United States District Court, N.D. Illinois, Eastern Division
May 12, 2005.
FLAMINGO INDUSTRIES (USA) LTD. and ARTHUR WAH, Plaintiffs,
UNITED STATES POSTAL SERVICE, Defendant.
The opinion of the court was delivered by: SUZANNE CONLON, District Judge
MEMORANDUM OPINION AND ORDER
Flamingo Industries (USA) Ltd. and Arthur Wah (collectively, "Flamingo")
bring this bid protest action against the United States Postal Service under
28 U.S.C. § 1491(b)(1) arising out of the Postal Service's 1997 and 1998
solicitation for bids to manufacture mail sacks.*fn1 Flamingo claims the
bid solicitations and 1997 contract awards violated the Postal
Service's purchasing manual and various federal statutes. The
Postal Service moves for summary judgment on the administrative record.
In a bid protest action, the court's review is limited to the
administrative record before the agency at the time of the
challenged procurement decision. Neals Janitorial Service v.
United States Dep't of the Navy, 1998 U.S. Dist. LEXIS 465, at *
8 (N.D. Ill. Jan. 6, 1998). The Postal Service filed the administrative record and a statement of undisputed
facts with references to the administrative record. Flamingo
failed to respond to the Postal Service's statement of facts as
required by Local Rule 56.1. Flamingo's failure to respond does
not have the usual effect under Local Rule 56.1 because the court
must limit its review to the administrative record. See Davis v.
Shalala, 1995 U.S. Dist. LEXIS 1419, at **1-2 (N.D. Ill. Jan.
31, 1995). The court must independently examine the
administrative record to determine whether the Postal Service's
challenged procurement decisions were arbitrary, capricious, an
abuse of discretion or otherwise not in accordance with law. See
WIT Assoc. v. United States, 62 Fed. Cl. 657, 660
(2004).*fn2 Unless otherwise noted, the following facts are
derived from the administrative record.
I. The 1997 Solicitation
Flamingo is an Asian-American small business with an office in
Elk Grove Village, Illinois. Arthur Wah is Flamingo's president
and owner. In the past, Flamingo has supplied mail sacks to the
Postal Service. AR Ex. 3, p. 2.*fn3 In March and May 1997,
the Postal Service's Mail Transport Equipment ("MTE") office
requested additional mail sacks because "sack inventories [had]
reached a critical state." AR Ex. 1, 2. MTE's request stated
"[i]f we are to have a successful peak mailing season this year,
it is imperative we have these shipments begin 9/97." Id. In
June 1997, the procurement office prepared a plan to purchase the
requested mail sacks. AR Ex. 3. The plan listed Flamingo as a past supplier of mail carrier bags. Id. at p. 2.
The plan stated that "proposals will be evaluated for ability to
ramp up to meet Sept 97 delivery requirements, past performance,
and experience with same or similar production items in similar
quantities. Pricing will be secondary to delivery capability."
Id. at p. 5.
On June 11, 1997, the Postal Service issued a solicitation for
polyprophylene mail sacks. AR Ex. 4. Several pages of the 1997
solicitation appear to be missing from the administrative record.
For example, the table of contents appears incomplete and the
section addressing evaluation and award factors appears to be
missing. The procurement department evaluated seven offers from
six different bidders in response to the 1997 solicitation. AR
Ex. 7. Two of the suppliers, General Bag Corporation and the
Osterneck Company, submitted offers to manufacture the bags in
Mexico. AR Ex. 8, at p. 5-6. The contracting officer added 6% to
the Mexican proposals. AR Ex. 8. The Mexican proposals were still
lower than the domestic proposals even after the 6% price
adjustment was made. AR Ex. 7, 8. The contracts were awarded to
General Bag and Osterneck. AR Ex. 8. The contracting officer's
evaluation and contract award determinations were reviewed and
approved by a team leader and the manager of operational
In September 1997, the Postal Service declared Flamingo to be
in partial breach of its contract to provide mail carrier bags.
AR Ex. 14. The Postal Service modified General Bag's contract to
include some of the bags it had purchased from Flamingo. Id.
The Postal Service saved $20,000 as a result of the modification.
