Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-94-05401/USCOURTS-caDC-94-05401-0/pdf.json

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

---

<<The pagination in this PDF may not match the actual pagination in the printed slip opinion>>

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued January 26, 1996 Decided July 5, 1996

No. 94-5401

SCHEDULED AIRLINES TRAFFIC OFFICES, INC.,

APPELLANT

v.

DEPARTMENT OF DEFENSE,

APPELLEE

Appeal from the United States District Court

for the District of Columbia

(No. 94cv02128)

Kenneth S. Kramer argued the cause for appellant, with whom Douglas W. Baruch and James S.

Kennell were on the brief.

Cynthia A. Schnedar, Assistant United States Attorney, argued the cause for appellee, with whom

Eric H. Holder, Jr., United States Attorney, R. Craig Lawrence and Michael J. Ryan, Assistant

United States Attorneys, were on the brief.

J. Scott Hommer argued the cause for amicus curiae, with whom Kenneth C. Bass, III, Bruce E.

Titus and Lars E. Anderson were on the brief.

Before: BUCKLEY, HENDERSON and TATEL, Circuit Judges.

Opinion for the Court filed by Circuit Judge TATEL.

TATEL, Circuit Judge: Certain Department of Defense agencies require that private

companies serving as on-site government travel agencies contribute a portion of their revenues to

local"Morale,Welfare, andRecreation"Funds. Morale Funds provide recreational and other services

to members of the military community. A travel agency challenges the requirement to contribute to

Morale Funds, arguing that it violates several federal laws. Concluding that the travel agency has

standing, we hold that because the travel revenues derive from government procurement contracts

in consideration for government resources, the practice violates the Miscellaneous Receipts statute,

31 U.S.C. § 3302(b) (1994), which requires government officials receiving "money for the

Government from any source" to deposit the money in the Treasury.

USCA Case #94-5401 Document #209528 Filed: 07/05/1996 Page 1 of 12
<<The pagination in this PDF may not match the actual pagination in the printed slip opinion>>

I.

Federal agencies typically obtain travel services by contracting with private companies to

operate commercial travel offices on the agency's premises. Except for the price of the tickets and

other travel accommodations, the government pays nothing for the service; it merely provides

contractors with free office space, utilities, and similar amenities. Contractors benefit by serving as

exclusive on-site travel agents, earning revenues like ordinary travel agents through commissions from

airlines, hotels, and other travel providers. In exchange for these benefits, contractors agree to pay

agencies monthly "concession fees" based on a percentage of gross revenues.

In April 1994, the Defense Construction Supply Center, an agency of the Department of

Defense, issued a solicitation seeking services for both "official" travel, meaning

Government-sponsored travel paid for with appropriated funds, and "unofficial" travel, defined as

"[l]eave, furlough, vacation, and leisure travel paid for from personal funds of the traveler for

personal use." The solicitation required bids to include two different "concession fees": a percentage

of official travelsales, which the Supply Center would deposit into the United States Treasury; and

a percentage of unofficial travelsales, which the SupplyCenter would turn over to the local "Morale,

Welfare, andRecreation"Fund, a nonappropriated fund instrumentalityestablished byinternal agency

regulation whose mission is to provide "morale, welfare, and recreation (MWR) activities, including

food and beverage, retail, recreation, lodging, and community support services ... for ... members of

the military community." The solicitation required that the concession fee percentage for official

travel exceed the percentage for unofficial travel, with a minimum of three percent for each.

Appellant Scheduled Airlines Traffic Offices, Inc., a travel agency also known as Sato, had

competed unsuccessfully for similar travel office contracts on several occasions prior to the April

1994 solicitation. In each instance, the Army awarded the contract to a Sato competitor who,

compared to Sato, had offered the government a higher concession fee for unofficial travel and a

lower fee for official travel. Based on post-award discussions with Defense Department personnel,

Sato learned that the agency had awarded the contracts to its competitors largely to maximize

payments to the local Morale Funds.

