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United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued April 17, 2003 Decided August 12, 2003
No. 02-5192
INFORMATION HANDLING SERVICES, INC.,
APPELLANT
v.
DEFENSE AUTOMATED PRINTING SERVICES, ET AL.,
APPELLEES
Appeal from the United States District Court
for the District of Columbia
(No. 98cv02796)
David T. Ralston, Jr. argued the cause for appellant. With
him on the briefs was John G. DeGooyer.
W. Mark Nebeker, Assistant U.S. Attorney, argued the
cause for appellee. With him on the brief were Roscoe C.
Howard, Jr., U.S. Attorney, and R. Craig Lawrence, Assis-
tant U.S. Attorney.
Bills of costs must be filed within 14 days after entry of judgment.
The court looks with disfavor upon motions to file bills of costs out
of time.
2
Before: GINSBURG, Chief Judge, and HENDERSON and
GARLAND, Circuit Judges.
Opinion for the Court filed by Circuit Judge GARLAND.
GARLAND, Circuit Judge: Information Handling Services,
Inc. brought suit alleging that the Department of Defense
violated statutory and regulatory requirements by developing
and maintaining an Internet-accessible database for the dis-
semination of government documents, without first determin-
ing whether the private sector could do so at lower cost. The
district court dismissed the complaint for lack of standing
and, in the alternative, granted summary judgment. We
reverse.
I
The Defense Automated Printing Services (DAPS) is the
component of the Department of Defense (DoD) that is
responsible for managing, maintaining, and distributing over
50,000 documents relating to unclassified military specifica-
tions and standards. DAPS lists the documents in the De-
partment of Defense Index of Specifications and Standards
(DoDISS). The Department uses those documents (hereinaf-
ter ‘‘DoDISS documents’’) to describe the products or ser-
vices that it wishes to obtain, and private contractors and
government agencies rely on them in responding to DoD
solicitations.
Beginning in the late 1970s, the Department sought to
automate its management of DoDISS documents. It eventu-
ally created an official electronic index of military standard-
ization documents, known as the Acquisition Streamlining and
Standardization Information System (ASSIST). ASSIST,
however, did not contain the text of the documents, which,
until the late 1990s, were distributed to government agencies,
defense contractors, and the general public only in hard copy.
Information Handling Services, Inc. (IHS) is a commercial
publisher of government and industrial standards and specifi-
cations. For many years, the company has obtained DoDISS
documents from the government and made them available to
3
its customers on a subscription basis. In the late 1980s, IHS
developed a searchable electronic database of DoDISS docu-
ments, called the DoDISS Plus Index, which the company
provided on CD–ROM to subscribing customers. Users of
this ‘‘value-added’’ database could search for particular speci-
fications or standards by document number, title, subject, or
keyword. Like users of ASSIST, however, IHS customers
who identified their desired document still had to obtain the
full-text version from IHS or the Department in hard copy.
Then, in the early 1990s, IHS produced a CD–ROM database
of full-text DoDISS documents that it linked to its DoDISS
Plus Index, allowing a subscriber to search for and immedi-
ately print a particular military specification or standard.
The company has continued to develop and market this
product, and current subscribers can access IHS’ database on
CD–ROM or through the Internet, and can retrieve full-text
DoDISS documents in various electronic formats, including
portable document file (PDF) versions.
The present dispute concerns the Defense Department’s
development of what the plaintiff describes as a document
search and retrieval system similar to the enhanced DoDISS
Plus Index. The government’s database was developed in the
mid–1990s. On October 1, 1998, an Internet version called
ASSIST On–Line became fully operational, allowing users to
search for and immediately retrieve current PDF versions of
DoDISS documents.
On November 17, 1998, IHS filed suit against various
officials and components of the Department of Defense, in-
cluding DAPS (hereinafter ‘‘DAPS’’ or ‘‘the Department’’), in
the United States District Court for the District of Columbia.
IHS’ complaint, brought under the Administrative Procedure
Act, 5 U.S.C. § 701 et seq., contained two causes of action.
First, IHS asserted that DAPS had developed and was
continuing to maintain ASSIST On–Line without first deter-
mining through a bona fide cost comparison that it could do
so at lower cost than the private sector, as required by 10
U.S.C. § 2462 and the relevant DoD procurement regulation,
32 C.F.R. § 169.4. In the complaint’s second count, IHS
contended that, by allowing users to access ASSIST On–Line
4
free of charge, DAPS was violating the requirement of 10
U.S.C. § 2328 that, if ‘‘required to release technical data
under’’ the Freedom of Information Act, the agency must
recoup from the person requesting the documents ‘‘all reason-
able costs attributable to search, duplication, and review.’’
