American Federation of Government Employees, Local 2017 v. Brown
Opinion of the Court
The appellants, Local 2017 of the American Federation of Government Employees
The general policy of the federal government is to rely on competitive private enterprise to supply the products and services it needs except when comparative cost analysis indicates that procurement from a private source is not as cost-effective as in-house performance.
In 1979 Congress enacted the Department of Defense Authorization Act, 1980. Pub.L. No.96-107, 93 Stat. 803 (1979), 10 U.S.C. § 2304 note (Supp. III 1979).
The present case arose from the decision by the Department of the Army to contract out certain functions performed by the Directorate of Industrial Operations and Housing at Fort Gordon, Georgia. These functions included housing, maintenance, supply and service, and transportation. Prior to making the contracting out decision the Army conducted an analysis of the functions to determine whether a cost savings could in fact be achieved by conversion to a private contractor. As a part of this analysis the Army first performed a study to determine the most efficient and cost-effective organization for in-house performance of these functions. The Army then solicited and received cost proposals from private contractors for the performance of the functions. The cost proposal offered by Pan Am was determined to be the lowest of all the contractors. The Army compared Pan Am’s cost proposal with the cost calculation for in-house performance and determined that an estimated 58-month savings of approximately $32 million could be achieved by contracting with Pan Am for the performance of the functions.
The results of the Army’s study were reported to Congress, including a certification that the Army’s in-house cost calcula
The Army, consequently, awarded the contract to Pan Am. On the same day that the contract was awarded reduction-in-foree notices were sent to 618 civilian employees at Fort Gordon whose positions would be eliminated because of the contract.
The appellant’s complaint alleged that the conversion violated Public Law 96-107, Section 806(a) because it was done to circumvent civilian personnel ceilings, and because the Army’s in-house cost calculations failed to provide a proper estimate of the most efficient and cost-effective organization for in-house performance.
The District Court did not consider the complaint on the merits, but rather held a hearing on the threshold issues of jurisdiction and standing. The court concluded that it was without jurisdiction because the Army’s conversion decision was not subject to judicial review. The court further concluded that the plaintiffs lacked standing because they were not within the zone of interests protected by Section 806. Upon the dismissal of the plaintiff’s complaint this appeal was taken.
II
The two issues before us on appeal are first, whether district courts have judicial review over alleged violations of Section 806(a) and second, whether affected civilian employees and their labor organization have standing under Section 806(a) to challenge a decision of the Department of the Army to convert from in-house performance of certain base functions to performance by private contractor.
The appellants argue that pursuant to the Administrative Procedure Act (APA)
There is no question that the APA affords judicial review of agency action to any person adversely affected or aggrieved by an agency action
In the absence of a statute that explicitly precludes judicial, review, an agency action is committed to the agency’s discretion and is not reviewable when an evaluation of the legislative scheme as well as the practical and policy implications demonstrate that review should not be allowed.
623 F.2d at 1046. In Bullard we indicated three criteria useful in making a determina
We agree with the finding of the District Court that Section 806 vests the Army with broad discretion to make contracting out decisions and provides no legal standard for the court to apply. As the District Court stated:
Section 806 is a statement of policy and legislative intent. It is a mandate from the legislative branch to the executive branch, but it is not replete with formu-lae or discernable (sic) guidelines against which the agency decision may be measured.
AFGE, Local 2017 v. Brown, No. CV ISO-136 at 12 (S.D.Ga. August 29, 1980).
There is no dispute that in enacting Section 806 Congress sought to elevate some aspects of existing practice and procedure under OMB Circular A-76 to the status of law.
In Local 2855, AFGE, the Third Circuit observed that pursuant to Citizens to Preserve Overton Park v. Volpe, 401 U.S. 402, 410, 91 S.Ct. 814, 820, (1971) the committed to agency discretion exception to judicial review is intended to be “applicable in those rare instances where ‘statutes are drawn in such broad terms that in a given case there is no law to apply.’ [citation omitted].” 602 F.2d at 578-79. In applying this rule to OMB Circular A-76 the court concluded that the circular failed “to provide meaningful criteria against which a court may analyze the Army’s decision.” Id. In a similar vein the District Court in the case at hand concluded correctly that because Section 806 lacked discernible guidelines “a District Judge would have no law to apply in determining whether or not a decision made by the agency was correct.” AFGE, Local 2017 at 11-12.