USCA Case #94-5401 Document #209528 Filed: 07/05/1996 Page 2 of 12
<<The pagination in this PDF may not match the actual pagination in the printed slip opinion>>

Sato bid on the Supply Center's April 1994 solicitation and then challenged the solicitation's

terms in a bid protest to the General Accounting Office. Among other arguments, Sato contended

that depositing the monthly concession fees into Morale Funds violates the Miscellaneous Receipts

statute, which requires "official[s] or agent[s] of the Government receiving money for the

Government from any source [to] deposit the money in the Treasury as soon as practicable without

deduction for any charge or claim." 31 U.S.C. § 3302(b). After the GAO denied Sato's protest, Sato

filed suit in the United States District Court for the District of Columbia seeking declaratory and

injunctive relief to prohibit the Supply Center from awarding a contract based on the April 1994

solicitation, as well as "[s]uch other and further relief asthe Court deems appropriate." The Defense

Department agreed to stay the procurement pending the district court's decision. On cross-motions

forsummaryjudgment, the district court rejected Sato's challenge, entering judgment for the Defense

Department. The Supply Center subsequently awarded Sato the contract. Sato nonetheless appeals,

challenging the requirement that it pay a portion of its fees into the Morale Fund.

II.

We deal first with the Government's argument that Sato lacks standing to bring this suit. To

have Article III standing, a party "must demonstrate three things: (1) "injury in fact' ...; (2) a causal

relationship between the injury and the challenged conduct ...; and (3) a likelihood that the injury will

be redressed by a favorable decision...." Northeastern Fla. Chapter of Associated General

Contractors of America v. Jacksonville, 508 U.S. 656, 663 (1993) (quoting Lujan v. Defenders of

Wildlife, 504 U.S. 555, 560 (1992)) (other citations omitted).

With respect to whether Sato has shown injury in fact, we have often found disappointed

bidders for government contracts to have suffered sufficient injury for standing purposes. Both the

economic loss and the injury to a bidder's "right to a legally valid procurement process" are

cognizable harms. National Maritime Union of America, AFL-CIO v. Commander, Military Sealift

Command, 824 F.2d 1228, 1237 (D.C. Cir. 1987). Not disputing this proposition, the Government

arguesthat because Sato was awarded the contract, it is not a disappointed bidder and thus suffered

no economic injury from the April 1994 solicitation.

USCA Case #94-5401 Document #209528 Filed: 07/05/1996 Page 3 of 12
<<The pagination in this PDF may not match the actual pagination in the printed slip opinion>>

We think the Government's argument misconceives the nature of Sato's complaint and the

remedy it seeks. A fair reading of the complaint as a whole indicates that Sato's allegations extend

beyond the Supply Center's single April 1994 solicitation. The named defendant is the Department

of Defense, not the Supply Center, and the complaint mentions not only the Supply Center's April

1994 solicitation, but also "recent similar [Defense Department] procurements." Compl. ¶ 21. The

complaint also alleges that "[a]bsent a declaration that the [Supply Center's] method of procuring

commercial travelservices is unlawful, [the Supply Center] and other components of [Defense] will

continue to procure such servicesin an unlawful manner," id. ¶ 4, and that "[u]nlessthe procurement

practices complained of herein are enjoined, future [commercial travel office] procurements will be

conducted in a comparable unlawful manner." Id. ¶ 22. Moreover, Sato sought "forward-looking

[declaratory and injunctive] relief," Adarand Constructors, Inc. v. Peña, 115 S. Ct. 2097, 2104

(1995), not damagesfor economic injury. Although the more specific paragraphs in Sato's prayer for

reliefmention only the April 1994 solicitation, Sato also sought "[s]uch other and further relief asthe

Court deems appropriate." Id. at 8-9; see also Fed. R. Civ. Pro. 54(c) (requiring courts to grant

appropriate relief "even if the party has not demanded such relief in the party's pleadings"). Sato's

alleged injury, therefore, is to its right to participate not only in the April 1994 solicitation, but also

in allsimilar travel office solicitations. Sato's lack of economic injury from the April 1994 solicitation

is thus irrelevant. Moreover, because the requirement to deposit separate concession fees for

unofficial travel into Morale Funds is part of an on-going Army procurement policy, see Army

Regulation 215-2, at ¶ 6-63(d); Chandler Aff. ¶ 5, Sato's future injury is "actual or imminent, not

conjectural or hypothetical," Adarand, 115 S. Ct. at 2104 (quoting Lujan, 504 U.S. at 560).

Sato also satisfiesthe second and third requirementsfor Article III standing. It contends that

the Department's policy of combining unofficial and official travel along with the requirement to

deposit unofficial travel concession feesinto Morale Funds places Sato at a competitive disadvantage

relative to larger travel companies "because the combined contract is too large for small business

concerns ... to handle," thus making it more difficult for smaller companies like Sato to offer high

concession feesfor unofficial travel. