# Petition for Writ of Certiorari — Gateway Center Corp. v. Merriam > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385607_0741%3A1 ## Record - **Collection:** Supreme Court brief - **Document type:** Petition for Writ of Certiorari - **Published:** January 1, 1973 - **Citation:** 414 U.S. 911 ## Text PaSE stag a a i 4 £% i 4 Wid hs TABLE OF CONTENTS Page eee BOW wn. i ce 0 a eee 2 Jurisdictional Statement ...........0.0...0...0.2005. 2 Statement of the Issues .. 2... ee eee 3 Constitutional and Statutory Provisions ............ 3 Siatement of the Case... ceca ied vwulds cays a eees 5 Reasons for Granting the Writ)... ...00.0200.0.00.... 7 COTE . 5 ose ce cee cea wa ened lameer tee ere 22 TABLE OF CITATIONS Cases: Allen M. Campbell Co., General Contractor, Inc. v. Lloyd Wood Construction Co., 446 F.2d 261 (BUTE?) vc eecn shes ccghanissne eee ce ee 9 American Smelting & Refining Co. v. United States, Soe US. Fe (See) 6 bs canes hae yae eee a 1] Association of Data Processing Service Organizations, Inc. v. Camp, 397 U.S. 150 (1970) ............. 9,10 Ballerina Pen Co. v. Kunzig, 433 F.2d 1204(1970).... 9 Barlow v. Collins, 397 U.S. 159(1970) .............. 10 Blackhawk Heating & Plumbing Co. v. Driver, 433 F.2d BAGS (QO0O) 6006 ise s saxeteee be keae 9, 14,17 City Railway Co. v. Citizens’ Street Railroad Co., 16€ Ue Be) (ER 6i6ssiei ae eee 21 Constructores Civiles de Centroamerica S.A.._ v. Hannah, 459 F.2d 1183 (1972) ................ 9, 14 Edelman v. Federal Housing Administration, 382 F.2d We CT is how OS eee ee eee 9,12 Priend v. Lee. 231 F 20G6 (1088)... .... cee cacan, 14 j HERONS 1° IT PRISE 3 a a ; 4 4 a 3 Pe § § ‘ 4 TABLE OF CITATIONS~ Continued ) Cases: Page Gary Aircraft Corporation v. United States, 342 F. Supp. ee CR ty er rn oe eee uae 12 Keco Industries v. United States, 428 F.2d 1233, 199 CE Se Fe CUD coc ev kt erences ce dens ) M. Steinthal & Co. v. Seamans, 455 F.2d 1289 (1971) . .9. 17 Perkins v. Lukens Steel Co., 310 U.S. 113 (1940) ..... 9 16 Scanwell Laboratories, Inc. v. Shaffer, 424 F.2d 859 CE go a ee eo es eae ee 9, 13, 14,16 Sicrra Club v. Morton, 405 U.S. 727, 92 S. Ct. 1361, 31 Le SMUT RD oc ba eva vo occweeecrvesun. 10 Twenty Percent Cases, 20 Wall 179 (1874)... 20.2... 21 United States v. St. Louis, San Francisco & Texas Rail- way Co., 270 U.S. 1 (1925) Whceelabrator Corporation v. Chafee, 455 F.2d 1306 fee eee eT eee res ee ees 9, 14, 18 Constitutional Provisions: United States Constitution, Amendment V.......... 21 Statutes: OPE hoa cs sock etae we eenee eee 4.9.10 Se IERS cg os oa cer cae ene ee es 2 We NES os oy oe oe ee ee reece een 4 gl | ee rer ree. ee Ps ena a eae es eae Pe 4,7 I IE 2 6 kira Poe eae eae ste oe eae 4,19 ff PEST OEE ee iy re Tyre Sere rer ey 4,19 Federal Procurement Regulations: Oe RRNA Tae by. Se SERA REE nied Pantie Bsr 19 D. The Plaintiff’s contentions that Defendant violated both the 1971 Appropriations Act and the Public Buildings Act of 1972 are rendered moot by the fact that no money was expended for this project in 1971, and that the Public Buildings Act does not apply retroactively. The Plaintiff complains that this contract is pro- hibited by the Independent Offices Appropriations Act for 19715, which requires congressional approval for the payment of rent in transactions where the Lessor is to construct a building at an estimated cost exceeding $200,000 and then leases space in that building to the Government. Although congressional approval was neither sought nor obtained, this contention is rendered moot by the fact that no money was expended by the government for the Gateway project until the commence- ment of rental payments following the execution of the Lease in November, 1972. Since the Independent Offices Appropriations Act for 19726 does not contain the pro- hibition found in the earlier acts, the government's pay- ment of rent to Gateway Center Corporation cannot be said to violate any appropriations Act. However, the Plaintiff complains further that this contract violates the Public Buildings Act Amendments of 1972, Pub. L. No. 92-313, 80 Stat. 217, 40 U.S.C. §606(a), and the Court of Appeals sustained this conten- tion. 476 F.2d at 1243-1244. These amendments, which contain a prohibition similar to that in the Independent Offices Appropriations Act, went into effect on June 16, 1972, and they are said to prohibit the lease from Gateway Center Corporation to GSA, which was executed on Novem- ber 1, 1972. 5. Independent Offices Appropriations Act, 1970: Pub. L. No. 91-556, 84 Stat. 1448. 6. Independent Offices Appropriations Act, 1971, Pub. L. No. 92-49, 85 Stat. 115. R i : . f 4 t ¥ % Le steers + pga, 20 This argument, however, ignores the fact that the Government's contract with Gateway Center Corporation entails more than the execution of the lease: the Govern. ment solicited offers to negotiate under 41 U.S.C. §252\¢)- (10), 63 Stat. 393, precisely because the facilities it desired could not readily be obtained, and because it therefore wished to negotiate with various offerors in order that more suitable facilities might become available. The nego- tiations resulted in significant amendments to Gatewavy’'s offer after its submission on October 13, 1970, and before the GSA acceptance on February 18, 1971, and_ these changes were made at GSA’s behest. When GSA accepted Gateways offer, it is clear that the rights and obligations of the parties then became fixed, and these rights and obligations included the execution of a lease and the pay- ment of rent under it: in the letter accepting Gateway’s offer, Arthur Sampson, Commissioner of the GSA Public Building Service stated that: “In accordance with the provisions of the Fed- eral Property and Administrative Services Act of 1949, as amended, and Executive Order 11512, | hereby accept your offer of October 12, 1970, as amended by Amendment to offer of Gateway Centre [sic] Corporation dated January 12, 1971, and Second Amendment to offer of Gateway Centre [sic] Corporation, dated January 18, 1971, to lease to the United States ... Rental will be paid at the rate of $2,316,000 per annum for a term of twenty years commencing 60 days after occupancy by the Govern- ment.” [Emphasis added. ] Mr. Sampson’s language indicates that the execution of the Lease was nothing more than a ministerial Act. This letter furthermore demonstrates that the contract between GSA and the Gateway Center Corporation was entered into on February 18, 1971, more than. sixteen months before the Public Buildings Act Amendments et ae ea DG iy TARR AUTRES tt hae ON me A eel 21 became effective. The holding of the Court of Appeals, that this 1972 statute applies to the Government's 1971 contract with Gateway Center Corporation, clearly impairs Gate- way’s rights under that contract and therefore constitutes an uncompensated taking of Gateway’s property rights in violation of the Fifth Amendment to the United States Constitution. Twenty Percent Cases, 20 Wall 179, 22 L. Ed. 339 (1874); United States v. St. Louis, San Francisco & Texas Railway Co., 270 U.S. 1, 46S. Ct. 182, 70 L. Ed. 435 (1925). Moreover, the decision of the Court of Appeals to apply these amendments retroactively also violates the established principle of statutory construction that a statute should not be applied retroactively unless the language is so clear as not to admit of any other construc- tion. City Railway Co. v. Citizens’ Street Railroad Co., 166 U.S. 557, 17 S. Ct. 653, 41 L. Ed. 1114 (1897). It should be noted that the decision of the Court of Appeals contradicts a General Accounting Office (GAO) ruling that these Amendments should only be applied prospectively. Deci- sion of the Comptroller General B-171958, January 19, 1973. Since the GAO is an agency of Congress (Wheelabra- tor Corporation, supra at 1313-1314; M. Steinthal & Co., supra at 1304-1305), its rulings on Congressional intent are entitled to great weight. The Petitioner therefore prays this Court to grant the writ of certiorari and to review the decision of the Court of Appeals. | NTA LHD 22 CONCLUSION The issues posed by this case are of a nature requiring decision by the Supreme Court. The principles of standing announced in this Court's recent decisions require further amplification, and this can be supplied only upon Supreme Court review: the District of Columbia Circuit and the Third Circuit are already applving different rules to unsuccessful offerors, who fail to obtain negotiated con- tracts with the government. Moreover, this Court is asked to review a Court of Appeals decision, which directly contravenes an earlier Supreme Court decision, and the importance of the issue is not lessened by the major bur- dens imposed on the courts, and the disruption of govern- ment procurement engendered by the ruling of the Court of Appeals. This disruption is furthered by the Court's decision to apply the Public Buildings Act Amendments retroactively in defiance of the intent of Congress and in violation of the Fifth Amendment to the Constitution. These issues assume major importance due to burdens imposed upon both courts and the executive branch of the government by this decision, and the Petitioner therefore requests this Court to grant this writ of certiorari to the United States Court of Appeals for the Third Circuit and to consider the issues raised herein. Respectfully submitted, 1 JS / { bictant ff hkhfa fe 4 U( DAVID F. MAXWELL Attorney for Petitioner, Gateway Center Corporation — Of Counsel OBERMAYER, REBMANN, MAXWELL & HIPPEL 14th Floor Packard Building Philadelphia, Pennsyivania 19102 INDEX TO APPENDIX APPENDIX I United States Constitution, Amendment Vio... .. Federal Property and Administrative Services Act Or ce Oe Re vce d es oenswa seas nes Federal Property and Administrative Services Act res ae Or ee es sn ee ees eae ee Section 10, Administrative Procedure Act... 2.0... . Seecutive Order No. 11512 .............00cc eee Federal Procurement Regulation 1-3.805-] 2.2... ... Independent Offices Appropriations Act for 1971... . Independent Offices Appropriations Act for 1972... . Public Buildings Act Amendments of 1972 .... . APPENDIX II Letter of the Comptroller, General, September 16, SEs, BORNE GPE TRUE cc kc cw aeaebechavdps Letter of the Comptroller General, March 17, 1972. ERC OMD fo ee a oa Or ee Opinion of the United States District Court for the Eastern District of Pennsylvania, June 26, 1972 Opinion of the United States Court of Appeals for the Third Circuit, February 16, 1973 Order Amending Opinion, United States Court of Appeals for the Third Circuit, April 13, 1973. . Opinion on Petition for Rehearing, United States Court of Appeals for the Third Circuit, April 27, 1973 iP esi ON x, PAP SM BOLE TE ete . A en aren Re INDEX TO APPENDIX— Continued) APPENDIX Il— Continued) Order of United States District Court for the Eastern District of Pennsylvania Permitting Inter- vention of Gateway Center Corporation as DeGeentiaet. Jemme DO, BOTS . 2... cece. APPENDIX III Solicitation for Offers No. NEG(70)-63, September aie ae es em Ae PE Rk aD aa 8 CGMP IE Tae BNulase > la APPENDIX I CONSTITUTIONAL PROVISIONS, STATUTES AND EX- ECUTIVE ORDERS UNITED STATES CONSTITUTION, AMENDMENT V. No person shall be held to answer for a capital, or otherwise infamous crime, unless on a presentment or indictment of a Grand Jury, except in cases arising in the land or naval forces, or in the Militia, when in actual service in time of War or public danger; nor shal] any person be subject for the same offence to be twice put in jeopardy of life or limb; nor shall be compelled in any criminal case to be a witness against himself, nor be de- prived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, with- out just compensation. FEDERAL PROPERTY AND ADMINISTRATIVE SER- VICES ACT OF 1949, as amended, June 30, 1949, c. 288, Title III, §303, 63 Stat. 395; July 12, 1952, c. 703, §1(m), 66 Stat. 594: as amended Mar. 16. 1968, Pub. L. No. 90-268, §2, 82 Stat. 49, 41 U.S.C. §253. §253. Advertising requirements Whenever advertising is required— (a) The advertisement for bids shall be made a suf- ficient time previous to the purchase or contract, and specifications and invitations for bids shall permit such full and free competition as is consistent with the pro- curement of types of property and services necessary to meet the requirements of the agency concerned. No adver- tisement or invitation to bid for the carriage of Govern- ment property in other than Government-owned cargo L STRELA RRR ety — | containers shall specify carriage of such property in cargo containers of any stated length, height, or width. (b) All bids shall be publicly opened at the time and place stated in the advertisement. Award shall be made with reasonable promptness by written notice to that re- sponsible bidder whose bid, conforming to the invitation for bids, will be most advantageous to the Government. price and other factors considered: Provided. That all bids may be rejected when the agency head determines that it is in the public interest so to do. FEDERAL PROPERTY AND ADMINISTRATIVE SER- VICES ACT OF 1949, as amended, June 30, 1949. c. 288, Title II, §302, 63 Stat. 393; as amended Nov. 8, 1965, Pub. L. No. 89-343, §§1, 2, 79 Stat. 1303; Nov. 8, 1965, Pub. L. No. 89-348, §1(2), 79 Stat. 1310; Mar. 16, 1968, Pub. L. No. 90-268. $4. 