IHS sought a declaratory judgment as well as injunctive
relief barring DAPS from ‘‘developing, marketing, implement-
ing, distributing, and selling’’ ASSIST On–Line without first
undertaking an appropriate cost comparison and recovering
the government’s costs.
On April 18, 2002, after denying IHS’ requests to take
discovery, the district court dismissed plaintiff’s first count on
the ground that IHS lacked standing to assert it. In the
alternative, the court granted summary judgment against the
plaintiff on that count, as well as on the second count. See
Information Handling Servs., Inc. v. Defense Automated
Printing Servs., No. 98–2796 (D.D.C. Apr. 18, 2002). IHS
filed a timely notice of appeal.
II
Before turning to the legal analysis, we pause for a moment
to clarify the scope of the issues on appeal. As just men-
tioned, IHS’ complaint was stated in two counts: the first
premised on alleged violations of § 2462 and the Depart-
ment’s procurement regulation, and the second on an alleged
violation of § 2328. The plaintiff’s appellate briefs directly
addressed only the first count, and at oral argument IHS
confirmed that it was not appealing the court’s grant of
summary judgment on the second. We therefore restrict our
review to the claimed violations of § 2462 and the regulation.
Section 2462 states as follows:
§ 2462. Contracting for certain supplies and services
required when cost is lower
(a) In general.—Except as otherwise provided by law,
the Secretary of Defense shall procure each supply or
service necessary for or beneficial to the accomplishment
of the authorized functions of the Department of Defense
5
(other than functions which the Secretary of Defense
determines must be performed by military or Govern-
ment personnel) from a source in the private sector if
such a source can provide such supply or service to the
Department at a cost that is lower TTT than the cost at
which the Department can provide the same supply or
service.
(b) Realistic and fair cost comparisons.—For the pur-
pose of determining whether to contract with a source in
the private sector for the performance of a Department
of Defense function on the basis of a comparison of the
costs of procuring supplies or services from such a source
with the costs of providing the same supplies or services
by the Department of Defense, the Secretary of Defense
shall ensure that all costs considered TTT are realistic
and fair.
10 U.S.C. § 2462. The relevant procurement regulation, 32
C.F.R. § 169.4, states in pertinent part:
(b) Achieve Economy and Quality through Competition.
Encourage competition with the objective of enhancing
quality, economy, and performance. When performance
by a commercial source is permissible, a comparison of
the cost of contracting and the cost of in-house perfor-
mance shall be performed to determine who shall provide
the best value for the GovernmentTTTT
(d) Rely on the Commercial Sector. DoD Components
shall rely on commercially available sources to provide
commercial products and services except when required
for national defense, when no satisfactory commercial
source is available, or when in the best interest of direct
patient care. DoD Components shall not consider an in-
house new requirement, an expansion of an in-house
requirement, conversion to in-house, or otherwise carry
on any [commercial activities] to provide commercial
products or services if the products or services can be
procured more economically from commercial sources.
32 C.F.R. § 169.4(b), (d); see also id. § 169a.4(c)-(d).
6
The first count of the plaintiff’s complaint alleged that
DAPS violated these statutory and regulatory requirements
by (1) developing, and (2) maintaining ASSIST On–Line
without undertaking a cost comparison study to determine
whether DAPS could ‘‘develop and maintain a digitized data-
base for DoDISS documents more economically than commer-
cial sources.’’ Compl. ¶ 29. At argument before this court,
IHS abandoned its claim regarding the development of
ASSIST On–Line. Plaintiff’s counsel made clear that, al-
though IHS still believes that DAPS violated 10 U.S.C.
§ 2462 and 32 C.F.R. § 169.4 by developing the product in-
house, it does not contend that the statute or regulation
requires the government to discard a product that it has
already developed — even if it was developed in violation of
the law. Accordingly, because ASSIST On–Line was devel-
oped during the mid–1990s and became operational in 1998 —
and hence was completed before the plaintiff filed suit — IHS
has withdrawn any claim to relief for the development of the
website and associated database.
This leaves only one claim remaining for our consideration:
IHS’ charge that DAPS is currently violating § 2462 and the
Department’s regulation by maintaining ASSIST On–Line
without considering whether the private sector can do so at
lower cost. The district court dismissed that claim on the
ground that IHS lacked standing to raise it. In the alterna-
tive, the court granted summary judgment against IHS on
the merits. We consider the plaintiff’s standing in Part III,
and, because we find that IHS does have standing to raise the
claim, we consider the district court’s grant of summary
judgment in Part IV.
