Petition for Writ of Certiorari — Courtney v. Smith

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(\) Supreme Court, U.S,

PLE D

No. 02162600721 2009

OFFICE OF Tie CLERK

In the

Supreme Court of the United States

JOHN M. COURTNEY; LARRY E. TROUTMAN;

MALCOLM A. WEBSTER,

Petitioners,

UNITED STATES OF AMERICA; DAVID R. SMITH,

MAJOR GENERAL, VICE COMMANDER OF THE

HQAFRC/CV, UNITED STATES AIR FORCE RESERVE,

Respondents.

On Petition For A Writ Of Certiorari

To The United States Court Of

Appeals For The Sixth Circuit

PETITION FOR WRIT OF CERTIORARI

Patrick J. Donlin, Sr.

Attorney at Law

308 Porter Street, N.E.

Warren, Ohio 44483

(330) 399-2632

Counsel fer Petitioners

—_— --_- ~~ =

[a . ~ ‘> —— — — - =_—

QUESTIONS PRESENTED FOR REVIEW

Whether the failure of the court below to find that

petitioners have prudential standing to sue, by being

within the required, “zone of interest”, presents a conflict

among the circuits in the application of prudential

standing law in wrongful privatization cases previously

established by this court, creating a serious and important

departure from this court’s established decisions and

creating an urgent need for review and/or clarification by

this court.

Ss ae

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TABLE OF CONTENTS

Page

QUESTIONS PRESENTED FOR REVIEW ..............000.. i

Se Te Se eiinarintcecaaiiadiiiia ieee ii

OPINIONS AND ORDERS BELOW ............ccccceceeeeeee iii

TABLE OF CASES, CITATIONS, AUTHORITIES ...... iv

STATEMENT OF SUBJECT MATTER AND

APPELLATE JURISDICTION ............c.cscscsssssososscscseceees 1

ili

OPINIONS AND ORDERS BELOW

The decision of the 6th Circuit Court of Appeals

(App. la-18a) is not reported but may be found at 2002

FED App. 0248 (6th Cir.) File Name: 02a0248p.06.

The decision of the Northern District of Ohio (App.

19a-26a) is not reported, but was rendered in Case Number

4:00 6V 1237 on November 15, 2000.

TABLE OF AUTHORITIES

Federal Cases Page

Abbott Laboratories v. Gardner,

8, Re eC EE meee ot 10

Air Courier Conference v. Postal Workers,

oh ef: AENEAN nr RIO eR Ce 7-8

American Friends Service Committee v. Webster,

Tae FF. BO, 4B GD.G. Cir, UBBB) ....<.cccrevecessccccoseesssvsecceness ce)

American Postal Workers Union v. U. So. Postal Service,

891 F.2d 304 (D.C. Cir. 1989) .............ccosessssossccccoseees 12-14

Arnold Tours, Inc. v. Camp,

FRAN Eo RRP E RNAP SOT LDS PS, %

Barlow v. Collins, -

ET I a a 10

Clarke v. Securities Industry Association

i ee: : eC ieee 7-15, 17

Data Processing Service Organizations, Inc. v. Camp,

re es Pe Ci icciacesstinictncintcaensnaiodessone 7, 8, 9, 10, 17

Diebold v. U.S.,

No. 90-5373 (6th Cir.) 1991, 947 F.2d 787 ............ 5, 6, 16

Hazardous Waste Treatment Council v. EPA,

861 F.2d 277 (D.C. Cir. 1988) ..................0000 11, 14, 15, 16

- International Ladies’ Garment Union v. Donovan,

232 U.S. App. D.C. 309 (D.C. Cir. 1983) ......cccccccccccceeees 16

BU penn ema pyre naa ere IRR

Investment Company Institute v. Camp,

Se SH er Ce iddaad seeped entiseniccinendcin 8,9

National Air Traffic Controllers Association v. Pena,

1996 U.S. App. LEXIS 8285 (1996) .........ccccccessceseeeees 6

National Credit Union Admin. v.

First National Bank & Trust Co.,

522 U.S. 479 (1908)........0crcccescesvessecees G, 7, &, 9, 11, 12, 17

National Federation of Federal Employees v. Cheney,

883 F.2d 1038 (D.C. Cir. 1989) ...........cccscsseseeseeeee 5, 9-16

RULES AND STATUTES

10 U.S.C. 2304, 2462-3, 2467-9, 2469(a)...... cc ceccceseeees 1

i Gy By GUD disiaisscidvcleianlavemationteamianadtdaale 1

EE SE PR MEU, vi consciiilasincsiclvncdinnbciaite dens 1

STATEMENT OF SUBJECT MATTER

AND APPELLATE JURISDICTION

The district court, and the court below, were

presented with a federal question involving a claim by the

three named plaintiffs, who seek to represent themselves

and 93 other federal employees at the Air Force Reserve

Station in Youngstown, Ohio, claiming that an Air Force

cost comparison study pursuant to Office of Management

and Budget’s Circular A-76 was conducted unfairly, in

violation of procedural guidelines of OMB Circular A-76,

the OMB A76 Handbook, the Budget and Accounting Act of

1921 (31 U.S.C. 1 et seq.), the Office of Federal Procurement

Policy Act Amendments of 1979 (41 U.S.C. 401 et seq.), and

the Federal Activities Inventory Reform Act of 1998 (PLL.

105-270), in illegally failing to award the performance of

the workload at issue to the most cost-effective bidder, the

government in-house employees, in violation of 10 U.S.C.

Section 2304, 2461, 2462, 2463, 2467, 2468, 2469, 2469(a)

and the other statutes mentioned herein above. Defendants

filed a motion to dismiss claiming lack of standing to sue,

which motion was granted on November 19, 2000, after

written briefs and memoranda from both sides. A timely

notice of appeal was filed and the case was reviewed by the

United States Court of Appeals For The Sixth Circuit, oral

arguments made on May 2, 2002, and then on July 23, 2002

said Court rendered a decision affirming the district court

decision. From that decision, appellants petition this Court

with the instant Petition for Writ of Certiorari.

STATEMENT OF THE CASE

This is an action by employees of the United States

Air Force Reserve Base, 910 LG/LGC in Vienna, Ohio

alleging an illegally and unfairly awarded contracting-out

decision to a private contractor, of a workload previously

performed by plaintiffs, who were the losing in-house bidders

in the contracting-out process, under the Office of

Management and Budget’s Circular A-76, which seeks to

assure that commercial activities are performed by the

entity, whether in-house government employees or private

contractors, most efficient and cost-effective in performing

said workload.

SEE! OP

The Air Force awarded the contract to Griffin

Services after a bidding process. Petitioners and their union

filed an administrative appeal under the A-76 Circular

procedure, which appeal was denied. Plaintiffs, three

members of the said union, seeking to represent all 93

employees, filed suit alleging that illegal and unfair cost

comparison procedures were followed, resulting in plaintiffs

and their co-workers, allegedly the most efficient and cost-

effective bidder, to lose both the bidding contest and their

federal employment, due to the illegal awarding of the said

contract to the less efficient and cost-effective entity, Griffin

Services. |

Petitioners (plaintiffs) amended their complaint once

before responsive pleadings were required, and later filed a

motion to amend a second time (shortly after responsive

pleadings were due) seeking to add class action allegations.

The District Court denied said motion and treated the

complaint not as a class action but merely as an action

brought by the three named plaintiffs.

Although the facts supporting the merits of the claims

of petitioners were never perinitted to be fully developed

because the case was short-circuited by the granting of a

Motion to dismiss at an early stage, and before any discovery,

petitioners filed their claim alleging that the Air Force

illegally awarded a multimillion dollar base-operating

support contract to a private contractor, Griffin Services,

by violating those specific statutes and A-76 Office of

Management and Budget Circular, which require, and

indeed manifest a congressional tent to have, fair

competition between the public sector, the federal

government employees, and the private sector for the

performance of commercial type workloads, and to have

AES OAR GORI MDCT IS

Ee vorrei pa oony

those workloads awarded to the most cost-effective entity.

As alleged in the complaint, and further alleged in the

Affidavit of Keith Chopic (an exhibit to plaintiffs’ trial Court

memorandum in opposition to the motion to dismiss), the

actions which plaintiffs allege are illegal, which results in

the awarding of the workload to the private contractor, have

resulted in the less efficient bidder winning the workload,

in plaintiffs and their 90 colleagues, with only a handful of

exceptions, either losing their federal jobs and careers

completely, being forced to relocate to other federal jobs

hundreds of miles from their homes, being forced to take

early retirement or buy-outs against their will, or being

downgraded to lesser positions. The administrative appeal

filed by the union was denied, and the timely notice of appeal

was filed in the Sixth Circuit, which Court affirmed, leading

to the instant Petition.

As set forth in the complaint and in the Affidavit of

Keith Chopic, petitioner John M. Courtney, has, as a result

of the illegal acts of defendants, been forced to choose

between losing his federal career entirely, or accepting a job

300 miles away near the New Jersey/Pennsylvania border

at the Tobyhanna Army Facility. Said petitioner chose the

latter, and has suffered a traumatic separation from his wife

and children, who have employment and school obligations

in the area of the affected Air Reserve Base in Vienna

Township. Petitioners have alleged, and would allege, if the

case were allowed to proceed on its merits, that, as pointed

out in the said Chopic Affidavit, one of many unfair features

of defendants’ actions included a conflict of interest situation

in which two or more of the base management employees

were in charge of the A-76 Cost Analysis Committee of the

federal employees’ group, charged with the job of calculating

the bid of the in-house employees, have been given top jobs

on the base under the contractor, Griffin Services, the

“mandatory” first right of refusal to former employees to

employment with the contractor was not followed and

several of the 93 affected employees were denied jobs because

of their attempted participation in this action, and that, as

the contractor assumed the said workload, the higher cost

of that contractor’s work became clear. Approximately half

of the 93 employees whom the three named petitioners have

attempted to represent in this suit, including two of the three

named Plaintiffs, fearing the lack of on-base placement or

any placement, were forced to accept unwanted buy-outs or

early retirements, curtailing their careers and diminishing

their pension benefits.

Petitioners would demonstrate, if the case proceeded

on its merits, that the best interests of taxpayers, and the

intent of Congress, have been thwarted by the awarding of

the contract to the less efficient entity, and that the required

“right of first refusal” offers were not forthcoming as

required, in many cases. Petitioners submit that, at a

hearing upon the merits, after conducting discovery, they

would show that a fair application of the cost comparison

statutes and administrative regulations would result in their

group being found to be the most efficient and cost-effective

entity, requiring a restoration of the contract to said

employees group, and resulting in efficiency savings for the

government.

SUMMARY OF THE ARGUMENT

Petitioners allege that they and their 90 co-workers

suffered true “injuries in fact” (the loss of careers or their

diminution), that the injuries were clearly traceable to the

challenged action, which is the faulty, unfair and illegal cost

comparison methods and actions of defendants. Further,

petitioners submit that the injuries to their careers, and

the injury to the intent of Congress to assure cost-effective

performance, are quite likely to be redressed by a favorable

decision of the court upon hearing this case on the merits.

Thus, petitioners clearly satisfy all three constitutional

requirements for standing to sue, which was not the basis

of the ruling below.

Petitioners further argue that the Court below was

in error in holding that plaintiffs are not within the “zone of

| interests” test enunciated by the Supreme Court of the

United States to determine whether such plaintiffs have

prudential standing to sue. There is one Sixth Circuit

decision which directly impacts this issue: The Sixth Circuit

held in Diebold v. U.S., No. 90-5373 (6th Cir.) 1991, 947

F.2d 787, that “the contracting-out decision in this wrongful

t privatization case is reviewable in a federal district court

under the Administrative Procedure Act. We reverse the

judgment of the District court in its dismissal for lack of

jurisdiction. We remand to the District court for further

proceedings including the development of the fact and law

governing standing for these plaintiffs.” Had the 6th Circuit

simply followed it’s own precedent in Diebold, the facts

herein could have been developed in the normal course, in

light of the District Court ruling that petitioners had not,

at that early stage of the case, demonstrated that they, and

more importantly, the taxpayers, had suffered an injury in

fact, necessary to show prudential standing.