II. The Limited Competition Solicitation
In September 1997, the procurement department issued a
procurement plan for additional mail sacks to "support mailer
demands and replenish inventories." AR Ex. 15. Flamingo was identified as a prior supplier of the bags. Id. at p. 1. The
plan stated that "MTE has indicated that available mail sack
inventories have reached a critical state. In order to have a
successful peak mailing season, it is imperative that delivery of
these mail sacks begin in October 1997." Id. at p. 2. The plan
stated further that "[l]imited competition will be utilized to
meet the October 1997 delivery requirement as requested by MTE
for this requirement. Proposals will be requested from the two
current contractors . . . (General Bag Corporation and The
Osterneck Company)." Id. at p. 4. As to Flamingo, the plan
stated "[d]ue to performance problems . . . Flamingo Industries
was not included in this process." Id. The plan was reviewed
and approved by the contracting officer's team leader and the
manager of operational equipment. Id. at p. 8. The plan
requested a waiver of the requirement to publicize the
solicitation due to an emergency. Id. at p. 7. The manager of
"HQ Purchasing" approved the wavier. Id. at p. 8. Osterneck was
awarded the business and its July 1997 contract was modified to
include the additional bags. AR Ex. 16.
III. The 1998 Solicitation
On December 24, 1998, the Postal Service issued a solicitation
for bids on additional mail sacks. AR Ex. 21. Certain portions of
the 1998 solicitation appear to be missing from the
administrative record. For example, the 1998 solicitation refers
to attached drawings and specifications. Id. at p. 8. The
administrative record does not contain the referenced drawings
and specifications. However, Exhibit 24 contains a drawing and
specifications from the 1998 solicitation. The specifications
require the top edge of the mail bags to be selvedge. AR Ex. 24,
Att. 3. A selvedge edge is woven like the cuff of a dress shirt.
AR Ex. 37, p. 2. Flamingo and some other domestic producers do
not have the flat weave equipment to create a selvedge edge.
Flamingo uses a circular weave to create a heat cut edge. AR Ex.
24, 32. The 1998 specification required the contract to be awarded on
the basis of initial proposals received and without discussions.
Id. at p. 42. It listed several evaluation factors. Although
price was paramount, the contracting officer was required to
consider each bidder's documented quality control system, plant,
facilities and personnel resources, financial resources to
support continued production, and acceptable record of past
performance. Id. at p. 47. A best value determination was to be
made considering all these factors. Id.
The 1998 specification contained a preference for domestic
suppliers provision.*fn4 Under this provision, a 6%
"proposal evaluation preference will be given to domestic-source
end products. . . ." A domestic-source end product is an
unmanufactured end product mined or produced in the United States
or an end product manufactured in the United States; the cost of
components produced or manufactured in the United States must
exceed 50% of the cost of all its components. AR Ex. 21, p. 28.
This provision also states:
The contractor agrees that there will be delivered
under this contract only domestic-source end
products, except end products:
(1) That the Postal Service determines are not mined,
produced, or manufactured in the United States in
sufficient and reasonably available commercial
quantities and of a satisfactory quality;
(2) For which the vice president of Purchasing and
Materials determines that domestic preference is
inconsistent with the interest of the Postal Service;
(3) For which the vice president of Purchasing and
Materials determines the cost to the Postal Service
to be unreasonable.
AR Ex. 21, p. 28. The 1998 solicitation required the contractor
to submit a "Buy American Certificate." Id. at p. 46. The 1998 solicitation provided that the maximum period of
performance for the contract was through March 31, 2002. Id. at
p. 5. There is no evidence a contract has yet been awarded. Under
the protest procedures in the Postal Service's procurement
manual, the Postal Service delays awarding a contract pending a
bid protest. § 3.6.5 of the purchasing manual.
IV. The Purchasing Manual
The Postal Service publishes and maintains a purchasing manual
that contains the Postal Service's purchasing policies. Some
sections of the purchasing manual are included in the
administrative record as part of the 1997 and 1998 solicitations.
AR Ex. 4, 21. However, other relevant sections of the purchasing
manual are referred to, but are not included as part of the
administrative record. The 1997 and 1998 solicitations were both
governed by the January 1997 purchasing manual. See, e.g., AR
Ex. 4, p. 24, Ex. 21, p. 23. The court reviewed the relevant
sections of the 1997 purchasing manual on the Postal Service's
The January 1997 purchasing manual contains policies that apply
to "all purchases of supplies, or services that involve the
furnishing of supplies. Deviations may be authorized by the VP,
Purchasing and Materials." § 1.7.12.b of the purchasing manual.