82 Stat. 50, 41 U.S.C. §252. §252. Purchases and contracts for property—applica- bility of chapter; delegation of authority Negotiated purchases and contracts for property; con- ditions (c) All purchases and contracts for property and services shall be made by advertising, as provided in section 253 of this title, except that such purchases and contracts may be negotiated by the agency head without advertising if— (1) determined to be necessary in the public interest during the period of a national emergency declared by the President or by the Congress; (2) the public exigency will not admit of the delay incident to advertising: (3) the aggregate amount involved does not exceed $2,500; (4) for personal or professional services; BUILD- ING TO BE ERECTED BY BIDDER. “a. Requirement. Each year since 1963. the follow. ing provision has been included in the Independent Offices Appropriations Act: ‘No part of any appropriation contained in this Act shall be used for the payment of rental on lease agree- ments for the accommodation of Federal agencies in buildings and improvements which are to be created by the lessor for such agencies at an estimated cost of construction in excess of $200,000 or for the payment of the salary of any person who executes such a least agreement: Provided, That the foregoing proviso shall not be applicable to projects for which a prospectus for the lease construction of space has been submitted to the Congress and approval made in the same manner as for the public buildings construction projects pur- suant to the Public Buildings Act of 1959. “b. Buildings and Improvements to be Erected or Al tered. In the event a bidder offers (1) a new building to be erected, or (2) an existing building to be extended or added to (see C(2\¢), below) such bid shall remain open for ac- ceptance by the Government for 120 days beyond the date for bid acceptance elsewhere specificd in this solicitation. in order to afford the Government adequate time to prepa and submit to the appropriate Committees of Congress for Qa ipproval, the prospectus required by the Act quoted in a. above. “c. Definition of Existing Buildings, Extension. and Additions. “(1) For the purpose of this solicitation, buildings, extensions or additions ‘which are to be erected by the lessor’ do not include: “(a) Buildings. extensions, or additions, con- struction of which is substantially completed prior to date of the solicitation. “(b) New buildings, or extensions of and additions to existing buildings the construction status of which, on the date of issuance of the solicitation, met all of the following conditions: “j. Title to the site was vested in the offeror or he possessed such other interest in and dominion and control over the site to enable starting construc- tion. “ii. Design was complete. “ii. Construction financing fully committed. “iv. A building permit for construction of the entire building, extension or addition had been issued. “vy. Actual construction is currently in prog- ress or a firm construction contract with a fixed com- pletion date has been entered into.” (Emphasis added. ) Gateway submitted the following documentation to the contracting officer to establish that its offered building Was within the exception of paragraph c(1 \b): 1. A lease dated September 23, 1970, between University City Science Center, landlord, and Gate- Way, as tenant, for a term of 50 years, with an option to purchase, Opinions of counsel as to the validity of the lease. 2. A letter from the Provident National Bank, Philadelphia, Pennsylvania, dated September 15, 1970, approving a construction loan to the extent of 512,000,000. 28a 3. Building permits issued by the City of Philade. phia. 4. A construction contract dated September 30. 1970, between Gateway and Rosemont Construction Corporation. 5. Drawings to demonstrate the design of th building had been completed. Since this documentation satisfied the contracting officer that Gateway met the five criteria set out in the solicitation, Gateway was included in the negotiations con- ducted with Merriam and two other sources. Ultimately, Gatewav’s offer was accepted on February 18, 1971. . It is Merriam’s position that the award to Gateway contravenes the Independent Offices Appropriation Act of 1970 (Public Law 91-556) because the documentation submitted by Gateway does not demonstrate that it ful- filled the five criteria on September 30. 1970, the date of issuance of the request for offers. With respect to the question whether Gateway pos- sessed “such ~ ~ © interest in and dominion and control over the site to enable starting construction,” as required by the first criterion, Merriam points out that paragraph 25 of the lease between University City Science Center and Gateway expressly provided that it was made pursuant to a certain redevelopment contract dated November 26. 1965, between the Science Center and the Redevelopment Authority, the terms of which are to be binding on the ten- ant. In the referenced agreement between the Redevelop- ment Authority of the City of Philadelphia (Authority) and the Science Center, the Authority agrees to transfer title to the subject property to the Center subject to certain condi- tions binding on the Center and any transferce thereol. Paragraph 14 of this agreement provides: “The REDEVELOPER or its) nominee shall not sell, lease or otherwise transfer the Project area. or Project, or any part thereof, without the prior written consent of the AUTHORITY until the At- 29a THORITY shall have certified in writing that the Redevelopment Project has been completed.” Paragraph 18 of the agreement provides: “The “-REDEVELOPER or its) nominee shall submit to the AUTHORITY for its review and ap- proval all necessary final plans, designs, and speci- fications for the development of the Project: area, including architectural and landscaping drawings. The REDEVELOPER or its nominee shall not com- mence any work pursuant to such plans, designs or specifications until approval by the AUTHORITY is made in writing: however, if no written Communi- cation is made by the AUTHORITY within thirty (30) days after such submission, AUTHORITY ap- proval is inferred, unless the AUTHORITY requests an additional thirty (30) days for approval. Such approval shall not be unreasonably withheld.” In support of its position that the requisite approval has not been given as of the date of solicitation issuance, Mer- ram submitted a letter dated March 19, 1971, to a city councilman from the Executive Director of the Authority. The letter states in pertinent part: “In response to your March 13 inquiry, please be advised that the Redevelopment Authority has ap- proved no lease between the Science Center and Gateway Center Corporation for the above site. “Preliminary plans for the proposed building on the site were approved in August, 1970. Final working drawings of the building have not vet been submitted for our approval. These plans must be submitted before construction can commence.” A letter dated April 20. 1971, between the same two persons states that while the Science Center has requested the Authority's approval of Gateway, the required documen- tation had not as of that date been furnished. Another 30a letter dated September 25, 1970, from the Authority to the Center states that Gateway is accepted as the Center's nominee subject, however, to several conditions such as formal approval by the Authority and the Department of Housing and Urban Development. The record before our Office fails to show that the required approvals were granted as of the date the solicitation was issued, Your General Counsel's petition in reply is that th approvals have no bearing on the efficacy of the lease and notes that Gateway had taken steps to secure the needed approvals, citing as an example the approval of the pre- liminary building plans in August of 1970. The point. how- ever, is that in the absence of the Authority's approval of the “final plans, designs, and specifications” pursuant to paragraph 18 of the redevelopment contract between the Authority and University Citv Science Center, it is difficult to understand how it can be said under any reasonabk interpretation of the circumstances and the linguage of the first criterion that Gateway’s interest on September 30. 1970, was such as would “enable starting construction.” While failure to meet the first criterion is, in itself, a sufficient basis to support Merriam’s position, we not that documentation submitted by Gateway to show com- pliance with the fifth criterion is also subject to question We may agree that the construction contract: between Gateway and Rosemont Construction Corporation literall complies with the requirement that there be a “firm con- struction contract with a fixed completion date.” However Merriam’s contention that Rosemont Construction Cor- poration is controlled by the same individual who controls Gateway and that, subsequent to award, Rosemont entered into a joint venture with a firm with the capacity to perform the work—a capacity which Rosemont allegedly did not have—certainly raises question as to whether Gateway complied with the spirit of the criterion. This question Is not, in our opinion, adequately answered by your General Counsel's advice in his Ictter of Julv 9 that Gateway com- plied with the criterion since actual construction is cur Sla rently in progress. The issue is whether Gateway complicd with the criterion at the time of issuance of the solicitation for offers. We might add that if the case turned solely on the propricty of GSA’s determination that Gateway complied with the third and fourth criteria, we would be inclined to deny Merriam’s protest. Insofar as the requirement of the third criterion that financing be fully committed is con- cerned, the letter dated September 15, 1970, from. the Provident National Bank recites that: “This letter represents our agreement to provide a construction loan up to a maximum of $12,000,000 subject to the execution of our usual Construc- tion loan documentation prior to closing. The interest rate shall be set at market level at the time of closing.” We cannot say that GSA’s position that this letter satisfies the requirement that construction financing be fully com- mitted is unreasonable, for there is no indication that the commitment is subject to a material condition, such as Gateway obtaining a lease with GSA. With respect to the fourth criterion, the question whether Gateway possessed a building permit for construc- tion of the “entire” building involves an interpretative issue and GSA notes in this regard that three permits were issued to Gateway prior to September 30 by the City of Philadel- phia Department of Licenses & Inspections for over $12,000 in permit fees. While Merriam urges that Gateway lacked permits for air conditioning, plumbing and electrical work, there is, as GSA points out. no indication that the basic permit is for less than an entire building. More important. in our view, is the following observation in vour General Counsel's letter of July 9, 1971, with which we agree: Whether the word ‘entire: means ‘com- pleted’ in the sense of total, final construction is a matter of semantics. GSA does not require the latter Which is not only impractical but virtually impossible since in order to meet the SFO [solicitation for offers aaa requirements} changes, even in building design, might be required. “AL that is required is that a permit has been issued for the building offered. . The clear implication of Merriam’s position with re- spect to GSA’s determination that Gateway complied with the five criteria, particularly insofar as the first and fifth criteria are concerned, is that a reasonable attempt to verify or assure the adequacy of the documentation sub- mitted was not made. From the record before us, we must agree. The attitude of GSA is also reflected in its treatment of the requirement of the second criterion that the design be “complete.” From the record, it appears to us that GSA considered that this requirement was complied with by virtue of the approval of the preliminary plans by the Authority in August of 1970, the bank commitment and the issuance of building permits by the City of Philadelphia. This conclusion appears to be bolstered by your General Counsel’s advice that the drawings were submitted by Gateway only for the purpose of aiding the contracting officer in evaluating the space in terms of potential use. layout, etc. This interpretation fails, in effect, to accord any independent meaning to the second criterion. We should add at this point that by letter dated Febru- ary 17, 1972, Merriam’s counsel submitted for our con- sideration certain depositions and affidavits (which we understand are part of the record before the court). We also received a further letter dated February 28, 1972, from counsel, forwarding a copy of University City Science Center's deed to the property. While we believe that reli- ance on this additional documentation is unnecessary to support our conclusion, we have examined the documen- tation and find nothing therein which would detract from Merriam’s position. We recognize that since GSA is charged with the primary responsibility for insuring compliance with the Appropriation Act limitation, its interpretations concer ing application of the criteria in any given case must bi S32 accorded great weight. Its determination if reasonable should stand notwithstanding that an alternative ap- proach might appear to be more reasonable. We have expressed our opinion in light of this standard. To sus- tain GSA’s determination here, we would have to say that it was under no duty to conduct a reasonable and inde- pendent examination of a particular offerors compliance with the criteria, including When necessary a request for additional information to resolve reasonable doubts about compliance. Such a conclusion would sanction a complete evasion of the Appropriation Act limitation. We come now to the corrective aspects of the pro- curement. Although it is our opinion that the agreement to lease is improper by reason of Gateway’s noncompliance with some of the criteria as of the date specified, it does not follow that Gateway must be excluded from any resolici- tation of the requirement, as Merriam urges. While non- compliance with the criteria implementing the Appropria- tion Act limitation at the date of issuance of a particular solicitation for offers may be decisive as to the eligibility of a particular prospective lessor to participate in’ these negotiations, we do not believe this alone would preclude that proposer from participating in future negotiations. Elimination of Gateway from future participation would release to the competitive aspects of GSA’s lease procure- ments—namely, the right of interested sources to compete equally for lease awards. As we indicated, this question is separate from an inquiry relating to the appropriation restriction. Insofar as the latter question is concerned. we find nothing in the limitation itself which would bar an diferor such as Gateway from future participation. See B-193036, September 2, 1964, wherein we expressed no objection to the subsequent execution of a new lease with an offeror who did not comply with the limitation at the time the original lease was executed. From the competitive standpoint, it has long been our position that the Government has the duty to secure mani- mum competition in its procurements. The rights of pro- 34a spective offerors to exclude other sources from any com- petition are clearly subordinate to) the Governments obligation to secure maximum competition. Morcover, in this context, as Merriam’s counsel recognizes in his letter of March 7, 1972, the elimination of Gateway from further participation would require a determination that Gateway Was not a responsible prospective contractor because of . lack of integrity. We cannot ignore the fact that Gateway has made sub- stantial construction progress in reliance on GSA’s assur: ance that it complied with the Appropriation Act limita- tion. Merriam would have us disregard the equities in favor of Gateway stemming from reliance upon determinations made by GSA. Merriam urges that if Gateway had truly in- tended to construct a building irrespective of executing a Government loan, there is no real harm done to Gateway in concluding that its lease with GSA is invalid for having failed to comply with solicitation