III
As the Supreme Court has explained, the ‘‘question of
standing ‘involves both constitutional limitations on federal-
court jurisdiction and prudential limitations on its exercise.’ ’’
Bennett v. Spear, 520 U.S. 154, 162 (1997) (quoting Warth v.
Seldin, 422 U.S. 490, 498 (1975)). To satisfy the require-
ments of Article III of the Constitution, ‘‘a plaintiff must,
generally speaking, demonstrate that he has suffered ‘injury
in fact,’ that the injury is ‘fairly traceable’ to the actions of
7
the defendant, and that the injury will likely be redressed by
a favorable decision.’’ Id. (quoting Lujan v. Defenders of
Wildlife, 504 U.S. 555, 560–61 (1992)). In addition, ‘‘the
federal judiciary has also adhered to a set of prudential
principles that bear on the question of standing.’’ Id. (inter-
nal quotation marks omitted). The prudential principle rele-
vant here is that, for a plaintiff to have standing, its ‘‘griev-
ance must arguably fall within the zone of interests protected
or regulated by the statutory provision or constitutional guar-
antee invoked in the suit.’’ Id.
We review the district court’s grant of DAPS’ motion to
dismiss for lack of standing de novo. See American Fed’n of
Gov’t Employees v. Rumsfeld, 321 F.3d 139, 142 (D.C. Cir.
2003). In analyzing whether IHS has standing at the dis-
missal stage, we must assume that IHS states a valid legal
claim, see Warth, 422 U.S. at 500; Louisiana Energy &
Power Auth. v. FERC, 141 F.3d 364, 367–68 (D.C. Cir. 1998);
American Fed’n of Gov’t Employees v. Pierce, 697 F.2d 303,
305 (D.C. Cir. 1982), and ‘‘must accept the factual allegations
in the complaint as true,’’ Sturm, Ruger & Co. v. Chao, 300
F.3d 867, 871 (D.C. Cir. 2002); see Sierra Club v. EPA, 292
F.3d 895, 898–99 (D.C. Cir. 2002).1
The dispute over IHS’ standing principally centers on
whether it is suffering ‘‘injury in fact.’’ IHS’ complaint avers
that DAPS’ unlawful failure to solicit bids from the private
sector to maintain ASSIST On–Line ‘‘harm[s] commercial
vendors, including IHS, TTT as it denies them the opportunity
1 Because IHS has abandoned its claim regarding the develop-
ment of ASSIST On–Line, we do not discuss standing issues
relating to that claim. Those include the district court’s determina-
tion that IHS lacked standing to raise the development claim
because ‘‘at the time the DoD began to develop TTT its system to
provide electronic copies of DoDISS documents TTT plaintiff did not
have a commercially-available product or service with which to
compare [DoD’s] costs,’’ Information Handling, slip op. at 5. They
also include the government’s argument that IHS lacks standing
because DAPS did not produce the product in-house but rather
used other private-sector vendors, and because IHS failed to bid on
the contracts that led to the development of ASSIST On–Line.
8
to demonstrate that they can provide the instant products and
services more economically.’’ Compl. ¶ 74. Such a claim of
lost contracting opportunities is ordinarily sufficient to estab-
lish injury in fact. See CC Distribs., Inc. v. United States,
883 F.2d 146, 150 (D.C. Cir. 1989).
The district court concluded that IHS nonetheless lacked
standing because it ‘‘does not now offer a service which is
procured by DoD.’’ Information Handling, slip op. at 5.
There are two concepts embedded in that conclusion. The
first — that IHS does not offer (or is not capable of offering)
the same service provided by ASSIST On–Line — is a
question of fact. The plaintiff avers that ‘‘such products and
services are now available more economically from IHS and
other commercial sources,’’ and that ‘‘IHS’s DoDISS Plus
Index products and services are a ‘commercially available
source’ of essentially the same products and services as
offered in’’ ASSIST On–Line. Compl. ¶¶ 13, 48.2 For pur-
poses of deciding a motion to dismiss, a court must take those
allegations as true, and the district court erred in not doing
so.
