1999 Decisions

Opinions of the United

States Court of Appeals

for the Third Circuit

6-24-1999

R A Glancey & Sons v. Dept Veteran Affairs

Precedential or Non-Precedential:

Docket 99-3188

Follow this and additional works at: http://digitalcommons.law.villanova.edu/thirdcircuit_1999

This decision is brought to you for free and open access by the Opinions of the United States Court of Appeals for the Third Circuit at Villanova

University School of Law Digital Repository. It has been accepted for inclusion in 1999 Decisions by an authorized administrator of Villanova

University School of Law Digital Repository. For more information, please contact Benjamin.Carlson@law.villanova.edu.

Recommended Citation

"R A Glancey & Sons v. Dept Veteran Affairs" (1999). 1999 Decisions. Paper 163.

http://digitalcommons.law.villanova.edu/thirdcircuit_1999/163
Filed June 24, 1999 

UNITED STATES COURT OF APPEALS 

FOR THE THIRD CIRCUIT 

No. 99-3188 

R.A. GLANCY & SONS, INC., 

Appellant, 

v. 

UNITED STATES OF AMERICA, 

DEPARTMENT OF VETERANS AFFAIRS 

v. 

POERIO, INC. 

Intervenor-Appellee 

ON APPEAL FROM THE 

UNITED STATES DISTRICT COURT 

FOR THE WESTERN DISTRICT OF PENNSYLVANIA 

(Civil Action No. 99-219) 

District Judge: The Honorable Donald J. Lee 

Argued: May 27, 1999 

Before: GREENBERG and ALITO, Circuit Judges, 

and DOWD, Senior District Judge.* 

(Opinion Filed: June 24, 1999) 

_________________________________________________________________ 

*The Honorable David D. Dowd, Jr., United States District Judge for the 

Northern District of Ohio, sitting by designation. 
 MEYER, UNKOVIC & SCOTT, LLP 

 JAMES R. MALL (ARGUED) 

 1300 Oliver Building 

 Pittsburgh, PA 15222 

 Counsel for Appellant, 

 R.A. Glancy & Sons, Inc. 

 DEPARTMENT OF JUSTICE 

 DOUGLAS HALLIARD-DREIMEIER 

 (ARGUED) 

 ANTHONY J. STEINMEYER 

 Civil Division 

 Room 9113 

 Washington, D.C. 20530-0001 

 Counsel for Appellee, 

 United States of America, Department 

 of Veterans Affairs 

 ECKERT SEAMANS CHERIN & 

 MELLOTT, LLC 

 JOEL L. LENNEN (ARGUED) 

 DENNIS L. VERALDI 

 KEITH L. BAKER 

 44th Floor, 600 Grant Street 

 Pittsburgh, PA 15219 

 Counsel for Appellee-Intervenor, 

 Poerio, Inc. 

OPINION OF THE COURT 

ALITO, Circuit Judge: 

R.A. Glancy & Sons, Inc. ("Glancy"), a losing bidder for a 

government contract, appeals the District Court's denial of 

a request for preliminary injunctive relief. That request 

sought an order enjoining the successful bidder from 

working on the project and reinstating Glancy's putatively 

successful bid. Because Glancy did not establish that it 

was likely to succeed on the merits or that the balance of 

equities favored the issuance of a preliminary injunction, 

we affirm the District Court's decision. 

 2 
I. 

On June 1, 1998, the Department of Veterans Affairs

("VA") issued an invitation for bids ("IFB") to renovate the 

VA Medical Center in Pittsburgh. The IFB asked for bids on: 

 ITEM I: GENERAL CONSTRUCTION 

 ITEM II: ASBESTOS ABATEMENT 

 ALTERNATE NO. 1 

 ALTERNATE NO. 2 

 ALTERNATE NO. 3 

 UNIT PRICE OF MINE GROUTING 

(J.A. 190a). The three alternates under Item II were listed 

as minor additions to or deletions from the IFB's asbestos 

abatement requirements. (J.A. 193-94). The IFB's 

performance requirements, set forth in S 01010 of the IFB, 

elaborated on the work to be performed: 

 ITEM I. GENERAL CONSTRUCTION: Work includes 

 general new construction, alterations, walks, grading, 

 paving, drainage, mechanical and electrical work, 

 elevators, necessary removal of existing structures and 

 construction and certain other items. 

