that the seal would have to be deformed or damaged in order to fit it inside the pump, which would then completely destroy the seal once the pump was turned on. (Id. at 126-27.) Government witnesses testified that in order to produce an acceptable alternate, Plaintiff would have to redesign its seal by resizing its components in order to get the seal to fit into the pump properly. (Id. at 127.) On this basis, DISC concluded that Plaintiff's seal was not an acceptable alternate, regardless of any purchases DISC had made of the part in the past. (Id. at 25.) The only evidence Plaintiff offered on this matter is an affidavit by its President, Thomas Doepker, who asserts without explanation that AST's seal would in fact fit into the pump. (Doepker Aff. PP 3, 4.)
Plaintiff seeks to enjoin Defendant from executing its contract with Calnevar Seal and, if the goods are still needed, to order DISC either to resolicit the contract or to award the contract under the previous solicitation in accordance with relevant procurement law and methodology. (Amended Complaint, at 4.) Defendant opposes the motion on its merits and for lack of subject matter jurisdiction. The court finds that although jurisdiction is proper, Plaintiff's motion should be denied.
The first issue to be resolved is whether this court, as opposed to the Court of Federal Claims (also "Claims Court") has subject matter jurisdiction over this case. As Defendant points out, the Court of Federal Claims has exclusive jurisdiction over cases in which a plaintiff is seeking monetary damages in excess of $ 10,000 from the federal government and such claim is derived from a federal statute, regulation, or contract. Rose Acre Farms, Inc. v. Madigan, 956 F.2d 670, 673 (7th Cir.), cert. denied, 121 L. Ed. 2d 34, U.S. , 113 S. Ct. 68 (1992); Hamilton Stores, Inc. v. Hodel, 925 F.2d 1272, 1277 (10th Cir. 1991). Moreover, the Claims Court has exclusive jurisdiction to grant declaratory relief, including injunctions, on any contract claim brought before the contract is awarded. 28 U.S.C. § 1491(a)(3); Maurice Sporting Goods, Inc. v. United States Navy Exchange Service Command, No. 93 C 4490, 1993 WL 524236, at *4 (N.D. Ill. Dec. 10, 1993) (Hart, J.) (Court of Federal Claims, not district court, has jurisdiction over a pre-award contract claim).
Outside of these parameters, the jurisdiction of the Court of Federal Claims does not necessarily preclude action by a federal district court. Western Securities Co. v. Derwinski, 937 F.2d 1276, 1279 (7th Cir. 1991) (statutes that allocate federal jurisdiction over contract claims against government between district courts and Claims Court do not constitute exclusive or exhaustive grant of jurisdiction over such claims). In particular, the district courts alone have jurisdiction to grant injunctive relief on claims brought after the award has been made. Maurice Sporting Goods, No. 93 C 4490, 1993 WL 524236, at *5-6 (district court may enjoin the government from conducting further business with a supplier when government allegedly violated applicable statutes and regulations); Beck by Beck v. Secretary of the Dep't of Health and Human Servs., 924 F.2d 1029, 1036 (Fed. Cir. 1991) (equitable power of Claims Court is limited and does not include power to issue injunctions when such power has not been explicitly granted); JDL Construction, Inc. v. United States, 14 Cl. Ct. 825 (1988) (Claims Court's equitable power does not extend to suits filed after the government has awarded the contract in question); La Strada Inn, Inc. v. United States, 12 Cl. Ct. 110 (1987) (Claims Court has no jurisdiction to entertain bidder's suit for injunctive relief when suit was not commenced until months after contract had been awarded to another party).