requirements. But such approach begs the question. If in fact it was certain that Gateway fully intended to construct the build- ing in question apart from GSA interest, there would be little question concerning validity of the lease in terms of the operative appropriation restriction. And it would be difficult to construe as a fatal defect any failure to meet solicitation criteria design solely to establish such intent. In the instant case an issue arises only by reason of the fact that it is not clear as to Gatewav's intent apart from GSA interest. In the circumstances we find it difficult to reach a conclusion that would penalize Gateway for having relied upon the Government's own determination in this matter. Moreover, we belive that the issues posed by this cas are broader than the isolated circumstance of a single leas transaction. GSA’s implementation of the appropriation restriction compliance criteria in the instant case is not unique, as our report to the Congress will demonstrate. and there is substantial likelihood that numerous other lessors are similarly situated. Thus. the magnitude and seriousness of the problems created by GS.A’s administt: eval tion of the Criteria leads us to conclude that the appro- priate course of action for our Office is to draw the entire matter to the attention to the Congress for its consider- ation and possible corrective legislative action. In light of the above conclusions we do not propose to initiate anv question (in the context of the issues discussed herein) with respect to payments under existing leases. However, We must advise that we have no alternative to raising objection to payments under any Tease executed after the date of this decision without proper regard for the restriction against Icasing buildings to be erected for the Government, where the restriction is operative both atthe ume of the lease execution and at the time of pav- ment. Sincerely vours, R. F. KELLER Deputy Comptroller General of the United States the Honorable Frederick F. Kreger Acting Administrator General Services Administration 36a IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA In re: JOHN W. MERRIAM v. Date: June 26, 1979 ROBERT L. KUNZIG, Administrator, No: Civil Action 71-2262 General Services Administration, et al. This is to advise you that Judge John B. Hannum filed Opinion and Order DISMISSING Plaintiff's Com- plaint. THE CLERK'S FEE IS $20.50 for said Opinion, Memorandum and/or Order JOHN J. HARDING, ESQ. CLERK By J. M. YAWORSKI (Miss Deputy Clerk Notice to: C. Clark Hodgson, Jr... Esq. Goodis. Greenfield, Henry, Shaiman & Levin, Esqs. Simons. Kashkashian, Nissenbaum & Kellis. Esqs. Obermayer, Rebmann, Maxwell & Hippel. Esqs. Copies To: Carl J. Melone, U.S. Attorney 37a IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA OPINION AND ORDER HANNUM, J. June 26th, 1972 On September 30, 1970, the defendant General Ser- vices Administration (hereafter, GSA) solicited bids for the lease of office space for several federal agencies located in the City of Philadelphia. On February 18, 1971 GSA awarded a 20 year Iease to Gateway Center Corporation ‘hereafter, Gateway), the builder of a new office building yet to be constructed. The plaintiff, John W. Merriam hereafter, plaintiff), is the owner of the Curtis Building, a twelve story office building located at Independence Square in Philadelphia. He, as an unsuccessful offeror of office space, has filed the present action seeking, inter alia, a declaratory judgment that the award to Gateway was illegal, an injunction prohibiting the defendants from executing the lease contemplated by the award, and an order compelling GSA to reconsider those offers, other than Gateway’s, that were responsive to the original solici- tation. Presently before the Court is the defendant's motion for summary judgment pursuant to Rule 56, Fed. R. Civ. P. 28 U.S.C. To deal with the legal questions raised a detailed statement of the facts underlving this controversy is required. HISTORY OF THE CONTROVERSY By Presidential directive dated March 27. 1969, the regional boundaries of the Department of Labor, Housing, and Urban Development, Health, Education and Welfare, and the Office of Economic Opportunity were realigned in order to promote their efficiency and to improve their 38a service to the general public. The City of Philadelphia was designated one of several regional headquarters for cach of these agencies. The GSA. charged with the responsibility of providing space for government agencies. implemented the Presidential mandate by adopting a policy requiring thy realigned agencies to be headquartered in the same build ing where feasible. As a consequence of this policy and duc to the lack of adequate government-owned office space. 4 need was created in Philadelphia for approximately 314.000 net useable square feet of office, storage. and related space! Following an effort to develop competition in the real estate market to supply the required space, GSA conducted a market survey between January 21 and January 28. 1970. During this interval, on January 25 and again on January 28, the Governments interest in acquiring the desired amount of space was advertised in an area news paper, the Philadelphia Inquirer. Thereafter. thirty-six persons or firms expressed an interest in supplying the Government's needs.? On September 50, 1970. at the direction of A. F. Sampson, Commissioner of GSA’s Public Buildings Service Solicitation for Offers No. NEG (70-65 was issued to the plaintiff and twenty-five other prospective offerors in the metropolitan area. In response to the solicitation a total of five offers. including the plaintiff's, were received. One bid was withdrawn and another determined to be non- responsive. Consequently. only three bids remained for GSA's consideration, the plaintiff's, Gateway Center Cor- poration’s, and a third, not relevant to the present con- troversy. On February 18. 1971. Robert L. Kunzig. \d- ministrator of GSA, upon the recommendation of Commis- sioncr Sampson, authorized the Latter to make the presents disputed award to Gateway Center Corporation.* On 1. Complaint. paras. 2.6. 7. Parker Affidavit. Exhibit A 2 Motion for Summary Judgment. Sampson Affidavit 3. Complaint, paras. 4. 5. 8. Motion for Summary Judgment. Sampson Affidavit. 19.4 bewuars 19) F971 phantlf protested the award to the Gemral Accounting Otfice hereafter, GAO. which, on Sptember 16, 19TE. advised his counsel that it did not fed that it Could rule authoritatively, on the protest: at thet me? The phanetf filed this law suit on the same date On November 17. 1971. plaintiff moved for a prelimi- nary injunction requesting that GSA be restrained from exccuting the Gateway lease and moved under Rule 37, Fed. R. Civ, PL. 28 USC. for a prompt bearing. On No- vember 19. the defendants filed a motion for summary judgment which. in addition to secking judgment as a matter of law. Challenged the jurisdiction of this Court and the plainuff’s standing to sue. On November 23, the de- hndants filed answers to both of the plaintiff's motions and. in light of the jurisdictional issues raised by their motion for summary judgment. requested the Court to defer any hearing on the plaintiff's motions until the motion for summary judgment had been resolved. At a pre-trial Conference om December 9. plainuff withdrew his motion for a preliminary injunction upon the repre- vntation of the Government that no lease would be exe- cuted with Gateway until the construction of its building had been completed. Thereafter, on February 7, 1972. this Court staved its hand for thirty davs in order to allow the Comptroller General of GAO to rule on the merits of the plaintiffs protest and thereby provide the Court with the benefit of the GAO's expertise in the arca of bid protests. See, M. Steinthal & Co. ©. Seamans. 455 F.2d 1289 (D.C. Cir, 1971). On March 17. 1972. the Comptroller General issued his ruling.* Having the benefit of GAO's views. the Court must still resolve the questions of jurisdiction and standing raised by the defendants NATURE OF THE CONTROVERSY The administrator of GSA is empowered to center into Jease agreements necessary for the accommodation of 1 Douglas Mo Parker Affidavit. Exhibit E. > Appendix A to this Opinion. [See page —— supra. | oo So APB E 4a federal agencies by virtue of Section 210 of the Federal Property and) Administrative Services Act of 1949, as amended, 40 U.S.C. §490¢h i) (1970): “The Administrator is authorized to enter into Jease agreements with any person, copartnership, corpo: ration, or other public or private entity, which do not bind the Government for periods in cxcess of twenty vears for each such lease agreement, on such terms as he deems to be in the interest of the United States and necessary for the accommodation of Federal agencies in buildings and = improvements which are in existence or to be erected by the lessor for such purposes and to assign and reassign space therein to Federal agencies.” (Emphasis added) Since 1963, annual appropriations for GSA’s opera- tions have contained the following restriction with regard to payments to be made by GSA for the lease of buildings vet to be constructed by the lessor. The restriction first appeared in the Independent Offices Appropriation Act. 1963, Act of Oct. 3, 1972, P.L. 87-741, tit. I, 76 Stat. 728: “No part of any appropriation contained in this Act shall be used for the payment of rental or Tease agreements for the accommodation of Federal agen- cies in buildings and improvements which are to be erected by the lessor for such agencies at an estimated cost of construction in excess of $200,000 or for the payment of the salary of any person who exccutes such a lease agreement: Provided, That the foregoing pro- viso shall not be applicable to projects for which a prospectus for the lease construction of space has been submitted to and approved by the appropriate Com- mittees of Congress in the same manner as for public building construction projects pursuant to the Public Buildings Act of 1959. (Emphasis added) During the period presently in controversy, essentially the same restriction appeared in both the Independent Offices a ee, Matin at 4a and Department of Housing and Urban Development \ppropriation Act, 1970, Act of Nov. 26, P.L. 91-126, tit. |, 83 Stat. 229, and the Independent Offices and Depart- ment of Housing and Urban Development Appropriation Act. 1971, Act of Dec. 17, 1970, P.L. 91-556, tit. IT, 84 Stat. 1449 ‘hereafter, 1.0.A.A.). In April and May of 1964 informal discussions were held between representatives of the General Services Administration and the General Accounting Office in an effort to determine the impact of the foregoing restrictions upon the basic authority of the Administrator to enter into lease agreements for the accommodation of Federal agencies. GSA’s purpose was to interpret the boundarics of the term “to be crected™ and thereby create workable criteria by which the restriction could be observed. These discussions gave birth to what have come to be known as the “5 conditions” which, when met by a lessor of a build- ing “to be erected.” have been interpreted by GSA_ to relieve it from the restrictive language of the Appropria- tion Acts. Should the lessor of a building to be constructed ata cost in excess of $200,000 certify its compliance with the five conditions, GSA would deem the building to be in existence already and thereby eliminate the need for Congressional approval of a prospectus. The five condi- tions required to be met by a lessor on the date of the issuance of an invitation for bids are satisfied if: “G) ~~ Title to the site was vested in the bidder or the bidder possessed such other interest in and dominion and control over the site to enable starting construction; (i) Design was complete: (iii) Construction financing fully committed: (iv) A building permit for construction of the entire building. extension or addition had been issucd: Wat () 0 Acti Construction is currently in’ progress or « firm comstruction Contract: with a fixed completion date has been entered into.”6 These conditions were put into effect on Mav 15, 1964 by 4 memorandum from John W. Chapman, Assistant Commis. sioner for Space Management, to all Regional Administra- tors of GSA. As of that date they were designated for inclusion in all solicitations for bids where new construc. tion was requested or permitted. Ino addition to having been included in the solicitation for bids involved in the present dispute, they have been included in thirty other solicitations issued by GSA since 1964.7 In response to the solicitation issucd in the case at bar, the plaintiff submitted a responsive offer of office space in a building that has been in existence for many years. The building offered by Gateway. however, was, and is. vet to be constructed. As planned, it will stand in the University Citv Science Center at 36th and Market Streets in Philadelphia and will be a modern fifteen stor building providing fourteen consecutive floors of uniform office space. The cost of construction will be in excess of 510.600 ,000. To certify its compliance with the “5 conditions” for being considered a building in existence, Gateway sub- mitted with its offer the following documentation: 1 =A lease from University. City Science Center dated September 23, 1970, accompanied by letters from counsel for both Gateway Center Corporation and University City Science Center of the same date, stating that in their opinion the lease was a valid and binding instrument.* 2. Building plans and specifications.® 6. Motion for Summary Judgment. Shipp Affidavit. 7. Id 8 Motion for Summary Judgment. Sampson Affidavit. At tachment 2 9. Id.. Attachment 3 43a 3. A letter from Allan C. Kirkman, Assistant Vice President of Provident) National Bank, Phila- delphia, Pa., dated September 15, 1970, commit- ting the bank to provide a construction loan up to $12,000,000. !° 4. A building permit issued by the City of Philadel- phia Department of Licenses and Inspections dated September 30, 1970."! 5. . Plamuff s Supplemental Brief. 