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Appeals Panel Upholds Constitutionality Of Contracting Law

April 1, 1986

NEWARK, N.J. (AP) _ A provision in federal law giving an arm of Congress some oversight over federal agencies’ contract acceptance procedures was upheld Monday by a federal appeals court, which said the provision did not violate the separation of powers.

The Reagan administration had called unconstitutional the provision, which allows unsuccessful bidders for federal contracts to block the contracts while they appeal did not violate the constitutional principle of separation of powers.

The provision gives the comptroller general of the General Accounting Office - an arm of Contress - the role of ruling on the bidders’ appeals.

″The delicate balance of power among the branches of government has not been endangered or upset,″ the 3rd U.S. Circuit of Appeals said in upholding a decision rendered in May by U.S. District Judge Harold Ackerman.

The case involved a New Jersey company, Ameron Inc., that bid on a project and sued when it lost the bid because of a typographical error in the bid proposal.

For Ameron, Monday’s decision is already moot, because the administration has been obeying the provision of the law since it lost the first round in federal court last year.

Ameron got the right to appeal to the GAO, as it had sought. But the GAO turned it down and another company got the contract.

Joseph Krovisky, a spokesman for the U.S. Justice Department, said he did not know if the government would appeal Monday’s ruling to the U.S. Supreme Court.

The disputed provision was adopted in 1984 as part of the Competition in Contracting Act.President Reagan signed it into law but declared the appeal provision unconstitutional. Agencies were told to ignore it.

The administration contended the provision violates the intent of the constitution that the executive branch takes care of the execution of laws.

In its ruling, the appeals court said the three branches of government are not ″hermetically sealed,″ adding that the ″GAO and comptroller general discharge their assigned functions with a measure of independence from both the legislative and executive branches.″

At issue was a $1 million bid by Ameron to the U.S. Army Corps of Engineers to clean and line underground pipes feeding the reservoir at the U.S. Military Academy at West Point, N.Y.

The corps later awarded the project to another New Jersey company, Spinello Contracting Co., which bid $1.2 million.

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