In this light, it is clear that this court has subject matter jurisdiction over this action. Plaintiff' suit is not a "veiled claim" for money damages, as Defendant urges (Defendant's Response, at 7; Defendant's Supplemental Response, at 1-2) because Plaintiff has not petitioned the court to order DISC to award the contract in its favor, or even to force DISC to award the contract at all. Thus, even if Plaintiff's motion were granted, Plaintiff would not necessarily receive any damages or their equivalent. Cf. Wabash Valley Power Ass'n, Inc. v. Rural Electrification Admin., 903 F.2d 445, 452 (7th Cir. 1990) (Claims Court, rather than district court, would have jurisdiction over plaintiff's claim challenging the REA's authority to increase wholesale electricity rates only if plaintiff were seeking specific performance on a contract with REA); Hamilton Stores, 925 F.2d at 1276-79 (disappointed bidder's petition for injunctive relief to prevent defendant agency from renewing contract with third party is not the equivalent of money damages; thus, district court and not Claims Court has jurisdiction). This conclusion is supported by cases cited by Defendant itself, which hold that district courts may entertain motions for equitable relief filed by disappointed bidders alleging that the government did not follow proper procurement procedures. See, e.g., Nat'l Maritime Union v. Commander, Military Sealift Command, 263 U.S. App. D.C. 248, 824 F.2d 1228, 1236-38 (D.C. Cir. 1987); Scanwell Labs., Inc. v. Shaffer, 137 U.S. App. D.C. 371, 424 F.2d 859, 864, 872-73 (D.C. Cir. 1970). These and other cases also make clear that a disappointed bidder has standing to challenge the procurement process. See, e.g., Nat'l Maritime Union, 824 F.2d at 1236; Wabash Valley Power, 903 F.2d at 451-52.
Furthermore, Plaintiff's claim is clearly a post-award claim, not a pre-award claim: Plaintiff filed its initial complaint two months after DISC awarded the contract to Calnevar Seal. See Space Age Engineering, Inc. v. United States, 2 Cl. Ct. 262, 263-64 (1983) (claim filed in November 1982 was clearly post-award when contract had been awarded in September 1982). This fact, together with the fact that Plaintiff is seeking purely equitable relief, means that the district court rather than the Court of Federal Claims has jurisdiction over this matter.
B. Preliminary Injunction
Although Plaintiff has brought its claim in the right court, Plaintiff has failed to persuade this court that its motion should be granted. A district court may issue a preliminary injunction only if the moving party can show: (1) that the case has some likelihood of success on its merits; (2) that the movant has no adequate remedy at law; and (3) that the movant would suffer irreparable harm if the injunction is not granted. Storck USA, L.P. v. Farley Candy Co., 14 F.3d 311, 313-14 (7th Cir. 1994). If the movant satisfies these three conditions, then the court must: (4) balance the harm to the movant if the injunction were denied against the harm to the defendant if it were granted; and (5) weigh the public's interest in this matter. Id. at 314. Plaintiff bears the burden of persuasion on each element. Heinz v. Frank Lloyd Wright Found., 762 F. Supp. 804, 806 (N.D. Ill. 1991), citing Lasco v. Northern, 733 F.2d 477, 480 (7th Cir. 1984). Here, Plaintiff has failed to persuade the court on any of these five elements.
1. Irreparable harm
Plaintiff cites a number of cases that hold that improper denial of an opportunity to bid on a contract, with the resulting loss of business and profits, constitutes "irreparable harm" that may warrant injunctive relief. Quality Transport Services, Inc. v. United States, 12 Cl. Ct. 276, 282 (1987); Georgia Gazette Publishing Co. v. Dept. of Defense, 562 F. Supp. 1004, 1010 (S.D. Ga. 1983); Abel Converting, Inc. v. United States, 679 F. Supp. 1133 (D. D.C. 1988); Collins & Co. v. Claytor, 476 F. Supp. 407 (N.D. Ga. 1979).
In the same vein, Plaintiff asserts it will suffer "irreparable loss of business, income and profits" if it is not granted the equitable relief it seeks. (Amended Complaint PP 18, 19; Plaintiff's Brief, at 11-14.)