The second concept implicit in the district court’s conclu-
sion is that IHS is not suffering ‘‘injury in fact’’ because
DAPS is not ‘‘procur[ing]’’ the service of maintaining and
operating the website, but rather is continuing to provide that
service itself. In a related vein, the government argues that
§ 2462 only compels DAPS to consider comparative costs
when it takes a private-sector service ‘‘in-house’’ — i.e., when
DAPS decides to develop a product or perform a service that
it had previously purchased from the private sector — or
when it develops a new product or service. Section 2462 is
inapplicable here, the government insists, because making
DoDISS documents available to the public is a service that
DoD has historically undertaken on its own. And because
§ 2462 is inapplicable, the government concludes, the interest
that IHS asserts is not ‘‘legally protected.’’ See DAPS Br. at
2 At oral argument before this court, counsel for IHS made clear
that its contention was that it could provide the same ongoing
services as ASSIST On–Line at lower variable cost than the govern-
ment, and that in making this calculation it was not including the
government’s sunk development costs on DAPS’ side of the ledger.
9
24–27; see also Defenders of Wildlife, 504 U.S. at 560 (stating
that the ‘‘injury in fact’’ element of standing requires the
‘‘invasion of a legally protected interest’’).
The problem with this argument is that at the motion to
dismiss stage, a plaintiff’s non-frivolous contention regarding
the meaning of a statute must be taken as correct for
purposes of standing. See Louisiana Energy & Power Auth.,
141 F.3d at 368; Claybrook v. Slater, 111 F.3d 904, 907 (D.C.
Cir. 1997). Were that not the case, we would effectively be
deciding the merits under the guise of determining the plain-
tiff’s standing. Here, IHS’ contention is that § 2462 requires
the government to consider procuring from the private sector
services that it performs in-house, even if the services neither
are new nor were once contracted out. The fact that the
government is not ‘‘procur[ing]’’ the maintenance service is
thus the gravamen of IHS’ claim, not a ground for finding
that IHS lacks standing to assert it. As we said in rejecting
a similar argument in CC Distributors, ‘‘[t]o note that ‘no
procurement process was ever invoked’ begs the question of
whether the relevant statutes and regulations require [DoD]
to undertake the TTT cost comparison procedures of that
procurement process, i.e., whether they create a conditional
right to compete.’’ 883 F.2d at 151.3 If we assume, as we
must at this stage, that IHS has read the statute correctly,
then DAPS’ conduct has indeed ‘‘inva[ded] TTT a legally
protected interest,’’ and the plaintiff has standing to raise its
claim. Defenders of Wildlife, 504 U.S. at 560.
The district court also determined that IHS had not estab-
lished injury in fact ‘‘because TTT DoD does not provide
DoDISS documents to the public less economically than plain-
tiff does.’’ Information Handling, slip op. at 5. But as we
have said, the complaint expressly alleges that ‘‘such products
and services are now available more economically from IHS
and other commercial sources.’’ Compl. ¶ 13. Because we
must take that allegation as true, this ground for finding a
3 The statutory provision that the court analyzed in CC Distribu-
tors, § 1223 of the National Defense Authorization Act for Fiscal
Year 1987, Pub. L. No. 99–661, 100 Stat. 3816, 3977 (1986), was later
codified without substantive change as 10 U.S.C. § 2462. See Act of
July 19, 1988, Pub. L. No. 100–370, 102 Stat. 840.
10
lack of standing must also fail. See Sturm, Ruger, 300 F.3d
at 871; Sierra Club, 292 F.3d at 898–99.
The government offers a potpourri of additional arguments
in support of the district court’s determination that IHS
lacked standing. First, it contends that the inability of IHS
to bid on a maintenance contract causes the plaintiff no injury
to a legally protected interest because ‘‘no one has the ‘right’
to a government contract.’’ DAPS Br. at 24. This contention
is readily dismissed, because it is precisely the same argu-
ment that the government tendered and this court rejected in
CC Distributors: ‘‘[A] plaintiff suffers a constitutionally cog-
nizable injury by the loss of an opportunity to pursue a
benefit,’’ we said, ‘‘even though the plaintiff may not be able
to show that it was certain to receive that benefit had it been
accorded the lost opportunity.’’ 883 F.2d at 150. IHS’ claim
that it has lost § 2462’s ‘‘statutorily conferred opportunity to
compete for a contract’’ to maintain the website is ‘‘sufficient
to confer standing.’’ Id.
Second, the government argues that IHS has no statutory
right to force the government to buy its CD–ROM database
of DoDISS documents, rather than to operate a website. But
if IHS ever claimed such a right in the district court, it does
not do so here. Instead, the plaintiff contends that if given
the opportunity, it would bid to operate a website that would
provide users with precisely the same services that the gov-
ernment now provides but at lower cost to the government.
