bids according to the category of product or service needed.
58. Prior to 1984, there were very few minority and women-owned businesses on the bidders' lists.
59. The majority of contracts issued by the School District each year are not advertised and require no bonding. Bidders for these contracts are obtained from the bidders' lists.
60. As a result of its reliance on the lists, the Board found that it was doing business with the same contractors over and over again.
61. Prior to 1984, School District outreach effort to the minority business community were [sic] sporadic and short lived. Minority business owners voiced concern that the School District was only paying lip service to its legal obligation of equal opportunity since they still met indifference, rudeness, and hostility when they approached School District employees about contracting opportunities.
The Board in response to continue [sic] complaints by minorities of being shut out from contracting opportunities tried set asides for a brief period in the 1970's. A small number of contracts valued at less than $ 500.00 for such services as minor electric, plumbing, and other repair of school facilities, were reserved for bid by minority contractors only. Minority participation rates rose for a time after initiation of this program, and then tapered off. Black contractors complained that they were not notified or called for price quotations even on projects supposedly set aside for them.
64. Failure of the trial set aside program was attributable in part to the attitude of School District employees who were more interested in maintaining established ways of operating than in following the directives of top School District officials to open up the system to newcomers.
65. The Board was concerned in adopting an affirmative option policy that minority and women owned business [sic] have a fair and equitable opportunity to participate in School District contracts.
66. The Board was aware of the hearings held before the Philadelphia City Council in 1981 prior to the City's adoption of an affirmative action program.
67. Investigation showed that only about one half of one percent of School District contracts were awarded to minority contractors between 1982 and 1983.
68. The Board was concerned that the low percentage of School District contracts awarded to minority and female owned businesses was the result of ongoing School District practices and procedures which limited access to minorities and women, and which had proved recalcitrant to change.
69. Among the practices which had the effect of limiting access to contracting opportunities was the practice of restrictively drafting specifications so that only certain contractors were qualified to bid and demanding bonding and insurance grossly in excess of the needs of the School District for protection.
70. The ability to get bonding for School District contracts is a function of the financial strength of the contractor. A weak financial posture of a white male contractor would impact on the ability of that contractor to obtain bonding the same as a weak financial posture would impact on a minority of [sic] women-owned contractor to get bonding.
71. The Board has not in Addendum No. 1 required that any specific number of School District contracts or any specific percentage of available contracting dollars in any year go to minority or female businesses.
a. Summary judgment standard.
In considering these cross-motions for summary judgment, we must determine whether the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, show there is no genuine issue as to any material fact, and whether the moving party is entitled to a judgment as a matter of law. Fed.R.Civ.P. 56(c). Arnold Pontiac-GMC, Inc. v. General Motors Corporation, 786 F.2d 564, 568 (3d Cir. 1986); Fragale & Sons Beverage Co. v. Dill, 760 F.2d 469, 472 (3d Cir. 1985); Wolk v. Saks Fifth Avenue, Inc., 728 F.2d 221, 224 (3d Cir. 1984); First Jersey National Bank v. Dome Petroleum Limited, 723 F.2d 335, 338 (3d Cir. 1983). The movant has the burden of demonstrating that there are no genuine issues of material fact and all reasonable inferences from the record must be drawn in favor of the non-moving party. Gans v. Mundy, 762 F.2d 338, 340 (3d Cir. 1985); United States v. Athlone Industries, Inc., 746 F.2d 977, 981-82 (3d Cir. 1984); Small v. Seldows Stationery, 617 F.2d 992, 994 (3d Cir. 1980). As the parties have stipulated to the facts upon which these motions will be decided, we find the case is ripe for summary judgment.
b. Plaintiffs' standing to sue.
The Board avers that the plaintiffs lack standing to seek declaratory relief, arguing that they have suffered no threatened injury which may thereby be cured. Arguing that it is settled law in Pennsylvania that a disappointed bidder is not ordinarily entitled to an order directing award of a public contract to itself, the Board avers that, because Main Line has not sought to bid on any other School District contracts, even if we were to find an illegality the plaintiffs could not personally benefit. Therefore, the argument goes, the plaintiffs have no injury distinct to themselves which declaratory relief may ameliorate. In their amended complaint, the plaintiffs aver that their claims arise out of the Board's bid solicitation process for a specific project, for which the plaintiffs actually submitted a bid. They argue they have suffered actual injury when the Board determined them to be a non-responsive bidder because of the requirement of meeting the set asides, and that the injury may be traced to the challenged action. They conclude by arguing that only a declaration, holding that the set aside process violates the Equal Protection Clause, can make them whole.