21-22 es Oa LOANS! But he argues that he has standing to protect the public interest.as a private attorney general’, and that. as such, the “zone of interests” requirement. of Duty Processing should be liberally construed “to enable any plaintiff to ‘argue’ that he has an interest: protected oy regulated within a given statute." In support of. this proposition the plainuff advances a recent line of Cases from the District of Columbia commencing with Scanuel! Laboratories, Inc. v. Shaffer, 424 F.2d 859 (D.C. Cir. 1970, Scanwell involved a bid protest similar to the present. The Federal Aviation Administration had issued an invita- tion for bids on instrument landing systems to be installed at airports. Scanwell Laboratories was an unsuccessful bidder who had submitted the second lowest bid. Becaus the lowest bidder had allegedly failed to comply in all respects with the invitation for bids, Scanwell filed-suits to have its acceptance set aside claiming that the FAAS award of the contract to an allegedly non-responsive bidder Was arbitrary, capricious, and a violation of the statutor provisions controlling government contracts. Judicial review was sought on the basis of §10 of the APA. Although the district court had dismissed the suit for lack of stand- ing, the District of Columbia Circuit reversed, holding that Scanwell had standing to sue as a “private attornes general”: “Thus the essential thrust of the appellant's claim on the merits is to satisfy the public interest in having agencies follow the regulations which control govern: ment contracting. The public interest in preventing the granting of contracts through arbitrary or capri cious action can properly be vindicated through a suit brought by one who suffers injurv as a result of the egal activity, but the suit itself is brought in the 14. In his brief he states, “Can this Court find the plainutt s interest specifically identified in the statute or legislative histor certainly not.” Plaintiffs Supplemental Briet. 23. 15. Id.. at 17. Pee; Sha public interest by one acting essentially as a precate attorney general,” AA F.2d 859, bob emphasis added The “private attornes general doctrine developed during a period in which standing was held to be licking unless the interest sought to be protected constituted © a legal right. —one of property, one arising out of Contract. one protected against tortious invasion, or onc founded on a statute Which conters a privilege”. Tennessee Electric ower Co. v. TVA, 306 U.S. 118, 137-38 (1939); Perkins co. Lukens Steel Co.. 310 U.S. 313, 325 (1940). The concept was designated to permit those with less than recognized legal rights to establish an otherwise lacking “case” or controversy” by acting as private attorneys general to vindicate the interest of the public in preventing unlawful agency action. It was first emploved in Associated Indus- tries v. Ickes, 134 F.2d 694 (2 Cir. 1943), vacated as moot, 20 U.S. 707 (1943), where an association of coal con- sumers sought to challenge an order of the National Bituminous Coal Commission increasing the minimum prices of coal. Judge Frank advanced the theory to recon- cile two previous decisions of the Supreme Court, FCC v. Sunders Bros. Radio Station. 309 U.S. 470 (1940), and Seripps-Howard Radio v. FCC, 316 U.S. 4 (1942), with the legal right” doctrine. In Sanders and Scripps-Howard. radio stations suffering increased competition as a result of FCC action were granted standing on the basis of 402(b\ 2) of the Communications Act!® which provided ieview for persons “aggrieved” or “adversely affected” by decisions of the Commission. In Associated Industries. Judge Frank granted standing on the basis that the peti- lioners were persons “aggrieved” within the meaning of the review provision in the Bituminous Coal Act of 1937;!7 “. . Congress can constitutionally cnact a statute conferring on any non-official person, or on a desig- 16. Act of June 19, 1934. c. 652. tit. IV. $402(b\ 2), 48 Stat. 1093 Iv. Act of April 26, 1937, ¢. 127. $6(b), 50 Stat. 85. a2a nated group of non-official persons, authority tp bring a suit to prevent action by an officer in viola. tion of his statutory powers; for then . ~~ there is ap actual controversy, and there is nothing constitu. tionally prohibiting Congress from empowering any person, official or not, to institute a proceeding jp. volving such a controversy, even if the sole purpose is to vindicate the public interest. Such persons, so authorized, are, so to speak, private Attorney Generals. “. . TL then. one is a ‘person aggrieved’, he has authority by review proceedings under §6(b), to vin- dicate the public interest involved in a violation of the Act. . . . even if he can show no part or threat- ened invasion of any private legally protected substan- tive interest of his own.” 134 F.2d 69-4, 704-05. Scanwell was decided when the weight of advers commentary and decisional law was) pressing for th abandonment of the legal right doctrine in) government contract cases. After analysis of its legislative history. it was held that Congress had intended to incorporate th private attorney general concept into the Administrative Procedure Act. As a result. it was held that the APA pro- vides standing to any person “in tact agurieved™ by agency action. In so holding, the court reper ted the legal right doc trine and reduced the requirements for standing to the minimum necessary to provide a constitutional “case” oF “controversy. In Data Processing, however, decided less than one month later, the Supreme Court did not go as far In requiring Complainants to demonstrate “injurv in fact it. too, rejected the legal right doctrine, but it added the non-constitutional requirement that the interest sought to be protected by the complainant be arguably within the zone of interests to be protected or regulated by the statut Claimed to have been violated. [tis clear that the Scanwell decision did not include, and therefore did not consider. this requirement. The District of Columbia Circuit may have been correct in its analysis of the APA's legislative history. Bui ysuming that it was. it is impossible to assume further that the Supreme Court intended the private attorney gen- eral concept “arguably” to supply the interest necessary to meet the “zone of interests” requirement. That requirement is inherently restrictive. It is antithetical to the private attorney general concept which would apply to any plaintiff who challenged an agency's violation of any statute. If, in Data Processing, the Supreme Court intended to permit any person injured in fact to have standing as a private attor- ney general under the APA, then the zone of interests re- quirement would have been surplusage and never imposed. Consequently, there is litthe basis for accepting the plain- tiffs contention that the Scanwell decision placed him arguably” within the zone of interests necessarv to confer standing."* Because the specific interest of the plaintiff 18. The cases decided after Scanwell and Data Processing do not alter this conclusion. In Ballerina Pen Company v. Kunzig. 433 F.2d 1204 (D.C. Cir. 1970), Data Processing was followed and the interest sought to be protected by the plaintiff was held wo be arguably within the zone of interests sought to be protected by the Wagner-O Davy Act. In Blackhawk Heating & Plumbing Co © Dreer, 433 F.2d 1137 (DC. Cir. 1970), however, the court only restated the requirements of Data Processing. applying in fact the requirements of Scanwell. In A. G. Schoonmaker Co.. Inc. wv. Rewr. 319 F.Supp. 933 (D. D.C. 1970), Data Processing was not considered and Scanwell was followed without analysis. In Shan- non i. U.S. Dept. of Housing and Urban Dev.. 436 F.2d 809 (3 Cw. 1970). the interest sought to be protected by the plaintiff was held to be arguably within the zone of interests to be protected by the Housing Act of 1949. In American Standard. Inc. v. Laird. 326 F.Supp. 492 (D. D.C. 1971), Data Processing was not con- sidered and Scanuwell was followed without analysis. In Citizess to Preserve Overton Park. Inc. v. Volpe. 401 U.S. 402 (1971). no question of standing was raised. And in National Helium Corp Morton. 326 F.Supp. 151 (D. Kan. 1971), M. Steinthal & Co. ce. Seamans, 455 F.2d 1289 (D.C. Cir, 1971). and Wheelabrator Corp i. Chafee. 455 F.2d 1306 (D.C. Cir, 1971). Data Processing was not considered and Scanu ell was followed without further analysis Not all courts have overlooked the conflict between Scan ell and Data Processing. See. ¢.g.. Gary Aircraft Corp) vu. Seamans WUS.LAW. WD. Tex. May 8. 1972) which. to the extent that it applies the Duta Processing zone ot interest requirement. is adopted by this Court. 54a cannot reasonably be considered to be included in the zone of interests to be protected or regulated by either. the 1.0.A.A. of 1970 or 1971, this Court is forced to conclude that the plaintiff lacks standing to sue and that his com- plaint must be dismissed. My decision is compelled by the present state of the law, vet considering the nature of the remedy available to the plaintiff had he standing and were he to prove his case, his present status may simply be an advancement of the inevitable. He concedes that this Court is not em- powered to make a contract for him. His remedy, at best, would be to have the award to Gateway set aside. Such action suggests one of two results: that the Government be compelled to award a lease to cither the plaintiff or the other remaining responsive offeror, or, that the Govern: ment be compelled to resolicit bids altogether. If the latter course of action were adopted, the additional question would be raised as to whether Gateway should be excluded from further competition. The wholesale exclusion of Gateway in either case would have to be weighed against the public interest in having the federal socio-economic agencies housed in a location which would provide optimal impact for the services to be provided and in a structure that would facilitate the highest interdepartmental efficiency. The present record reflects major differences between the location and building offered by Gateway and those offered by the two other responsive bidders.!* Of con- siderable significance ‘is the high preference accorded the Gateway location by all Federal, State, and local agencies consulted.2° It is clear that were Gateway to be excluded to vindicate one public interest, it would be done so only at the expense of another. In its decision not to object to GSA’s action, GAQ suggests that nothing beneficial would be accomplished by upsetting the present award in order to satisfy the plain- 19. See Appendix B. Commissioner Sampson's recommenda tion of February 18, 1971, p. 3-4. 20. Id., 5-8 55a tiffs asserted right) to. reconsideration.2!- The positive aspects of the Gateway project are manifest. If there has been harm in GSA’s action, it has been harm in the method. not in the result. ORDER AND NOW, this 26th day of June, 1972. it is OR- DERED that the Plaintiff's Complaint be, and is, hereby DISMISSED. JOUN B. HANNUM J. 21. Appendix A, 10-11 APPENDIX A Comptroller Generals Decision B-171958. letter of March 17, 1972; see Appendix 2. p. 21a et seq. 56a APPENDIX B UNITED STATES OF AMERICA GENERAL SERVICES ADMINISTRATION February 1, 1971 Public Buildings Service Washington, D.C. 20405 Reply to Attn. of: Commissioner, Public Buildings Ser- vice — 1 Subject. Consolidation—Socio-Economic Agencies, Phila- delphia. Pennsylvania Mr. Robert L. Kunzig The Administrator - A In March 1969, President Nixon, so as to enhance the efficiency and effectiveness of the Federal human resources programs and to improve service to the gencral public, directed that common regional boundaries and headquarters for the regional offices of the various Federal agencies be established. It was determined bv the Office of Management and Budget that the regional activities of the Departments of HUD, HEW, Labor and the OEO should be collocated in the new regional headquarters cities. Philadelphia was designated as one of the head- quarters Cities. A. Implementation of the Directive to Collocate the Socio: Economic Agencies. rn In the absence of sufficient Government-owned space in which to collocate the socio-economic agencies in Phila- delphia, it is necessary to acquire by lease approximately 314,000 net usable square feet of space for this program. a. Procedure. (1) Market Survey. Vhe projected space require- ment for the collocation was advertised in the Philadelphia Inquirer on 1/23/70 and 1/25/70, and a market survey was conducted during the period 1/21 through 1/28/70. On March 3. L9TO, market survey questionnaire letters were distributed to 36 entreprencurs who had manifested an interest in supplying the required space. (2) Solicitation for Offers. On September 30, 1970, Solicitation for Offers NEG(70)-63. was issued to 26 prospecuve offerors. The solicitation called for 314,000 square feet, with a minimum of 20,000 square feet of office space per floor on contiguous floors, located within the city of Philadelphia, for a firm term of 20 years, to be delivered July 1, 1972. Award factors include those speci- fied in Executive Order 11512. A requirement for an af- firmative action plan to ensure equal employment oppor- tunity Was made a special condition of the solicitation. (3) Receipt of Offers and Negotiations. Initial offers for 5 locations were received and ultimately nego- tiated to the final offered price. to 58a INITIAL OFFEROR LOCATION PRICE/SQ FT FINAL Gateway Centre Corp. Gateway Build- $8.90 $7.67 ing #1, NE Cor- (52.316,00) ner, 36th & per vear) Market Streets 2. 401 N. Broad Street 401 N. Broad $6.17 $5.604 Corp. Street ($1.700.00 per vear) Binswanger Corp. Bourse Build- $7.56 Withdrew ing, 21 S. 5th Street Binswanger Corp. Ford-Philco $7.14 $5.10 Plant. 4700 ($1.905.95 Wissahickon per vear Ave. Richard B. Herman Curtis Building, $6.38 $7.09 & Co. 6th & 7th & ($2,173.5f2 Walnut & Juniper per vear Streets (4) Compilation of Data Award Factors. In order to comply with criteria established in’ Executive Order 11512, appropriate Federal, State, and local agen- cics were consulted about the prospective impact of the effered locations on the social and cconomic development of the community. Visits were made to the Philadelphia Planning Commission, Philadelphia Bicentennial Corpo- ration, and other affected public and private agencies. The Secretaries of Commerce, HEW, and HUD were requested to provide representation on an ad hoc committee to advise with respect to the factors set forth in the executive order, and those agencies were asked to advise us as to the comparative merits of cach of the proposed locations. A city task force on intergovernmental Cooperation Was also formed under the chairmanship of Philadelphia Mavor James Hl. J. Tate to evaluate the sites offered under the 59a wrms of the Intergovernmental Cooperation Act and OMB Circular A-95. The information and data obtained were related to the proposed sites by field inspection. B. Evaluation of Offers. a. Responsiveness to Solicitation and Economy Act. The offers submitted for Gateway Building #1, 401 N. Broad, and the Curtis Building are responsive to the requirements and specifications of the solicitation. The offer for the Bourse Building was withdrawn by the offeror. The offer for the Philco-Ford Plant was not responsive because the offeror will not accept the escala- tion provisions as required, nor firmly commit to deliver the required space by July 1, 1972. All of the above responsive offers are within the ap- praised fair rental values and Economy Act Limitations. a b. Space Utilization. (1) Gateway Building #1. This building is located in the University City Science Center. It is a new mod- ern, 15-story office building, rectangular in shape, mea- suring 200’ x 120’, serviced by a_ centrally located core area with high speed elevators. The building will provide 14 consecutive office floors of 20,000 square feet each with uniform configuration. Its interior column spacing is on uniform 24’'6” centers with exterior window space on a 3'6" module. Its design, configuration, and column spacing will assure an efficient lavout, effective utilization of the space, and a continuing high degree of flexibility for space changes over the 20-vear firm term of the proposed lease, (2) 401 N. Broad Street. this building was) con- structed in 1930 for semi-industrial and storage purposes with related office space. It is rectangular in shape, meas- wing 225' x 525°. and contains approximately 1,000,000 square feet. Floors 6 to 11. offered to the Government. are “U shaped, divided by a light well. 60a The Federal agencies presently occupying the build. ing have been dissatisfied, over an extended period of time. with the building's elevators, air conditioning, heating and restroom facilities. Although the owner can improv upon some of these deficiencies in accordance with the specifications of our lease solicitation, it will not be pos: sible to entirely correct the functional obsolescence of the building’s mechanical systems. In these circumstances. it can be expected that agency dissatisfaction will continue to some extent, with an attendant drop in morale and agency efficiency. Several other characteristics of the building preclude optimum space utilization and functional space avout. The building has large circular columns and column spacing varies at several locations within the building. There is noo standard module. Mechanical shafts are located throughout the space as opposed to being confined to a central core. The extended distance from the primar corridors requires an extensive secondary corridor system Finally, of the seven floors offered, only two floors are offered in their entirety. Various sized sections of the other five floors are offered and will result in the ineffic- ient splitting of functional agency components to fit the space available. In summary, the design of the building. the built-in functional obsolescence. and the adverse lavout charac: teristics will not produce effective space utilization and opumum operational efficiency mn agency activities 3) Curtis Building. This building, constructed about LOG) was designed for a combination of heavy industry and manufacturing use with some related offic space. The building is) rectangular in) shape. approx- mately 23004 379°) and contains approximately 1,000,006 square feet. Ttas divided into 4 basic areas cach served by freight and passenger clevators. Accessibility is restricted between areas because of a central light court: and the scattered placement of fire stairs, elevators and mechanical bla areas. The column spacing is irregular (13, 18, and 20 feet) With varied Column spacings from floor to floor and within floors. On the 10th and 11th floors, both of which have been offered for lease, there are variations in cleva- tions, requiring ramp or stair access. The office space will contain a relatively high proportion of interior windowless space. The configuration of the building would neces- sitate an extensive corridor system to provide appropriate access to all of the operational units of the agencies to he accommodated and will not produce an efficient space lavout. Thus, the effective cost of the space actually util- ved for office purposes will be increased above that which would prevail in a building designed for office purposes. C. Summary of Advice Regarding Locations. 1]. Gateway Building #1. The City Task Force on Inter-governmental Cooperation ranked this site as being the best. The Department of Health, Education, and Welfare, after a detailed analysis, rated this site the highest. the Department of Commerce also preferred this site, indicating it offers the best location for the programs administered by the agencies and, because of its Conve- nence to nearby neighborhoods, offers opportunities for hiring and training of disadvantaged people. 2. 401 North Broad Street. None of the advising wencies rated this location as their first choice. This loca- won Is not as Conveniently located as the Gateway Build- ing #1 with respect to educational and training facilities needed to adequately support the agencies being housed. \dditonally, the acquisition of this location would have very Limited :positive impact on the local goals of the renewal programs in the City of Philadelphia. » Curtis Building. Those advising agencies which provided a priority listing of the various sites did not rate this location as the preferred site for the collocation. Over- Il. the acquisition of spacesat this location would not have (NY positive effect on ongoing Federal programs for the 2: development and/or redevelopment of the City of Phila. delphia. D. Analysis and Findings Executive Order 11512 requires selection of the offer which will achieve the optimum blending and benefit in terms of the stated criteria set forth in the Order. One of the primary factors is attaining the maximum impact of the Federal monies being expended in direct or assisted programs in the community. Each of the three locations responsive to the require- ments and. specifications of the solicitation have been analyzed with respect to meeting the criteria of the Execu- tive Order and the advice received from other Federal and citv. agencies concerned. The Gateway Building #1 is the first choice of the city, HEW, Commerce and DHUD. The Citw’s Task Force made a comprehensive analy- sis of the sites under consideration and ranks the Gateway Building as the strongly preferred location by a consider- able margin. The Task Force has also indicated that this building is in complete conformance with the local goals of the renewal programs in the City of Philadelphia. In summary, there is a definite preference on the part of the concerned governmental organizations for the Gate- way Building #1 location. Detailed support for the selec: tion of this location is evidenced by the following: a. Housing. A survey of employee domicile was con- ducted of all Federal employees involved with the col- location move. This survey found that approximately 72 percent of all emplovees in grades 1 to 6 live within the Citv of Philadelphia. The Gateway Building #1 site is readily accessible from all arcas of the city. A large supply of low and moderate income housing has been provided through the citv’s Housing Authority and the quasi-public Philadelphia Housing Development Corporation. Some 15,000 units of this housing supply are located in the nearby Center Citv, Lower North, and West O3a Philadelphia areas. In addition to these city efforts. the West Philadelphia Corporation, which is composed of the University of Pennsylvania, Drexel Institute, Presbyterian Hospital and other similar institutions, has sponsored the redevelopment of low cost housing in proximity to the Uni- versity City Science Center. b. Transportation. Vhe Gateway Building #1 is cated in an area with excellent transportation facilities by several modes which provide good accessibility for agency emplovees and clients. Subway service is available athe nearby 34th Street Station. There are several bus lines and street car routes operating on the streets adjacent w or within easy walking distance of Gateway Building +]. This location is in proximity to the 30th Street Com- muter Rail Station and the planned through-rail connec- tion to Penn Center Station and the Reading Terminal. [here is good accessibility. via the Schuylkill Expressway and the planned Schuylkill Expressway Bypass. to the freeway system serving the general area. There are several arterial streets serving the area and the impact of traffic generated by this facility will be minimal. Parking facilities we planned as a part of the development of the University City Science Center. ¢. Community Facilities. The central location and weellent: transportation facilities serving this site make the Gateway Building #1 readily accessible to a wide array of community facilities within the City of Philadelphia. The location is particularly convenient to institutions of, higher learning including the University of Pennsylvania. Drexel Institute, and the Franklin Institute. These insti- tions offer exceptional opportunities for employee train- ing and for Government research. d. Impact on Neighborhood. The impact of this com- jlex on the nearby community in West Philadelphia will % extremely beneficial. A survey of the socio-economic problems within Philadelphia has shown the areas im- mediately north and west of the University City Science Ota Center have some of the most severe problems of low family income, unemployment. and cducational attain- ment. The selection of this site will expand the impact of approximately $18,600,000 in Federal funds which have been expended to assist in the redevelopment and revitalization of this area. The occupancy of this building will reinforce the beneficial impact the construction of the Food and Drug laboratory building on Market Street, west of 38th Street, will have on the neighborhood, and serve as a catalyst to accelerate the development of the University City Science Center. ve. Conformity to Existing Plans. The Gateway Building #1 site and the University Citv Science Center complex has been officially designated by the City of Philadelphia as a redevelopment area. Full community participation was obtained in the planning process prior to the city’s approval. f. Coordination with Local, State and Federal Of- ficials. Mayor Tate’s Task Force expressed his city’s strong support of the Gateway Building #1 over the other possible sites. Many other prominent citizens of the city, including the Executive Vice-President of the Greater Philadelphia Chamber of Commerce and the Chairman of the Board of the Philadelphia Bicentennial Corporation. expressed similar support for this site. Governor Milton J. Shapp and former Governor Raymond P. Shafer both have indicated that the State supports the Gateway Building #1 site. Senators Hugh Scott and Richard S. Schweiker have strongly backed the collocation move to this site. The socio-economic impact of this site selection was also carefully reviewed with appropriate officials of the Departments of Commerce. HEW and DIIUD, and they have indicated a preference for the Gateway Building #1 location. 65a E. Conclusions and Recommendation. a & * z ia s : Three responsive offers have been received. The offer by the owners of the Gateway Building #1 exceeds f the offer of space in the Curtis Building by $..98 per square ; foot or approximately $142,000 per year, and the offer of : space at 401 North Broad Street by $2.07 pet square foot or $616,000 per year. The Government, through the local redevelopment authority, has invested 518,000,000 in the University City Science Center. Development of this center is lagging, and the community is not realizing any return from the Federal funds which have been committed. The acquisition of space in the Gateway Building #1 will expand the impact of these funds and secure for the com- munity the benefits envisaged at the time of those expen- ditures. Such action will also secure for the Government modern, first-class office space which will provide for optimum operational efficiency on the part of the agencies to be housed. The acquisition of space through acceptance of the third highest offer is in accordance with the objec- tives and aims of Executive Order 11512 and the require- ments of the Federal Property and Administrative Ser- vices Act of 1949, as amended. Therefore, it is recom- mended that the Gateway Building #1 be selected for the collocation of the Federal socio-economic agencies in Philadelphia, and that I be authorized to proceed with the award of the lease contract. A. F. Sampson Commissioner Public Buildings Service APPROVED: The Administrator February 18, 1971 Date | a sore 66a UNITED STATES COURT OF APPEALS For THE THIRD CIRCUIT No. 72-1686 JOHN W. MERRIAM, Appellant v. ROBERT L. KUNZIG, Administrator, General Services Administration, A. J. SAMPSON, Commissioner, Public Building Service of the General Services Admin- istration, L. M. SHIPP, JR., Assistant Commissioner, Space Management of the General Services Adminis- tration and the GENERAL SERVICES ADMINIS- TRATION of the United States of America (D. C. Civil Action No. 71-2262) APPEAL FrRomM THE UNiTED STATES District Court For THE EASTERN DistRICT OF PENNSYLVANIA Argued December 7, 1972 Before Van Dusen, Gippons and HUNTER, Circuit Judges C. Clark Hodgson, Jr., Philadelphia, Pa.. Attorney for Appellant. Kent Frizzell, Philadelphia, Pa., Carl J. Malone, Philadel- phia, Pa., Warren D. Mulloy, Philadelphia, Pa., Robert - A. Prince, Philadelphia, Pa. 67a George R. Hyde. Washington, D.C... Rembert A. Gaddy. Washington D.C... Anthony Borwick, Washington, D.C.. Eva R. Datz, Washington, D.C., Attorneys for Appellees. OPINION OF THE COURT (Filed February 16, 1973) Gippons, Circuit Judge. This is an appeal from an order of the district court dismissing the complaint of appellant Merriam on defend- ants’ motion for summary judgment for lack of standing. Merriam is one of two unsuccessful bidders on a solicitation for bids to furnish leasehold office space to the General Services Administration (GSA). That agency and several of its officials are defendants. Merriam seeks to have set aside an award made by GSA to Gateway Center Corporation (Gateway) for a twenty year lease of a new office building to be constructed in Philadelphia, and to have enjoined the execution of the proposed lease. GSA’s Solicitation for Offers for leasehold space was issued on September 30, 1970, to Merriam, to Gateway and to twenty-four other prospective offerors in the Philadelphia metropolitan area. Five bids were received. One was with- drawn and another was determined to be nonresponsive. On February 18, 1971, the Administrator of GSA author- ized the making of the disputed award to Gateway. On February 19, 1971, Merriam, pursuant to 4 C.F.R. §§20.1- 20.12 (1972), protested the award to the General Account- ing Office, which on September 16, 1971, advised him through counsel that it could not rule authoritatively on the protest at that time.' As soon as he was so advised 1. The General Accounting Office regulations respecting bid protests did not at the time contain time limitations for the filing of protests, the submission of comments by the agency involved, or the ruling by the Comptroller General. These defects were remedied by new regulations issued at 36 Fed. Reg. 24791 (Dec. 23, 1971) 68a Merriam commenced this lawsuit. On November 17, 1971. he moved for a preliminary injunction restraining the GSA from executing a lease pending determination of the cause. and, pursuant to Rule 57, Fed. R. Civ. P.. for a prompt hear- ing. The government defendants made a cross motion for summary judgment, raising among others the issue of Mer- riam’s standing to sue. They also requested that the court defer decision on Merriam’s motions until the standing issue was resolved. This, of course, would have left GSA free pendente lite to execute the disputed lease. At a pre- trial conference on December 9, 1971, however, Merriam withdrew his motion for a preliminary injunction on the representation of the Government that no lease would be executed with Gateway until the construction of the pro- posed building had been completed. The district court soon thereafter stayed all proceedings. On February 7, 1972, over Merriam’s objection, it entered an order which provided in part: “. . . because the defendant has advised the Court that the General Accounting Office is reviewing its lease construction practices, including the present bid protest, it is hereby ORDERED that the Court will stay its hand for 30 days pending receipt of the results of such review.” The General Accounting Office review was not completed until March 17, 1972. In the meantime Gateway’s building was under construction, but no lease had been executed. effective January 23, 1972. See 4 C.F.R. $§20.1-20.12. The new regulations also provide: “320.4. Withholding of award. When notice is given the agency that a protest has been filed with the General Accounting Office, award shall not be made prior to a ruling on the protest by the Comptroller Gen- eral, unless ther: has first been furnished to the General Accounting Offic« « written finding by the head of the agency, his deputy, or an Assistant Secretary (or equivalent), specify- ing the factors which will not permit a delay in the award un- til issuance ef a ruling by the Comptroller General.” 