Petitioners also submit that the numerous prior

holdings of the Supreme Court of the United States clearly

support plaintiffs’ position regarding the “zone of interest”

test, and the case relied upon by defendants, and by the

trial Court, National Federation of Federal Employees v.

Cheney, 883 F.2d 1038 (D.C. Cir. 1989) (full citation omitted)

is in conflict with the line of United States Supreme Court

cases, and with Diebold in the 6th Circuit, which have

allowed standing in cases similar to the case at bar.

Petitioners also argue that the trial court abused its

discretion in denying plaintiffs’ motion for leave to file a

second amended complaint, seeking to add allegations of

class action status. Plaintiffs submit that the granting of

said leave to amend, at such an early stage, could not

prejudice any party, and that Federal Rules of Civil

Procedure 15 and 23 require that the courts grant such

amendments freely when justice so requires, and allows

motions to certify a class long after commencement of an

action.

ARGUMENT

The failure of the Court below to find that petitioners

have prudential standing to sue presents a conflict among

the Circuits and is in conflict with prior decisions as to

standing by this Court creating an important departure from

this Court’s established decisions as to standing, an

important federal issue.

The only decision in the Sixth Circuit on federal

employee standing in this context relative to the issue of

prudential standing requirements: the “zone of interests”

test, is the Diebold case, decided in favor of standing. This

case should have been followed. The unpublished decision

of National Air Traffic Controllers Association v. Pena, 1996

U.S. App. LEXIS 8285 (1996), cited by appellees and the

Court below, is clearly not applicable since it involves

whether a service is inherently a governmental function and

can or cannot be properly contracted out under OMB

Circular A-76. Petitioners have not argued here that the

workload in question is governmental. Therefore, the

National Air Traffic Controllers Association case is

inapplicable here.

The Sixth circuit, and the trial courts within it, are

governed by a series of Supreme Court decisions on the issue

of whether plaintiffs are within the “zone of interests”

standing rule. Appellees’ trial Court memorandum

erroneously claimed that Courts can only find plaintiffs

within the “zone of interests” of the applicable statutes if

Congress specifically intended to benefit a given class of

plaintiffs by its statute (defendants’ trial memorandum at

p. 9). This Court has held otherwise.

The most recent, and clearest, Supreme Court

pronouncement on the “zone of interests” test is the case of

National Credit Union Admin. v. First National Bank &

Trust Co., 522 U.S. 479 (1998). The National Credit Union

Admin. v. First National Bank & Trust Co. case was an action

by commercial banks under Section 10(a) of the

Administrative Procedure Act, challenging government

agency action by the National Credit Union Administration

interpreting the federal credit union statute to allow

unrelated groups to become members. In finding that the

plaintiffs were arguably within the “zone of interests”

contemplated by Congress and thus had standing, the Court

spelled out and clarified its consistent line of decisions

favoring liberal standing interpretations and allowing liberal

access to review of government agency actions:

“(c) In applying the “zone of interests” test,

the Court does not ask whether Congress

specifically intended the statute at issue to

benefit the plaintiff, see, e.g., Clarke, supra,

at 399-400, 107 S.Ct., at 747-748. Instead, it

discerns the interests “arguably...to be

protected” by the statutory provision and

inquires whether the plaintiff’s interests

affected by the agency action in question are

among them, see e.g., Data Processing, supra,

at -153, 90 S.Ct., at 829-830...”

Appellees argued, in their trial Court dismissal

motion memo, an earlier case, Air Courier Conference uv.

Postal Workers, 498 U.S. 517 (1991), to support its claim

that Congress must be found to have targeted a certain entity

in order for that entity to have standing. The Supreme Court

in National Credit Union Admin. case said that such an

interpretation of Air Courier is mistaken:

“We therefore cannot accept petitioners’

argument that respondents do not have

standing because there is no evidence that the

Congress that enacted 109 was concerned

with commercial banks’ competitive interests.

To accept that argument, we would have to

reformulate the “zone of interests” test to

require that congress had specifically

intended to benefit a particular (522 U.S. 481)

class of plaintiffs before a plaintiff from that

class could have standing under the

Administrative Procedure Act to sue.

Petitioners also mistakenly rely on Air

Courier Conference v. Postal Workers, 498 U.S.

517, 519, 111 S.Ct. 913, 195, 112, L.Ed.2d

1125. Unlike the plaintiffs there who were

denied standing, respondents here have

“competitive and direct injury,” 498 U.S., at

528, n. 5, 111 S.Ct. at 920, n. 5, as well as an

interest “arguably...to be protected” by the

statute in question. Under the court’s

precedents, it is irrelevant that in enacting

the FCUA, Congress did not specifically

intend to protect commercial banks Pp. 936-

938.”

Further clarifying, the Supreme Count in National

Credit Union Admin. v. First National Bank & Trust Co.

case tracked the development of the test in their decision in

Data Processing Service Organizations, Inc. v. Camp, 397

U.S. 150 (1970), Arnold Tours, Inc. v. Camp, 400 U.S. 45

(1970), Investment Company Institute v. Camp, 401 U.S. 617

(1971) and Clarke v. Securities Industry Association, 479

U.S. 388 (1987):

“In each case, we declined to accept the

Comptroller’s argument. In Data Processing,

we considered it irrelevant that the statutes

in question “d(id) not in terms protect a

specified group, “because” their general policy

(was) apparent(,) and those whose interests

(were) directly affected by a broad or narrow

interpretation of (the statutes) (were) easily

identifiable.” 397 U.S., at 157, 90 S.Ct., at 832.

In Arnold Tours, we similarly believed it

irrelevant that congress had shown no

concern for the competitive position of travel

agents in enacting the statutes in question.

See 400 U.S., at 46, 91 S.Ct., at 159. In

Investment Company Institute, we were

unmoved by Justice Harlan’s comment in

dissent that the Glass-Steagall Act was

passed in spite of its positive effects on the

competitive position of investment banks. See

401 U.S., at 640, 91 S.Ct., at 1103-1104

(Harlan, J., dissenting). And in Clarke, we did

not debate whether (522 U.S. 498) the

Congress that enacted the McFadden Act was

concerned about the competitive position of

securities dealers. See 479 U.S., at 403, 107

S.Ct., at 759. The provisions at issue in each

of these cases, moreover, could be said merely

to be safety-and-soundness provisions,

enacted only to protect national banks and

their depositors and without a concern for

competitive effects. We nonetheless did not

hesitate to find standing.” National Credit

Union Admin. at 938.

Judge Mikva dissenting in the D.C. Circuit’s case of

National Federation of Federal Employees v. Cheney, 883

F.2d 1038 (D.C. Cir. 1989), cert. denied, 496 U.S. 936 (1990),

provided an excellent discussion of the “zone of interests”

test from its inception:

“Originally, the zone of interests test for 702

claims was adopted, in Data Processing

Service Organizations, Inc. v. Camp, 397 U.S.

150, 153-54, 90 S.Ct. 827, 829-30, 25 L.Ed.2d

184 (1970), to enlarge, not restrict, the class

entitled to protest administrative action. See

American Friends Service Committee v.

Webster, 720 F.2d 29, 49 (D.C. Cir. 1983). The

Supreme Court has repeated loudly and

clearly that courts are to welcome those

pursuing grievances under’ the

Administrative Procedure Act. In Abbott

Laboratories v. Gardner, 387 U.S. 136, 140-

41, 87S.Ct. 1507, 1511, 18 L.Ed.2d 681 (1967),

the Court said that “the Administrative

Procedure Act’s generous review provisions

must be given a hospitable interpretation” ,

and that “only upon a showing of clear and

convincing evidence of a contrary legislative -

intent should the courts restrict access to

judicial review” (internal quotations deleted).

In Barlow v. Collins, 397 U.S. 159, 166-67,

90 S.Ct. 832, 837-38, 25 L.Ed.2d 192 (1970),

the companion case to Data Processing, the

Court cautioned that “preclusion of judicial

review of administrative action adjudicating

private rights is not lightly to be inferred” and

that “judicial review*** will not be cut off

unless there is persuasive reason to believe

that such was the purpose of Congress.” In

its most recent opinion on the subject, the

Court reiterated that while the “zone of

interests” test is a gloss on 702 and provides

some limit to access, it “is not meant to be

especially demanding,” and there need only

be “a plausible relationship” between the

» interest plaintiff asserts and the policies

underlying the relevant statutory framework.

Clarke, 479 U.S. at 396, 399, 403, 107 S.Ct.

At 756, 757, 58. In the 19 years since the Court

announced the “zone of interests” test for 702

claims, it has yet to find any party before it

outside the zone.” See National Federation of

Federal Employees v. Cheney at p. 1054.

The United States Supreme Court, having set forth

the standard in Clarke v. Securities Industry Association

and that line of cases, has clearly and repeatedly\granted

standing to plaintiffs whose actual motivation is marginally

related to Congress’ purposes, but whose asserted interest

is consistent with them.

Standing is permitted to those whom Congress

intended to be relied on to challenge agency disregard of

the law. Clarke, 479 U.S. at 399. Clarke has held that “there

is a presumption of judicial review of agency action which is

overcome when there is a fairly discernible congressional

intent to preclude it.” id.

The Sixth Circuit’s failure herein below to follow the

Supreme Court’s standard enunciated in National Credit

Union Admin. v. First National Bank & Trust Co. and its

predecessors, is an unsupportable departure form this

Court’s pronouncements, and must be reversed. There is

also precedent even in the D.C. Circuit (which gave us

National Federation of Federal Employees and Judge

Mikva’s strong dissent) for the proposition that standing

can be found in cases in which plaintiffs are not affirmatively

parties whom Congress was trying to protect. In Hazardous

Waste Treatment Council v. EPA, 861 F.2d 277 (D.C. Cir.

1988) (per curiam), cert. denied, the D.C. Circuit analyzed

the Supreme Court’s “zone of interests” decisions and

concluded that: “In the absence of apparent congressional

intent to benefit, however, there may still be standing if some

factor — some indicator that the plaintiff is a peculiarly

suitable challenger of administrative neglect - supports an

inference that Congress would have intended eligibility.” id.

861 F.2d at 283. The decision in Hazardous Waste Treatment

Council finding that the “zone of interests” issue is to be

decided in favor of finding standing under circumstances

such as this, where plaintiffs are not only a peculiarly

suitable challenger, but the only available challenger, shows

that even in the D.C. Circuit which rendered the decision in

National Federation of Federal Employees v. Cheney, there

is support for standing in cases such as the instant one.

In the face of this strong line of Supreme Court

precedent favoring standing in such cases, the 1988 Seventh

(D.C.)-Cireuit decision in National Federation of Federal

Employees, cited as the sole authority by appellees below,

and by the trial Court, is singularly unpersuasive. The

lengthy discussion by the majority in the National

Federation of Federal Employees, decision (appellants’ trail

Court memorandum at p. 9-13), pointing to the thin

connection between those plaintiffs’ interests and the intent

of Congress, is irrelevant as long as there is “some arguable

connection.” Even the same D.C. Circuit Court, later in the

same year, (1989) watered down, if not completely rejected,

the reasoning in National Federation of Federal Employees,

the bulwark case of the defendants’ trial Court memo on

standing, long before the 1998 Supreme Court clarified

Clarke v. Securities Industry Association with National

Credit Union Admin. v. First National Bank & Trust Co., in

the case of American Postal Workers Union v. U.S. Postal

Service, 891 F.2d 304 (D.C. Cir. 1989):

“In Clarke, the most recent instruction from

the Supreme Court on the subject, the Court

acknowledged that the “zone of interests” test

is a gloss on 720 of the Administrative

Procedure Act that provides some limits on

access to the courts. The Clarke Court,

however, in several places admonished this

circuit and others in general for a somewhat

parsimonious approach to the law of

prudential standing, stating that “there need

be no indication of a congressional purpose to

benefit the would-be plaintiff.” 479 U.S. at

399-400 & n. 15, 107 S.Ct. at 757 & n. 15

(emphasis added). Again, the Court asserted

that the test “is not meant to be especially

demanding,” and that there need be only “a

plausible relationship” between the interests

propounded by the plaintiff and the policies

undergirding the statutory framework. Pp.