The purchasing manual contains the following Buy American policy,
which is at the heart of this dispute:
1.7.12 Buy American Policy
1.7.12.a Policy. Postal Service policy is to give
preference to domestic-source products and materials
when purchasing supplies and services. This policy
is based on the Buy American Act
(41 U.S.C. 10a-d). . . .
* * * 2. Definitions
(a) End Products. Articles, materials and supplies to
be purchased for Postal Service use.
(b) Components. Articles, materials and supplies
directly incorporated in end products.
(c) Domestic Source End Products. An unmanufactured
end product mined or produced in the United States or
an end product manufactured in the United States, if
the cost of its components mined, produced, or
manufactured in the United States exceeds 50 percent
of the cost of all its components. . . .
(d) Foreign End Product. An end product other than a
domestic-source end product.
(e) Domestic Proposal. A proposed price for a
domestic-source end product, including transportation
(f) Foreign Proposal. A proposed price for a
foreign-end product, including transportation to
destination and duty. . . .
3. Requirement. Only domestic-source end products
may be purchased, except when the VP, Purchasing and
Materials determines that:
(a) The articles, materials or supplies are of a
class or kind not mined, produced or manufactured in
the United States in sufficient and reasonable
available commercial quantities or satisfactory
quality . . .; or
(b) Purchases of domestic-source end products would
be inconsistent with the interest of the Postal
Service, or that its cost would be unreasonable, as
when the price comparison procedures described in
1.7.12.b.5 result in the purchase of a foreign end
4. Proposal Evaluation
(a) If award is to be based solely on price, the
procedures discussed in 1.7.12.b.5 are used for price
(b) If performance evaluation factors will have a
significant weight in proposal evaluation,
domestic-source end products receive a preference in
the case of closely ranked proposals, but no price
comparison should be made.
5. Price Comparison. Each foreign price proposal
must be adjusted for purposes of evaluation by adding
to the foreign proposal (inclusive of duty) a factor
of six percent of that proposal. If a tie results
between a foreign proposal and a domestic proposal,
the domestic proposal must be selected for award.
When more than one line item is involved, the six
percent evaluation factor is applied on an
item-by-item basis. . . .
6. Solicitation Provision. Solicitations must include
Provision 1-4, Buy American Certificate Supplies.
7. Clause. Contracts must include Clause 1-9,
Preference for Domestic Supplies. (Emphasis added). Other relevant sections in the purchasing
1.7.1.a Purchases valued at more than $10,000 (the
competitive threshold) must be made on the basis of
adequate competition whenever appropriate. Adequate
competition means the solicitation and participation
of a sufficient number of qualified suppliers to
ensure that the required quality and quantity of
goods and services is obtained when needed, and that
the price is fair and reasonable.
1.7.1.b Contracting officers, supported by such
assistance as is necessary, must determine that
adequate competition has been obtained in any
instance in which it is required. In making that
determination, contracting officers must act with
reasoned discretion, taking into account both the
business requirements of the particular purchase and
the Postal Service's general interest in identifying
new suppliers and in providing opportunities for its
1.7.2 Best Value
It is the policy of the Postal Service to award all
of its contracts to the supplier offering the best
value to the Postal Service. The best value depends
on the item being purchased, and is determined by the
comparative analysis of proposals in accordance with
the evaluation criteria of the solicitation and the
business judgment of the contracting officer, with
the assistance of the purchasing team. In
establishing and evaluating best value criteria,
contracting officers and purchase teams make
trade-offs among such matters as past performance,
supplier capability, price, quality, life-cycle
costs, risk, delivery terms and warranty terms.
3.2.1.a General. It is the policy of the Postal
Service to establish and maintain a strong,
competitive supplier base that reflects the diversity
of the American supplier community. The Postal
Service focuses on the entire business community for
quality supplies and services that meet or exceed
operational needs. . . .
3.2.1.b Supplier Diversity. Supplier Diversity is the
proactive business process that seeks to provide
suppliers with equal access to purchasing
opportunities. It promotes supplier participation
reflective of the American supplier community and
encourages economic development. . . .
Postal Service supply contracts in excess of $10,000 are
subject to the Walsh-Healey Public Contracts Act,
41 U.S.C. §§ 35-35, except for "noncompetitive purchases justified by unusual
or compelling urgency (when delay would seriously harm the Postal
Service)." §§ 9.5, 9.5.3 of the purchasing manual. Section 3.55
allows the Postal Service to award noncompetitive contracts when
obtaining adequate competition for the purchase is not feasible
or appropriate. This exception included situations where the
delay of competitive bidding would seriously harm the Postal
V. Flamingo's Protest
Flamingo protested the 1998 solicitation in accordance with the
procedures set forth in § 3.6 of the purchasing manual. AR Ex.
24. It contended the mail sack specifications were unduly
restrictive of competition because American manufacturers lacked
the capacity to produce the bags and therefore were denied the
opportunity to compete. Id. Flamingo claimed the 1998
solicitation violated §§ 1.7.12, 1.8, 3.2.1 and 3.2.2.b of the
purchasing manual, the domestic-source provision in the 1998
solicitation, and the Buy American Act, 41 U.S.C. § 10a-d. Id.
Flamingo supplemented its protest with additional letters. AR Ex.
27, 28. The crux of Flamingo's bid protest was that the 1998
solicitation favored foreign producers because domestic producers
do not have the flat weave equipment to produce a selvedge edge.
Several other manufacturers protested the 1998 solicitation as
well. AR Ex. 25, 30, 32, 34. Conversely, numerous producers
disputed Flamingo's claim that the mail bags could not be
manufactured in the United States. AR Ex. 26, 33, 36, 44.
VI. Contracting Officer's Response
On February 24, 1999, the contracting officer submitted a
statement to the General Counsel's office responding to the bid
protests in accordance with § 3.6.7.e of the purchasing manual.
AR Ex. 37. In response to the inadequate competition claim, the
contracting officer submitted a chart showing nine proposals were
received from eight different bidders. The contracting officer determined the pool of bidders to provide adequate competition
for the solicitation. AR Ex. 37 at p. 5.
In response to the claim that the 1998 solicitation violated
the supplier diversity policy (§ 3.2.1 of the purchasing manual),
the contracting officer pointed out that 50% of the bidders were
minority and/or women-owned businesses. Id. at p. 6. In
responding to the claim that the 1998 solicitation violated the
Buy America policy, the contracting officer demonstrated that
three proposals contemplated manufacturing the bags domestically.
Id. The contracting officer provided additional evidence that
the bags can be manufactured domestically. Id. The contracting
officer concluded "USPS is not prohibited from buying bags from
foreign firms if they are the only ones that can make the bags or
that can compete on price." Id. at p. 7.
To rebut the protesters' claim that the specification was
unduly restrictive, the contracting officer produced evidence
that MTE had a rational basis for requiring a selvedge edge a
selvedge edge is stronger than a heat cut edge. AR Ex. 37, p. 8,
Ex. 42, 43. The protesters claimed they should have been allowed
to submit bags with alternative specifications. The contracting
officer disagreed because MTE had an immediate need for the bags
and did not want to delay a contract award to consider
alternative proposals. AR Ex. 37 at. p. 10.
The protesters and the contracting officer submitted additional
statements to the General Counsel in support of their positions.
AR Ex. 38, 45. The contracting officer further explained the
urgent need for mail bags. The Postal Service had less than 1
million mail bags in storage. AR Ex. 45, p. 3. Customers order
hundreds of thousands of bags each week. Id. The procurement
department had to ration the bags because of the shortage. Id. VII. Senior Counsel's Decision
On May 6, 1999, the senior counsel for contract protests and
policies issued a decision on the protests. AR Ex. 48. He
concluded that "[t]he protester's assertions that the
specifications were revised with the intention to favor foreign
sources are unsupported by evidence, and do not overcome the
presumption that the government acts in good faith." Id. at p.
3. He determined that the contracting officer identified an
acceptable basis for preferring sacks with a selvedge edge: "[i]t
is clearly not unreasonable to prefer a manufacturing method that
results in a stronger, smoother, and less abrasive sack." Id.
at p. 7. He rejected the protesters' arguments that the
solicitation violated the Buy American policy. He concluded there
is no requirement that specifications be tailored to encourage
domestic sourcing and that the only domestic source preference
applicable to the solicitation was the 6% price adjustment. Id.
In addition, he rejected the protesters' argument that the 1998
solicitation resulted in inadequate competition because the
contracting officer received numerous bids. Id.
VIII. Flamingo's Sole Remaining Claim
The Ninth Circuit Court of Appeals held Flamingo had standing
under 28 U.S.C. § 1491(b)(1) to assert its claim that the Postal
Service's solicitation for bids violated the procurement manual.