 ITEM II. ASBESTOS ABATEMENT: Work includes 

 abatement of asbestos in the area of the work as well 

 as in other selected areas, including the work 

 described in ALTERNATE 2 below. 

(J.A. 193). Alternate 2 requested a break-out price for 

remediating asbestos-containing floor tiles on the third floor 

of the building. The IFB form provided separate lines for 

each bid item and each alternate line; it contained no 

explicit indication that Item II was a subset of Item I. (J.A. 

188). 

On July 1, 1998, the VA issued a clarifying amendment 

to the IFB, which read: 

 Although the VA has asked for the price of the 

 Asbestos Abatement work to be listed separately (ITEM 

 II - ASBESTOS ABATEMENT under item 10 of SF 1442) 

 on the bid form, all asbestos abatement work is 

 included in a single prime contract that will be the 

 responsibility of the General Contractor. 

 3 
(J.A. 202). 

The VA unsealed the bids on July 15, 1998. The VA 

determined the lowest bidder by aggregating the bids for 

Items I & II to reach a total cost for the project. Pursuant 

to this calculation, Poerio Inc. ("Poerio"), the Appellee, was 

the lowest bidder, with a bid of $11,401,500. Glancy was 

the sixth lowest bidder. 

Glancy and another bidder, the Massaro Company 

("Massaro"), informed the VA that they had understood the 

IFB to have required that total costs be included in Item I. 

According to that understanding, both Glancy and Massaro 

contended that the figure for Item I included the costs of 

Item II and that Item II was merely a break-out of Item I. 

(J.A. 213-14). Even under this understanding of the IFB, 

however, Glancy was the second lowest bidder after 

Massaro. 

Pursuant to Massaro and Glancy's protest, the VA 

examined the bidding materials, noted that the IFB did not 

contain customary language indicating that the contract 

would be awarded based on the aggregate of all bid items, 

and determined that the IFB was ambiguous. (J.A. 261-62). 

Based on this conclusion, the VA decided to open a second 

round of bidding. Massaro, the lowest bidder according to 

its interpretation of the IFB, and Poerio, the lowest bidder 

according to its interpretation of the IFB, eachfiled a 

protest with the Comptroller General under the Competition 

in Contracting Act, 31 U.S.C. SS 3551-56 (1994), 

contending that the IFB unambiguously supported their 

interpretation. The VA submitted briefing in defense of its 

position that the IFB was ambiguous and therefore should 

have been canceled. (J.A. 163-68). The VA admitted that 

the "only interpretation of the [IFB] together with [its 

specifications] at the time the solicitation was issued, was 

that each bid item was to be priced separately." (J.A. 166). 

The VA contended, however, that "the addition of the 

clarification language in Amendment No. 2 created an 

ambiguity that can be interpreted in two ways. It can be 

interpreted to require, as Poerio did, that bids be presented 

separately for general construction (Bid Item I) and for 

asbestos abatement (Bid Item II) or it can be interpreted to 

 4 
require, as did both Massaro and Glancy, that Bid Item I 

contain the bid for all work including asbestos." (J.A. 166). 

While the protest was pending before the Comptroller 

General, the VA conducted a second round of bidding, and 

in this round Glancy was the lowest bidder. (J.A. 197). 

Because the protest was pending, however, the VA did not 

award the contract to Glancy. 

The Comptroller General ultimately sustained Poerio's 

interpretation of the IFB as the only reasonable one and 

rejected the VA's assertion that the IFB was ambiguous. 

The Comptroller General stated: 

 First, the cover page of the solicitation (Standard Form 

 1442) identifies two separate bid items for the 

 acquisition, "general construction" and "asbestos 

 abatement." Each of the two bid items is identified on 

 that page as a free-standing item for acquisition by the 

 agency -- specifically, there is no indication that one of 

 the two identified bid items is encompassed by the 

 other. Second, the IFB's performance requirements . . . 

 expressly define "general construction" and"asbestos 

 abatement" as distinct, separable work efforts; again, 

 each bid item description follows the separate title and 

 item number associated with each of the two separate 

 work categories. The stated item I (general 

 construction) simply does not encompass the 

 separately stated item II specialized work requirements 

 in the area of asbestos abatement. Third, the bid 

 schedule itself clearly separates the two bid items: 

 there is one space for the bidder's price for the general 

 construction work, and a separate space for the price 

 for the asbestos abatement work. Finally amendment 

 No. 2 that one prime contract would be awarded, to 

 include both the item I and item II work requirements, 

 simply does not provide any reasonable basis for a 

 bidder to conclude that its item II price should be 

 included in its item I price. 

