Opinion ID: 3010664
Heading Depth: 2
Heading Rank: 3

Heading: Post-Submission Conduct

Text: Several months after the submission of the bid for the Greek RFP, defendant learned that its proposal for the project remained competitive. Nevertheless, in early December of 1990, defendant contacted Craig Systems (Craig), a manufacturer of bare shelters, shelter integrator, and competitor to plaintiffs. When Craig expressed an interest in performing the shelter integration work on the Greek project -- the same work that had been promised to plaintiffs -- defendant sent to Craig all of the information, design notes, general correspondence, and plaintiffs' technical proposal regarding the Greek RFP. 5 Defendant then asked Craig to submit a bid for the shelter work, and Craig ultimately submitted its final proposal and price quotation in late January of 1991. On January 24, 1991, plaintiffs' Greek agent forwarded defendant the results of the Greek government's review of the various bids, which indicated that the defendant's bid was the lowest among the competitors. Although defendant at this point was confident that it would win the contract, it realized that the final award would require further negotiations with the Greek government.4 For the next several months, defendant negotiated with Greek authorities to determine the final technical specifications and price concessions. Then, on May 13, 1991, defendant sent all its potential subcontractors, including plaintiffs, a form letter which stated: We have recently been called by the Greek government to negotiate the final terms and conditions for this shelter contract. Therefore, we ask that your firm please REQUOTE YOUR OFFER to us as soon as possible, and extend the quote validity date to at least August 31, 1991. . . . . . . All outside vendor equipment and service is being bid in a competitive environment and Trans World will chose the supplier, based on the price of goods, quality, service and technical/manufacturing capabilities. App. at 2413 (emphasis in original). On the same date, defendant sent plaintiffs another letter which,encourage[d] you to make your bid as competitive as possible. While we were encouraged in our earlier preliminary discussions by _________________________________________________________________ 4. Apparently, negotiations between the government and contractors even after the unsealing of the bids are typical in thisfield of government contracting. See Air Tech. Corp. v. General Elec. Co., 199 N.E.2d 538, 543 (Mass. 1964); Brent E. Newton, Note, The Legal Effect of Government Contractor Teaming Agreements: A Proposal for Determining Liability and Assessing Damages in Event of Breach, 91 Colum. L. Rev. 1990, 1995 n.25 (1991); W. Noel Keyes, Government Contracts in a Nutshell 137-69 (2d ed. 1990). 6 the cost estimates you provided us for planning purposes, your later formal proposal was disappointingly high and was not competitive with other proposals which we have received. App. at 2412. This letter was thefirst communication to plaintiffs by defendant indicating that defendant had in fact been soliciting other proposals for the shelter integration and air conditioning portions of the project. It was also the first time plaintiffs had learned that defendant considered plaintiffs' proposal disappointingly high, even though defendant's bid for the Greek RFP was the lowest of all bidders. Shocked at defendant's position, plaintiffs responded to these letters by confirming the validity of their price proposals submitted on June 28, 1990. Although plaintiffs indicated that they were not and never have been unwilling to discuss with you an equitable adjustment to our proposed pricing if such an adjustment is required in obtaining the award, App. at 2432, they emphasized that [t]here was an agreement between Trans World and ATACS that ATACS would be the sole source shelter integrator and supplier, and . . . AIRTACS [would be the] sole source provider of air conditioners . . . . App. at 2414. Defendant did not respond to plaintiffs' letters or other attempts at communication. By December 11, 1991, defendant completed negotiations with the Greek government and executed a contract in the amount of $23,006,319, which closely corresponded to the original bid from defendant, absent minor adjustments to hardware, training, and technical specifications. Nearly a month later, defendant sent another letter to potential subcontractors, including plaintiffs, explaining the technical changes and requesting an updated quote on the revised shelter design specifications. While plaintiffs did not respond, defendant received quotations from three other companies, including Craig, for the shelter integration work. These proposals quoted prices significantly lower than plaintiffs' final price quote, and included proposals for bare shelters, which was not included in the plaintiffs' package. Defendant ultimately executed subcontracts with Craig for the shelter integration work and Airflow for the air conditioner portion of the project. The total price difference 7 between the Craig/Airflow contracts and the plaintiffs' proposals totaled $1,887,104.