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Insourcing Protest Dismissed for Lack of Prudential Standing


A protester did not have standing to challenge an insourcing decision, according to the Court of Federal Claims, because the prudential standing doctrine applies to the court's bid protest jurisdiction and the protester's asserted injury did not fall within the zone of interests protected by statutory provisions addressing insourcing of Department of Defense work. The protester challenged the government's decision to insource vehicle operations and maintenance services that were previously performed by the protester.

Zone of Interest


The court disagreed with a recent CFC insourcing decision (Santa Barbara Applied Research, Inc. v. U.S., 55 CCF 79,574) that declined to apply prudential standing to bid protests under 28 USC 1491(b)(1). In authorizing suits by an "interested party," the "more restrictive formulation" of Section 1491 suggested it did not negate the prudential standing doctrine, which is a judicially self-imposed limit on the exercise of federal jurisdiction and "boils down to 'whether the interest sought to be protected by the complainant is arguably within the zone of interests to be protected or regulated by the statue or constitutional guarantee in question.' "Here, the protester invoked 10 USC 129a, a budget statute requiring DoD justification for manpower requirements, and 10 USC 2463, which requires internal agency insourcing guidelines. Both statutes are subject to legislative oversight, and the guidelines under Section 2463 were indistinguishable from other internal agency guidelines courts regularly refuse to enforce. Far from suggesting an intent to confer a right to judicial review, it could be assumed Congress intended to avoid protest litigation for insourcing decisions by not requiring the formal competitions associated with outsourcing determinations under OMB Circular A-76. The text, structure, and legislative history of the statutes indicated they were not designed to confer benefits on outside contractors, and the government's motion to dismiss was granted. (Hallmark-Phoenix 3, LLC v. U.S., FedCl, 55 CCF 79,586)

































































































 






 

 

(The news featured above is a selection from the news covered in the Government Contracts Report Letter, which is published weekly and distributed to subscribers of the Government Contracts Reporter. )

     
  
 

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