We begin our discussion of the standing issue in this case by acknowledging that this is not the first time that set asides like those at issue sub judice have been challenged. In Rocks v. City of Philadelphia, 868 F.2d 644 (3d Cir. 1989), five plaintiffs, none of whom were involved in the construction industry, failed in their attempt to demonstrate standing to sue in their capacities as municipal taxpayers. While determining that the plaintiffs established the pure requirements of Article III standing, the United States Court of Appeals for the Third Circuit agreed with the district court that the prudential limitations on the exercise of federal jurisdiction militated against permitting those plaintiffs to assert the rights of non-minority construction contractors. As the plaintiffs sub judice are involved in the construction industry, we find their lawsuit asserts their own legal interests and does not rely upon the legal rights of third parties. The plaintiffs sub judice, therefore, provide the element missing in Rocks.
In order to have standing to sue, plaintiffs must assert a personal stake in the outcome of the controversy, one which demonstrates that they have suffered an injury in fact. Warth v. Seldin, 422 U.S. 490, 498-99, 45 L. Ed. 2d 343, 95 S. Ct. 2197 (1975). Second, the plaintiff must show that their injury is causally linked to the putatively unconstitutional conduct of the defendant. Gladstone Realtors v. Village of Bellwood, 441 U.S. 91, 99, 60 L. Ed. 2d 66, 99 S. Ct. 1601 (1979). These two factors have been characterized as the "irreducible minimum" required by Article III. Valley Forge Christian College v. Americans United For Separation of Church and State, Inc., 454 U.S. 464, 472, 70 L. Ed. 2d 700, 102 S. Ct. 752 (1982).
The injury in fact component serves a separation of powers concern central to the case or controversy language of Article III by limiting judicial power to those disputes "thought capable of resolution through the judicial process". Flast v. Cohen, 392 U.S. 83, 97, 101, 20 L. Ed. 2d 947, 88 S. Ct. 1942 (1968). It serves "as at least a rough attempt to put the [dispute] in the hands of those who have a direct stake in the outcome," Sierra Club v. Morton, 405 U.S. 727, 740, 31 L. Ed. 2d 636, 92 S. Ct. 1361 (1972), and provide the court with "that concrete adverseness which sharpens the presentation of issues upon which the court so largely depends for the illumination of difficult constitutional questions". Baker v. Carr, 369 U.S. 186, 204, 7 L. Ed. 2d 663, 82 S. Ct. 691 (1962).
Additionally, plaintiffs must demonstrate a sufficient causal connection between the challenged activity and the alleged personal harm. The usual formulation of the causation requirement is that the plaintiff must show that the injury "fairly can be traced to the challenged action of the defendant." Simon v. Eastern Kentucky Welfare Rights Organization, 426 U.S. 26, 41, 48 L. Ed. 2d 450, 96 S. Ct. 1917 (1976). We find the plaintiffs meet both requirements of pure Article III standing.
Plaintiffs satisfy the injury in fact requirement. Had there been no set aside policy in effect when Bid Specification No. B-91 of 1988/1989 was advertised and let, Main Line would have been the successful bidder on the project. Its bid was the lowest of the three submitted. Stipulation No. 28. There is no evidence that Main Line's bid was unresponsive in any other aspect. Main Line would have earned a profit had it received the contract. Stipulation No. 47. As the Board rejected all bids and readvertised the work as a new Bid Specification, for which the plaintiffs were not the low bidder, Main Line has suffered a putative monetary injury in its lost profit on the original Bid Specification.
In order to actualize its putative injury, Main Line must demonstrate that the Board's act of rejecting the original bids was done for an improper purpose. Declaratory relief, we therefore find, is a necessary element of the plaintiffs' cause of action. Whether declaratory relief should be granted in an appropriate case is committed to the sound discretion of the trial court. Bituminous Coal Operators' Ass'n., Inc. v. International Union, UMW, 585 F.2d 586, 595-596 (3d Cir. 1978). In determining the appropriateness of declaratory relief, the court must consider whether it will resolve an uncertainty giving rise to a controversy, the convenience of the parties, the public interest and the availability of other remedies. Id. at 596-597. The uncertainty giving rise to this controversy is the continued constitutionality of the Board's set aside policy in light of the Croson case. Adjudicating the request for declaratory relief will resolve this uncertainty, as well as serve the convenience of the parties through its issue preclusion effect. We find the public interest will also be served because of this issue's important relationship to the cost of financing public construction projects. Finally, as we have stated, the declaratory relief sought is a necessary element of the cause of action.
Respecting the causation requirement of Article III standing, we find the plaintiffs satisfy this requirement as well. Again, Main Line's bid was the lowest submitted; there was no other cause for its rejection by the Board other than Main Line's failure to meet the allegedly unconstitutional set aside requirements. Causation has, therefore, been demonstrated.
We come then to the prudential limitations associated with the concept of standing, which kept the plaintiffs out of court in Rocks. Succinctly stated by the Supreme Court in Warth and Valley Forge, and quoted by the Court of Appeals in Rocks,
Beyond the constitutional requirements, the federal judiciary has also adhered to a set of prudential principles that bear on the question of standing. Thus, the Court has held that "the plaintiff generally must assert his own legal rights and interests, and cannot rest his claim to relief on the legal rights or interests of third parties."