This is a factual dispute that cannot be resolved on a motion
to dismiss.
Finally, the government contends that IHS lacks prudential
standing because its claim does not come within the zone of
interests protected by § 2462. According to the government,
IHS is merely trying to protect the near-monopoly it used to
enjoy. But that is not the nature of IHS’ claim here. The
complaint alleges that IHS can provide the same service that
the government does at lower cost to the taxpayers. Compl.
¶¶ 13, 48, 74. There can be no question that such a claim
comes within the zone of interests of a statute that directs the
Secretary of Defense to procure a service from a private-
11
sector source ‘‘if such a source can provide such TTT service to
the Department at a cost that is lower TTT than the cost at
which the Department can provide the same TTT service.’’ 10
U.S.C. § 2462.4 As the court said in CC Distributors:
We can hardly say that the interest of a private firm in
competing for a Defense Department contract is only
‘‘marginally related’’ to the goal of improving efficien-
cyTTTT [T]he plaintiffs’ interest in obtaining the oppor-
tunity to compete for [this] contract[ ] is closely related
to, even if not the same as, Congress’s goal of ‘‘efficiency
and economy in defense matters.’’
883 F.2d at 153.5
In sum, we conclude that none of the arguments against
the plaintiff’s standing is sufficient to justify the dismissal of
the complaint. The district court, having concluded that IHS
lacked standing, went on to consider the merits of IHS’
complaint and to grant summary judgment in favor of the
defendants. Although the district court would have been
without jurisdiction to consider the merits had IHS truly
lacked standing, see Steel Co. v. Citizens for a Better Env’t,
523 U.S. 83, 93–94 (1998), because we have concluded that
IHS does have standing, we now proceed to consider the
court’s decision to grant summary judgment.
4 See also 32 C.F.R. § 169.4(b), (d) (indicating that the purpose of
the regulation is to ‘‘Achieve Economy and Quality through Compe-
tition’’ and to encourage DoD components to ‘‘Rely on the Commer-
cial Sector’’ (italics omitted)).
5 At oral argument, the government raised an additional standing
argument. It contended that IHS’ injury could not be traced to
DAPS’ alleged failure to solicit bids for maintenance of the website
because, in fact, DAPS had recently solicited such bids. IHS, the
government said, had simply failed to submit a bid. The plaintiff
responded that DAPS’ recent solicitation did not include mainte-
nance and operation of the website. This is, once again, a factual
dispute inappropriate for resolution on the face of the complaint.
Nor, as we note below, does examination of the solicitation itself
readily resolve the factual dispute. See infra Part IV.
12
IV
We review the district court’s grant of summary judgment
de novo. Morgan v. Federal Home Loan Mortgage Corp.,
328 F.3d 647, 650 (D.C. Cir. 2003). Summary judgment is
appropriate only if ‘‘ ‘there is no genuine issue as to any
material fact and TTT the moving party is entitled to a
judgment as a matter of law.’ ’’ Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 247 (1986) (quoting FED. R. CIV. P. 56(c)).
In determining whether a ‘‘genuine issue’’ exists, ‘‘we must
view the evidence in the light most favorable to [the plaintiff]
and draw all reasonable inferences in [its] favor.’’ Water-
house v. District of Columbia, 298 F.3d 989, 991 (D.C. Cir.
2002).6
In this case, we must also determine whether the dispute
was ripe for summary judgment: that is, whether the district
court erred in refusing IHS’ request, pursuant to Federal
Rule of Civil Procedure 56(f), to delay ruling on DAPS’
motion for summary judgment until IHS had a chance to take
discovery.7 Summary judgment ‘‘ordinarily ‘is proper only
6 As with respect to standing, we do not discuss summary judg-
ment issues relating to IHS’ claim concerning the development of
ASSIST On–Line, since the plaintiff has abandoned that claim on
appeal. Those include the district court’s determination that
‘‘§ 2462(a) and 32 C.F.R. § 169.4 TTT did not require DoD to
conduct a cost comparison analysis before developing its own
ASSIST and ASSIST On–Line systems’’ because ‘‘there is no
evidence’’ that there was ‘‘a commercially-available alternative to
the programs DoD proposed to develop’’ at that time. Information
Handling, slip op. at 6–7. Nor do we consider the court’s determi-
nation that IHS’ claim under § 2328 (the plaintiff’s second count)
failed because ‘‘there is no evidence that when a user obtains
documents and forms through ASSIST On–Line, it involves costs to
DOD ‘attributable to search, duplication, and review,’ ’’ id. at 8
(quoting 10 U.S.C. § 2328), since IHS has also not appealed the
district court’s judgment against it on that claim.