396, 399, 403, 107 S.Ct. pp. 755, 757, 759.

Finally, the Court reaffirmed an established

presumption in favor of judicial review.

Would-be plaintiffs should be allowed into

courts unless they are “not even ‘arguably

within the zone of interests to be protected or

regulated by the statute.” P. 397, 107 S.Ct. p.

756 (emphasis added, citation omitted). This

presumption would seem to operate with

particular favor for those plaintiffs that

satisfy the constitutional requirements for

standing.

As the Clarke Court explained, the “zone of

interests” test serves as our guide for deciding

whether “in view of Congress” evident intent

to make agency action presumptively

reviewable, a particular plaintiff should be

heard to complain of a particular agency

action.” P. 399, 107 S.Ct. p. 757. In cases such

as this, where the would-be plaintiff is not

the subject of the contested regulation, the

test denies standing only if “the plaintiff’s

interests are so marginally related to or

inconsistent with the purposes implicit in the

statute that it cannot reasonably be assumed

that congress intended to permit the suit.” P.

399, 107 p. 757 (emphasis added).

With the Supreme Court and the D.C. Circuit in

agreement that there is a presumption of standing and

reviewability in these cases, “would-be plaintiffs need only

have an interest slightly above “marginal,” arguable to be

precise.” That test is easily met in the instant case.

Appellees, in their trial Court memo, relying solely

on the D.C. Circuit’s 1989 decision in National Federation

of Federal Employees v. Cheney, try to argue that plaintiffs

in National Federation of Federal Employees and in the

—— ae

instant case, are only interested in showing illegai

application of contracting-out statutes, to save their jobs,

which, they argue, is not in the “zone of interests”. They

cite no real authority for its premise that the employees can

not assert an interest in having the government conform to

the law in making a contracting-out decision. On the

contrary, it is easily arguable that congress plausibly

expected someone such as the plaintiffs (federal employees)

to enforce its expressed statutory intentions to have a fair

contracting-out process. In Hazardous Waste Treatment

Council v. EPA, 861 F.2d 277 (D.C. Circuit 1988), cert. denied,

490 U.S. 1106, at 284 quoting Clarke v. Securities Industry

Association, the Seventh Circuit interpreted the Supreme

Court’s “zone of interests” pronouncements to say that, even

without clear congressional intent to benefit federal

employees with these statutes, the fact that federal

employees are peculiarly suitable challengers of

administrative misfeasance, that would support the

argument that Congress would have intended that they have

standing. Applying this Court’s law of standing consistently,

federal employees (and union plaintiffs) do have standing

unless the statutes and their histories reveal a congressional

intent to preclude reliance on the particular class of

plaintiffs.

As Judge Mikva of the D.C. Circuit said in his

extensive and well-reasoned dissent in National Federation

of Federal Employees v. Cheney, (he wrote the majority

opinion later that year in American Postal Workers Union

v. U.S. Postal Service finding standing) at p. 1059:

“The 1921 Budget Act was enacted to

centralize the budget process and make it

more economical. This is emphasized

repeatedly in its legislative history. For

example, its chief sponsor, Rep. James W.

Good, said in describing the evil the law was

intended to remedy: “We have been talking

about economy in Government affairs, and at

SSD GPT

the same time have been practicing

extravagance. *** It will be necessary to adopt

a system of economy and efficiency in every

department, establishment, and bureau in

order that the Government of the United

States may obtain what it has never obtained

before in all its history, and that is a dollar’s

worth of service, if possible, for every dollar

expended.” 61 cong.Rec. 980 (1921). Thus, an

action brought by National Federation of

Federal Employees to assure that the Army

chooses to obtain needed services by the least

expensive means is wholly consistent with

congress’ purposes.”

Petitioners submit that their action here to assure

that the Air Force chooses to obtain needed services by the

least expensive means is also wholly consistent with

Congress’ purpose in enacting the contracting-out provisions

and the A-76 Circular of OMB. Clearly, they have standing

to sue in this case, since they, as the displaced employees,

are the only would-be plaintiffs available to seek

enforcement of Congress’ intent to obtain the most efficient

cost for services by fair and lawful cost comparison

procedures.

Judge Mikva, in his dissent urging that the majority

in National Federation of Federal Employees v. Cheney, were

contravening their own precedent in Hazardous Waste

Treatment Council v. EPA, and were contravening Clarke

v. Securities Industries Association and other Supreme Court

decisions, said:

“There is no evidence that congress intended

to benefit federal employees when it passed

two of the three statutes at issue, and

amiguous evidence as to the third. Thus the

question, according to Hazardous Waste

Treatment Council v. EPA, is whether there

is some factor - such as that federal employees

are peculiarly suitable challengers of

administrative misfeasance (emphasis added)

- that would support an inference that

Congress would have intended that they have

standing. That factor is present here...”.

« .As Hazardous Waste Treatment Council

indicates, the availability of another potential

plaintiff whom Congress affirmatively sought

to protect may defeat standing. In the only

Supreme Court case - as well as in every post-

Clarke D.C. circuit case - rejecting

Administrative Procedure Act standing,

another potential plaintiff was found to be

available...”.

“While the existence of an alternative

plaintiff, affirmatively contemplated by

Congress, may not always be sufficient

ground to deny standing, see International

Ladies’ Garment Union v. Donovan, 232 U.S.

App. D.C. 309, 722 F.2d 795 (D.C. Cir. 1983),

neither the Supreme Court nor this court

(since Clarke) has denied Administrative

Procedure Act standing when, as here, no

alternative plaintiff can be found...”.

In the case at bar as well, no alternative plaintiff

can be found. As in all such Supreme Court cases, and all

such prior Seventh Circuit cases except National Federation

of Federal Employees v. Cheney, standing should have also

been found here by the Court below. The failure of the Sixth

Circuit to follow Diebold and so find has created a conflict

in the Circuits and a decision which departs from this Court’s

established decisions on prudential standing, and thus must

be reviewed and clarified by this Court, to avoid chaos in

the process of privatizing procurement in federal government

activities.

CONCLUSION

The Sixth Circuit’s failure to find prudential standing

here is not supported by, and is contrary to, the law of

standing in such cases as set forth in a line of Supreme Court

decisions starting with Data Processing Service

Organizations, Inc. v. Camp, through Clarke v. Securities

Industry Association and finally in National Credit Union

Admin. v. First National Bank & Trust Co. in 1998, which

creates an important departure from this Court’s established

law and must be addressed and reversed so as to avoid a

chaotic conflict and misinterpretation of this Court’s

pronouncements in this area of standing law, and to avoid a

chaotic result in federal procurement.

Respectfully submitted,

PATRICK J. DONLIN, SR.

Attorney at Law

(Ohio #0030848)

308 Porter Street, NE

Warren, Ohio 44483

(330) 399-2632

Council for Petitioners

APPENDIX

(Any footnotes trail the end of each document.)

RECOMMENDED FOR FULL-TEXT PUBLICATION

Pursuant to Sixth Circuit Rule 206

ELECTRONIC CITATION: 2002 FED App. 0248P (6th

Cir.)

File Name: 02a0248p.06

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

JOHN M. COURTNEY, LARRY

E. TROUTMAN, and MALCOLM

A. WEBSTER, No. 00-4554

Plaintiffs-Appellants,

DAVID R. SMITH, Major

General, Vice Commander of

the HQAFRC/CV,

)

v. )

)

Defendant-Appellee )

)

Appeal from the United States District Court

for the Northern District of Ohio at Akron.

No. 00-01247 - David D. Dowd, Jr., District Judge.

Argued: May 2, 2002

Decided and Filed: July 23, 2002

Before: MERRITT, SUHRHEINRICH, and GILMAN,

Circuit Judges

COUNSEL

ARGUED: Patrick J. Donlin, Warren, Ohio, for Appellants.

Thomas M. Bondy, UNITED STATES DEPARTMENT OF

JUSTICE, CIVIL DIVISION, APPELLATE SECTION,

Washington, D.C., for Appellee. ON BRIEF: Patrick J

Donlin, Warren, Ohio, for Appellants. Thomas M. Bondy,

Anthony J. Steinmeyer, UNITED STATES DEPARTMENT

OF JUSTICE, CIVIL DIVISION, APPELLATE SECTION,

Washington, D.C., for Appellee.

GILMAN, J., delivered the opinion of the court, in

which SUHRHEINRICH, J., joined. MERRITT, J. (pp. 20-

21), delivered a separate dissenting opinion.

OPINION

RONALD LEE GILMAN, Circuit Judge. Jor a M. Courtney,

Larry E. Troutman, and Malcolm A. Webster brought suit

against Major General David R. Smith, the Vice-Commander

of the U.S. Air Force Reserve Command (AFRC), alleging

that the federal government violated its internal policies

and various laws by outsourcing certain work performed at

the Youngstown-Warren Air Force Reserve Base to Griffin

Services, Inc., a private contractor. According to the

plaintiffs, all of whom worked at the Base prior to the

government's decision, the government failed to perform the

required cost comparison before granting the contract to

Griffin, or made its decision based upon a faulty analysis.

The district court dismissed the complaint for lack

of standing, concluding that the plaintiffs failed to

demonstrate an injury in fact, one of the three prerequisites

for constitutional standing. In addition, the district court

determined that the plaintiffs lacked prudential standing

because they were not within the “zone of interests”

protected by the statutes under which they brought suit.

For the reason set forth below, we AFFIRM the judgment

of the district court.

I. BACKGROUND

A. Factual background

The Base in question is located in Vienna, Ohio. A

cost-comparison analysis of the work performed at the Base

began in 1998. This action was initiated by the AFRC

pursuant to the procedures set forth in Office of Management

and Budget Circular No. A-76 (the Circular). The Circular

requires that all commercial activities that are not

inherently governmental in nature must be performed by

private contractors unless one of several exceptions applies.

At issue in the present case is the exception that directs the

government to perform work in-house if a cost comparison

“demonstrates that the Government is operating or can

operate the activity on an ongoing basis at an estimated

lower cost than a qualified commercial source.” Executive

Office of the President, OMB Circular A-76, para. 8(d)

(Revised 1999). To comply with the periodic review mandated

by the Circular, the AFRC’s analysis sought to determine

whether a private contractor could perform Base Operating

Support Services (BOS) more economically than the federal

employees who were doing the work on the Base.

The AFRC announced its decision to grant the BOS

contract to Griffin in January of 2000. Within a month of

the government’s announcement, the union representing the

Base’s employees filed an appeal of the outsourcing decision

with the AFRC. This internal appeal was made possible

because of the Circular’s requirement that agencies establish

an administrative appeals procedure to resolve complaints

by “federal employees... that have submitted formal bids

or offers who would be affected by a tentative decision to

convert to or from in-house, contract, or [Inter-Service

Support Agreements] as a result of a cost comparison.” OMB

Circular A-76, Supp. Part I, Ch. 3, ara. K(2)(b). The AFRC

denied the union’s appeal in March of 2000.

B. Procedural background

This lawsuit was filed in the United States District

Court for the Northern District of Ohio in May of 2000.

According to the plaintiffs’ amended complaint, the

government’s decision to award the BOS contract to Griffin

rather than to the in-house government employees violated

(1) Circular A-76 and its accompanying Supplement, (2) The

Budget and Accounting Act of 1921, ch. 18, 42 Stat. 20 (1921)

(codified as amended in scattered sections of 31 U.S.C.), (3)

the office of Federal Procurement Policy Act Amendments

of 1979, 41 U.S.C. §§ 403-36, (4) the Federal Activities

Inventory Reform Act of 1998, 31 U.S.C. § 501 Note (Supp.