69a The March 17, 1972 ruling by the Deputy Comptroller General of the United States was to the effect that the award to Gateway Was improper in several respects to which more specific reference will be made hereafter, but that because Gateway had made substantial construction progress in reliance on GSA’s assurance that it had complied with the governing law, the Comptroller General would not initiate any question . With respect to payments under existing leases. However, we must advise that we have no alternative to raising objection to payments under any lease ex- ecuted after the date of this decision without proper regard for the restriction against leasing buildings to be erected for the Government, where the restriction is operative both at the time of lease execution and at the time of payment.” The quoted language of the March 17, 1972 ruling may be understood in the context of the next preceding paragraph of the ruling, which explained that GSA’s improper leasing practices were not confined to the isolated circumstances of a single lease transaction, and that the magnitude and seriousness of the problem created by GSA’s administra- tion of its leasing program required that the entire matter be referred to Congress for possible corrective legislative action. Thus, the General Accounting Office position seems to have been (1) that the award to Gateway was illegal, (2) that it would not challenge payments under existing leases, and (3) that as to leases not yet in existence it recognized that Congress could authorize future payments even though the award may have been improper. The ruling does not disclose whether the General Accounting Office was aware of the actual Gateway-GSA situation; that is, that the Government had represented that it would not execute a lease until the building was complete, and no lease had yet been executed. The March 17, 1972 ruling was brought to the atten- tion of the district court by stipulation. It then took up and 70a granted the Government’s motion for summary judgment on the ground that Merriam lacked standing, as an un- successful bidder, to challenge an illegal award. This ap- peal followed. Merriam’s Legal Contention The Solicitation by GSA was made under the author- itv of the Federal Property and Administrative Services Act of 1949, as amended, 40 U.S.C. §490(h) 1): “The Administrator is authorized to enter into lease agreements . . . which do not bind the Government for periods in excess of twenty years . . . on such terms as he deems to be in the interest of the United States and necessary for the accommodation of Fed- eral agencies in buildings and improvements which are in existence or to be erected by the lessor for such purposes. .. .’ This general leasing authority is limited, however, by a statute, 41 U.S.C. §11(a), applicable to all public contracts: “No contract or purchase on behalf of the United States shall be made, unless the same is authorized by law or is under an appropriation adequate to its ful- fillment. . . . Merriam contends that the leasing authority of GSA has, since 1963, been further limited by provisions reenacted annually.2 The statute in effect on September 30, 1970. Was the Independent Offices Appropriations Act, 1971, Pub. L. No. 91-556, 84 Stat. 1442, which provides: 2. Independent Offices Appropriations Act, 1963, 1964, 1965. 1966, 1967, 1968, 1969, 1970, 1971; Pub. L. No. 87-741, 76 Stat. 716, Pub. L. No. 88-215, 77 Stat. 425; Pub. L. No. 88-507, 78 Stat. 640; Pub. L. No. 89-128, 79 Stat. 520; Pub. L. No. 89-555, 80 Stat. 663; Pub. L. No. 90-121, 81 Stat. 341; Pub. L. No. 90-550, 82 Stat. 937; Pub. L. No. 91-126, 83 Stat. 221; Pub. L. No. 91-556, 84 Stat. 1442. fla “No part of any appropriation contained in this Act shall be used for the payment of rental on lease agree- ments for the accommodation of Federal agencies in buildings and improvements which are to be erected by the lessor for such agencies at an estimated cost of construction in excess of $200,000 or for the payment of the salary of any person who executes such a lease agreement: Provided. That the foregoing proviso shall not be applicable to projects for which a prospectus for the lease construction of space has been submitted to the Congress and approval made in the same man- ner as for public buildings construction projects pur- suant to the Public Buildings Act of 1959 [40 U.S.C. §§601-15].” In preparing the Solicitation which resulted in the dis- puted award, GSA recognized that it was bound by the quoted provision of the Independent Offices Appropriations Act, 1971, the obvious purpose of which was to prevent without prior congressional approval the financing of new building construction on the credit of the United States by the use of government leases.? In the Solicitation GSA 3. Explaining the purpose of the lease construction provision in the Independent Offices Appropriations Act, 1963, Pub. L. No. 87-741, 76 Stat. 716, where it first appeared, the House Appropria- tions Committee said: “The General Services Administration wants to build sev- eral new buildings in the District of Columbia under a lease construction program to provide 1 million square feet of addi- tional space. The entire space in each building is to be rented by the Government. With this procedure the Committee dis- agrees since they are completely financed new buildings under lease construction contracts. The Committee believes that the Government should own the buildings instead of giving some- body a ten to fifteen year payout. The concern of the Committee is that lease construction is clearly the most expensive method of providing Government space. Under this method the Government . . . never obtains title to the property. A limitation on use of funds for lease con- struction projects costing over $200,000 has therefore been included in the bill. . . .” H.R. Rep. No. 2050, 87th Cong.., 2d Sess. 13 (1962). made reference to the fact that each year since 1963 the lease construction prohibition had appeared in the Inde. pendent Offices Appropriations Act. It provided that if the bid were for a building to be erected by the lessor the bid must remain open for an additional 120 days bevond that normally specified to afford the Government adequate time to obtain congressional approval. It then provided: “(1) For the purpose of this solicitation, buildings . . which are to be erected by the lessor do not include: (b) New buildings . . . the construction status of which, on the date of issuance of the solici- tation, met all of the following conditions: i. Title to the site was vested in the offeror or he possessed such other interest in and dominion and control over the site to enable starting construction. ii. Design was complete. iii. Construction financing fully com- mitted. iv. A building permit for construction of the entire building, extension or addition had been issued. v. Actual construction is currently in progress or a firm construction contract with a fixed completion date has been entered into.” It is undisputed that at the time of the solicitation the Gateway site was a vacant lot in an urban renewal area in the city of Philadelphia, and that the proposed Gateway lease was never submitted to Congress. Merriam’s complaint alleges (1) that Gateway met none of the five criteria set forth in the Solicitation, (2) that the five criteria are in any event an improper interpretation of the Independent Offices Appropriations Act, and (3) that Gateway’s representations in résponse to the Solicitation were false and were known to the officials of GSA to be false when they arbitrarily, capriciously and unlawfully accepted Gateway’s bid. Because the case was dismissed Ta lor lack of standing none of these issues were decided by the district court.# The Government’s Position On appeal the Government advances three arguments. First, it urges that congressional action since the award to Gateway has rendered this case moot. Next it urges that the district court correctly ruled that Merriam lacked standing. Finally, it urges that no statute has been violated by the award or would be violated by the proposed lease. The Mootness Contention On July 13, 1972, Congress passed an appropriations act for certain independent agencies, including the GSA, for the fiscal year ending June 30, 1973. Pub. L. No. 92-351, 86 Stat. 471. If the building is finished before June 30, 1973, that act will apply to the initial rental payments. The 1973 appropriations act, like that of the year before, Pub. L. No. 92-49, 85 Stat. 108, omits the lease-construction prohibition upon which Merriam relies. This, the Government urges, makes Merriam’s case moot, because the prohibition against payments contained in the Independent Offices Appropri- ations Acts for the previous nine years ceased prior to the execution of the Gateway lease. The Government's contention must be read, however, in the light of another congressional action. In June of 1972. prior to the passage of the 1973 appropriations act on which the Government relies, Congress passed the Public Build- ings Amendments of 1972. Pub. L. No. 92-313, 86 Stat. 216. Prior to these amendments, the Public Buildings Act of 1959, 40 U.S.C. §§601-615, had provided that in order to insure ,equitable distribution of public buildings through- 4. The district court does mention that in the event of a deci- sion requiring new bidding. if Gateway is permitted to rebid. the Government's strong preference for Gateway’s site over that of Mer- riam would dictate its choice. Merriam, on the other hand, contends that Gateway should be disqualified from bidding because of its alleged fraud. 76a amount in controversy requirement of 28 U.S.C. $133 hia), Phe court recognized, as well, that the complaint set forth a present controversy arising under a law of the United States. It held, however, that in addition to a genuine con- troversy arising under the laws of the United States, pressed by a party asserting injury in fact to him, there was a sepa- rate standing requirement. Such standing, the court held, must be conferred by some federal statute which brings the party asserting the injury in fact within a protected zone of interest. The district court, in short, applied to the un- successful bidder on a federal contract the requirement that he be a Hohfeldian plaintiff. See W. Hohfeld, Fundamental Legal Conceptions as Applied in Judicial Reasoning | & IL. 23 Yale L. J. 16 (1913), 26 Yale L. J. 710 (1917). It found no federal statute conferring a right of action. Therefore it dismissed the complaint. Chief reliance was placed upon Perkins v. Lukens Steel Co., 310 U.S. 143, 125 (1940) and Tennessee Electric Power Co. v. T.V.A., 306 U.S. 118, 137-38 (1939). Those cases, in turn, hark back to Frothingham i. Mellon, 262 U.S. 447 (1923). In adopting this position, the district court rejected a settled line of authorities in the District of Columbia Cir- cuit recognizing the standing of unsuccessful bidders on federal contracts, to which specific reference will be made shortly. These authorities were rejected on the ground that their analysis of Supreme Court authority since Perkins v. Lukens Steel Co., supra, was tacitly rejected by the Court in the recent case of Sierra Club v. Morton, 405 U.S. 727 1972). We hold that Merriam, as a landlord about to lose vovernment tenants and as an unsuccessful bidder, does have standing to seek judicial review of a government con- tract award, In Scanwell Laboratories, Inc. v. Shaffer, 424 F.2d 859 ‘D.C. Cir. 1970) Judge Tamm made an extensive analysis of the issue whether an unsuccessful bidder on a federal government contract had standing to challenge an award. No purpose would be served by burnishing that analysis by repetition. It suffices to point out that he recognizes the 77a substantial Changes made, since the decision in Perkins v. Lukens Steel Co., supra, first by the Supreme Court in FCC v. Sanders Brothers Radio Station, 309 U.S. 470 (1940) and Scripps-Howard Radio, Inc. v. FCC, 316 U.S. 4 (1942), and next by Congress when it enacted Section 10 of the Administrative Procedure Act. 5 U.S.C. §702. The holding in Scanwell is best set forth by a quotation: “The public interest in preventing the granting of con- tracts through arbitrary or capricious action can prop- erly be vindicated through a suit brought by one who suffers injury as a result of the illegal activity, but the suit itself is brought in the public interest by one act- ing essentially as a ‘private attorney general’.” 