7 Rule 56(f) provides that a court ‘‘may refuse the application for
judgment or may order a continuance to permit affidavits to be
obtained or depositions to be taken or discovery to be had’’ if it
‘‘appear[s] from the affidavits of a party opposing the motion that
13
after the plaintiff has been given adequate time for discov-
ery.’ ’’ Americable Int’l, Inc. v. Department of Navy, 129
F.3d 1271, 1274 (D.C. Cir. 1998) (quoting First Chicago Int’l
v. United Exch. Co., 836 F.2d 1375, 1380 (D.C. Cir. 1988));
see Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986);
Anderson, 477 U.S. at 257. We review the district court’s
refusal to allow discovery for abuse of discretion. Paquin v.
Federal Nat’l Mortgage Ass’n, 119 F.3d 23, 28 (D.C. Cir.
1997).
As we have noted above, IHS’ claim is based on § 2462 and
the relevant DoD procurement regulation. Section 2462(a)
declares that the Department ‘‘shall procure each supply or
service TTT from a source in the private sector if such a
source can provide such supply or service to the Department
at a cost that is lower TTT than the cost at which the
Department can provide the same supply or service,’’ and
§ 2462(b) requires the Department to make ‘‘[r]ealistic and
fair cost comparisons’’ for ‘‘the purpose of determining wheth-
er to contract with a source in the private sector for the
performance of a [DoD] function.’’8 IHS’ complaint alleges
that the ‘‘future maintenance of DAPS’s [website] require[s]
the ‘carrying on’ of activities designed to provide a commer-
cial product or service,’’ Compl. ¶ 50, that IHS can provide
that service at lower cost to the government than DAPS can,
id. ¶¶ 13, 48, 74, and that DAPS has failed to ‘‘prepare any
cost comparison study’’ that would justify retaining the work
in-house, id. ¶ 51. DAPS does not deny that it continues to
expend resources to maintain ASSIST On–Line, nor does it
argue that such maintenance falls within the statutory excep-
tion for ‘‘functions which the Secretary of Defense [has]
the party cannot for reasons stated present by affidavit facts
essential to justify the party’s opposition.’’ FED. R. CIV. P. 56(f).
8 See also 32 C.F.R. § 169.4(b), (d) (providing that DoD compo-
nents ‘‘shall not TTT carry on any [commercial activities] to provide
commercial products or services if the products or services can be
procured more economically from commercial sources,’’ and requir-
ing those components to conduct a cost comparison ‘‘[w]hen perfor-
mance by a commercial source is permissible’’).
14
determine[d] must be performed by military or Government
personnel,’’ 10 U.S.C. § 2462(a).9 Accordingly, on its face
IHS’ complaint alleges conduct contrary to § 2462 and the
Department’s regulation, which, if proven, would justify a
judgment in its favor. See 5 U.S.C. § 706(2)(A).
The district court nonetheless held § 2462 and the DoD
regulation inapplicable to IHS’ claims because DAPS ‘‘is not
procuring supplies or services in connection with TTT ASSIST
On–Line,’’ but is instead ‘‘making its own forms and docu-
ments, which have long been available to the public, available
through the Internet.’’ Information Handling, slip op. at 7.
As we noted in our discussion of standing, this is a variant on
the government’s argument that § 2462 only applies when
DAPS takes in-house a service that it had previously con-
tracted out to the private sector, or when it institutes a new
service. According to the government, ‘‘DAPS never had an
agreement with any contractor to provide DoD specifications
and standards on the internet.’’ DAPS Br. at 26. Rather, ‘‘it
was DAPS’ historic mission to provide such information to
DoD components and others.’’ Id. And because the opera-
tion of the website assertedly represents only a continuation
of DAPS’ historical function, rather than a decision to bring
an existing service in-house or to create a new service, the
government argues that DAPS was not obligated to consider
outsourcing to the private sector.
This argument fails to justify a grant of summary judgment
on either the law or the facts. First, nothing in the language
of § 2462 suggests that it applies only to functions that the
Department had previously contracted out to the private
sector, or to entirely new functions. Rather, the statute
applies to ‘‘each supply or service necessary for or beneficial
to the accomplishment of the authorized functions’’ of the
Department. 10 U.S.C. § 2462(a) (emphasis added). Simi-
9 The government also does not contend that DAPS’ activities fall
within any of the regulatory exceptions. See 32 C.F.R. § 169.4(d)
(providing exceptions ‘‘when required for national defense, when no
satisfactory commercial source is available, or when in the best
interest of direct patient care’’).
