The U.S. Court of Appeals for the Third Circuit recently affirmed a N.J. federal district court decision which found that that the Delaware River Port Authority (DRPA) had acted improperly in rejecting the low bidder for a painting contract for the Commodore Barry Bridge. My original post on the DRPA case can be found here.
In 2016, the DRPA rejected Alpha Painting & Construction Company, Inc.’s low bid and awarded the contract to Corcon, Inc., the second low bidder. After its protest was denied, Alpha sued the DRPA to rescind the award to Corcon. The district court found that the DRPA’s actions were arbitrary and capricious, and ordered the DRPA to award the contract to Alpha. The DRPA appealed.
On appeal, the Third Circuit agreed with the district court, finding in a lengthy opinion that the DRPA’s decision to reject the low bidder was irrational, arbitrary, and capricious. However, the Third Circuit held that district court went too far in directing the DRPA to award the contract to Alpha. Instead, the Third Circuit remanded the case for entry of a more limited injunction, stating:
Here, DRPA arbitrarily removed Alpha from contention for the Phase 2 contract. Accordingly, Alpha should be restored to competition and DRPA should evaluate Alpha’s bid and affirmatively determine, per its guidelines, whether Alpha, the lowest bidder, is a “responsible” contractor.
In reaching its decision, the Third Circuit considered prior case law which limited the remedy in such situations, noting as follows:
This case implicates a subsequent question in the remedy analysis: what is the appropriate scope of injunctive relief. The District Court directed DRPA to award the contract to Alpha. Although Sea-Land does not preclude this coercive form of relief, we have been clear that a district court “must not succumb to the temptation of substituting its judgment” for that of the agency’s procurement expertise. This is especially true where, as here, the agency is charged with determining whether a contractor is safe, responsible, and capable of performing a highly specialized and potentially hazardous construction project. Depending on the posture of the procurement, directing an agency to award a contract to a specific bidder has the high potential of transgressing this limitation. Accordingly, district courts should not direct an agency to award a contract to a specific bidder “unless it is clear that, but for the illegal behavior of the agency, the contract would have been awarded to the party asking the court to order the award.” [citations omitted]
The full Third Circuit decision can be found here.
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