(Comptroller General Op. at 4). After noting that bidders 

who perceived an ambiguity should have requested a 

clarification from the VA before submitting their bids, the 

Comptroller General concluded that the VA lacked a 

 5 
compelling reason for cancelling the first solicitation, and 

the Comptroller General recommended that Poerio be 

granted the contract pursuant to the first solicitation. (Id. 

at 5). After receiving the Comptroller General's opinion, the 

VA informed the bidders that it was reactivating thefirst 

round of bidding, and it then awarded the contract to 

Poerio. 

Glancy brought this action in the District Court. Glancy 

asked the Court to declare that the VA's decision was 

arbitrary and capricious and that Glancy was the low 

bidder and was entitled to the contract. Glancy also 

requested, among other things, injunctive relief ordering the 

VA not to award the contract to any other parties. At 

Glancy's request, the District Court issued a temporary 

restraining order on February 24, 1999. (J.A. 3). The 

District Court scheduled a hearing on whether a 

preliminary injunction should issue, and this hearing was 

held before a Magistrate Judge on March 3, 1999. On

March 5, 1999, the Magistrate Judge issued her Report and 

Recommendation, concluding that Glancy had not shown 

that it was likely to succeed on the merits of its challenge 

to the VA's decision or that it would suffer irreparable 

injury in the absence of preliminary injunctive relief. The 

Magistrate Judge, accordingly, recommended that the

request for a preliminary injunction be denied. The District 

Court adopted the Magistrate Judge's recommendations, 

found that granting a preliminary injunction would not be 

in the public interest because of the delays that such relief 

would cause in needed renovations to the hospital, and 

denied the motion for a preliminary injunction. This 

expedited appeal followed. 

II. 

The District Court's denial of a preliminary injunction is 

reviewed for abuse of discretion. Cleary v. Waldman, 167 

F.3d 801, 804 (3d Cir. 1999). The District Court did not 

abuse its discretion, and we therefore affirm. 

Under 28 U.S.C. S 1491(b)(4) (1994),1 the VA's decision is 

_________________________________________________________________ 

1. The jurisdiction of the District Court rested exclusively on 28 U.S.C. 

S 1491(b). Although Glancy's complaint involved 28 U.S.C. S 1346(a)(2), 

Glancy subsequently disavowed any reliance on that provision. 

 6 
subject to review under the standards set forth in the 

Administrative Procedures Act, 5 U.S.C. S 706 (1994), and 

thus Glancy could not prevail in this case without showing 

that the VA's decision was "arbitrary, capricious, an abuse 

of discretion, or otherwise not in accordance with law." 5 

U.S.C. S 706 (1994). Applying this standard in prior 

procurement cases, we have observed that "[j]udicial 

intervention in procurement disputes necessarily results in 

delay and the expenditure of funds on behalf of all parties, 

usually without measurable benefit to the public," Sea-Land 

Serv., Inc. v. Brown, 600 F.2d 429, 434 (3d Cir. 1979), and 

we have held that discretion to award injunctive relief in 

such cases "is restricted to circumstances where the 

governmental agency's action is illegal or irrational." Coco 

Bros. v. Pierce, 741 F.2d 675, 679 (3d Cir. 1984); see also 

Sea-Land, 600 F.2d at 434 (only where agency action has 

"no rational basis" or upon a showing of "clear illegality" 

may federal court enjoin government procurement 

decision). 

Further, while irrationality or illegality is a necessary 

condition to the issuance of an injunction in the 

government procurement context, "[e]ven when that 

showing has been made, prudent judicial discretion may 

still refuse declaratory or injunctive relief because of 

overriding public interests." Sea-Land, 600 F.2d at 434; see 

also Coco, 741 F.2d at 680; Princeton Combustion Research 

Lab., Inc. v. McCarthy, 674 F.2d 1016, 1021-22 (3d Cir. 

1982); Allis-Chalmers Corp. v. Friedkin, 635 F.2d 248, 253 

(3d Cir. 1980). Thus, in determining whether injunctive 

relief is proper, a court must also weigh "the practical 

considerations of efficient government operation; the public 

interest in avoiding excessive costs; and the bidders' 

entitlement to fair treatment through agency adherence to 

statutes and regulations." Sea-Land, 600 F.2d at 434. 