15
larly, the Department’s regulation states that conversion to
in-house production or the creation of a new in-house service
are only two of the events that can trigger the cost compari-
son requirement: ‘‘DoD Components shall not consider an in-
house new requirement, an expansion of an in-house require-
ment, conversion to in-house, or otherwise carry on any
[commercial activities] to provide commercial products or
services if the products or services can be procured more
economically from commercial sources.’’ 32 C.F.R. § 169.4(d)
(emphasis added). Indeed, a DAPS position paper on Do-
DISS states: ‘‘All DoD activities annually review their core
capabilities and identify functions for possible cost compari-
sons with private industry. When such studies are conducted
and a determination is made that a particular service may be
more appropriately performed by the private sector, TTT a
solicitation is advertised [and] a competitive selection is
awarded.’’ DAPS, DoDISS Documents On–Line, Proposed
Questions and Answers ¶ 9 (Sept. 21, 1998) (J.A. at 29)
[hereinafter ‘‘DAPS, Questions and Answers’’].
Second, even if § 2462 does apply only to services that
DAPS had previously procured from the private sector or
that are entirely new, IHS has raised a genuine factual
dispute as to DAPS’ claim that its services fall into neither
category. With respect to previous procurement, IHS con-
tends that ‘‘[f]or many years prior to defendants’ rollout of its
electronic military standards product on October 1, 1998,
defendants had been purchasing a comparable product from
IHS.’’ Reply Br. at 4. Specifically, IHS asserts that during
the 1990s, DoD components purchased CD–ROMs and Inter-
net-based products from IHS that enabled them to conduct
desktop computer searches and retrieve full-text versions of
DoDISS documents. See Compl. ¶¶ 22–23; Pace Decl. ¶¶ 5,
11, 16 (Apr. 20, 1999) (J.A. at 274–76).
Moreover, the government’s contention that DAPS is mere-
ly carrying out its long-standing function of disseminating
DoDISS documents, while arguably correct when stated at a
high level of generality, obscures the fact that the way in
which DAPS carries out that function has changed dramati-
cally. DAPS cannot dispute that it ‘‘historically distributed
16
only paper copies of DoDISS documents,’’ and that it was not
until 1996 that ‘‘selected documents were also made available
in electronic format on diskettes or CD–ROMs.’’ DAPS,
Questions and Answers ¶ 14 (J.A. at 30). Dissemination of
DoDISS documents through the Internet did not begin until
DAPS’ website went active on October 1, 1998, see Saunders
Decl. (Dec. 4, 1998) (J.A. at 156), just weeks before IHS
brought suit. We cannot agree that providing for the retriev-
al of documents in electronic format over the Internet is not a
new service as compared to the manual retrieval of hard copy
from government warehouses.
As an alternative ground in support of the district court’s
grant of summary judgment, the government argues that
application of § 2462 to ASSIST On–Line would conflict with
a provision of the Electronic Freedom of Information Act
Amendments of 1996, which requires the Department to
make ‘‘records created on or after November 1, 1996 TTT
available, including by computer telecommunications.’’ 5
U.S.C. § 552(a)(2). DAPS similarly cites the Paperwork
Reduction Act’s mandate that agencies provide ‘‘timely and
equitable access to the [data] underlying’’ public information
‘‘maintained in electronic format.’’ 44 U.S.C. § 3506(d)(1)(B).
But there is no conflict between the requirement that DAPS
make DoDISS documents available over the Internet, and the
requirement that it do so by contracting the function out to
the private sector if that would be more economical.
The government further argues that, even if § 2462 and
the Department’s regulation apply, the agency has fully com-
plied with their mandates. According to the government,
DAPS has contracted out ‘‘the great majority of [the] work’’
of developing, operating, and maintaining ASSIST On–Line
‘‘to other private vendors.’’ DAPS Br. at 23. At oral argu-
ment, government counsel further contended that DAPS had
published a request for proposals (RFP) on March 30, 2001,
seeking private-sector firms to take over all of DAPS’ remain-
ing responsibilities associated with the website, and that IHS
failed to submit a proposal.