Plaintiff admits, however, that this rule "is by no means universal" among the circuits. (Plaintiff's Brief, at 13.) There are a large number of cases that have held that economic loss alone does not constitute irreparable harm. See, e.g., Sampson v. Murray, 415 U.S. 61, 90, 39 L. Ed. 2d 166, 94 S. Ct. 937 (1974) ("Mere injuries, however substantial, in terms of money, time, and energy necessarily expended in the absence of a stay, are not enough."); Fairplain Development Co. v. R.G. Freeman, 512 F. Supp. 201, 203 (N.D. Ill. 1981) (same), citing American Hospital Association v. Harris, 625 F.2d 1328, 1331 (7th Cir. 1980); Forest County Potawatomi Community v. Doyle, 803 F. Supp. 1526, 1537 (W.D. Wis. 1992) ("lost profits do not constitute irreparable injury, barring exceptional circumstances"), citing Downstate Stone Co. v. United States, 651 F.2d 1234, 1241 (7th Cir. 1981); Wisconsin Gas Co. v. Federal Energy Regulatory Comm'n, 244 U.S. App. D.C. 349, 758 F.2d 669, 674 (D.C. Cir. 1985); Housing Study Group v. Kemp, 736 F. Supp. 321, 330 (D. D.C. 1990). Although these cases did not involve disappointed bidders, this rule should apply here all the same. Plaintiff stood to recover no more than $ 44,000 in gross income from the contract. Plaintiff has offered no evidence at all concerning its projected costs or profits, nor has Plaintiff offered evidence that the loss of this contract would irreparably harm its business, its viability, or its ability to compete for other contracts. Cf. Wisconsin Gas, 758 F.2d at 674 (monetary loss constitutes irreparable harm if it threatens the very existence of plaintiffs business); Cf. Westin v. McDaniel, 760 F. Supp. 1563, 1569 (M.D. Ga.) (monetary loss constitutes irreparable harm where damages are clearly difficult to assess and measure or where movant would be forced out of business without injunction), aff'd, 949 F.2d 1163 (11th Cir. 1991). Absent a showing to the contrary, this court is not convinced that an injunction is necessary to avoid irreparable harm to Plaintiff.
2. Inadequate remedy at law
In some cases, a finding of irreparable harm is related to the absence of an adequate remedy at law. See, e.g., Sampson, 415 U.S. at 90 ("The possibility that adequate compensatory or other corrective relief will be available at a later date, in the ordinary course of litigation, weighs heavily against a claim of irreparable harm."). In Plaintiffs eyes, these elements are "substantially overlapping" (Plaintiff's Brief, at 11-12); accordingly, Plaintiff has not explained what specific remedies at law may exist or why they are inadequate. Plaintiff merely asserts without explanation that the "irreparable loss" of business and income it would suffer if Defendant's contract with Calnevar Seal is not enjoined "may not be remediated in an ordinary action at law. " (Amended Complaint P 19.)
This court is not convinced. In Fairplain Development, 512 F. Supp. at 203-204, the court found that the ability of a disappointed bidder to recover costs incurred in preparing its bid did constitute an adequate remedy at law. Similarly, in cases like Design Pak, Inc. v. Secretary of the Treasury, 801 F.2d 525, 527-28 (1st Cir. 1985) and Union Carbide Agricultural Products Co. v. Costle, 632 F.2d 1014, 1019 (2d Cir. 1980), cert. denied, 450 U.S. 996, 68 L. Ed. 2d 196, 101 S. Ct. 1698 (1981), courts have denied injunctive relief partly because of the disappointed bidder's failure to demonstrate that an award of damages was inadequate or unavailable. Also, in M. Steinthal & Co. v. Seamans, 147 U.S. App. D.C. 221, 455 F.2d 1289, 1302-03 (D.D. Cir. 1971), a case cited by Plaintiff, the court reversed the lower court's grant of injunctive relief, in part because the court held that equitable relief may be withheld even when the bidder cannot be completely made whole in damages if the public interest so demands.
Here, Plaintiff's failure to discuss the adequacy of any remedy at law, together with its unconvincing claim of irreparable harm, is sufficient grounds to deny Plaintiff's motion for injunctive relief.
3. Likelihood of success
Even if this court were to adopt Plaintiff's suggestion that it has suffered irreparable harm that could not be remedied at law, Plaintiff's motion should be denied on other grounds. To challenge an agency's decision to award a contract to a third party, the disappointed bidder must show either that the agency's decision had "no rational basis" or that its procurement process involved a "clear and prejudicial violation" of applicable law. Elcon Enters., Inc. v. Washington Metro. Area Transit Auth., 298 U.S. App. D.C. 197, 977 F.2d 1472, 1478 (D.C. Cir. 1992); Stay, Inc. v. Cheney, 940 F.2d 1457, 1461 (11th Cir. 1991), cert. denied, 117 L. Ed. 2d 138, U.S. , 112 S. Ct. 973 (1992). The burden on the plaintiff is a "heavy" one. Elcon; Stay. In a case cited by Plaintiff, the Court of Appeals for the Federal Circuit explained that a disappointed bidder must show there is a "substantial chance" that it would have been awarded the contract had the procuring agency followed proper procedures, or, in other words, that the plaintiff's bid was "within the zone of active consideration." CACI, Inc.-Federal v. United States, 719 F.2d 1567, 1574-75 (Fed. Cir. 1983) (cites, quotes omitted); see also Elcon, 977 F.2d at 1478-79 (to set aside a procurement decision, a court must find agency's violation to have been "clear and prejudicial," not merely trivial or non-prejudicial (emphasis in original)). This rule is consistent with the great deference that a court will give to an agency's interpretation of its own statutes and regulations, Stay, 940 F.2d at 1461, as well as to the agency's technical expertise and its determination which bid is most advantageous to the government. Lockheed Missiles & Space Co. v. Bentsen, 4 F.3d 955, 958-59 (Fed. Cir. 1993).
