B-171782, SEP 7, 1971

B-171782, SEP 7, 1971

BID PROTEST - INJUNCTIVE RELIEF - ADJUDICATION ON THE MERITS AFFIRMING PRIOR DECISION WHICH DENIED PROTEST AGAINST AWARD OF A CONTRACT TO LEASCO INFORMATION PRODUCTS, INC., UNDER AN RFP ISSUED BY THE OFFICE OF EDUCATION, H.E.W. THE COMP. GEN.'S ORIGINAL DECISION DEALT WITH ONLY ISSUE NUMBER 3 OF THE PROTEST BECAUSE ISSUES 1 AND 2 WERE ADJUDICATED IN THE NATIONAL CASH REGISTER COMPANY V RICHARDSON, CIVIL NO. 312-71 (U.S.D.C., D.C., FEBRUARY 17, 1971). THE RECORD INDICATES THAT PROTESTANT RECOGNIZED THAT THE DISMISSAL OF ITS COMPLAINT SEEKING PERMANENT RELIEF OPERATED AS AN ADJUDICATION OF THE MERITS OF THE CONTROVERSY AND THE COMP. GEN. WILL FOLLOW THE COURT'S RULING.

TO FREEDMAN, LEVY, KROLL & SIMONDS:

REFERENCE IS MADE TO YOUR LETTER DATED JULY 30, 1971, ON BEHALF OF NATIONAL CASH REGISTER COMPANY (NCR), REQUESTING RECONSIDERATION OF OUR DECISION, B-171782, JULY 19, 1971, WHICH DISMISSED YOUR PROTEST AGAINST THE AWARD OF CONTRACT NO. OEC-9-70-1041 TO LEASCO INFORMATION PRODUCTS, INCORPORATED (LEASCO) UNDER REQUEST FOR PROPOSALS (RFP) NO. 71-1, ISSUED BY THE OFFICE OF EDUCATION, DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE.

NCR'S PROTEST WAS BASED ON THE FOLLOWING CONTENTIONS: (1) THE AMENDMENT TO THE SOLICITATION ISSUED ON JANUARY 4, 1971, ELIMINATING ALL EVALUATION CRITERIA EXCEPT PRICE CHANGED THE NATURE OF THE CONTRACT, NECESSITATING ITS RESOLICITATION BY MEANS OF AN INVITATION FOR BIDS; (2) HEW HAS VIOLATED PROCUREMENT PROCEDURE BY CALLING FOR BEST AND FINAL OFFERS THREE TIMES PURSUANT TO VARIOUS AMENDMENTS AND BY MEETING WITH LEASCO REPRESENTATIVES ON JANUARY 21, 1971, AFTER NEGOTIATIONS HAD BEEN CLOSED BUT BEFORE THE DEADLINE FOR SUBMISSION OF FINAL PROPOSALS; AND (3) HEW APPROVED, AT A MEETING ON JANUARY 15, 1971, AN IMPROPER 60-DAY START-UP DELAY FOR LEASCO, WHICH, IN EFFECT COMMUNICATED TO LEASCO THAT, AS OF THAT TIME, ITS PRICE WAS LOW.

OUR DECISION DENIED YOUR PROTEST WITH RESPECT TO ISSUE NO. 3. WITH REGARD TO ISSUES NOS. 1 AND 2, NCR'S PROTEST WAS DISMISSED ON THE BASIS THAT THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA IN THE NATIONAL CASH REGISTER COMPANY V RICHARDSON, CIV. ACTION NO. 312-71 (U.S.D.C., D.C., FEBRUARY 17, 1971), HAD DISMISSED NCR'S COMPLAINT THUS CONSTITUTING AN ADJUDICATION ON THE MERITS OF THE CONTROVERSY. IN OUR DECISION, WE STATED THAT BY ASKING THE COURT FOR PERMANENT INJUNCTIVE RELIEF NCR ATTEMPTED TO OBTAIN A COURT ADJUDICATION UPON THE MERITS OF TWO OF THE MATERIAL ISSUES OF THE PROTEST. WE CONCLUDED THAT SINCE THE COMPLAINT WAS DISMISSED, EFFECTING AN ADJUDICATION UPON THE MERITS ACCORDING TO FEDERAL RULE OF CIVIL PROCEDURE 41(B), WE SHOULD FOLLOW THE COURT'S RULING.

NCR'S COMPLAINT ASKED THE COURT TO GRANT THE FOLLOWING RELIEF:

"(A) ORDER DEFENDANT AND ANY AND ALL HIS SUBORDINATES TO CANCEL AND SET ASIDE THE CONTRACT AWARDED TO LEASCO (CONTRACT NO. OEC-0-71-1041) ON JANUARY 21, 1971, AND TO REINSTATE THE CONTRACT AWARDED TO PLAINTIFF ON DECEMBER 11, 1970 (CONTRACT NO. OEC-0-71-0846) OR IN THE ALTERNATIVE TO ORDER THAT A NEW SOLICITATION BE ISSUED AND PROPER PROCEDURES FOLLOWED:

"(B) PERMANENTLY ENJOIN DEFENDANT AND ANY AND ALL OF HIS SUBORDINATES FROM IMPLEMENTING CONTRACT NO. OEC-0-71-1041, AWARDED TO LEASCO INFORMATION PRODUCTS ON JANUARY 21, 1971.