17
Counsel for IHS conceded that the company would have no
claim under § 2462 or the relevant regulation if the operation
and maintenance work were already being done by other
private firms. And DAPS may well have provided IHS all
the relief the company sought if, in fact, the March 2001 RFP
encompassed all of DAPS’ remaining responsibilities regard-
ing ASSIST On–Line. IHS contends, however, that there are
genuine issues of material fact as to both questions, and we
agree. As to the former, the government itself concedes that
‘‘DAPS performs the day-to-day operations and minor adjust-
ments to the Website, such as entering new and revised
documents into the database, managing customer accounts,
and other administrative functions.’’ DAPS Br. at 7 (citing
Saunders Decl. (Feb. 25, 1999) (J.A. at 168)). As to the
latter, IHS contends that, contrary to the government’s as-
sertion, the March 2001 solicitation did not cover the mainte-
nance and operation of the website — a dispute that we
cannot resolve by unaided examination of the abstruse lan-
guage of the RFP itself. See J.A. at 347–93 (DAPS RFP).
This is not to say that further proceedings in the district
court could not both clarify and resolve the question of
whether there truly are disputed issues of fact on these
points. But further discovery is plainly required before that
can be done. And while IHS requested discovery of ‘‘all TTT
documents relating to the TTT maintenance[ ] and marketing
of’’ ASSIST On–Line, citing its inability to determine which
work concerning the website was ‘‘retained in-house by defen-
dants,’’ Pl.’s Supp’l Mem. in Opp’n to Defs.’ Mot. to Dismiss
at 7–8 (J.A. at 323–24), the district court granted summary
judgment without permitting such discovery, Information
Handling, slip op. at 7 n.4. As a result, there is no evidence
in the record as to which services DAPS currently provides
in-house in support of ASSIST On–Line, and no underlying
documents that might clarify the nature of the March 2001
solicitation. As we said in Americable, a procurement case
presenting issues similar to those presented here:
If the Navy is correct, there may well be no genuine
issue of material fact with respect to the applicability of
18
§ 2462 to this caseTTTT Unfortunately, neither we nor
the district court are in a position to decide as a matter
of law whether there is a genuine dispute here because
the district court did not permit Americable any discov-
ery before issuing its rulingTTTT As a consequence,
there is no evidence in the record as to who will perform
those functions that may be necessary to ‘‘operate’’ and
‘‘maintain’’ the new system and any inferences that exist
must be construed in the appellant’s favor. Under these
circumstances, it was inappropriate for the district court
to grant summary judgment without first giving Ameri-
cable a chance to conduct discoveryTTTT
129 F.3d at 1274 (internal quotation marks, citations, and
paragraph break omitted).
Finally, we reach a similar conclusion with respect to
DAPS’ repeated suggestion that IHS is incapable of providing
the same services that ASSIST On–Line provides, or, at the
very least, incapable of providing them at lower cost to the
government. If DAPS is right on either charge, then it will,
of course, prevail: § 2462 requires Department components
to procure a service from a source in the private sector only if
such source can provide the ‘‘same’’ service at ‘‘a cost that is
lower.’’ 10 U.S.C. § 2462(a). But IHS offered affidavit
evidence that it can do both,10 and sought discovery from the
10IHS’ Vice President, John Pace, filed a sworn declaration based
on his personal knowledge, averring that the allegations of the
complaint were true and correct. Pace Decl. (Nov. 12, 1998) (J.A.
at 48). Those included allegations that the services offered by
DAPS ‘‘are now available TTT from IHS and other commercial
sources’’ at ‘‘lower than the cost at which defendants can provide
such products and services,’’ Compl. ¶ 13, and that ‘‘IHS’ DoDISS
Plus Index products and services are a ‘commercially available
source’ of essentially the same products and services as offered in’’
ASSIST On–Line, id. ¶ 48. See also Pl.’s Supp’l Mem. in Supp. of
T.R.O. at 7; Pace Decl. (Nov. 24, 1998) (J.A. at 145).
19
government in order further to make its case — particularly
on the cost to the government of providing the service. See
Pl.’s Supp’l Mem. in Opp’n to Defs.’ Mot. to Dismiss at 2 (J.A.
at 318). Therefore, these questions, too, involve disputed
issues of material fact. And to the extent there is any doubt
about the genuineness of those disputes, it cannot be resolved
until IHS is ‘‘given adequate time for discovery.’’ America-
ble, 129 F.3d at 1274 (internal quotation marks omitted).
V
For the foregoing reasons, we reverse the district court’s
grant of DAPS’ motions to dismiss and for summary judg-
ment, and we remand for further proceedings consistent with
this opinion.
So ordered.