Alpha Painting & Construction Co. v. Delaware River Port Authority
853 F.3d 671
3rd Cir.2017Background
- DRPA solicited bids for Phase 2 of a lead-paint removal and repainting contract for the Commodore Barry Bridge; Alpha was the apparent low bidder at $17,886,000 and Corcon bid ~$10,200 higher.
- IFB and DRPA procurement guidelines required bidders to submit OSHA 300 forms and three years of Experience Modification Factors (EMFs); DRPA uses EMFs and OSHA 300s to assess a bidder’s "safety culture" and responsibility.
- DRPA staff concluded Alpha was "not responsible" because Alpha’s bid lacked usable EMFs (Alpha’s broker letter said Alpha did not qualify for EMFs in PA/NJ) and DRPA did not complete follow-up inquiries; DRPA then approved Corcon after obtaining a missing EMF year from Corcon’s broker and later adjusted Corcon’s mobilization line item to comply with a 7.5% cap.
- Alpha filed an expedited federal suit; the District Court held a four-day bench trial, found DRPA’s actions arbitrary and capricious, and ordered DRPA to award the contract to Alpha.
- The Third Circuit affirmed that DRPA acted arbitrarily and capriciously but held the District Court abused its discretion by directing an award to Alpha because DRPA never completed the responsibility investigation; the remedy was vacated and remanded for a more limited injunction restoring Alpha to competition.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether DRPA lawfully rejected Alpha as "not responsible" based on missing OSHA 300s/EMFs | DRPA lacked a rational basis; absence of EMFs is inconclusive and DRPA failed to follow its own responsibility-investigation procedures | EMF absence justified concluding Alpha's safety record was unknowable and therefore nonresponsible | Court: DRPA acted arbitrarily and capriciously; no rational basis shown and DRPA failed to perform required follow-up inquiries |
| Whether DRPA permissibly modified Corcon's mobilization line item to make it the low bid | Alpha: the belated modification was pretextual and outside IFB authority | DRPA: IFB language ("correctly computed") permitted adjustment to enforce 7.5% cap | Court: DRPA lacked authority to make that substantive bid modification two months later; Alpha remained lowest bidder before the modification |
| Whether Corcon was a necessary party under Fed. R. Civ. P. 19 | (Alpha) Corcon not a necessary party because it had no enforceable contract right yet | (DRPA) Corcon had a protectable interest after Board action and should have been joined | Court: Corcon not required; DRPA had not "fully executed" a contract and DRPA represented Corcon's interests in litigation |
| Proper remedy for procurement violation: directed award vs. limited injunction | Alpha: directed award appropriate because it was the low, qualified bidder and would suffer irreparable harm | DRPA: directed award substitutes court judgment for agency procurement expertise | Held: Injunctive relief appropriate but directing award to Alpha was an abuse of discretion; remand for limited relief restoring Alpha to competition and requiring DRPA to complete responsibility determination |
Key Cases Cited
- Princeton Combustion Research Labs., Inc. v. McCarthy, 674 F.2d 1016 (3d Cir. 1982) (courts should not substitute their judgment for agency procurement decisions unless irrational)
- Sea–Land Servs., Inc. v. Brown, 600 F.2d 429 (3d Cir. 1979) (framework for reviewing procurement decisions and factors for injunctive relief)
- Coco Bros. Inc. v. Pierce, 741 F.2d 675 (3d Cir. 1984) (agency action that is illegal or irrational can justify relief)
- Delta Data Sys. Corp. v. Webster, 744 F.2d 197 (D.C. Cir. 1984) (district courts should not direct specific contract awards absent clear proof the plaintiff would have received it but for the violations)
- Ulstein Maritime Ltd. v. United States, 833 F.2d 1052 (1st Cir. 1987) (remedy ordering agency to re-award to next low responsible bidder rather than naming a specific plaintiff)
- Allis-Chalmers Corp. v. Friedkin, 635 F.2d 248 (3d Cir. 1980) (judicial intrusion in government procurement can harm public interest and increase costs)
- Independent Enterprises, Inc. v. Pittsburgh Water & Sewer Auth., 103 F.3d 1165 (3d Cir. 1997) (a disappointed bidder has no property right until a contract is actually awarded)