Flamingo Indus. v. United States Postal Service, 302 F.3d 985,
994-95 (9th Cir. 2002). This is the sole remaining claim.
See id.; United States Postal Service v. Flamingo Indus.,
540 U.S. 736 (2004); November 22, 2004 Order, Dkt. No. 19.
Section 1491(b)(1) provides for district court jurisdiction
over any claim by an interested party "objecting to a
solicitation by a Federal agency for bids or proposals for a
proposed contract or to a proposed award or the award of a
contract or any alleged violation of statute or regulation in connection with a procurement or a proposed procurement."
Flamingo objects that the 1997 contract awards to General Bag and
Osterneck and the 1998 solicitation for bids violate the Buy
American policy, the affirmative action policy, environmental
regulations and other procurement manual provisions. See
Complaint, ¶¶ 57-66. Flamingo seeks damages, declaratory and
injunctive relief, including a permanent injunction barring the
Postal Service from violating the purchasing manual. The Postal
Service moves for summary judgment on the administrative record
with respect to this sole remaining claim.
A district court may review a bid protest by an interested
party objecting to a solicitation by a federal agency for bids or
proposals for a proposed contract or to the award of a contract
or any alleged violation of statute or regulation in connection
with a procurement or a proposed procurement. 28 U.S.C. § 1491
(b). The Administrative Dispute Resolution Act of 1996, Publ. L.
No. 104-320, 110 Stat. 3870, 3874-76 (ADRA), vested the Court of
Federal Claims and district courts with concurrent jurisdiction
over bid protest actions. 28 U.S.C. § 1491(b)(1). Pursuant to the
ADRA's sunset provision, however, district court jurisdiction
terminated on January 1, 2001. Now, the Court of Federal Claims
has exclusive jurisdiction over bid protests. This case was filed
in the United States District Court for the Northern District of
California in 2000, and was transferred to this court in August
2004. Flamingo Indus. v. United States Postal Service,
2004 U.S. Dist. LEXIS 17530 (N.D. Cal. Aug. 23, 2004). When this case
was filed, the district court properly exercised jurisdiction and
continues to do so. Flamingo Indus., 302 F.3d at 994. II. Standard of Review
Summary judgment is appropriate when the moving papers and
affidavits show there is no genuine issue of material fact and
the movant is entitled to judgment as a matter of law.
Fed.R.Civ.P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322
(1986); King v. National Human Resource Committee, Inc.,
218 F.3d 719, 723 (7th Cir. 2000). A party seeking summary
judgment bears the initial responsibility of informing the court
of the basis for its motion, and identifying evidence that
demonstrates the absence of a genuine issue of material fact. The
non-moving party must then come forward with evidence and
designate specific facts that establish there is a genuine
triable issue. Selan v. Kiley, 969 F.2d 560, 564 (7th Cir.
1992). A genuine issue of material fact exists when the evidence
would support a reasonable jury verdict for the non-moving party.
Insolia v. Philip Morris, Inc., 216 F.3d 596, 599 (7th Cir.
2000). In a bid protest action, the court examines the
administrative record to determine whether any genuine issues of
material fact exist and whether the moving party is entitled to a
judgment as a matter of law. NVT Technologies, Inc. v. United
States, 370 F.3d 1153, 1159 (Fed. Cir. 2004).
A bid protest proceeds in two steps. The court first determines
whether the government acted without rational basis or contrary
to law when soliciting and evaluating bids and awarding
contracts. Bannum, Inc. v. United States, 2005 U.S. App. LEXIS
6815, at * 7 (Fed. Cir. April 21, 2005). In making this
determination, the court considers whether the agency's
procurement decision was "arbitrary, capricious, an abuse of
discretion or otherwise not in accordance with law." Id. at *8.
The agency's failure to follow the terms of its own solicitation
or procurement manual is a quintessential example of arbitrary
and capricious conduct. Hunt Building Co., Ltd. v. United
States, 61 Fed. Cl. 243, 263 (2004); Concept Automation, Inc. v. United
States, 41 Fed. Cl. 361, 367, 369 (1998). If the court finds the
government acted without rational basis or contrary to law, it
next determines if the bid protester was prejudiced. Bannum,
2005 U.S. App. LEXIS 6815, at *8. To establish prejudice, a
claimant must show there was a substantial chance it would have
received the contract award but for that error. Galen Medical
Assoc., Inc. v. United States, 369 F.3d 1324, 1329-30 (Fed. Cir.