"(C) PENDING A HEARING UPON THE MERITS OF THIS CASE, ISSUE A PRELIMINARY INJUNCTION ENJOINING DEFENDANT AND ANY AND ALL HIS SUBORDINATES FROM IMPLEMENTING CONTRACT NO. 0-71-1041 AWARDED ON JANUARY 21, 1971 UNTIL THE COMPTROLLER GENERAL OF THE UNITED STATES HAS HAD AN OPPORTUNITY TO RULE ON THE PROTEST FILED BY PLAINTIFF WITH HIM ON JANUARY 29, 1971.

"(D) PENDING THE HEARING UPON THE PRELIMINARY INJUNCTION, ISSUE A TEMPORARY RESTRAINING ORDER *** RESTRAINING THE DEFENDANT AND ANY AND ALL HIS SUBORDINATES IN THE MANNER AFORESAID UNTIL THE COMPTROLLER GENERAL OF THE UNITED STATES HAS HAD AN OPPORTUNITY TO RULE ON THE PROTEST FILED BY PLAINTIFF WITH HIM ON JANUARY 29, 1971.

"(E) AWARD PLAINTIFF SUCH FURTHER RELIEF AS MAY BE JUST AND EQUITABLE UNDER THE CIRCUMSTANCES."

AS STATED IN OUR DECISION OF FEBRUARY 19, 1971, THE MOTION FOR TEMPORARY RESTRAINING ORDER WAS DENIED ON FEBRUARY 4, 1971; THE MOTION FOR A PRELIMINARY INJUNCTION WAS DENIED AND THE COMPLAINT DISMISSED PURSUANT TO A MEMORANDUM OPINION DATED FEBRUARY 17, 1971. NCR THEN FILED A MOTION TO ALTER THE MEMORANDUM OPINION, STATING IN PART:

"THE DISMISSAL OF THE COMPLAINT AT THIS TIME IS HIGHLY PREJUDICIAL TO THE PLAINTIFF FOR THERE IS PENDING WITH THE COMPTROLLER GENERAL A PROTEST AGAINST HEW'S AWARD OF A CONTRACT TO LEASCO AND PENDING HIS RULING ON THE PROTEST, PLAINTIFF DESIRES TO RETAIN ITS RIGHT TO OBTAIN A DECISION FROM THE COURT ON THE MERITS OF THIS CONTROVERSY AFTER A FULL OPPORTUNITY TO PRESENT TESTIMONY AND TO CROSS-EXAMINE THOSE PERSONS WHO GAVE AFFIDAVITS FOR THE DEFENDANT."

THE COURT DENIED THIS MOTION ON FEBRUARY 19, 1971, STATING AS FOLLOWS:

"PLAINTIFF'S SOLE PRAYER IS FOR INJUNCTIVE RELIEF. THE COURT HAS RULED AS A MATTER OF LAW THAT THIS CASE IS NOT AN APPROPRIATE CASE FOR AN INJUNCTION UNDER ANY CIRCUMSTANCES, EVEN IF ALL OF PLAINTIFF'S ALLEGATIONS ARE ACCEPTED AS TRUE. PLAINTIFF'S MOTION TO ALTER MEMORANDUM OPINION IS DENIED."

ESSENTIALLY, NCR'S REQUEST FOR RECONSIDERATION IS BASED UPON THE ALLEGATION THAT IT NEVER HAD ITS MAJOR CONTENTIONS ADJUDICATED ON THE MERITS IN THE DISTRICT COURT. YOU STATE THAT THE COURT PROCEEDING WAS INSTITUTED SIMPLY TO MAINTAIN THE STATUS QUO UNTIL THE COMPTROLLER GENERAL COULD HAVE AN OPPORTUNITY TO RULE ON THE PROTEST. ALTHOUGH NCR HAD REQUESTED INTERIM RELIEF TO MAINTAIN THE STATUS QUO, IT REQUESTED PERMANENT RELIEF IN ITS COMPLAINT AS WELL. IT APPEARS CLEAR THAT NCR RECOGNIZED THAT THE DISMISSAL OF ITS COMPLAINT OPERATED AS AN ADJUDICATION OF THE MERITS OF THE CONTROVERSY IN VIEW OF THE ABOVE QUOTED STATEMENT FROM ITS MOTION TO ALTER MEMORANDUM OPINION DATED FEBRUARY 18, 1971. THE COURT NOT ONLY DENIED THE TEMPORARY INTERIM RELIEF REQUESTED TO MAINTAIN THE STATUS QUO, IT DISMISSED THE COMPLAINT AS WELL. WE DO NOT BELIEVE THAT STATEMENTS MADE IN NCR'S MEMORANDUM IN SUPPORT OF MOTION FOR TEMPORARY RESTRAINING ORDER OR IN ORAL ARGUMENT BEFORE THE COURT WITH REGARD TO NCR'S MOTION FOR A PRELIMINARY INJUNCTION DETRACT FROM OUR CONCLUSION SINCE THOSE STATEMENTS WERE SIMPLY RELATED TO THE INTERIM RELIEF REQUESTED. HAD NCR SIMPLY ASKED THE COURT TO MAINTAIN THE STATUS QUO PENDING OUR DECISION, OUR CONCLUSION MIGHT WELL BE DIFFERENT; BUT THE FACT REMAINS THAT PERMANENT RELIEF WAS ALSO REQUESTED IN THE COMPLAINT. IT IS CLEAR THAT THE COURT REALIZED THAT DISMISSING THE COMPLAINT WAS DISPOSITIVE OF THE CONTROVERSY AND REFUSED TO ALTER ITS CONCLUSION. FIND NO REASON TO CONCLUDE THAT OUR PRIOR DECISION WAS INCORRECT AND ACCORDINGLY MUST DENY YOUR REQUEST TO CONSIDER THE ISSUES RAISED IN YOUR ORIGINAL PROTEST.