424 F.2d at 864. Thus, a bidder who has suffered sufficient injury in fact to meet the case or controversy test of Article III may, in pur- suit of a vindication of that injury, assert not only his own rights but those of the public. The District of Columbia Circuit still follows Scanwell. See Constructores Civiles de Centroamerica v. Hannah, 459 F.2d 1183 (1972); Wheel- abrator Corp. v. Chafee, 445 F.2d 1306 (D.C. Cir. 1971); M. Steinthal & Co. v. Seamans, 455 F.2d 1289 (D.C. Cir. 1971); Ballerina Pen Co. v. Kunzig, 433 F.2d 1204 (D.C. Cir. 1970), cert. denied, 401 U.S. 950 (1971); Blackhawk Heating & Plumbing Co. v. Driver, 433 F.2d 1137 (D.C. Cir. 1970). Merriam meets the standing test adopted by the Dis- trict of Columbia Circuit. Assuming for the moment, as the Government contends that both the Independent Offices Appropriations Act and the Public Buildings Amendments of 1972 were designed to protect no zone of interest within which he falls, Merriam may nevertheless assert the public interest provided he has suffered injury in fact. In addition to the destruction of a present and a future potentially profitable relationship with the Government, an injury which the district court acknowledged, Merriam also suf- fered loss of the costs incurred in preparing and submitting 78a his proposal. Such an injury has been recognized as com. pensable by the Court of Claims when an unsuccessful bidder secks judicial review of an allegedly illegal award in that court. Keco Industries. Inc. v. United States. 428 F.2d 1233 (Ct. Cl. 1970). Bid preparation costs are not specifically alleged here, although under 28 U.S.C. $146 (a)(2) the district court would have jurisdiction to consider such claims if less than $10,000. We mention the possibility of such a claim not to reject the district court’s basis for finding the necessary allegation of injury in fact in the loss of a potentially profitable relationship, but to show that Merriam has suffered more than an intangible or specula- tive loss. Thus. the district court's reliance, in rejecting Mer- riam’s standing, upon Sierra Club v. Morton, supra is mis- placed. That case is an application of the “injury in fact” test. That test requires “that the party seeking review be himself among the injured.” 405 U.S. at 735. The Supreme Court's analysis in Sierra Club v. Morton is actually quite similar to that of Judge Tamm in Scanwell “Taken together, Sanders and Scripps-Howard thus established a dual proposition: the fact of economic injury is what gives a person standing to seek judicial review under the statute, but once review is properly invoked, that person may argue the public interest in support of his claim that the agency has failed to com- ply with its statutory mandate.” (footnote omitted ) 405 U.S. at 737. Sierra Club v. Morton rejects a construction of the Admin- istrative Procedure Act which would recognize standing to seek judicial review in persons not having a direct stake in the outcome. But it recognizes that those, such as unsuc- cessful bidders, who do have such a direct stake, may assert not only their own interest, but that of the public at large. The Sierra Club holding in no way reflects upon the au- thorities in the District of Columbia Circuit which recog: nize the standing of an unsuccessful bidder. Ta The Government argues, however, that Scanwell and the cases following it are inconsistent with Association of Data Processing Service Organizations, Inc. v. Camp, 397 U.S. 150 (1970) and Barlow v. Collins, 397 U.S. 159 (1970). These cases establish a dual test for judicial review of fed- eral agency action. (1) The plaintiff must satisfy Article II] by alleging injury in fact, (2) he must also establish that he falls within the zone of interest protected by the statute or regulation upon which he relies. Neither Merriam nor any other unsuccessful bidder, it is urged, can meet the second test, because all of the statutes or regulations with respect to government procurement are intended solely for the protection of the Government, and no one outside the Gov- ernment falls within their zone of interest. We do not accept the Government's contention. Gov- ernment procurement is usually made under the authority of the Armed Services Procurement Act of 1947, 10 U.S.C. $§2301-14 or the Federal Property and Administrative Services Act of 1949. 41 U.S.C. §§251-60. The latter statute applies to GSA. 41 U.S.C. §252(a\(1). It sets forth procure- ment procedures both for contracts made after advertising for bids and for negotiated contracts. In this case the GSA advertised for bids. 41 U.S.C. §253 provides: “Whenever advertising is required— (a) The advertisement for bids shall be made a suffi- cient time previous to the purchase or contract, and ' “specifications and invitations for bids shall permit such full and free competition as is consistent with the procurement of types of property and services necessary to meet the requirements of the agency concerned. . . . (b) All bids shall be publicly opened at the time and place stated in the advertisement. Award shall be made with reasonable promptness by written notice to that responsible bidder whose bid, conforming to the invitation for bids, will be most advantageous to the Government, price and other factors considered: Oca Rea y Pera eles 80a Provided, That all bids may be rejected when the agency head determines that it is in the public interest so to do.” Accord, 10 U.S.C. §2305(c), applicable to military procure- ment. It is noteworthy that 41 U.S.C. §253(b) permits the rejection of all bids in the public interest, and permits the acceptance of any bid conforming to the invitation to bids found to be most advantageous to the Government, but does not permit the acceptance of a bid not conforming to the invitation to bids. This is consistent with the announced policy in 41 U.S.C. §253(a) of drawing specifications and invitations which shall permit full and free competition. Patently the statute protects not only the Government's interest in securing advantageous contracts, but also the interests of those responding to the Government’s invitation to do business with it.6 Merriam, as a bidder, is within the zone of interest protected by the applicable procurement statute. See Shannon v. HUD, 436 F.2d 809 (3d Cir. 1970); Superior Oil Co. v. Udall, 409 F.2d 1115 (D.C. Cir. 1969). 5. There is nothing in the legislative history of this provision which indicates that “property” does not include rental space. Orig- inally the statute said “supplies”, but this was changed by the 1952 amendments to the Federal Property and Administrative Services Act of 1949. Act of July 12, 1952, ch. 703, $1(m), 66 Stat. 594; Sen. Rep. No. 2075, 1952 U.S. Code Cong. & Ad. News, 82d Cong. 2d Sess. 2121. 6. But see Lind v. Staats, 289 F.Supp. 182 (N.D. Cal. 1968). 7. Even assuming that Merriam did not fall within a zone of interest protected by 41 U.S.C. $253, we would be inclined to hold that his standing as a litigant should nevertheless be recognized. In a Hohfeldian sense a legal right can have its origin elsewhere than in a statute. When the Government solicits proposals to which bidders in good faith take the trouble to respond, the actual rela- tionship between solicitor and bidder is not the same as before. The bidder has placed in the hands of the representatives of the Govern- ment the power to bind him to a contract. It is not too much to find a correlative obligation of fair dealing within the terms of the solici- tation; an obligation sufficient to confer standing to enforce that obligation. ent eealeal 8la Any doubt that Congress intended that bidders be included within the zone of interest of the procurement statutes may be resolved, we think, by the interpretation of these statutes made by the General Accounting Office. That office is the agent of Congress in policing governmental ex- penditures. It has adopted regulations which expressly recognize the standing of unsuccessful bidders to challenge an award. 4 C.F.R. §§20.1-20.12. Indeed, the very solici- tation here in issue was the subject of a proceeding in the General Accounting Office. No statute has made the GAO remedy exclusive, or its determination final. Cf. 5 U.S.C. §§551 et seq. It would be anomalous indeed if the courts declined to recognize the same zone of interest recognized by the General Accounting Office, the congressional agent. Whatever justification there may be for imposing, in addi- tion to the case or controversy requirements of Article II], a zone of interest requirement for standing to seek judicial review of agency action, must be found in some notion of separation of powers. When the congressional agent inter- prets the governing procurement statutes as permitting review of executive agency action the separation of powers justification does not apply. There is, of course, the issue of harmful injunctive interference with executive branch deci- sions. But that problem is not one of standing, but of bal- ancing the equities. See Page Communications Engineers, Inc. v. Resor, No. 24,784 (D.C. Cir., Dec. 4, 1970). There is, too, the issue of appropriate standards for judicial review of government contracting decisions. But again, that prob- lem is not one of standing, but of developing standards of review for the varying factual situations likely to be pre- sented. See A. G. Schoonmaker Co. v. Resor, 445 F.2d 726 D.C. Cir. 1971); Note, Judicial Review and Remedies for the Unsuccessful Bidder on Federal Government) Con- tracts, 47 N.Y.U.L. Rev. 496 (1972). On the record before us neither issue is presented. One other point should be mentioned. Merriam alleged injury not only to a prospective but to a present advan- lageous relationship with the Government. Some cases have recognized that such an existing relationship is suffi- 82: cient to supply the missing ‘Tegal right” element thought to be necessary, in addition to injury in fact, before an un. successful bidder's standing would be recognized. Sev Gonzalez v. Freeman, 334 F.2d 570 (D.C. Cir. 1964); Cop. per Plumbing & Heating Co. v. Campbell, 290 F.2d 368 (D.C. Cir. 1961). On this basis. too, Merriam may be con- sidered to have met any dual test for standing which may be applicable. . We hold, then, that the district court erred in dis. missing Merriam’s claim for lack of standing. The Merits of the Claim On this appeal the Government briefed only mootness and standing. At oral argument, however, government counsel urged that the district court judgment should be affirmed because it was in any event entitled to summan judgment. This contention was based upon the assertion that neither the Independent Offices Appropriations Act, 1971 nor the Public Buildings Amendments of 1972 ap. plied to the disputed lease. We have referred above to the legislative background of both statutes. The Government's point with respect to the Independent Offices Appropria- tions Act is that since the lease with Gateway has not yet been executed and that statute has expired, execution of the lease now could not be a violation. Its point with re- spect to the Public Buildings Amendments of 1972 is that that statute was not intended to have retroactive applica- tion, either to leases already signed, or to agreements to make leases entered into prior to its effective date. This sophisticated analysis, whereby the Gateway lease would simply slip through the cracks between the two statutes, misses the thrust of Merriam’s complaint. When GSA prepared its solicitation for bids it said that the Inde- pendent Offices Appropriations Act applied, and that be. fore upproval of a lease for a new building could be made without congressional approval the offeror must meet five specified criteria. The award to Gateway is objected to not only because the lease was not submitted to Congress for 83a approval, but also because the award without such ap- proval is to a bidder who did not meet the advertised spec- ifications. There is, as well, his contention that the award was fraudulent. The expiration of the Independent Offices Appropriations Act simply cannot cure the agency's dis- regard of its own advertised specifications, or dispose of the fraud allegation. Thus, in rejecting the Government's contention that it is entitled to summary judgment, we need not pass upon its sophisticated but dubious interpre- tation of the two statutes. Finally, the Government urges that the proceeding before the General Accounting Office forecloses relief. As we pointed out above, that office ruled that Gateway did not meet the advertised specifications, but said it would not apply its ruling to existing leases. All that was before the district court, and all that is before us, is the text of the March 17, 1972 ruling by the General Accounting Office. The record of that agency is not before us. There is no way of telling, for example, whether the General Accounting Office was aware that the Government had agreed, in this case, that it would not execute the Gateway lease until construction was completed, thereby avoiding a decision on Merriam’s preliminary injunction application. Certainly the present record is not ripe for summary judg- ment as to the propriety of the General Accounting Office ruling in such circumstances. Moreover, it is the action of G SA of which Merriam seeks judicial review. In this recently developing area of law it is not yet clear what precise role the General Account- ing Office will be held to play. See Wheelabrator Corp. v. Chafee, supra, at 1313-17. Possibly it will ultimately be found appropriate to impose on top of the procurement agency’s procedures a rule requiring exhaustion of admin- istrative remedies available in the General Accounting Office. Such a rule would postpone final judicial review 8. In the cases permitting suit, exhaustion of such administra- tive remedies has been disposed of by considering them inadequate or by deeming them essentially exhausted already. See 3 Gov't Cont. Rep. £24,095 at 12,044-45 (1972). 84a until that agency acted on a bid protest. but might be coupled with the recognition that a federal court could pre- serve the status quo by a preliminary injunction in an appropriate case in the interim. Cf. 29 U.S.C. $160), But such issues cannot be decided in a vacuum. The dis. trict court’s decision dismissing for lack of standing left such a vacuum. Our holding is limited to these propositions. (1) The case is not moot. (2) The plaintiff has standing to sue. (3) We cannot on the present record grant summary judgment to the Government. The judgment of the district court will be reversed and the cause remanded for further proceed: ings. A True Copy: Teste : Clerk of the United States Court of Appeals for the Third Circuit. 