2004). Even if a contract award violates a regulation or
procedure, a claimant cannot prevail unless it was prejudiced by
that violation. Id. at 1330-31; Admerasia, Inc. v. United
States Postal Service, 2004 U.S. Dist. LEXIS 7225, at * 25
(S.D.N.Y. April 26, 2004).
The court must independently address any legal issues, such as
the correct interpretation of a solicitation or manual provision,
and then determine whether the agency decision lacked a rational
basis or involved a prejudicial violation. Galen,
369 F.3d at 1329-30. In cases where an agency rendered a bid protest
decision, the court reviews the agency's underlying procurement
decision, not the bid protest decision. Advanced Data Concepts,
Inc. v. United States, 43 Fed. Cl. 410, 416 (1999). However,
deference must be given to the bid protest decision. Id. Where
a bid evaluation is challenged, the court must examine the
agency's evaluation to ensure that it was reasonable and
consistent with the evaluation criteria and applicable statutes
and regulations. Galen, 369 F.3d at 1330.
A. The 1997 Contract Awards
Flamingo claims the Postal Service's 1997 contract awards to
General Bag and Osterneck violated the Buy American, domestic
preference and affirmative action policies set forth in the
purchasing manual and 1997 solicitation. 1. Buy American and Domestic Preference Policies
The parties agree the General Bag and Osterneck mail sacks are
foreign-source end products. Both the Buy American and domestic
preference provisions require the Postal Service to purchase
domestic-source end products unless it determines that
domestic-source products are unavailable, or the vice president
of purchasing and materials determines that domestic preference
is inconsistent with Postal Service interests, or that the cost
of domestic-source end products is unreasonable. AR Ex. 4, p.
30-31; § 1.7.12.b.3 of the purchasing manual. The Buy American
policy states that price is unreasonable when "the price
comparison procedures described in 1.7.12.b.5 result in the
purchase of foreign end product." § 1.7.12.b.3 of the purchasing
manual. Section 1.7.12.b.5 requires the Postal Service to add 6%
of the proposal price to foreign price proposals. § 1.7.12.b.5 of
the purchasing manuel. The contracting officer complied with this
provision by adding 6% to the foreign proposals. AR Ex. 7. The
foreign proposals were still cheaper than any of the domestic
proposals. AR Ex. 7, 8. The Postal Service correctly applied the
6% price adjustment.
This finding does not end the court's inquiry. The Buy American
and domestic preference policies require the Postal Service to
purchase domestic-source end products unless certain
determinations are made. § 1.7.12.b.3 of the purchasing manual;
AR Ex. 4, at p. 30-31. There is no evidence the Postal Service
determined domestic-source products were unavailable. Indeed, the
contracting officer received proposals to manufacture the mail
bags domestically. Nor is there any evidence the vice president
of purchasing and materials determined the purchase of
domestic-source products was inconsistent with Postal Service
interests or that the cost of domestic-source products was
unreasonable. Thus, there may have been a technical violation of
the domestic preference and Buy American provisions if the vice
president did not make the required determination. The court must determine whether this possible violation prejudiced
Flamingo. Neither party's brief addresses this precise issue.
Even if the vice president failed to make the Buy American
determination, Flamingo has not shown it was prejudiced by that
technical violation. To establish prejudice, Flamingo must show
that the vice president would not have made the Buy American
determination and that Flamingo would have had a substantial
chance of winning the contract. There is no evidence to support
either of these conclusions. First, the Buy American policy
clearly provides that the cost of domestic products is
unreasonable if foreign products are cheaper than the domestic
products even after the 6% price adjustment is made. § 1.7.12.b.3
of the purchasing manual. General Bag and Osterneck's foreign
proposals were cheaper than any of the domestic proposals even
after the 6% price adjustment. AR Ex. 7. This evidence suggests
the domestic proposals were unreasonable as a matter of course
under the Buy American policy. § 1.7.12.b.3 of the purchasing
manual. Moreover, the contracting officer's evaluation and
contract award decisions were reviewed and approved by both a
team leader and the manager of operational equipment. AR Ex. 8.
Flamingo offers no evidence to support a conclusion that the vice
president of purchasing and materials would not have made a Buy
American determination under these circumstances.