2002), (5) various federal procurement statutes, 10 U.S.C.

§§ 2304, 2461-63, 2467-69, and (6) the Administrative

Procedure Act, 5 U.S.C. §§ 702, 706. All three plaintiffs were

then working for the Vehicle Maintenance Group at the Base,

one of the activities covered by the BOS contract.

The plaintiffs filed a motion for class certification in

August of 2000, seeking to represent 93 similarly situated

civilian employees at the Base. That same month, the

government filed a motion to dismiss for lack of standing.

The district court denied class certification in September of

2000 and dismissed the case for lack of standing

approximately two months later. With respect to the

defendants’ motion, the court concluded that the plaintiffs

were unable to establish the constitutional requirements

for standing because their alleged injuries - the loss of their

jobs - had not occurred and were only speculative, and

because no guarantee existed that their jobs would have

been preserved even if the BOS contract had remained in-

house. The district court also determined that because the

plaintiffs were not within the “zone of interests” intended

to be protected by the statutes under which they had brought

suit, they did not satisfy the prudential requirements of

’

;

‘

standing. This timely appeal followed.

Il. ANALYSIS

A. Standard of review

We review de novo a district court’s decision to

dismiss a case for lack of standing, Am. Fed’n of Gov't

Employees v. Clinton, 180 F.3d 727, 729 (6th Cir. 1999). “For

purposes of ruling on a motion to dismiss for lack of standing,

a complaint must be viewed in the light most favorable to

the plaintiff; all material allegations of the complaint must

be accepted as true.” Jd. But the plaintiff, as the party

invoking federal subject matter jurisdiction, has the burden

of persuading the court that all of their requirements

necessary to establish standing to bring the lawsuit have

been met. Lujan v. Defenders of Wildlife, 504 U.S. 555, 561

(1992) (explaining that the party invoking federal

jurisdiction has the burden of establishing the three

elements that constitute the “irreducible constitutional

minimum of standing”).

B. Constitutional standing

Article III of the United States Constitution limits

the jurisdiction of federal courts to actual “Cases” and

“Controversies.” U.S. Const. art. ITI, § 2, cl. 1. To satisfy this

“case-or-controversy” requirement, “a plaintiff must

establish three elements: (1) an injury in fact that is concrete

and particularized; (2) a connection between the injury and

the conduct at issue - the injury must be fairly traceable to

the defendant’s action; and (3) [a] likelihood that the injury

would be redressed by a favorable decision of the Court.”

Blachy v. Butcher, 221 F.3d 896, 909 (6th Cir. 2000) (internal

quotation marks omitted); Lujan, 504 U.S. at 560 (noting

that “the core component of standing is an essential and

unchanging part of the case-or-controversy requirement”).

The district court concluded that the plaintiffs failed

to satisfy the injury-in-fact requirement because their

alleged injuries - the loss of their jobs - had not actually

occurred and were therefore only hypothetical. In reaching

its decision, the court noted that federal regulations required

Griffin to offer the plaintiffs, as federal employees, “the right

of first refusal for employment openings under the contract

in positions for which they are qualified .. .” 48 C.F.R. §

52.207-3(a). The district court also expressed its view that

“even if the contract had been awarded to the in-house

bidders, there is no guarantee that plaintiffs would not have

been subject to a RIF [reduction in force] anyway.” As a

result, the court concluded that the plaintiffs were unable

to establish the second and third requirements of Article ITI

standing - causation and redressability.

In response, the plaintiffs argue that the district

court failed to give effect to a supporting affidavit

establishing that Courtney lost his job at the Base and had

to accept a position at Tobyhanna Army repair Depot in

Pennsylvania, 350 miles east of the Base, in order to remain

a federal employee. The affidavit specifies that Courtney's

transfer led to his being separated from his family, all of

whom remained in Ohio. Courtney was therefore forced to

commute 700 miles round trip every weekend in order to

see his family. Although these facts did not appear in the

plaintiffs’ complaint, the timely filed affidavit supports the

proposition that at least one of the plaintiffs has standing

to bring this lawsuit. Warth v. Seldin, 422 U.S. 490, 501

(1975) (nothing that “it is within the trial court’s power to

allow or to require the plaintiff to supply, by amendment to

the complaint or by affidavits, further particularized

allegations of act deemed supportive of plaintiff’s standing”).

The affidavit does not discuss whether Courtney's

new position had a lower salary or reduced benefits, so we

are unable to determine whether his move resulted in any

economic harm. Courtney’s geographic separation from his

family, and the associated inconvenience and expense of

having to travel 700 miles each weekend to be with them,

might be a sufficient injury to satisfy the first requirement

of Article III standing. See Associated Builders & Contractors

v. Perry, 16 F.3d 688, 691 (6th Cir. 1994) (explaining that “a

sufficient ‘injury in fact’ can be alleged from a noneconomic

or aesthetic harm”). But the affidavit does not address

whether Troutman or Webster experienced any comparable

inconveniences or separations from their families. As a

result, even if Courtney’s compelled move to Pennsylvania

meets the injury-in-fact requirement, neither Troutman nor

Webster have provided any evidence to support a conclusion

that they have suffered an injury in fact.

Rather than deciding whether Courtney has

established Article III standing when it appears unlikely

that the other two plaintiffs have done so, we will proceed

to an examination of the prudential standing requirements.

Our conclusion below that the plaintiffs have failed to satisfy

the requirements of prudential standing eliminates the need

to rule definitively on the question of constitutional standing.

Fed for Am. Immigration Reform, Inc. v. Reno, 93 F.3d

897, 899 (D.C. Cur. 1996) (“Because we find that the

Federation lacks prudential standing, we need not consider

the issue of constitutional standing or the political question

doctrine.”). -

C. Prudential standing

Section 10(a) of the Administrative Procedure Act

(APA) permits injured parties to obtain judicial review of

agency actions that allegedly violate federal statues. 5 U.S.C.

§ 702 (“A person suffering legal wrong because of agency

action, or adversely affected or aggrieved by agency action

within the meaning of a relevant statute, is entitled to

judicial review thereof.”). A plaintiff seeking judicial review

of agency action under the APA, however, must not only meet

the constitutional requirements of standing, but must also

demonstrate prudential standing. Nat? Credit Union Admin.

v. First Nat'l Bank & Trust Co., 522 U.S. 479, 488 (1998)

(NCUA) (“We have interpreted § 10(a) of the APA to impose

a prudential standing requirement in addition to the

requirement, imposed by Article III of the Constitution, that

a plaintiff have suffered a sufficient injury in fact.”).

Prudential standing exists if the interest that the plaintiff

seeks to protect is “arguably within the zone of interests to

be protected or regulated by the statute . . . in question.” Jd.

(ellipsis in original) (quoting Ass’n of Data Processing Serv.

Orgs., Inc. v Camp, 397 U.S. 150, 153 (1970)).

The Supreme Court has acknowledged that the “zone

of interest” test “has not proved self-explanatory.” Clarke v.

Sec. Indus. Ass’n, 479 U.S. 388, 396 (1987). Nevertheless,

the Court has set forth several general principles to govern

the prudential-standing inquiry:

The “zone of interest” test is a guide for

deciding whether, in view of Congress’ evident

intent to make agency action presumptively

reviewable, a particular plaintiff should be

heard to complain of a particular agency

decision. In cases where the plaintiff is not

itself the subject of the contested regulatory

action, the test denies a right of review if the

plaintiff’s interests are so marginally related

to or inconsistent with the purposes implicit

in the statute that it cannot reasonably be

assumed that Congress intended to permit the

suit. The test is not meant to be especially

demanding; in particular, there need be no

indication of congressional purpose to benefit

the would-be plaintiff.

Id. at 399-400 (footnote omitted). Rather than examining

whether Congress specifically intended to benefit the

plaintiff, the “zone of interest” inquiry consists of “first

discern[ing] the interests arguably . . . to be protected by

the statutory provision at issue” and “then inquir[ing]

whether the plaintiff’s interests affected by the agency action

in questions are among them” NCUA, 522 U.S. at 492

(ellipsis in original) (internal quotation marks omitted).

The plaintiffs in the present case have a particular

interest in retaining their government jobs at the Base. They

also assert a more general interest in ensuring that the

government conforms to the applicable laws in making

outsourcing decisions. But this generalized grievance, which

presumably would be shared by all citizens, is insufficient

to satisfy the prudential standing requirements. Coal

Operators & Assoc., Inc., v. Babbitt, 291 F.3d 912, 916 (6th

Cir. 2002) (explaining that for the purpose of prudential

standing, “a plaintiff’s claim must be more than a

‘generalized grievance’ that is pervasively shared by a large

class of citizens”) (citing Valley Forge Christian College v.

Americans United for the Separation of Church and State,

Inc., 454 U.S. 464, 474-75 (1982); Nat’l Fed’n of Fed.

Employees v. Cheney, 883 F.2d 1038, 1047 (D.C. Cur. 1989)

(Cheney) (“Appellants may have many ‘interests,’ but for zone

of interest purposes we must look to their particular

interests, not to the interests amounting to generalized

grievances of all citizens.”).

Similarly, the Supreme Court has admonished

against allowing plaintiffs to meet the constitutional or

prudential requirements of standing by asserting that no

other plaintiffs are available to challenge the government

actions. Valley Forge Christian College, 454 U.S. at 489 (“But

‘(t]he assumption that if respondents have no standing to

sue, no one would have standing, is not a reason to find

standing.” (quoting Schlesinger v. Reservists Comm. to Stop

the War, 418 U.S. 208, 227 (1974) (alternation in original)).

We must therefore determine whether tise plaintiffs’ desire

to continue working at the Base falls within the “zone of

interest” of any of the statutes cited in their complaint.

1. OMB Circular A-76 and Supplement

The plaintiffs first rely upon the Circular and its

SRN~ne ts a re

10a

Supplement to demonstrate that their interests are among

those that “a relevant statute” seeks to protect. 5 U.S.C. §

702. But neither the Circular nor the Supplement are

statutes. Cheney, 883 F.2d at 1943 (“The Circular is not a

statute, and, although promulgated pursuant to

congressional authority, the Circular itself cannot grant

standing.”) (citation omitted). Instead, they represent and

implement the policy of the Executive Branch, which issued

the Circular and Supplement pursuant to the authority of

the Budget and Accounting Act of 1921, the Office of Federal

Procurement Policy Act Amendments of 1979, and the

Federal Activities Inventory Reform Act of 1998. Executive

Office of the President, OMB Circular A-76, para. 3 (Revised

1999). We therefore conclude that the plaintiffs cannot rely

upon the Circular and Supplement to obtain judicial review

of whether the AFRC properly awarded the BOS contract to

Griffin. Cheney, 883 F.2d at 1943 (holding that the plaintiffs,

who asserted a claim under the APA to challenge the Army’s

decision to outsource the work that the plaintiffs had

previously performed, could not rely upon the Circular as

“a relevant statute” for the purpose of their lawsuit).

Nevertheless, the Circular is relevant insofar as it

provides an indication of the congressional purpose behind

any of the relevant statutes that plaintiffs contend the AFRC

violated. Clarke, 479 U.S. at 401 (explaining that “we are

not limited to considering the statute under which

respondents sued, but may consider any provision that helps

us to understand Congress’ overall purposes” in the relevant

statutes); Nat'l Air Traffic Controllers Ass’n v. Pena, No. 95-

3016, 1996 WL 102421, at * 3 (6th Cir. March 7,. 1996)

(unpublished table decision) (“To the extent that the policies

of OMB Circular A-76 are reflected in the [relevant statute]

and can inform our understanding of [that statute], its

policies may be considered in determining standing.”).

But the Circular provides minimal support at best

for the plaintiffs’ argument that their desire to maintain

government employment falls within the zone of interests

lla

protected by the relevant statutes. As noted above, the

Circular expresses an unmistakable preference for the

federal government to rely upon private contractors to

perform commercial activities that the government requires.

Executive Office of the President, OMB Circular A-76, para.