7 daa 85a UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT No. 72-1686 JOHN W. MERRIAM, Appellant U. ROBERT L. KUNZIG, Administrator, General Services Ad- ministration, A. J. SAMPSON, Commissioner, Public Building Service of the General Services Administra- tion, L. M. SHIPP, JR., Assistant Commissioner, Space Management of the General Services Adminis- tration and the GENERAL SERVICES ADMINISTRA- TION of the United States of America APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA Present: VAN DUSEN, GIBBONS and HUNTER. Circuit Judges ORDER AMENDING OPINION The slip opinion, filed February 16, 1973, is hereby ordered amended so that the first full paragraph on page 18 reads: Finally, the Government urges that the proceed- ing before the General Accounting Office forecloses relief. As we pointed out above, that office ruled that Gateway did not meet the advertised specifications. but said it would not apply its ruling to eNisting leases. AH that was before the district Court when its 86a opinion was prepared was the text of the March 17. 1972 ruling by the General Accounting Office.*® Ther is no way of telling. for example, whether the General Accounting Office was aware that the Government had agreed, in this case, that it would not execute the Gateway lease until construction was completed, thereby avoiding a decision on Merriam’s preliminary injunction application. Certainly the present record is not ripe for summary judgment by an appellate court as to the propricty of the General Accounting Office ruling in such circumstances. 8. The motion for summary judgment was argued on April 21, 1972. On April 25, 1972, after the argument but before the decision, the parties filed a stipulation making the March 17, 1972 ruling a part of the record. The district court opinion was filed on June 26, 1972. On that date a certificate of GAO was filed. to which is attached certain documents on file in that office in the Merriam bid protest procedure. The circumstances of the filing do not appear of record. The certificate does not establish that the documents attached comprise the entire GAO record. The district court opinion makes reference only to documents included in the record up to the date of the stipulation. And the slip opinion is further ordered amended so that the footnote in the second full paragraph on page 18 numbered 8 is to be renumbered 9. Dated: April 13, 1973 John J. Gibbons Circuit Judge A True Copy : Teste : Clerk of the United States Court of Appeals for the Third Circuit. 87a UNITED STATES COURT OF APPEALS For THE THIRD CIRCUIT No. 72-1686 JOHN W. MERRIAM, Appellant v. ROBERT L. KUNZIG, Administrator, General Services Ad- ministration, A. J. SAMPSON, Commissioner, Public Building Service of the General Services Administra. tion, L. M. SHIPP, JR., Assistant Commissioner. Space Management of the General Services Administration and the GENERAL SERVICES ADMINISTRATION of the United States of America (D.C. Civil Action No. 71-2262) Present Seitz. Chief Judge, Van Dusen, ALDISERT, ApaMs, GIBBONS, RoSENN and Hunter, Circuit Judges C. CLARK HODGSON, JR., Philadelphia, Pa. Attorney for Appellant KENT FRIZZELL Assistant Attorney General Department of Justice Washington, D.C. 20530 CARL J. MALONE United States Attorney Philadelphia, Pennsylvania 19107 WARREN D. MULLOY Assistant United States Attorney Philadelphia, Pennsylvania 19107 90a “Patci.tly the statute protects not only the Govern. ment’s interest in securing advantageous contracts. but also the interests of those responding to the Government's invitation to do business with jt Merriam, as a bidder, is within the zone of interest protected by the applicable procurement statute.” [d. at 15 (footnotes and citations omitted). I am not convinced that the plaintiff has satisfactorily demonstrated that he or any interest or legal right of his was intended by Congress to be protected by the statute in guestion. At the same time, a careful review of the relevant case law has persuaded me that the panel's analysis of the important issues presented in this appeal mav Jead to uncertainty in an area of the law already too well known for its lack of guidance. For these reasons, and because of the effect th: improper resolution of this second issue may be thought to have upon the role of federal courts in our system of government, I respectfully dissent from the Court's decision not to reconsider en banc this important aspect of the present appeal. In view of the vast literature on the standing doc- trine.* it would serve little purpose to repeat what others have already said, except to point out that the standing inquiry focuses upon whether the particular plaintiff “has a sufficient personal interest in getting the relief he seeks... 24 Putting that question to one side? | am 3. See. e.g.. Scott, Standing in the Supreme Court—A Func- tional Analysis, 86 Harv. L. Rev. 645 (1973). Jaffe. Standing Again. 84 Harv. L. Rev. 633 (1971): Davis. The Liberalized Law of Standing. 37 U. Chi. L. Rev. 450 (1970); Davis. Standing: Tax- pavers and Others, 35 U. Chi. L. Rev. 601 (1968); Jaffe. The Citizen as Litigant in Public Actions; The Non-Hohteldian or Ideological Plaintiff, 116 U. Pa. L.. Rev. 1033 (1968). 4. HO Hart & H. Wechsler, The Federal Courts and The Federal System 174 (1953). see Flast v. Cohen, 392 U.S. 83, 99- 100 (1968): “The question is whether the person whose standing is challenged is a proper party to request an adjudication of a particular issue and not whether the issue itself is justiciable.” 5. Lam not inclined to dissent from the Court's decision not Q]a troubled by the pancl’s approach to determining whether Congress has revealed any interest in protecting a party such as this plaintiff. When Congress has not explicitly provided in a given legislative enactment for judicial review of agency action either generally or at the behest of a particular class of litigants (i.e., private individuals), the question may arise whether one seeking to challenge the validity of an agency's action may do so in the courts despite the legislative silence.6 Although this problem may not logically appear to reconsider whether the plaintiff has standing in an Article II] sense. In addition, because | dissent only from the decision of this Court denying the petition for rehearing en banc, | express at this time no views upon the merits of this Case as 4 whole or upon the panels ultimate resolution of the issue which this dissenting opinion addresses. This dissenting opinion deals onty with the approach to the overall “standing question” which the panel has taken. 6. See Jaffe, Standing Again, 84 Harv. L. Rev. 633 (1971). Thus, a distinction must be mude between those cases in which judicial review is sought of an act of a governmental agency which Congress has expressly made subject to review in the courts and those cases in which review is sought by means of a general juris dicttonal grant. See Scott. Standing in the Supreme Court--A Functional Analysis, 86 Harv. L. Rev. 645, 647-48 (1973); compare. eqg.. FCC vy. Sanders Bros. Radio Station, 309 U.S. 470 (1940) (statutory review) with. e.g.. Barlow v. Collins, 397 U.S. 159 (1970) (non-statutory review). For examples of statutes expressly subject- ing agency action to judicial review, sec, e.g., Federal Trade Com mission Act, 15 U.S.C. §45(¢) (1970): Federal Power Act, 16 U.S.C. $825L(b) (1970). Federal Aviation Act, 49 U.S.C. $1486(a) (1970): Interstate Commerce Act, 49 U.S.C. §1¢1970); National Labor Relations Act, 29 U.S.C. $160(f) (1970). Securities Act of 1933, 15 U.S.C. §77Ifa) (1970); Investment Company Act of 1940, 15 U.S.C. 880a-42(a) (1970). Federal Communications Act, 47 U.S.C. $402(b%6) (1970). The statutory and non-statutory review situa- tions must be separately analyzed because in the former Congress has expressed a policy that at least under some circumstances the agency's action shall be subject to judicial review, while in the latter a court does not have even that much guidance. In the present case, no relevant statute expressly provides for judicial review, and thus the plaintiff has sued under 28 U.S.C. $1331 (federal question jurisdiction }. MANS Ghee RIE QP to raise a typical standing issue,’ courts have often sought to resolve it, under the standing rubric, by inquiring whether the plaintiff has a “legally protected interest” or “legal right.”* For example, in Tennessee Electric Power Company vy. TVA® nineteen power companies attempted to attack th constitutional validity of the Tennessee Valley Authority. Despite the financial harm the plaintiffs had suffered, the Supreme Court concluded that they had no right derived from either common law or statute to be free from compe- tition. To bring such a suit, the “right invaded [must be} a legal right, — one of property, one arising out of contract. one protected against tortious invasion, or one founded on a statute which confers a privilege.“ As Justice Frank- furter later explained the doctrine in a different case: “A litigant ordinarily has standing to challeng governmental action of a sort that, if taken by a private 7. Courts frequently treat a host of different kinds of prob- lems as raising standing issues. Familiar are cases involving (! whether the plaintiff has in fact suffered injury. see Sierra Club v. Morton, 405 U.S. 727 (1972). Flast v. Cohen, 392 U.S. 83. 94 101 (1968). (2) whether a plaintiff may properly sue on the basi, of another person's rights, see NAACP v. Alabama, 357 U.S. 449 458 (1958). Barrows v. Jackson, 346 U.S. 249, 255-59 (1953). The present case, on the other hand. concerns. apart from the Article It “injury in fact” issue, whether the plaintiff can establish the existence of a legal right which the GSA has allegedly violated If he cannot so demonstrate, dismissal for iailure to state a claim or cause of action is a more appropriate judicial response, in my view. than dismissal for lack of standing. The Supreme Court however, has treated the problem as one of “standing.” and, there fore, throughout this opinion, | shall analyze it im the same terms See. e.g... Investment Co. Institute v. Camp, 401 U.S. 617 (1971 Association of Data Processing Service Organizations, Inc. \ Camp, 397 U.S. 150 (1970), Perkins v. Lukens Steel, 510 US. 115 (1940). 8. See Perkins v. Lukens Steel, 310 U.S. 113, 125 (1940). Alabama Power Co. v. Ickes, 302 U.S. 464 (1938). 9. 306 US. 118161939) 10. Id. at 137-38 a al xl person, would create a right of action cognizable by the courts... Or standing may be based on an interest created by the Constitution or a statute. But if no comparable common law right exists and no such constitutional or statutory interest has been created, relief is not available judicially. Within two years of the Tennessee Electric Power decision, the Supreme Court journeyed into the area of determining what a plaintiff must show in order to satisfy the “legally protected interest” test. In FCC v. Sanders Brothers Radio Station.’? an owner of a radio station sought judicial review of the grant of an operating license to an applicant. The Court held that the seciion of the Federal Communications Act permitting an appeal by any person aggrieved or whose interests are advers« ly affected by any decision of the Commission” provided standing for the plaintiff to challenge the grant of the license to its competitor. The Supreme Court did so, however, onlv (a) after examining the relevant legislative historv'™ and (b) in view of the express provision in the statute for judicial review In 1968, the Supreme Court examined standing to challenge agency action in Hardin v. Kentucky Utulities Company.) In that case. a private power company sought review of the TV.A's expansion of services into the complainant's market arca by alleging that such expansion violated a statute.'© Although the Tennessee Valley Au- Il. Joint Anti-Fascist Refugee Comm. vo MeGrath, 341 U.S. 123. 152-53 (Frankfurter, J.. concurring) 12. 309 US. 470(1940) 13. 47 U.S.C. $402¢b) (1964). It should be noted that in view of this provision Sanders should be analyzed as a statutory review case See note 6. supra 14. 3O9ULS. at 476-77 15. 390 U.S. 1 (61968) 16. Tennessee Valley Authority Act of 1933 $15d(a), 16 US.C. $831n-diay (1964). see US. at3no i ROO Ohi thority Act contains no express provision for judicial review, the Supreme Court inspected the legislative history in order to determine whether the plaintiff could rely upon implied protection from the regulatory statute.'? Inferring from the legislative history that the “primary purpose” of the statute was to benefit the plaintiff's interest, the Court held that such implicit congressional intent justified judicial review, The Supreme Court has even more recently probed the requisites for judicial review of agency action. In Associa: tion of Data Processing Service Organizations v. Camp," the Comptroller of the Currency issued a ruling permitting national banks to provide data-processing service to their customers. An association of companies offering Computer services throughout the country filed suit challenging the ruling on the ground that the National Banking Act gives national banks only such “incidental powers as_ shall be necessary to carry on the business of banking. . . 7! Examining the standing issue in two parts, the Su- preme Court first concluded that the petitioners had suffered “injury in’ fact.2° In the second part. of its standing analysis, the Court proceeded to determine “whether the interest sought to be protected by the com- plainant is arguably within the zone of interests to be protected or regulated by the statute . . . in question,*! Quoting from a First Circuit opinion®? that discussed the legislative history and purpose of §4 of the Bank Service 17. 390 U.S. at 6-7 18 397 U.S. 150 (1970). For additional recent cases on the subject. see Investment Co. Institute v. Camp, 401 U.S. 617 (1971). Arnold Tours, Inc. v. Camp, 400 U.S. 45 (1970) (per curiam). Barlow v. Collins, 397 U.S. 159 (1970): Flast v. Cohen, 392 U.S 83 (1968). 19. 12 U.S.C. §24 (seventh) (1970). 20, 397 U.S..at 152 2). ‘ld: at 153 22. Id. at 155. quoting Arnold Tours, Inc. v. Camp, 408 F2¢ 1147, 1153 (1st Cir. 1969). 95a Corporation Act of 1962, prohibiting bank service corpora- tions from engaging “in any activity other than the per- formance of bank services for banks,” the Supreme Court held that “§4 arguably brings a competitor within the zone of interests protected by it.”24 The critical issue which this dissent addresses is essentially the same as the question presented in the cases discussed above: whether Congress, in enacting the statute or statutes involved, intended them to protect the interest asserted by the particular litigant in each case.25 Placed in the factual setting of this appeal, that question becomes whether Congress intended to provide one seeking a government contract with judicial recourse when an alleged violation of that asserted interest by a federal administrative agency is set forth in a claim for judicial relief. In grappling with this problem, it is not sufficient to hold merely that the plaintiff has standing to sue, since that holding may, in effect, sav only that he has been injured in fact by the agency action of which he complains.?6 Rather, the Cou [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385607_0741%3A1. Public record. Not legal advice.