The Army’s contracting out decision is also an inappropriate subject for judicial review because the decision involves military and managerial choices inherently un
In addition, the contracting out decision is based on the special expertise of the Army officials involved. Calculations of the most efficient and cost-effective way to perform a function at a military installation “are matters on which experts may disagree; they involve nice issues of judgment and choice.” Panama Canal Co. v. Grace Line, Inc., 356 U.S. 309, 78 S.Ct. 752, 2 L.Ed.2d 788 (1958). These issues are best resolved by the Army analysts rather than by the courts since, in the words of Justice Frankfurter, they “do not present questions of an essentially legal nature in the sense that legal education and lawyers’ learning afford peculiar competence for their adjustment.” Driscoll v. Edison Light & Power Co., 307 U.S. 104, 122, 59 S.Ct. 715, 724 (1939) (Frankfurter, J. concurring).
The appellants argue further that the District Court erred in holding that they lacked standing to challenge the Army’s contracting out decision. In view of our determination that the District Court was correct in finding that it lacked jurisdiction it is unnecessary to address the question of standing.
Ill
The judgment of the District Court is AFFIRMED.
. Local 2017 is a labor organization representing certain employees of the Department of the Army at Fort Gordon.
. The Secretaries of Defense and the Army, the Commanding General of the United States Army Training and Doctrine Command, the Commander of the U.S. Army Operations at Fort Gordon, and a contracting officer were each named defendants in their official capacities. Pan American World Airways, Inc., the awardee of a contract to perform the work in question was granted permission by the court to intervene in the action as a defendant.
. In-house performance is also allowed when national defense needs require it; contract performance would cause unacceptable delay or disruption of an essential program; or no satisfactory private source exists that is capable of providing the required product or service.
. The government’s policy of acquiring needed products and services from private sources was first expressed in Bureau of Budget Bulletins issued in 1955, 1957 and 1960. In 1966 Circular No. A-76 was issued and for the first time, prescribed the policy and implementing guidelines in a permanent directive. The Circular in effect at the time the present case arose was issued March 29, 1979. This circular is not materially different from the current version issued September 26, 1980.
. This Act was an appropriations statute for fiscal year 1980 only. It thus has no present force or effect.
. Section 806(a) read:
(a) During fiscal year 1980, no commercial or industrial type function of the Department of Defense that on the date of the enactment of this Act is being performed by Department of Defense personnel may be converted to performance by a private contractor—
(1) to circumvent any civilian personnel ceiling; and
(2) unless the Secretary of Defense shall provide to the Congress in a timely manner—
(a) notification of any decision to study such commercial or industrial type function for possible performance by a private contractor, together with a certification that the government in-house cost calculation for the function is based on an estimate of the most efficient and cost effective organization for in-house performance;
. As was required under the contract Pan Am offered all displaced civilian employees the right of first refusal for employment openings under its contract in positions for which they were qualified. Each of the individual plaintiffs in this action was offered a position with Pan Am.
. 5 U.S.C. §§ 701-706 (1976).
. 5 U.S.C. § 702 (1976).
. 5 U.S.C. § 701(a) (1976).
. In Abbott Laboratories v. Gardner, 387 U.S. 136, 141, 87 S.Ct. 1507, 1511, 18 L.Ed.2d 681 (1967) the Supreme Court noted 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.” ■
. These three criteria were taken from the Third Circuit’s opinion in Local 2855, AFGE v. United States, 602 F.2d 574 (3d Cir. 1979). Local 2855 essentially raised the same issue as the present case. The court held that the Army’s contracting out decision was committed to agency discretion and thus not subject to judicial review.
. Our review of the legislative history convinces us that the overriding concern of Congress was to provide for increased congressional review and oversight of conversion decisions.
. We expressed similar sentiments in Mindes v. Seaman, 453 F.2d 197, 199 (5th Cir. 1971) when we stated:
Traditional judicial trepidation over interfering with the military establishment has been strongly manifested in an unwillingness to second-guess judgments requiring military expertise and in a reluctance to substitute court orders for discretionary military decisions .... [T]he greatest reluctance to ac- • cord judicial review has stemmed from the proper concern that such review might stultify the military in the performance of its vital mission.
. We should also note that if a contracting out decision is in fact made on the basis of an erroneous calculation of the cost of in-house performance, or to circumvent civilian personnel ceilings, affected civilian employees and their labor representative are always free to bring such discrepancies to the attention of Congress and to seek legislative relief.
Reference
- Full Case Name
- AMERICAN FEDERATION OF GOVERNMENT EMPLOYEES, LOCAL 2017 v. Harold BROWN, Clifford Alexander, Jr., Pan American World Airways, Inc., Intervenor-Appellee
- Cited By
- 9 cases
- Status
- Published