4(a) (Revised 1999) (“[I]t has been and continues to be the

general policy of the Government to rely on commercial

sources to supply the products and services the Government

needs.”). The Circular also specifies that it does not

[e]stablish and shall not be construed to create

any substantive or ;rocedural basis for

anyone to challenge any agency action or

inaction on the basis that such action or

inaction was not in accordance with this

Circular, except as specifically set forth in

Part I, Chapter 3, paragraph K of the

Supplement, ‘Appeals of Cost Comparison

Decisions,’ and as set forth in Appendix 2,

paragraph G, consistent with Section 3 of the

Federal Activities Inventory Reform Act of

1998.

Id. at para. 7(c)(8); see id. Supp. Part I, Ch. 3, para, K(7)

(“The procedure does not authorize an appeal outside the

agency or judicial review ... .”). This limitation suggests

that the internal administrative appeals process set forth

in the Supplement is intended to be the sole basis for

challenging agency action that allegedly violates the

Circular.

The dissent focuses on the Circular’s definition of

“directly affected parties” to support its conclusion that the

plaintiffs are “adversely affected or aggrieved by agency

action within the meaning ofa relevant statute.” 5 U.S.C. §

702. We believe that reliance upon this definition is

misplaced, however, for two reasons. First, as noted above,

the Circular is not a statute. Second, a party cannot be

“adversely affected . . . within the meaning of a relevant

12a

statute” unless the party is within the zone of interest sought

to be protected by that statute. The Circular’s identification

of “directly affected parties,” in our opinion, relates to

nothing more than the internal administrative appeals

process detailed in the Supplement. We therefore

respectfully disagree with the dissent’s conclusion that the

plaintiffs’ status as “directly affected parties” under the

Circular’s terms places them within the zone of interest

sought to be protected by a relevant statute.

2. The Budget and Accounting Act of 1921

The first statute upon which the plaintiffs rely to

meet the prudential standing requirements is the Budget

and Accounting Act of 1921, ch. 18, 42 Stat. 20 (1921)

(codified as amended in scattered sections of 31 U.S.C.) (the

1921 Act). This legislation, which has been amended thirteen

times since its original enactment, was designed “to

coordinate budgeting procedures and to increase efficiency

in government operations after vast governmental growth

during World War I.” Cheney, 883 F.2d at 1044-45. The 1921

Act sought to achieve these goals by (1) creating the Bureau

of the Budget (the predecessor to the OMB) within the

Department of the Treasury, and (2) establishing the General

Accounting Office (GAO) to serve Congress's interests in

auditing federal programs and expenditures. Id. at 1045-46

(discussing the key components of the 1921 Act); 31 U.S.C.

§§ 501-02, 521-22 (recognizing the OMB as “an office in the

Executive Office of the President,” designating the key staff

positions at the OMB, and granting the OMB’s Director the

authority to appoint employees and make necessary

expenditures); 31 U.S.C. §§ 701-20 (setting forth the GAO’s

duties and designating its key personnel). These two offices

were intended to serve as “checks and balances” over the

budgeting process. Cheney, 883 F.2d at 1045-46 (noting that

“Congress considered these two separate offices, the Bureau

and the GAO, one within each political branch, as a

functional and valid constitutional ‘check and balance’ over

the expenditure of funds”) (citing 59 Cong. Rec. 7949 (1920)

13a

(statement of Rep. James W. Good)).

We agree with the Court of Appeals for the District

of Columbia’s conclusion that the 1921 Act’s legislative

history provides no support for the proposition that Congress

intended to safeguard the employment of federal employees,

or even to provide those workers with a procedure by which

they could challenge budgetary decisions which adversely

affected them. Cheney, 883 F.2d at 1046 (“Nothing in the

legislative history of the 1921 Act suggests that Congress

contemplated the protection of employment of federal

employees.”). Instead, the legislative history indicates that

Congress was aware that a number of federal employees

would lose their jobs as a result of the changes implemented

by the 1921 Act. Id. at 1046-47 (citing Representative Good's

acknowledgment that federal employees would be

discharged by the Bureau of the Budget, and noting that

“although Congress was well aware that the reformation of

the federal budgeting process would result in a loss of federal

jobs, it afforded the discharged employees neither protection

nor remedy”).

We therefore conclude that the plaintiffs’ interests

in maintaining their employment at the Base are not within

the “zone of interests” protected or regulated by the 1921

Act. Id. at 1048 (“[T]he legislative history of the Budget and

Accounting Act of 1921, as amended, leads us to conclude

that Congress did not contemplate in-house federal

employees and federal employee labor unions as plaintiffs.”).

The plaintiffs’ particular interests are instead most

accurately viewed as being “so marginally related to or

inconsistent with the purposes implicit in the statute that

it cannot reasonably be assumed that Congress, intended

to permit the suit.” Clarke v. Sec. Indus. Ass’n, 479 US.

388, 399 (1987); Cheney, 883 F.2d at 1948 (“At most federal

employees’ interests are marginally related to this

centralized annual budgeting process balanced between the

Executive and legislative branches [in the 1921 Act]. It is

more logical to conclude that federal employees’ interests

l4a

are inconsistent.”) (internal quotation marks and citation

omitted). As a result, the 1921 Act cannot serve as “a relevant

statute” pursuant to which the plaintiffs can bring their APA

challenge to the AFRC’s outsourcing decision.

3. The Office of Federal Procurement Policy Act

Amendments of 1979

The second statute cited by the plaintiffs in support

of their prudential standing argument is the Office of Federal

Procurement Policy Act Amendments of 1979, 41 U.S.C. §§

403-36 9 (OF PPAA). This legislation extended the existence

of the Office of Federal Procurement Policy (the OFPP),

which Congress had established in 1974, and amended

various aspects of the statute. The central purpose of the

OFPP is “to provide overall direction of Government-wide

procurement policies, regulations, procedures, and forms for

executive agencies and to promote economy, efficiency, and

effectiveness in the procurement of property and services

by the executive branch of the Federal Government.” 41

U.S.C. § 403(a).

Nothing in the OFPPAA or in its legislative history

supports the conclusion that congress intended to protect

the employment of federal workers. Instead, the

procurement policy that the OFPP was directed to

implement reflects a desire to outsource government work

whenever doing so would result in increased cost efficiency.

Cheney, 883 F.2d at 1949 (“After a thorough review of the

OFPPAA and its legislative history, we have found nothing

to suggest a congressional purpose more than marginally

related to the interests of federal employees vis-a-vis

procurement policy. Throughout the legislative history of

OFPPAA and its amendments, Congress emphasized

economy and efficiency in government operations.”). As the

D.C. Circuit noted, the Senate Report accompanying the

OFPPAA “does not merely favor the private sector; it

endorses ‘reliance’ on the private sector.” Id. (quoting S. Rep.

No. 144, 96th Cong., Ist Sess. 4 (1979), 1979 U.S. Code Cong.

15a

& Admin. News 1492). |

Accurate comparisons between the cost of in-house

performance and private contracts are essential to achieving

the OFPP’s goals, but this desired result does not support a

finding that Congress had a concern with preserving federal

employment when it enacted the OFPPAA. Instead, it

demonstrates Congress’s interest in ensuring that

government funds are spent efficiently. See id. (concluding

that the Senate Report’s “call for ‘rigorous comparison of

contract cost versus in-house cost,’ read in the context of

the whole policy, illustrates that Congress wanted in-house

costs estimates to be strictly reviewed, so as not to frustrate

the . . . emphasis on the private sector”) (quoting S. Rep.

No. 144, 96th Cong., 1st Sess. 4 (1979), 1979 U.S. Code Cong.

& Admin. News 1492). The desire to achieve this goal is

shared by all taxpayers, and is not a particular interest of

the plaintiffs.

For these reasons, we conclude that the plaintiffs’

cognizable interests are not within the “zone of interests”

that the OFPPAA protects or regulates. Cheney, 883 F.2d at

1050 (concluding that the plaintiffs’ interests “are

inconsistent with the purposes of the OFPPAA and not

within the zone of interest of that Act”). The OFPPAA

therefore cannot serve as “a relevant statute” pursuant to

which the plaintiffs can bring their APA challenge.

4. The Federal Activities Inventory Reform Act of

1998

Shifting to the Circular’s final authorizing statute,

the plaintiffs next rely upon the Federal Activities Inventory

Reform Act of 1998, 31 U.S.C. § 501 Note (Supp. 2002)

(FAIRA), to support their prudential standing argument.

This statute requires the head of each executive agency to

submit “a list of activities performed by Federal Government

sources for the executive agency that, in the judgment of

the head of the executive agency, are not inherently

16a

governmental functions” to the Director of the OMB on a

yearly basis. 31 U.S.C. §501 Note § 2(a). These lists, which

agency heads must provide to Congress and which the

Director of the OMB must publish in the Federal Register,

identify the activities that the agency heads can consider

contracting out to the private sector. Id. § 2(c),(d). The FAIRA

requires the agency head to utilize “realistic and fair” costs

in comparing the expense of procuring services from a

private contractor with the costs of federal employees

performing the work. Id. § 2(e).

Although the FAIRA allows challenges by interested

parties, including “[a]n officer or employee of an organization

within an executive agency that is an actual or prospective

offeror to perform the activity,” id. § 3(b)(3), these appeals

to executive agencies are limited to “a challenge of an

omission of a particular activity from, or an inclusion of a

particular activity on, a list .. .” Id. § 3(a); Am. Fed’n of

Gov't Employees v. United States, 46 Fed. Cl. 486, 498 (Fed.

Cl. 2000) (noting that the FAIRA “specifically distinguishes

between the agency’s decision to place a particular activity

on the list to be contracted out and the agency’s decision to

contract out to a particular source,” that § 3(a) of the statute

“is cognizant of this distinction and expressly limits

authorized challenges” to the omission or inclusion of an

activity on a list, and that the FAIRA’s definition of interested

parties in § 3(b) “expressly limits challenges to those ‘with

respect to an activity referred to in subsection [2](a)”)

(internal citation omitted) (alternation in original), aff’d on

alternative grounds, 258 F.3d 1294 (Fed. Cir. 2001). This

review process therefor benefits federal employees who

contend that their work is inherently governmental and

consequently should not be on the lists.

But nothing in the FAIRA provides for review of the

cost comparisons that an agency performs. Moreover, the

requirement that agencies prepare lists of all activities that

rea not inherently governmental accords with the federal

government’s policy, as expressed in the Circular, to procure

17a

its goods and services from private contractors whenever

possible. This policy is also apparent in the FAIRA’s

legislative history. Id. at 497 (acknowledging that the

FAIRA’s principal sponsor, Senator Craig Thomas, stated

“that Congress intended [The FAIRA] to ‘codif[y] a process

to assure government reliance on the private sector to the

maximum extent feasible”) (citing 144 Cong. Rec. S9104-

02, S9105 (daily ed. July 28, 1998) (statement of Sen.

Thomas)). The FAIRA therefore provides no indication that

congress intended to benefit or protect federal employees

who are performing work that is concededly not inherently

governmental.

For these reasons, we conclude that the plaintiffs’

interest in maintaining their federal employment is at best

marginally related to, and more likely inconsistent with,

the purpose of the FAIRA. See Am. Fed’n of Gov't Employees

v. Cohen, 171 F.3d 460, 471 (7th Cir. 1999) (Cohen)

(concluding that “the interests of federal employment and

the goal of private procurement are inconsistent”). This

statute therefore cannot serve as “a relevant statute” for

the purpose of the plaintiffs’ APA challenge.

5. Various procurement statutes

Finally, the plaintiffs seek to rely upon several

procurement statutes to establish that they have prudential

standing. These statues, among other things, (1) require the

use of competitive procedures “in conducting a procurement

for property or services,” 10 U.S.C. § 2304(a), (2) mandate

that the Department of Defense (DOD) comply with certain

reporting and analysis requirement before transferring

commercial or industrial functions that were being

performed by DODO civilian employees as of October 1, 1980

to the private sector, 10 U.S.C. § 2461, (3) require the DOD

to obtain supplies and services from private sector sources

if “realist and fair” costs comparisons reveal that reliance

on private contractors would be more economical than the

use of federal civilian employees, 10 U.S.C. § 2462, (4) oblige

the DOD to collect and retain “cost information data” after

18a

changing the source of DOD services or functions from

civilian employees to private contractors or from private

contractors to civilian employees, 10 U.S.C. § 2463, (5)

mandate that the DOD consider “retirement system costs .

