts its past

involvement in what it calls "black" programs at the highest level of

national security.

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reluctance to give the government a free hand in conducting interviews of its employees. Its decision may well have been a sound piece

of legal strategy. Nevertheless, to have the suspension lifted, FEI has

the burden of demonstrating its present responsibility. If it will not,

even for sound reasons, the legal effect is the same as if it cannot

establish its present responsibility.

The decision of the AFSO is in accordance with law and is not

arbitrary and capricious.5

III.

FEI also asserts that it has been denied due process because it has

not been afforded an opportunity to present live witnesses on its

behalf or to confront its "accusers." The regulations call for a process

"that [is] as informal as is practicable, consistent with the principles

of fundamental fairness." 48 C.F.R. § 9.407-3(b)(1). Live witness testimony and cross-examination of agency witnesses are prescribed

only where the suspension is not based on an indictment, and not even

then if the Department of Justice advises the agency"that substantial

interests of the Government in pending or contemplated legal proceedings based on the same facts as the suspension would be prejudiced." See id. § 9.407-3(b)(2). In actions based on an indictment, the

suspending official may generally act on the written record, including

any submissions from the contractor. See id.§ 9.407-3(d).

The Due Process Clause does not universally mandate trial-like

formalities. "The judicial model of an evidentiary hearing is neither

a required, nor even the most effective, method of decisionmaking in

all circumstances." Mathews v. Eldridge, 424 U.S. 319, 348 (1976).

"Due" simply means adequate to the task at hand, and adequacy is

_________________________________________________________________

5 FEI also asserts that CIPA prevented it from showing the AFSO classified information that allegedly tends to exonerate it of the criminal

charges. FEI's criminal trial is the proper forum for this attempted exoneration. The AFSO here properly focused on factual issues relating to

FEI's present responsibility. We think that an obvious purpose of the regulation deeming an indictment "adequate evidence" for suspension is to

prevent a parallel inquiry that might prejudice the government, the contractor, or both.

 10
measured by the importance of the private interest at stake and by the

"`risk of error inherent in the truthfinding process as applied to the

generality of [similar] cases.'" Califano v. Yamasaki, 442 U.S. 682,

696 (1979) (quoting Mathews, 424 U.S. at 344). Our first inquiry is

therefore into the nature of FEI's interest.

A property interest in a particular governmental benefit requires a

"legitimate claim of entitlement" to that benefit. Board of Regents v.

Roth, 408 U.S. 564, 577 (1972). Because no one is entitled in advance

to the award of a government contract, FEI cannot claim a property

interest recognized by the Due Process Clause.

On the other hand, FEI's reputation may be sullied by a suspension

for misconduct. Though reputation alone is not protected by the Due

Process Clause, Paul v. Davis, 424 U.S. 693, 706-12 (1976), an injury

to reputation occasioned by the government's "alteration of some

right or status recognized by . . . law" may give rise to a protected liberty interest. See Vanelli v. Reynolds School Dist. No. 1, 667 F.2d

773, 77-78 (9th Cir. 1982); see also Ferencz v. Hairston, 119 F.3d

1244, 1249 (6th Cir. 1997). Eligibility for federal contracts is such a

status. Accordingly, suspensions premised on misconduct can deprive

the contractor of a "liberty" interest protected by the Due Process

Clause. See ATL, Inc. v. United States, 736 F.2d 677, 682-83 (Fed.

Cir. 1984); Old Dominion Dairy Prods., Inc. v. Secretary of Defense,

631 F.2d 953, 961-64 (D.C. Cir. 1980). Where the suspension for

misconduct is based on a criminal indictment, however, this liberty

interest is greatly diminished, because it is unlikely that the suspension tarnishes the contractor's reputation any more than would the

indictment standing alone. See FDIC v. Mallen , 486 U.S. 230, 243

(1988).

We have previously indicated that the regulations' requirement of

"adequate evidence" of fraud or other similar crimes protects the contractor's due process rights. James A. Merritt & Sons v. Marsh, 791

F.2d 328, 330 (4th Cir. 1986) (reversing preliminary injunction and

ruling that due process challenge to regulation was not likely to succeed on merits). As we explained:

A decision to issue an indictment is made by a deliberative

public body acting as an arm of the judiciary, operating

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under constitutional and other legal constraints. The Constitution does not require the government to wait for the outcome of the criminal proceeding before implementing an

administrative suspension when a contractor has been

accused of fraud after the grand jury's investigation and

deliberative process. An indictment triggers a judicial process which protects the rights of the accused while determining guilt or innocence. The formalities attendant to

issuing an indictment carry sufficient indicia of reliability to

allow the government to act to protect itself against future

dealings with someone accused of fraud.

 A suspension is to be imposed "only in the public interest

for the Government's protection and not for purposes of

punishment." 48 C.F.R. 9.402(b). In this case the public

interest and the potential harm to the government coincide.

The proper expenditure of tax dollars is, of course, a primary responsibility of government. It is not only correct for

the government to question the integrity of a contractor who

has been indicted for the manner in which he carried out

military contracts, but failure to do so would be highly irresponsible.

Id. at 330-31. Indeed, FEI concedes that the initial decision to suspend

it was perfectly lawful and comported with due process.

However, FEI asserts that, because suspension is temporary, the

continuance of a suspension for over three years constitutes an additional deprivation requiring additional process, that is, a trial-like

hearing.