Second, Flamingo has not shown it had a substantial chance of
receiving the contract even if General Bag and Osterneck's
foreign proposals were rejected. The 1997 contracts were not
awarded on price alone. The contracting officer considered
production capacity, delivery capability, and past performance.
AR Ex. 8, p. 3. In evaluating the proposals, the contracting
officer noted that "Flamingo is currently at full capacity and is
behind schedule on both current contracts. . . . In view of
Flamingo's delivery status on its current contracts, Flamingo
poses a high risk to performance in view of the critical need of the mail sacks." AR Ex. 8, p. 4.
Flamingo offers no evidence that the contracting officer acted
unreasonably or irrationally in making these findings. Moreover,
Flamingo did not bid for all the line items and did not have the
capacity to produce all the bags requested in the solicitation.
AR Ex. 8 at p. 4. This evidence suggests Flamingo would not have
received the contract even if the foreign proposals were
rejected. Flamingo presents no conflicting evidence. In sum,
assuming there was a technical violation of the Buy American
policy because the vice president failed to make the required
determination, there is no evidence Flamingo was prejudiced as a
Flamingo argues that the Postal Service violated the Buy
American policy when it partially terminated Flamingo's contract
in 1997 and ordered the bags from General Bag instead. Flamingo
claims the Postal Service failed to apply the 6% price
differential required under the Buy American policy. Flamingo's
argument misses the mark because the Postal Service applied the
6% price differential when it awarded General Bag the 1997
contract. The Postal Service merely modified the existing
contract to order additional bags. There is no evidence the
modification violated the purchasing manual.
2. Supplier Diversity Policy
Flamingo claims the 1997 contract awards also violated the
Postal Service's affirmative action policy. Flamingo fails to
identify particular purchasing manual or solicitation clauses it
claims were violated by the 1997 contracts. Presumably, Flamingo
refers to § 3.2 of the purchasing manual, Supplier Diversity. The
purpose of those provisions is to ensure that "no suppliers are
excluded from competition on the basis of race, color, religion,
sex, age or national origin." § 3.2.1.b of the purchasing manual.
The policy does not require contracts to be awarded to minority
businesses. The administrative record reflects that three of the six proposals
received in response to the 1997 solicitation were from minority
or women-owned businesses. AR Ex. 8, p. 10. Thus, minority firms
were well represented in the bidding process. Flamingo fails to
present any evidence that the 1997 solicitation or contract
awards violated the supplier diversity policies.
Summary judgment must be granted for the Postal Service on the
administrative record because, even assuming a technical
violation of the Buy American and domestic preference policies,
there is no evidence Flamingo was prejudiced. Moreover, there is
no other evidence the 1997 contract awards were irrational or
otherwise contrary to law.
B. The 1997 Limited Competition Award
Flamingo argues the 1997 limited competition award violated the
purchasing manual and the Walsh-Healey Public Contracts Act,
41 U.S.C. §§ 35-45. According to Flamingo, the Postal Service
declared a false emergency for mail sacks in order to avoid
publicly announcing the solicitation. Flamingo offers absolutely
no evidence to support this argument. Flamingo's mere suspicion
and innuendo are insufficient to create factual issues regarding
the Postal Service's conduct in the procurement process.
Admerasia, Inc. v. United States Postal Service, 2004 U.S.
Dist. LEXIS 7225, at *22 (S.D.N.Y. April 26, 2004).
The undisputed evidence shows the 1997 limited competition
award complied with the purchasing manual. The purchasing manual
explicitly exempts emergency purchases from public announcement.