_. of both the [DOD] and the contractor” in conducting any

cost comparisons required by the Circular, 10 U.S.C. § 2467,

and (6) set forth requirement fro contracts to perform “a

depot-level maintenance and repair workload.” 10 U.S.C. §

2469.

We conclude that none of these statutes support a

finding that Congress intended to protect the jobs of federal

employees. Cohen, 171 F.3d at 470-73 (holding that the

plaintiffs were not within the zone of interest protected by

either § 2304 or § 2462); Cheney, 883 F.2d at 1051 (“Insofar

as appellants assert an interest different from the citizenry-

at-large, that interest - the protection of government

employees whose job opportunities would be impaired

because of contracting out - is close to the very bureaucratic

interest, in expansion of government, that Congress sought

to restrain in all of these statutes.”).

The requirements of performing realistic and fair cost

comparisons and of considering all relevant factors, as

previously noted, suggests that congress intended for the

government to operate efficiently and procure its goods and

services in the most economical way possible. Moreover,

the legislative history of 10 U.S.C. § 2462 indicates that

“the provision for a ‘realistic and fair’ cost comparison was

designed to protect the integrity of the contracting out

process by resolving ‘handicaps’ against government

contractors - the apparent intended beneficiaries of [the

statute].” Cheney, 883 F.2d at 1050 (quoting S. Rep. No. 331,

99th Cong., 2nd Sess. 278 (1986), 1986 U.S. Code Cong. &

Admin. News 6413, 6472); Cohen, 171 F.3d at 470 (noting

that the legislative history of § 2462 indicates that the

obligation to perform “realistic and fair” cost comparisons

“as meant to ‘enable private industry to compete with the

government sector whenever possible. . ””) (quoting S. Rep.

19a

No. 331, 99th Cong. 2nd Sess. 278 (1986), 1986 U.S. Code

Cong. & Admin. News 6413).

Section 2461 requires the DOD to consider “the

potential economic effect of performance of the function by

the private sector on. . . [e]mployees of the [DOD] who would

be affected by such a change in performance.” 10 U.S.C. §

2461(b)(3)(B\(i). But we have found no legislative history,

nor have the plaintiffs cited any, indicating that this

provision was intended to preserve federal employment. On

the contrary, § 2461, when read in conjunction with the other

procurement statutes and the Circular, recognizes that the

DOD will likely transfer work to private contractors in order

to increase government efficiency, See Cohen, 171 F.3d at

471 (concluding that “the interests of federal employment,

and the goal of private procurement are inconsistent”).

For these reasons, we conclude that the plaintiffs do

to fall within the “zone of interest” of any of the procurement

statutes cited in their complaint. These statutes thus cannot

serve as the basis for the plaintiffs to bring their APA

challenge.

D. Class action

The plaintiffs also appeal the district court’s denial

of their motion for class certification. Based upon our

conclusion that the plaintiffs lack standing to bring their

lawsuit, however, they cannot advance the claims of other

unnamed individuals. See Lewis v. Casey, 518 U.S. 343, 357

(1996) (explaining that “even named plaintiffs who represent

a class must allege and show that they personally have been

injured, not that injury has been suffered by other,

unidentified members of the class to which they belong and

which they purport to represent”) (internal quotation marks

omitted); Wooden v. Bd of Regents of Univ. Sys. of Georgia,

247 F.3d 1262, 1287 (11th Cir. 2001) (holding that “as a

prerequisite to certification, it must be established that the

proposed class representatives have standing to pursue the

20a

claims as to which classwide relief is sought”). We therefore

conclude that the district court did not err in denying the

plaintiffs’ motion for class certification.

Ill. CONCLUSION

For all of the reasons set forth above we AFFIRM

the judgment of the district court.

DISSENT

MERRITT, Circuit Judge, dissenting. The

Administrative Procedure Act provides that a “person

suffering legal wrong because of agency action, or adversely

affected or aggrieved by agency action within the meaning

of a relevant statute, is entitled to judicial review thereof.” 5

U.S.C. § 702 (emphasis added). The three plaintiffs, civilian

employees of the Defense Department at the Youngstown-

Warren Air Force Base, brought this action as aggrieved

parties under the Administrative Procedure Act to review a

contracting-out decision. The employees are in the “vehicle

maintenance group” at the Base and allege that an award

of a Defense Department contract to Griffin Services, Inc.

will cause them to “lose their federal jobs unless” the award

is enjoined. The District Court held that they lack standing

because their claim does not satisfy either the :injury-in-

fact” test for Article III standing or the APA “zone of interest”

test for “Prudential APA standing” as outlined in NCUA uv.

First National Bank & Trust, 522 U.S. 479, 488 (1998). Such

contracting-out or privatization decisions are governed by

Circular A-76, adopted in 1983 by the Office of Management

and Budget for its subsidiary Office of Federal Procurement,

pursuant to the Office of Federal Procurement Act

Amendments of 1979, 41 U.S.C. § 401. Section 6g of Circular

A-76 provides that when contracting-out decisions are made:

“Directly affected parties are Federal employees and their

representative organizations and bidders or offerors on the

2la

instant solicitation” (emphasis in original). The precise

question here, a question not expressly addressed in the

District Court, is whether this provision of Circular A-76

defining Federal employees as “directly affected parties”

under the Procurement Act is sufficient to make federal

employees who are about to lose their jobs “adversely affected

or aggrieved” parties under the Procurement Act and APA.

The contracting-out decision in this case may turn out to be

fine on the merits, and the plaintiffs will simply have to

suffer the consequences. But to say they are not “adversely

affected” by agency action abolishing their jobs defies

common sense as well as the position and interpretation of

the White House - embodied in Circular 76-A — about who is

“directly affected” by such decisions. For this reason, as well

as the reasons generally stated in Judge Mikva’s dissent in

National Federal of Federal Employees v. Cheney, 883 F.2d

1038, 1054 (D.C. Cir. 1989), I would grant standing.

22a

DOWD, J.

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF OHIO

EASTERN DIVISION

FILED, NOVEMBER 15, 2000

John M. Courtney, etal. )

Plaintiffs Case No. 4:00 CV 1247

vs. JUDGMENT ENTRY

David R. Smith, etc., et al.,

Defendants )

For the reasons set forth in the Memorandum

Opinion filed contemporaneously with this Judgment Entry,

IT IS HEREBY ORDERED, ADJUDGED and DECREED

that defendants’ motion to dismiss is granted and the above-

captioned action is dismissed. Case closed, with all parties

to bear their own costs.

s/ David D. Dowd, Jr.

David D. Dowd, Jr.

US. District Judge

23a

DOWD, J.

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF OHIO

EASTERN DIVISION

FILED, NOVEMBER 15, 2000

John M. Courtney, et al.,

Plainiiffs Case No. 4:00 CV 1247

vs. ORDER

David R. Smith, etc., et al., (Resolving Doc. No. 8)

Defzndants ~

Nee ee ee ON

Before the Court is defendants’ motion, pursuant to

Fed. R. Civ. P. 12(bX1), to dismiss the complaint for plaintiffs’

lack of standing. (Doc. No. 8). Plaintiffs have Siled their

response to the motion (doc. No. 12) and defendants have

filed a reply. (Doc. No. 13). For the reasons set forth below,

the motion is granted.

On May 16, 2000, piaintiffs John M. Courtney, Larry

E. Troutman and Malcolm A. Webster filed a complaint for

declaratory and injunctive relief against Major General

David R. Smith and Brigadier General Michael F. Gjede.

The complaint was amended on May 26, 2000, before any

responsive pleading had been filed.

The plaintiffs allege that they are individual

employees “bringing suit as representative parties on behalf

of all 93 civilian employees at the Youngstown-Warren Air

force Reserve base, 910 LG/LGC, in Vienna, Ohio” (hereafter

“the Base”). (Compl. J 1). Apparently because no separate

class allegations had been made, plaintiffs sought leave to

amend the complaint a second time to add such allegations.

This motion was denied. See Order of September 18, 2000

24a

(Doc. No. 11). Accordingly, the complaint is not being treated

as a class action but merely as an action brought by the

three named plaintiffs. )

Plaintiffs allege that this Court has jurisdiction

“pursuant to 23 U.S.C. Sections 1331, 1491(b), 2201 and

2202, and inter alia, 31 U.S.C. Sections 1 et seg., 41 U.S.C.

Sections 401 et seq., Officer of Management and the Budget

Circular A-76 and its Supplemental Handbook and 5 U.S.C.

Section 702.” (Compl. { 2).

Office of Management and Budget (“OMB”) Circular

A-76 “establishes Federal policy for the performance of

recurring commercial activities.” It provides federal agencies

with “updated guidance and procedures for determining

whether recurring commercial activities should be operated

under contract with commercial sources, in-house using

Government facilities and personnel, or through interservice

support agreements.”

The plaintiffs, all of whom are federal employees

working in the Vehicle Maintenance Group at the Base, are

attempting to challenge an Air Force decision to outsource

Base Operating Support (“BOS”) services. They specificaily

challenge the initial January 2000 announcement awarding

the BOS contract to Griffin Services, Inc. and the subsequent

denial of the administrative appeal taken by the Base

employees, who apparently were the losing in-house bidders

(Comp. {J 9-13).

The defendants have filed their motion to dismiss

challenging plaintiff’s standing to sue. The Supreme Court

has addressed the constitutional issue of standing as follows:

Over the years, our cases have established that

the irreducible constitutional minimum of

standing contains three elements. First, the

plaintiff must have suffered an “injury in fact”

- an invasion of a legally protected interest

25a

which is (a) concrete and particularized, see

[Allen v. Wright, 456 U.S.] at 756, 104 S.Ct., at

3327; Warth v. Seldin, 422 U.S. 490, 508, 95

S.Ct. 2197, 2210, 45 L.Ed.2d 343 (1975); Sierra

Club v. Morton, 405 U.S. 727, 740-741, n. 16,

92 S.Ct. 1361, 1368-1369, n. 16, 31 L.Ed.2d 636

(1972);' and (b) “actual or imminent, not

‘conjectural’ or ‘hypothetical” Whitmore [v.

Arkansas], 495 U.S., at 155, 110 S.Ct., at 1723

(quoting Los Angeles v. Lyons, 461 U.S. 95, 102,

103 S.Ct. 1660, 1665, 75 L.Ed.2d 675 (1983)).

Second, there must be a causal connection

between the injury and the conduct complained

of - the injury has to be “fairly . . . Trace[able]

to the challenged action of the defendant, and

not... th{e] result [of] the independent action

of some third party not before the court.” Simon

v. Eastern Ky. Welfare Rights Organization, 426

US. 26, 41-42, 96 S.Ct. 1917, 1926, 48 L.Ed.2d

450 (1976). Third, it must be “likely,” as opposed

to merely “speculative,” that the injury will be

“redressed by a favorable decision,” Jd., at 38,

43, 96 S.Ct., at 1924, 1926.

Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61 (1992)

(footnote in original). Allegations of a future injury will

satisfy the concept of “imminence” only if the injury is

“Certainly impending.” Jd. at 565 n.2 (emphasis in original;

citation and internal quotation marks omitted).

Plaintiffs here cannot satisfy these three elements.

First, although plaintiffs allege injury in that, “[b]ecause of

the illegal actions of the defendants, [they] either have

already lost or will by, September 29, 2000, lose their federal

jobs and career[]” (Compl. { 1), this is either outrightly wrong

or merely speculative since Griffin is required by federal

regulation to offer plaintiffs “the right of first refusal for

employment openings under the contract in positions for

which they are qualified .. .”48 C.F.R. §§ 52.207-3; 7.305(c).?