Finally, where as here the Comptroller General has made 

a recommendation that the procuring officer follows, that 

recommendation must be taken into account in reviewing 

the Executive's decision. In the Competition in Contracting 

Act ("CICA"), 31 U.S.C. SS 3551-56 (1994), Congress

strengthened the Comptroller General's role in the 

government procurement process. Honeywell, Inc. v. United 

 7 
States, 870 F.2d 644, 648 (Fed. Cir. 1989). We have noted 

that while the CICA does not "compel procuring agencies to 

obey the recommendation of the Comptroller General,"2 its 

effect "is to compel procurement officials to make purchase 

decisions in light of what the Comptroller General 

recommends the government do in that case." Ameron v. 

United States Army Corps of Eng'rs, 809 F.2d 979, 986 (3d 

Cir. 1986); see Honeywell, 870 F.2d at 648 (in light of 

CICA, "a procurement agency's decision to follow the 

Comptroller General's recommendation, even though that 

recommendation differed from the contracting officer's 

initial decision, [is] proper unless the Comptroller General's 

decision itself was irrational"). 

Applying these standards,3 we can discern no abuse of 

discretion in the District Court's determination that Glancy 

is unlikely to succeed on the merits. The GAO first noted 

that, under applicable law, only a compelling reason will 

justify reopening a closed bidding process. (Comptroller 

General's Op. at 3). The reason for this is to discourage 

"auction type" bidding at which a disappointed bidder, 

armed with knowledge of the prior bids, artificially lowers 

its bid in order to win the contract. Chemung County v. 

Dole, 781 F.2d 963, 972 (2d Cir. 1986). While an ambiguity 

in a bid solicitation can be a sufficiently compelling reason 

to reopen the bidding process, the Comptroller General 

concluded in this case that the IFB was not "susceptible to 

_________________________________________________________________ 

2. In Ameron v. United States Army Corps of Eng'rs, 809 F.2d 979 (3d 

Cir. 1986), the government argued unsuccessfully that the CICA is 

unconstitutional insofar as it authorizes the Comptroller General to 

shorten or lengthen the stay of the execution of a contract that 

automatically occurs when a bid protest is filed with the Comptroller 

General. However, the government did not challenge the Comptroller 

General's authority to investigate procurement decisions or to make 

recommendations on the basis of his investigation. See 809 F.2d at 988. 

3. Glancy's attempt to distinguish Sea-Land , Princeton Combustion and 

Coco is unavailing. Glancy argues that these cases do not apply because 

they did not involve sealed bids (as here) or did not involve a situation 

where the procuring agency reversed itself on the basis of the GAO's 

recommendation. These are distinctions without significance in this 

context. In any event, Glancy does not even attempt to distinguish 

Honeywell, a case squarely on point, and that clearly supports the 

deferential standard of judicial review the District Court employed. 

 8 
more than one reasonable interpretation when read in the 

context of the solicitation as a whole." (Comptroller General 

Op. at 3) (emphasis added). This decision is rational for the 

reasons identified by the Comptroller General-- the IFB 

contained two separate items upon which bidders were to 

submit bids, separate lines were provided for the bids on 

these items, and the clarifying amendment's admonition 

that one prime contract would be awarded was not a 

reasonable basis upon which to base a conclusion that Item 

II was a break-out of Item I. Mindful that courts are not to 

substitute their judgment for that of the Executive, we 

agree with the District Court's assessment of the merits 

and with its conclusion that preliminary injunctive relief 

was inappropriate. 

The District Court's alternate basis for denying relief -- 

that the delays associated with bringing in a new general 

contractor if preliminary injunctive relief were granted 

would not be in the public interest because it would further 

delay the renovation of a vital liver transplant center -- is 

based on factual findings amply supported by the record. 

(Supp. Findings of Fact P 2 et seq.). We agree with the 

District Court that the equities here do not lie with Glancy, 

especially in light of the fact that even under its

understanding of the first solicitation, Glancy was not the 

low bidder. (See Gov't Br. at 40-41 ("Glancy's claimed 

interest in fair procurement procedures rings hollow. 

Glancy was not the low bidder in the initial round of 

bidding even under its own reading of the original 

solicitation.").) 

III. 

Accordingly, we affirm the District Court's March 10, 

1999, Order denying Glancy's motion for preliminary

injunctive relief. 

A True Copy: 

Teste: 

 Clerk of the United States Court of Appeals 

 for the Third Circuit 

 9