§§ 3.5.3.a.1, 9.5.3 of the purchasing manual. The contracting
officer determined that the need for mail bags was "critical" and
requested a waiver of the public announcement requirement
pursuant to § 3.5.3.a.1 of the purchasing manual. AR Ex. 15. The
waiver was approved. Id. There is no evidence suggesting the contracting
officer's determination that there was a critical need for mail
bags was arbitrary, capricious, an abuse of discretion, or
otherwise contrary to law. Accordingly, summary judgment must be
granted for the Postal Service with respect to the 1997 limited
C. The 1998 Solicitation
Flamingo claims the 1998 solicitation is unduly restrictive and
violates numerous purchasing manual provisions and federal
1. Unduly Restrictive
Flamingo claims the 1998 specification requiring a selvedge top
edge is unduly restrictive because it excludes domestic
suppliers. Flamingo argues it should have been allowed to submit
an alternative proposal that deviated from the specification. The
Postal Service responds that it had a rational basis for
requiring a selvedge edge and did not have time to consider
alternative specifications. The administrative record amply
demonstrates a rational basis for the changed specification: a
selvedge edge was determined to be stronger than a heat-sealed
edge. AR Ex. 37, p. 8, Ex. 43. Mailers typically hang open bags
on mail racks by metal hooks to load and unload mail. AR Ex. 37,
at p. 8. Because the mail bags are reused, durability is
important. Id. The court's role is not to second-guess
procurement decisions. Rather, the court must review the
administrative record to determine only whether procurement
decisions are arbitrary, capricious, an abuse of discretion or
otherwise contrary to law. T&S Products, Inc. v. United States,
48 Fed. Cl. 100, 104 (2000). There is ample evidence supporting
the Postal Service's 1998 specification. The decision to change
the specification was not arbitrary or capricious. 2. Buy American Policy
Flamingo argues the Postal Service "deliberately changed its
specifications, so that U.S. factories could not produce plastic
mail bags according to their specifications" in violation of the
Buy American policy. Response, at 3. The evidence directly
refutes this argument. The undisputed evidence shows domestic
factories can produce mail bags in accordance with the 1998
specification. AR Ex. 31, Ex. 33, Ex. 36. Indeed, three of the
eight proposed suppliers domestically manufacture the bags. AR
Ex. 37, Att. 1. Accordingly, there is no evidence the 1998
specification is unduly restrictive or that it violates the Buy
American policy by excluding domestic producers.
Flamingo argues it should have been allowed to submit a bid
with different specifications. The solicitation did not allow
proposals with alternative specifications. The Postal Service had
an immediate need for the bags and could not delay a contract
award to consider alternative specifications. AR Ex. 37, p. 10.
Given the immediate need for bags, the Postal Service did not act
arbitrarily or capriciously in refusing to consider proposals
with alternative specifications.
3. Supplier Diversity Policy
Flamingo also suggests the 1998 solicitation violated the
Postal Service's affirmative action policy. Presumably, Flamingo
refers to the supplier diversity policies. The purpose of the
supplier diversity policies is to ensure that "no suppliers are
excluded from competition on the basis of race, color, religion,
sex, age or national origin." § 3.2.1.b of the purchasing manual.
The undisputed evidence shows that four of the eight bidders were
minority and/or women-owned businesses. AR Ex. 37, p. 6, Att. 1.
There is no evidence the 1998 solicitation violated the Postal
Service's supplier diversity policies. 4. Miscellaneous Violations
Without citing any evidence, Flamingo argues the bags produced
in Mexico violate environmental regulations. Additionally,
Flamingo claims the 1998 solicitation violates numerous other
purchasing manual policies and federal statutes without citing
any evidence or even explaining this generalized claim. Flamingo
merely lists the provisions and statutes. Flamingo has waived
these arguments by failing to develop them in response to summary
judgment. Baxter v. Trinity Servs., 2004 U.S. Dist. LEXIS
17980, at *22-23 (N.D. Ill. Sept. 3, 2004). Moreover, the court
has carefully reviewed the administrative record. There is no
evidence of inadequate competition. § 1.7.1 of the purchasing
manual. Indeed, the Postal Service received eight offers. AR Ex.
37, Att. 1. Nor is there any evidence that the contracting
officer violated the best value policy. § 1.7.2 of the purchasing
There is no evidence the Postal Service acted irrationally or
contrary to law when it changed the specification for mail bags
and issued the 1998 bid solicitation. Summary judgment must be
granted for the Postal Service on the administrative record with
respect to this claim.
D. Breach of Good Faith and Fair Dealing
Flamingo argues there are issues of fact regarding the Postal
Service's breach of its duty to cooperate in good faith in
connection with Flamingo's delivery of mail bags. Count VII is
the sole remaining claim. The court's jurisdiction over Count
VII, pursuant to 28 U.S.C. § 1491(b)(1), allows an interested
party to challenge a federal agency's procurement decision, not a
breach of contract or duty of good faith and fair dealing. See
Flamingo Indus., 302 F.3d at 994. Flamingo cannot avoid summary judgment by pointing to alleged issues of
fact regarding the Postal Service's purported breach of good
faith and fair dealing.
The court has carefully examined the administrative record.
There are no factual issues precluding summary judgment for the