26a

As for the second and third elements, even if the contract

had been awarded to the in-house bidders, there is no

guarantee that plaintiffs would not have been subject to a

RIF anyway.

In addition to the fundamental Article III

requirements, the Supreme Court has recognized other

prudential elements of standing, among which is the

requirement that “the plaintiff’s complaint fall within ‘the

zone of interests to be protected or regulated by the statute

or constitutional guarantee in question.” Valley Forge

Christian College. v. American United for Separation of

Church and State, 454 U.S. 464, 475 (1982) (quoting

Association of Data Processing Service Orgs. v. Camp, 397

U.S. 150, 153 (1970)).

the “zone of interest” test is a guide for deciding

whether, in view of Congress’ evident intent to

make agency action presumptively reviewable,

a particular plaintiff should be heard to

complain of a particular agency decision. In

cases where the plaintiff is not itself the subject

of the contested regulatory action, the test

denies a right of review if the plaintiff’s

interests are so marginally related to or

inconsistent with the purposes implicit in the

statute that it cannot reasonably be assumed

that congress intended to permit the suit. The

test is not meant to be especially demanding;

in particular, there need be no indication of

congressional purpose to benefit the would-be

plaintiff. Investment company Institute v.

Camp, 401 U.S. 617, 91 S.Ct. 1091, 28 L.Ed.2d

367 (1971).

Clarke v. Securities Industry Assoc., 479 U.S. 388, 399-400

(1987) (footnotes omitted).

Federal courts considering claims similar to those

(27a

advanced by the plaintiffs have consistently held that federal

employees attempting to preserve their government jobs are

not within the “zone of interests” intended to be protected

buy the budget and procurement statutes under which OMB

Circular A-76 was promulgated.

In National Federation of Federal Employees v.

Cheney, 883 F.2d 1038 (D.C. Cir. 1989), cert. denied, 496

U.S. 936 (1990) (“NFFE”), the D.C. Circuit was confronted

with a challenge brought by federal employees and their

union against a decision by the Army to “contract out” to

private contractors the services which had been performed

by the Directorate of Logistics at fort Sill, Oklahoma. This

Directorate had provided support, maintenance,

transportation, and supply functions for Fort Sill and

surrounding installations, and had also operated and

maintained a fleet of 500 government vehicles. Following

the award of these services to a private contractor, the

employees and union unsuccessfully pursued administrative

remedies. They then filed suit.

Turning first to the Budget and accounting Act of

1921, 31 U.S.C. § 101, et seq., (the “1921 Act”), the D.C. circuit

concluded: -

Nothing in the legislative history of the 1921

Act suggests that congress contemplated the

protection of employment of federal employees.

Indeed, Representative Good’s presentation of

the 1921 Act to the 67th Congress suggests a

congressional purpose inconsistent with those

interests. That is, the Act would require that

some federal employees be terminated under

the new budgeting process.

NFFE, 883 F.2d at 1046.

The court then examined the Office of Federal

Procurement Policy Act Amendments of 1979, 41 U.S.C. §

28a

401, et seq. (“the OFPPAA”) and concluded:

After a thorough review of the OFPPAA and

its legislative history, we have found nothing

to suggest a congressional purpose more than

marginally related to the interests of federal

employees vis-a-vis procurement policy.

Throughout the legislative history of OFPPAA

and its amendments, congress emphasized

economy and efficiency in government

operations. Specifically regarding “contracting

out,” the Senate Committee on Governmental

Affairs recognized that there had been a long-

standing “executive branch policy of reliance

on the private sector” to improve governmental

efficiency as expressed in earlier versions of

OMB Circular A-76, S. Rep. No. 144, 96th

Cong., 1st Sess 4 (1979), U.S. code cong. &

Admin. News 1979, p. 1492.

* * *

Since the legislative history of the OFPPAA

endorses the Executive branch policy of

reliance on the private sector and the [OMB]

Circular [A-76] finds authority in the OFPPAA,

it is difficult to conclude anything but that the

interests of federal employees are inconsistent

with the purposes of OFPPAA. As previously

discussed, appellants’ real interest in this case

is the protection of the federal jobs of its

members, not efficiency in governmental

operations. If appellants’ real interest in this

case was governmental efficiency, they might

very well be within the zone of interest of the

purposes of the OFPPAA. But again in the

assertion of that interest of efficiency, they have

no greater claim to standing than any

taxpayers .. . Their real interest of job

29a

protection flies in the face of a policy that

federal departments and agencies, through

OMB Circular A-76, should rely on the private

sector. Thus appellants’ interests are

inconsistent with the purposes of the OFPPAA

and not within the zone of interest of that Act.

Cf. Clarke, 479 U.S. at 399, 107 S.Ct. at 757.

Because we hold that appellants’ interests are

not within the zone of interest of the Budget

and Accounting Act of 1921 or the OFPPAA,

the statutory authority for OMB Circular A-

76, appellants may not assert standing based

on those statutes.

Id. at 1049-50. See also American Federation of Gov't.

Employees v. Cohn, 171 F.3d 460 (7th Cir. 1999) (analyzing

the same statutes).

No Sixth Circuit published opinion addresses this

question of federal employee standing in the context of

“contracting out.” However, in an unpublished opinion, the

Sixth Circuit seems to endorse the reasoning of the D.C.

Circuit in NFFE. See, National Air Traffic Controllers Assoc.,

MEBA, AFL-CIO v. Pena, No. 95-3016, 1996 WL 102421

(6th Cir. March 7, 1996) (“NATCA”).

NATCA involved a challenge by federal employees

and their union to a decision that air traffic control services

are not inherently governmental functions and can,

therefore, properly be contracted out under OMB Circular

A-76. The Sixth Circuit found that the NATCA plaintiffs

had standing because their interest “is not just keeping their

jobs but extends to ensuring that the FAA does not privatize

inherently governmental functions.” NATCA, 1996 WL

102421, at **4. NATCA expressly distinguished NF FE

stating that “[t]he [VFFE] court specifically noted that no

assertion had been made in its case that the goods or services

involved were inherently governmental .. .” Jd. at *66. Thus,

30a

NATCA concluded that “the question of standing in relation

to inherently governmental functions was not presented in

(NFFE].” Id. Although finding that the plaintiffs in NATCA

met the “zone of interests” test for standing, the Sixth Circuit

remanded the case for a determination on whether the

plaintiffs met the Article III requirements of standing.

The plaintiffs in the instant case are doing no more

than trying to protect their federal employment. They are

not asking for a determination that their vehicle

maintenance group performed inherently governmental

functions. Therefore, as with the federal employees in NFFE,

they are not within the “zone of interests” which the

statutory formulations are designed to preserve.

Since the plaintiffs here are unable to meet either

the Article III requirements of standing or the “zone of

interest” test, defendants’ are entitled to dismissal of this

action.

Accordingly, Doc. No. 8 is granted.]

IT IS SO ORDERED.

s/ David D. Dowd, Jr.

David D. Dowd, Jr.

US. District Judge

1 By particularized, we mean that the injury must affect

the plaintiff in a personal and individual way.

2 Even if a Base employee is ultimately subject to a

reduction in force as a result of the Griffin contract, that employee

might be reassigned to another job at the same grade, reassigned

to a job with a lower grade but the same pay for two years, see 5

C.FR. § 536.103, accept early retirement, 5 U.S.C. § 8336(d)(2);

8414(b), or accept employment with Griffin. See generally, 5 C.F.R.

Part 351 (Civil Service RIF procedures).

sla

OMB Circular A-76

OFFICE OF MANAGEMENT AND BUDGET

EXECUTIVE OFFICE OF THE PRESIDENT

OFFICE OF MANAGEMENT AND BUDGET

WASHINGTON, D.C. 20502

CIRCULAR NO. A-76 (REVISED 1999)

August 4, 1983

TO THE HEADS OF EXECUTIVE DEPARTMENTS AND

ESTABLISHMENTS

SUBJECT: Performance of Commercial Activities

1. Purpose: This Circular establishes Federal policy

regarding the performance of commercial activities and

implements the statutory requirements of the Federal

Activities Inventory Reform Act of 1998, Public Law 105-

270. The Supplement to this Circular sets forth the

procedures for determining whether commercial

activities should be performed under contract with

commercial sources or in-house using Government

facilities and personnel.

2. Rescission. OMB Circular No. A-76 (Revised), dated

March 29, 1979; and Transmittal Memoranda 1 through

14 and 16 through 18.

3. Authority. The Budget and Accounting Act of 1921 (31

U.S.C. 1 et seqg.), The Office of Federal Procurement

Policy Act Amendments of 1979. (41 U.S.C. 401 et seq.),

and The Federal Activities Inventory Reform act of 1998.

(P.L. 105-270).

4. Background.

32a

a. Inthe process of governing, the Government should

not compete with its citizens. The competitive

enterprise system, characterized by individual

freedom and initiative, is the primary source of

national economic strength. In recognition of this

principle, it has been and continues to be the general

policy of the Government to rely on commercial

sources to supply the products and services the

Government needs.

b. This national policy was promulgated through

Bureau of the Budget Bulletins issued in 1955, 1957

and 1960. OMB Circular No. A-76 was issued in

1966. The Circular was previously revised in 1967.

1979, and 1983. The Supplement (Revised

Supplemental Handbook) was previously revised in

March 1996 (Transmittal Memorandum 15).

5. Policy. It is the policy of the United States Government

to:

a. Achieve Economy and Enhance Productivity.

Competition enhances quality, economy, and

productivity. Whenever commercial sector

performance of a Government operated commercial

activity is permissible, in accordance with this

Circular and its supplement, comparison of the cost

of contracting and the cost of in-house performance

shall be performed to determine who will do the

work. When conducting cost comparisons, agencies

must ensure that all costs are considered and that

these costs are realistic and fair.

b. Retain Governmental Functions In-House. Certain

functions are inherently Governmental in nature,

being so intimately related to the public interest as

to mandate performance only by Federal employees.

These functions are not in competition with the

commercial sector. Therefore, these functions shall

33a

be performed by Government employees.

c. Relay on the Commercial Sector. The Federal

Government shall rely on commercially available

sources to provide commercial products and services.

In accordance with the provisions of this Circular

and its Supplement, the Government shall not start

or carry on any activity to provide a commercial

product or service if the product or service can be

procured more economically form a commercial

source.

6. Definitions. For purpose of this Circular:

a. Acommercial activity is one which is operated by a

Federal Executive agency and which provides a

product or service that could be obtained from a

commercial source. Activities that meet the

definition of an inherently Government function

provided below are not commercial activities. A

representative list of commercial activities is

provided in Attachment A. Acommercial activity also

may be part of an organization or a type of work

that is separable from other functions or activities

and is suitable for performance by contract.

. A conversion to contract is the changeover of an

activity from Government performance to

performance under contract by a commercial source.

. A conversion to in-house is the changeover of an

activity from performance under contract to

Government performance.

. A commercial source is a business or other non-

Federal activity located in the United States, its

territories and possessions, the District of Columbia

or the Commonwealth of Puerto Rico, which

provides a commercial product or service.

34a

e. An inherently Government function is a function

which is so intimately related to the public interest

as to mandate performance by Government

employees. Consistent with the definitions provided

in the Federal Activities Inventory Reform Act of

1998 and OFPP Policy Letter 92-1, these functions

include those activities which require either the

exercise of discretion in applying Government

authority or the use of value judgment in making

decisions for the Government Services or products

in support of inherently Governmental functions,

such as those listed in Attachment A, are commercial

activities and are normally subject to this Circular.

Inherently Governmental functions normally fall

into two categories:

(1) The act of governing; i.e., the discretionary

exercise of Government authority. Examples include

criminal investigations, prosecutions and other

judicial functions; management of Government

programs requiring value judgments, as in direction

of the national defense; management and direction

of the Armed Services; activities performed

exclusively by military personnel who are subject to

deployment in a combat, combat support or combat

service support role; conduct of foreign relations;

selection of program priorities; direction of Federal

employees; regulation of the use of space, oceans,

navigable rivers and other natural resources;

direction of intelligence and counter-intelligence ~

operations; and regulation of industry and commerce,

including food and drugs.