Defendant admits that DISC violated its regulations by not evaluating Plaintiff's technical package before making the award. The evidence shows, however, that this violation did not prejudice Plaintiff's proposal for the simple reason that DISC would not have awarded Plaintiff even if it had examined the package.
Defendant has offered testimony from two technical experts that Plaintiff's seal is too large to fit into the pump without damaging or destroying the seal. Plaintiff, by contrast, has offered only the opinion of AST's president, Thomas Doepker, that the seal would fit. Doepker provides no substantiation for his conclusion, nor has Plaintiff offered any other evidence to rebut Defendant's testimony. This court is unwilling to accept Plaintiff's assertion that Doepker "is probably in the best position to recognize" that its seal would fit (Plaintiff's Reply Brief, at 7) absent compelling evidence to this effect.
Plaintiff apparently believes it can rest its case on its claim that because DISC allegedly procured AST's seal on two previous occasions, DISC was wrong to deny its approval of the seal on this contract. There are two main flaws in Plaintiff's argument. First, Plaintiff's claim that it has twice filled orders for NSN 2563 (which is identical to the object of the solicitation in question) rests on weak and contradictory evidence. Plaintiff has not offered any evidence to substantiate its allegation that DISC purchased an AST seal in 1986. As for DISC's procurement of an AST seal in 1990, the government's purchase order shows that Plaintiff was to supply a seal manufactured by Aqua-Chem or John Crane, not AST. If Plaintiff supplied an AST seal instead, then Plaintiff improperly substituted its own product for that which had been actually ordered by the government, so any "approval" is meaningless.
The second flaw is that Plaintiff has not provided any evidence showing that DISC ever actually approved AST's seal as an alternate for either NSN 2563 or NSN 1113. As Defendant maintains, if DISC had procured AST's seal in the past without approving it, then that procurement was in error. The court finds no reason to compound that error by forcing DISC to terminate a contract in order to reconsider purchasing a seal that it has shown will not work.
The remainder of Plaintiff's argument on this point is long on assertions but short on evidence. For example, Plaintiff claims it was improperly denied an opportunity to defend its proposal prior to award to the contract, in violation of procurement regulations. (Plaintiff's Brief, at 27-28.) Plaintiff then undermines its own argument by stating that "while the chance [of being awarded the contract] is admittedly speculative, it is not zero and may be significant." (Plaintiff's Brief, at 28.) Speculation of any degree is inadequate to rebut Defendant's more concrete evidence to the contrary, and it fails to satisfy Plaintiff's burden to show that it had a "substantial chance" of being awarded the contract. CACI, Inc.-Federal, 719 F.2d at 1574-75. Plaintiff also asserts that DISC failed properly to publish its qualification requirements or its de facto demand that vendors offer exact copies, rather than alternates, of the parts specified in the solicitation. If these assertions are true, they are relevant to Plaintiff's challenge to DISC's procedures, but not to Plaintiff's contention that those procedures prejudiced Plaintiff's own bid. Finally, Plaintiff's suggestion that the government's concern is limited to the amount of information on Plaintiff's technical drawings and "not . . . the physical configuration of the seal itself" (Plaintiff's Reply, at 7) cannot be accepted. The real issue is whether the configuration of the seal is such that it would suit the government's purpose, yet Plaintiff has provided no compelling evidence to this effect.