We will accept without deciding that the premise of this argument

is correct -- the sheer duration of a temporary deprivation might trigger a right to supplemental due process at some point -- though

defining the contours of any such right would be problematic. How

long is too long a temporary deprivation? Does the right to some new

process accrue in full at a bright line point or incrementally as the

deprivation continues?

We can accept this premise because the regulations are already

fully sensitive to it. The suspending officer has the power to lift the

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suspension upon a showing of present responsibility, and the contractor has the ability to submit documentary evidence demonstrating

such responsibility. FEI's retort, of course, is that due process here

requires more than the opportunity to submit written evidence. We are

not persuaded.

As we noted above, deciding whether a process provides what is

"due" requires an examination of the nature and importance of the private right and the risk of error inherent in the process as applied to

the generality of cases. The private right here-- the incremental

injury to reputation occasioned by the continuation of the suspension

of an indicted contractor -- is a slight one indeed.

Moreover, there is little risk of this slight interest's erroneous

deprivation through the procedure used. FEI has been indicted and

remains under indictment. It is not enough that an oral hearing might

permit an indicted contractor to establish its present responsibility in

a specific case. Due process is offended only if, in the generality of

cases, there is a sufficient risk that a contractor who could make this

showing at an oral hearing could not do so through written submissions. Because we conclude that such a risk is small in the general

suspension case, we hold that the regulations do not violate due process.

The judgment of the district court is affirmed.

AFFIRMED

BUTZNER, Senior Circuit Judge, dissenting:

I would reverse the district court's grant of summary judgment to

the Air Force and remand for further proceedings.

In November of 1993 a grand jury indicted Frequency Electronics,

Inc. (FEI) and four of its senior executives, including FEI's then

Chairman Martin Bloch, for conspiracy to defraud the United States,

fraud and making false statements. Four years later this criminal case

is still pending. On December 13, 1993, FEI, Martin Bloch, and the

three other FEI executives were suspended by the Air Force pending

 13
the completion of the criminal proceeding. The suspensions were

based solely on the indictment. FEI asserts, and the Air Force does

not contest, that the government was not monetarily harmed from

FEI's alleged wrongdoing. FEI has maintained throughout its suspension that the government received full value in the contested transactions.

Upon suspension, Bloch resigned as chairman and voluntarily

agreed to stop participating in any board decisions or actions. The

three other executives all resigned or were reassigned so that they had

no duties or responsibilities that related to FEI's government business.

Subsequent to the suspension, Bloch was assigned to some government work but only when he was requested by the government or the

government's prime contractor. FEI and Bloch also voluntarily submitted proposed administrative agreements that confirmed Bloch's

isolation from FEI's government work.

Retired Major General Joseph P. Franklin, the former Commandant

of West Point and Special Assistant to the Chairman of the Joint

Chiefs of Staff, was hired in an effort to clean up the alleged problems

at FEI. FEI also confirmed its ongoing ethics program by placing over

500 pages in the administrative record that related to its ethics training and compliance program.

During this suspension, FEI has continued to work on government

projects, chiefly as a subcontractor. Between December 1993 and

December 1996, FEI's government related revenue was $49,218,000.

Almost half of that revenue came from contracts awarded to FEI after

it had been suspended. At no time during the suspension has FEI been

accused of any wrongdoing or has the government complained about

the quality of FEI's work. Additionally, the government has acknowledged that FEI is essential on many government contracts and that "it

would probably require several years and at least tens of millions of

dollars to develop alternate suppliers." JA. 78-79, 2017-2019. Despite

these facts the Air Force denied FEI's request to lift the suspension.

FEI invoked the court's equitable powers when it asked the court

for a preliminary injunction against the Air Force's suspension. A

court sitting in equity has greater flexibility than a court of law. See,

e.g., International Union, United Auto., Aerospace and Agric. Imple-

 14
ment Workers v. Scofield, 382 U.S. 205, 211 (1965) ("While the court

must act within the bounds of the statute and without intruding on the

administrative process, it may adjust its relief to the exigencies of the

case in accordance with the equitable principles governing judicial

action.") (quoting Ford Motor Co. v. NLRB, 305 U.S. 364, 373

(1939)). Despite the literal text of the federal acquisition regulations,

I believe that a court sitting in equity must not turn a blind eye to the

injustice of FEI's nearly five-year old suspension.

When we consider the circumstances of the case including the

length of the suspension, it is apparent that FEI's request is not inconsistent with the regulations. A comparison of a suspension with a

debarment discloses that the regulations do not contemplate a suspension of this length. The regulations consider a debarment more serious

than a suspension. A company can be suspended prior to receiving a

hearing of any kind, but before a company can be disbarred it must

receive notice and a hearing. 48 C.F.R. §§ 9.406-3(b), 9.407-3(b)(1).

Under the regulations the more serious sanction of a disbarment cannot last for more than three years without a showing that the debarment is necessary to protect the government's interest. 48 C.F.R.

§ 9.406-4.

When these provisions are read together, the Air Force's position,

that a suspension can run for nearly five years without a showing that

it is in the government's interest, is inequitable."The essence of

equity jurisdiction has been the power of the Chancellor to do equity

and to mould each decree to the necessities of the particular case.

Flexibility rather than rigidity has distinguished it." Hecht Co. v.

Bowles, 321 U.S. 321, 329 (1944).

Respectfully dissenting, based on these equitable principles, I

would reverse the district court's grant of summary judgment and

remand for consideration of injunctive relief.

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