(2) Monetary transactions and entitlements,

such as tax collection and revenue disbursements;

control of the Treasury accounts and money supply;

and the administration of public trusts.

f. Acost comparison is the process of developing an

35a

estimate of the cost of Government performance of a

commercial activity and comparing it, in accordance

with the requirements of the Supplement, to the

cost to the Government for contract performance of

the activity.

g. Directly affected parties are Federal employees and

their representative organizations and bidders or

offeror on the instant solicitation.

h. Interested parties for purposes of challenging the

contents of an agency's Commercial Activities

Inventory under the Federal Activities Inventory

Reform Act of 1998 are:

(1)A private sector source that (A) is an actual

or prospective offeror for any contract or other form

of agreement to perform the activity; and (B) has a

direct economic interest in performing the activity

that would be adversely affected by a determination

not to procure the performance of the activity from a

private sector source.

(2) A representative of any business or

professional association that includes. within its

membership private sector sources referred to in (1)

above.

(3) An officer or employee of an organization

within an executive agency that is an actual or

prospective offeror to perform the activity.

(4) The head of any labor organization

referred to in section 7103(a)(4) of Title 5, United

States Code that includes within its membership

officers or employees of an organization referred to

in (3) above.

7. Scope.

36a

a. Unless otherwise provided by law, this Circular and

its Supplement shall apply to all executive agencies

and shall provide administrative direction to heads

of agencies.

b. This Circular and its supplement apply to printing

and binding only in those agencies or department

which are exempted by law from the provision of

Title 44 of the U.S. Code.

c. This Circular and its Supplement shall not:

(1) Be applicable when contrary to law,

Executive Orders, or any treaty of international

agreement;

(2) Apply to inherently Governmental

functions as defined in paragraph 6.e.;

(3) Apply to the Department of Defense in

times of a declared war or military mobilization;

(4) Provide authority to enter into contracts;

(5) Authorize contracts which establish an

employer-employee relationship between the

Government and contractor employees. An employer-

employee relationship involves close, continual

supervision of individual contractor employees by

Gevernment employees, as distinguished from

general oversight of contractor operations. However,

limited and necessary interaction between

Government employees and contractor employees,

particularly during the transition period of

conversion to contract, does not establish an

employer-employee relationship.

(6) Be used to justify conversion to contract

solely to avoid personnel ceilings or salary

37a

limitations;

(7) Apply to the conduct of research and

development. However, severable in-house

commercial activities in support of research and

development, such as those listed in Attachment A,

are normally subject to this Circular and its

Supplement; or

(8) Establish and shall not be construed to

create any substantive or procedural basis for anyone

ts challenge any agency action or inaction on the

basis that such action or inaction was not in

accordance with this Circular, except as specifically

set forth in Part 1, Chapter 3, paragraph K if the

Supplement, “Appeals of Cost Comparison Decisions”

and as set forth in Appendix 2, Paragraph G,

consistent with Section 3 of the Federal Activities

Inventory Reform Act of 1998.

d. The requirements of the Federal Activities Inventory

Reform Act of 1998 apply to the following executive

agencies:

(1) an executive department named in 5 USC

101,

(2) a military department named in 5 USC

102, and

(3) an independent establishment as defined

in 5 USC 104.

e. The requirements of the Federal Activities Inventory

Reform Ac of 1998 do not apply to the following

entities or .ctivities:

(1) the General Accounting Office,

38a

(2) a Government corporation or a

Government controlled corporation as defined in 5

USC 103,

(3) anon-appropriated funds instrumentality

if all of its employees are referred to in 5 USC 2105(c),

(4) Depot-level maintenance and repair of the

Department of Defense as defined in 10 USC 2460.

8. Government Performance of a Commercial

Activity. Government performance of a commercial

activity is authorized under any of the following

conditions:

a. No Satisfactory Commercial Source Available.

Either no commercial source is capable of providing

the needed product or service, or use of such a source

would cause unacceptable delay or disruption of an

essential program. Findings shall be supported as

follows:

(1) If the finding is that no commercial source

is capable of providing the needed product or service,

the efforts made to find commercial sources must be

documented and made available to the public upon

request. These efforts shall include, in addition to

consideration of preferential procurement programs

(see Part I, Chapter 1, paragraph C of the

Supplement) at least three notices describing the

requirement in the Commerce Business Daily over a

90-day period or, in cases of bona fide urgency, two

notices over a 30-day period. Specifications and

requirements in the solicitation shall not be unduly

restrictive and shall not exceed those required of in-

house Government personnel or operations.

(2) If the finding is that a commercial source

39a

would cause unacceptable delay or disruption of an

agency program, a written explanation, approved by

the assistant secretary or designee in paragraph 9.a.

of the Circular, must show the specific impact on an

agency mission in terms of cost and performance.

Urgency along is not adequate reason to continue

in-house operation of a commercial activity.

Temporary disruption resulting from conversion to

contract is not sufficient support for such a finding,

nor is the possibility of a strike by contract employees.

If the commercial activity has ever been performed

by contract, an explanation of how the instant

circumstances differ must be documented. These

decisions must be made available to the public upon

request.

(3) Activities may not be justified for in-house

performance solely on the basis that the activity

involves or supports a classified program or the

activity is required to perform an agency’s basic

mission.

b. National Defense.

(1) The Secretary of Defense shall establish

criteria for determining when Government

performance of a commercial activity is required for

national defense reasons. Such criteria shall be

furnished to OMB, upon request.

(2) Only the Secretary of Defense or his

designee has the authority to exempt commercial

activities for national defense reasons.

c. Patient Care. Commercial activities performed at

hospitals operated by the Government shall be

retained in-house if the agency head, in consultation

with the agency’s chief medical director, determines

that in -house performance would be in the best

40a

interests of direct patient care.

Lower cost. Government performance of a

commercial activity is authorized if a cost

comparison prepared in accordance with the

Supplement demonstrates that the Government is

operating or can operate the activity on an ongoing

basis at an estimated lower cost than a qualified

commercial source.

9. Action Requirements. To ensure that the provisions

of this Circular and its Supplement are followed, each

agency head shall:

Designate an official at the assistant secretary or

equivalent level and officials at a comparable level

in major component organizations to have

responsibility for implementation of this Circular

and its Supplement within the agency.

Establish one or more offices as central points of

contact to carry out implementation. These offices

shall have access to all documents and data

pertinent to actions taken under the Circular and

its Supplement and will respond in a timely manner

to all requests concerning inventories, schedules,

reviews, results of cost comparisons and cost

comparison data.

Be guided by Federal Acquisition Regulation (FAR)

Subpart 24.2 (Freedom of Information Act) in

considering requests for information.

Implement this Circular and its Supplement with a

minimum of internal instructions. Cost comparisons

shall not be delayed pending issuance of such

instructions.

Ensure the reviews of all existing in-house

4la

commercial activities are completed within a reasonable time

10.

11.

12.

in accordance with the Federal Activities Inventory

Reform Act of 1998 and the Supplement.

Annual Reporting Requirement. As required by the

Federal Activities Inventory Reform Act of 1998 and

Appendix 2 of the Supplement, no later than June 30

of each year, agencies shall submit to OMB a

Commercial Activities Inventory and any supplemental

information requested by OMB. After review and

consultation by OMB, agencies will transmit a copy of

the Commercial Activities Inventory to Congress and

make the contents of the Inventory available to the

public. Agencies will follow the process provide din the

Supplement for interested parties to challenge (and

appeal) the contents of the inventory.

OMB Responsibility an Contact Point. All

questions or inquiries should be submitted to the Office

of Management and Budget, Room 6002 NEOB,

Washington, DC 20503. Telephone number (202) 395-

6104, FAX (202) 395-7230.

Effective Date. This Circular and the changes to its

Supplement are effective immediately.

EXAMPLES OF COMMERCIAL ACTIVITIES

Audiovisual Products and Services

Photography (still, movie, aerial, etc.)

Photographic processing (developing, printing,

enlarging, etc.)

Film and videotape production (script writing,

direction, animation, editing, acting, etc.)

Microfilming and other microforms

Art and graphics services

Distribution of audiovisual materials

42a

Reproduction and duplication of audiovisual products

Audiovisual facility management and operation

Maintenance of audiovisual equipment

Automatic Data Processing

ADP services - batch processing, time-sharing, facility

management, etc.

Programming and systems analysis, design,

development, and simulation

Key punching, data entry, transmission, and

teleprocessing services

Systems engineering and installation

Equipment installation, operation, and maintenance

Food Services

Operation of cafeterias, mess halls, kitchens, bakeries,

dairies, and commissaries

Vending machines

Ice and water

Health Services

Surgical, medical, dental, and psychiatric care

Hospitalization, outpatient, and nursing care

Physical examinations

Eye and hearing examinations and manufacturing and

fitting glasses and hearing aids

Medical and dental laboratories

Dispensaries

Preventive medicine

Dietary services

Veterinary services

Industrial Shops and Services

Machine, carpentry, electrical, plumbing, painting, and

other shops

43a

Industrial gas production and recharging

Equipment and instrument fabrication, repair and

calibration

Plumbing, heating, electrical, and air conditioning

services, including repair

Fire protection and prevention services

Custodial and janitorial services

Refuse collection and processing

Maintenance, Overhaul, Repair, and Testing

Aircraft and aircraft components

Ships, boats, and components

Motor vehicles

Combat vehicles

Railway systems

Electronic equipment and systems

Weapons and weapon systems

Medical and dental equipment

Office furniture and equipment

Industrial plant equipment

Photographic equipment

Space systems

Management Support Services

Advertising and public relations services

Financial and payroll services

Debt collection

Manufacturing, Fabrication, Processing, Testing, and

Packaging

Ordnance equipment

Clothing and fabric products

Liquid, gaseous, and chemical products

Lumber products

Communications and electronics equipment

Rubber an plastic products

44a

Optical and related products

Sheet metal and foundry products

Machined products

Construction materials

Test and instrumentation equipment

Office and Administrative Services

Library operations

Stenographic recording and transcribing

Word processing/data entry/typing services

Mail/messenger

Translation

Management information systems, products and

distribution

Financial auditing and services

Compliance auditing

Court reporting

Material management

Supply services

Other Services

Laundry and dry cleaning

Mapping and charting

Architect and engineer services

Geological surveys

Cataloging

Training - academic, technical, vocational, and

specialized Operation of utility systems (power, gas,

water steam, and sewage)

Laboratory testing services

Printing and Reproduction

Facility management an operation

Printing and binding - where the agency or department

is exempted from the provisions of Title 44 of the

U.S. Code

45a

Reproduction, copying, and duplication

Blueprinting

Real Property

Design, engineering, construction, modification, repair,

and maintenance of buildings and structures;

building mechanical and electrical equipment and

systems; elevators; escalators; moving walks

Construction, alteration, repair, and maintenance of

roads and other surface area

Landscaping, drainage, mowing and care of grounds

Dredging of waterways

Security

Guard and protective services

Systems engineering, installation, and maintenance of

security systems and individual privacy systems

Forensic laboratories

Special Studies and Analyses

Cost benefit analyses

Statistical analyses

Scientific data studies

Regulatory studies

Defense, education, energy studies

Legal/litigation studies

Management studies

Systems Engineering, Installation, Operation,

Maintenance, and Testing

Communications systems - voice, message, data, radio,

wire, microwave, and satellite

Missile ranges

Satellite tracking and data acquisition

Radar detection and tracking

46a

Television systems - studio and transmission

equipment, distribution systems, receivers,

antennas, etc.

Recreational areas

Bulk storage facilities

Transportation

Operation of motor pools

Bus service

Vehicle operation and maintenance

Air, water, and land transportation of people and things

Trucking and hauling

— ; eaten BiPAe i ADA SAR ile AE a ei NE Ap GAS intially

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.