In sum, Defendant may have violated certain procurement regulations by not evaluating Plaintiff's technical package in a timely manner, but Plaintiff has not shown that this omission actually prejudiced consideration of its proposal. Plaintiff has failed to rebut Defendant's evidence that Plaintiff's seal would not fit, nor has Plaintiff offered any other evidence to show that it would have had a substantial chance to be awarded the contract had its package been evaluated. Finally, Plaintiff has not shown that DISC ever approved or properly purchased AST's seals to fill orders for NSN 2563 or NSN 1113. Consequently, there is little likelihood that Plaintiff would succeed on the merits of its claim.
4. Balancing the harm to the parties
In considering whether to grant a preliminary injunction, the court views the merits and harm to the parties as inversely related; in other words, the greater the movant's chance of success on the merits, the less it must show that the balance of harm is in its favor. Storck, 14 F.3d at 314. On the other hand, the lower the movant's chance of success on the merits, the greater a showing it must make that the balance of harm is in its favor. Diginet, Inc. v. Western Union ATS, Inc., 958 F.2d 1388, 1393 (7th Cir. 1992). The converse holds for the defendant -- the greater the harm to the defendant if the injunction is granted, the smaller the showing defendant must make that its own position has merit. Id. See also Original Great American Chocolate Chip Co. v. River Valley Cookies, Ltd., 970 F.2d 273, 276 (7th Cir. 1992); American Hosp. Supply Corp. v. Hospital Products Ltd., 780 F.2d 589, 593-94 (7th Cir. 1986) (describes abstract formula for weighing parties' harm and merits). This abstract approach is applicable in disappointed bidder cases, for its validity does not depend on the legal basis of the plaintiff's claim. American Hosp. Supply, 780 F.2d at 594.
Here, there is little likelihood that Plaintiff will prevail on the merits of its claim, given that Plaintiff has failed to show that its seal would work properly. Consequently, Plaintiff must show that the harm it would suffer if the injunction were denied is far greater than the harm Defendant would suffer if the injunction were granted. Plaintiff asks this court to adopt the position "that an injunction is appropriate if the Plaintiff satisfies the court that it will likely prove that defendant committed material violations of federal procurement law." (Plaintiff's Brief, at 15.) That the violations occurred is not the only issue, however. Plaintiff must show that it would suffer great harm if the injunction is denied, yet Plaintiff has failed to do so. Defendant, on the other hand, points out that it has none of the seals in question in its current inventory, and that it has had to order its contractor to cease production of the seals, causing both the contractor and the government to suffer considerable expense, delay, and other complications. It is clear, then, that any harm to Plaintiff caused by denying the injunction would not outweigh the harm to Defendant by granting it.
5. Weighing the public interest
In weighing the relative harms to the parties, the court is also directed to consider the interests of the public in granting or denying the injunction. Storck, 14 F.3d at 314. Plaintiff asserts that the public would be best served by having procurement officials perform their duties in full accord with applicable law. (Plaintiff's Brief, at 15-16.) While the court has no disagreement with this general principle, the court also believes that the public would be ill-served by an order requiring DISC to cancel a contract for much-needed parts in order to reconsider a proposal for a seal assembly that will not fit the pump for which it is intended. Consequently, the public interest weighs in favor of denying rather than granting this injunction.
The court finds that it has subject matter jurisdiction over this case because it is a post-award claim for purely equitable relief, as opposed to a pre-award claim or a claim for money damages that should be brought before the Court of Federal Claims. Having established that jurisdiction is proper, however, Plaintiff fails to convince this court that injunctive relief is appropriate. Plaintiff has not shown that any loss of business or income it may suffer constitutes "irreparable harm," or that such harm could not be remedied at least in part by a remedy at law. Furthermore, Plaintiff has little likelihood of success on the merits of its claim because it has failed to rebut Defendant's evidence that AST's seal simply will not fit properly. Finally, the court finds that the harm to Defendant and the public in granting this motion would be much greater than the harm to Plaintiff in denying it. Consequently, this court recommends that Plaintiffs' motion for a preliminary injunction be denied.
Date: October 26, 1994
REBECCA R. PALLMEYER
United States Magistrate Judge
Counsel have ten days from the date of service to file objections to this Report and Recommendation with the Honorable Paul E. Plunkett. See FED. R. Civ. P. 72(b); 28 U.S.C. § 636 (b)(1). Failure to object constitutes a waiver of the right to appeal. Egert v. Connecticut General Life Ins. Co., 900 F.2d 1032, 1039 (7th Cir. 1990).