CHALLENGING INSOURCING IN COURT

Judge Beryl A. Howell, United States District Judge of the United States District Court for the District of Columbia has just held that the Court of Federal Claims (COFC) has exclusive jurisdiction over challenges to the government's decision to insource services.  In the process, Judge Howell spends considerable time explaining the meaning of the word "procurement" as used in the Tucker Act and the Administrative Disputes Resolution Act of 1996.

The District Court holds, consistent with other courts both in and outside DC, the Federal Circuit, and the Court of Federal Claims, that an agency's decision to insource is "in connection with a procurement."  A procurement includes all stages of the process from determining a need to contracting and closeout.  Insourcing involves determining a need for property or services and whether that need can be met through private contractors.  Although insourcing itself does not involve procurement, a decision whether or not to insource involves the process for determining the need.  Consequently, insourcing involves a procurement or proposed procurement regardless of whether it actually happens.

Left unanswered by Judge Howell is the question of standing. 

The Court recognizes that the parties have spilled considerable ink over whether the plaintiff is an 'interested party' and has standing under the Tucker Act.  Nonetheless, the Court need not resolve this issue because the matter is one that is more appropriately addressed by the Court of Federal Claims, which has exclusive jurisdiction to adjudicate the merits of the plaintiff's claims and whether the plaintiff has the ability to pursue them at all.

At least one judge of the COFC says a contractor has standing in the COFC (Judge Firestone) and we are not aware the issue has been resolved by the Court of Appeals for the Federal Circuit (CAFC).

The propriety of insourcing also can be challenged at the GAO.  Generally, GAO will not review decisions to perform work in house.  However, if a solicitation requires a cost comparison of in house to outside, GAO will examine the reasonableness of the decision to go in house.  GAO also will examine an agency's rationale for cancelling a solicitation to see if cancellation is a mere pretext or "flimsy excuse" for going in house.

bill@spriggslawgroup.com