Opinion ID: 2176374
Heading Depth: 2
Heading Rank: 2

Heading: GIA's Bid Protest and Suit for Injunctive Relief

Text: Ten days later, on January 17, 1992, GIA filed a bid protest with the CAB requesting the Board to cancel the District's contract with QDP. The protest alleged that: QDP lacked the required expertise to perform the contract; the District had failed to apply the evaluation criteria properly; QDP had a potential conflict of interest because it was also a provider of dental services; QDP intended to subcontract most of its vision services to non-minority businesses; the District had ignored GIA's proposed 20 percent discount and therefore had misinterpreted GIA's actual price proposal. On January 27, 1992, GIA filed an amended protest containing the additional claim that QDP was not a responsible contractor within the meaning of 27 DCMR § 2200.1 (1988) because QDP's Vice President, Thomas A. Parnham, had recently pled guilty to charges of conspiracy and failing to maintain proper records as required by the Employee Retirement Income Security Act, in violation of 18 U.S.C. § 371 (1988) and 29 U.S.C. §§ 1027, 1131 (1988). [2] Consequently, GIA alleged, the District's contract with QDP violated the District's own requirement that [t]he contracting officer shall ... award contracts only to responsible contractors. 27 DCMR § 2200.1. The District responded with an agency report to the CAB in which the District denied all of GIA's allegations and moved the Board to dismiss as untimely GIA's claim in its amended protest that QDP was not a responsible contractor. In an amended report, the District subsequently withdrew its motion to dismiss and submitted an affidavit from the District Controller stating that he had not become aware of Parnham's convictions until January 24, 1992, after he had entered into the letter agreement with QDP. The Controller averred that he had reviewed the government's statement of fact in support of Parnham's guilty pleas and had discussed the situation with QDP's president (Dr. Milton Bernard), Parnham, and Parnham's attorney. After this review, the Controller said, he had concluded that Parnham's guilty plea should not be imputed to QDP and that QDP remained a responsible contractor. In reaching this conclusion, the Controller had taken into account the following facts: (1) the convictions were for misdemeanors, not felonies; (2) the misdemeanors only involved a failure to disclose information; (3) Parnham had not been involved in taking or accepting illegally obtained funds; and (4) the convicting court had specifically informed Parnham that the convictions did not bar him from continuing with QDP in an administrative position. While GIA's bid protest was pending before the CAB, GIA also filed a complaint in the Superior Court on February 13, 1992, requesting declaratory and injunctive relief, including a temporary restraining order, against the District. This complaint repeated most of the allegations set forth in GIA's bid protest to the CAB. In response, the District asserted that the trial court lacked jurisdiction to hear the complaint because GIA had failed to exhaust its administrative remedies in failing to wait for the CAB to render a decision on its bid protest. The District also claimed that, even if the court had jurisdiction to hear the case, GIA had failed to make the required showing of irreparable harm. Additionally, the District submitted the same affidavit from the Controller that it had filed with the CAB. QDP joined the District and moved for leave to intervene. After a hearing, the trial court denied GIA's request for a temporary restraining order on February 28, 1992. Expressing his reluctance to interfere with the administrative process, the trial judge ruled that GIA should instead seek a stay of the contract from the CAB. GIA then filed with the CAB an emergency motion for a stay of the contract. In an opinion issued on March 25, 1992, the CAB concluded that under D.C.Code § 1-1189.8(e) (1992) it had no authority to stay performance of a contract pending its decision on a bid protest. See 39 D.C.Reg. 4491, 4497, 4503 (1992). Armed with the Board's decision, GIA returned to the trial court two days later. This time, the trial court concluded that GIA had exhausted its administrative remedies when the CAB denied GIA's request for a stay. Accordingly, the trial court agreed to hold a hearing on GIA's motion for a preliminary injunction to halt performance of QDP's contract with the District. Testimony and evidence submitted at the hearing disclosed that Parnham had entered his guilty pleas in July 1991 and that Dr. Bernard, QDP's president, had known of this fact at that time. After reviewing the government's statement of facts in the case against Parnham, however, Dr. Bernard had concluded that Parnham's involvement had been limited in duration and scope and that Parnham could continue to perform his duties on behalf of Quality Dental and conduct himself with honesty and integrity. Accordingly, Parnham had participated fully in developing QDP's proposal to the Districta proposal in which he was named as a principal of QDP. On April 1, 1992, the trial court issued an order enjoining the District and QDP from taking any further steps to implement the contract between them except for transitioning to an emergency procurement pending the Contract Appeals Board's final decision. In reaching this decision, the trial court relied on the following findings of fact and conclusions of law. First, the trial court concluded that, under 27 DCMR §§ 2200.3 and 2200.4 (1988), as well as under paragraphs 35(3), 37(1) and (2), and 38(2) of the District's RFP, QDP was obliged to disclose the fact of Parnham's convictions. The failure to reveal this information, the court said, cast doubt not only on Parnham's integrity but also on QDP's as well. Accordingly, the court concluded that there was a substantial likelihood that GIA would succeed in its protest to the CAB. Second, the court found that the harm faced by GIA was comparable to the harm that QDP would suffer if enjoined from performing the contract. Absent an injunction, GIA would be forced to wait until the CAB rendered a decision, which would lead to a probable delay of about a year. As a result, GIA would lose 50 percent of its then-annual revenue and might be forced to lay off as many as four employees. On the other hand, an injunction would hurt QDP financially and force it to lay off a number of employees, but it would not threaten QDP's existence. Third, the trial court found that the public interest overwhelmingly favored the granting of an injunction, so as to send a strong message that companies seeking to do business with the District could not profit from misrepresenting their qualifications. Finally, the court determined that, given the CAB's disclaimer of authority to issue injunctive relief while an appeal was pending before it, GIA had exhausted its administrative remedies and had no adequate remedy available to it at law. Both the District and QDP appealed from the trial court's order (Nos. 92-CV-437 & 92-CV-477).