Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-02-05192/USCOURTS-caDC-02-05192-0/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 

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Notice: This opinion is subject to formal revision before publication in the

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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, Assistant 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.

USCA Case #02-5192 Document #766007 Filed: 08/12/2003 Page 1 of 19
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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 dissemination of government documents, without first determining 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 specifications and standards. DAPS lists the documents in the Department of Defense Index of Specifications and Standards

(DoDISS). The Department uses those documents (hereinafter ‘‘DoDISS documents’’) to describe the products or services 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 eventually created an official electronic index of military standardization 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 specifications. For many years, the company has obtained DoDISS

documents from the government and made them available to

USCA Case #02-5192 Document #766007 Filed: 08/12/2003 Page 2 of 19
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its customers on a subscription basis. In the late 1980s, IHS

developed a searchable electronic database of DoDISS documents, 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 specifications 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 immediately 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, including 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 determining 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

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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 reasonable costs attributable to search, duplication, and review.’’

IHS sought a declaratory judgment as well as injunctive

relief barring DAPS from ‘‘developing, marketing, implementing, 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 mentioned, IHS’ complaint was stated in two counts: the first

premised on alleged violations of § 2462 and the Department’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

USCA Case #02-5192 Document #766007 Filed: 08/12/2003 Page 4 of 19
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(other than functions which the Secretary of Defense

determines must be performed by military or Government 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 purpose 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 performance 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 inhouse 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).

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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 database for DoDISS documents more economically than commercial 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, although IHS still believes that DAPS violated 10 U.S.C.

§ 2462 and 32 C.F.R. § 169.4 by developing the product inhouse, 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 developed 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 alternative, 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 federalcourt 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 requirements 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

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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. (internal quotation marks omitted). The prudential principle relevant here is that, for a plaintiff to have standing, its ‘‘grievance must arguably fall within the zone of interests protected

or regulated by the statutory provision or constitutional guarantee 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 dismissal 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 development of ASSIST On–Line, we do not discuss standing issues

relating to that claim. Those include the district court’s determination 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.

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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 establish 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 purposes 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 conclusion 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 government, and that in making this calculation it was not including the

government’s sunk development costs on DAPS’ side of the ledger.

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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 plaintiff’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 established injury in fact ‘‘because TTT DoD does not provide

DoDISS documents to the public less economically than plaintiff 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 Distributors, § 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.

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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 argument that the government tendered and this court rejected in

CC Distributors: ‘‘[A] plaintiff suffers a constitutionally cognizable 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 government 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 privateUSCA Case #02-5192 Document #766007 Filed: 08/12/2003 Page 10 of 19
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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 efficiencyTTTT [T]he plaintiffs’ interest in obtaining the opportunity 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 Competition’’ and to encourage DoD components to ‘‘Rely on the Commercial 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 maintenance 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.

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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.’’ Waterhouse 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 judgment 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 determination 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

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after the plaintiff has been given adequate time for discovery.’ ’’ 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 whether 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 commercial 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 exception 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 components ‘‘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 requiring those components to conduct a cost comparison ‘‘[w]hen performance by a commercial source is permissible’’).

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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 documents, 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 contracted 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 operation 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). Simi9 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’’).

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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 comparison requirement: ‘‘DoD Components shall not consider an inhouse 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(d)

(emphasis added). Indeed, a DAPS position paper on DoDISS states: ‘‘All DoD activities annually review their core

capabilities and identify functions for possible cost comparisons 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 contends 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 Internet-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 merely 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 dramatically. DAPS cannot dispute that it ‘‘historically distributed

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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 retrieval 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 complied 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 argument, 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’ remaining responsibilities associated with the website, and that IHS

failed to submit a proposal.

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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 regarding 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 adjustments 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 assertion, the March 2001 solicitation did not cover the maintenance and operation of the website — a dispute that we

cannot resolve by unaided examination of the abstruse language 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 defendants,’’ 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

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§ 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 discovery 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 Americable 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

10 IHS’ 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).

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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.’’ Americable, 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 judgment, and we remand for further proceedings consistent with

this opinion.

So ordered.

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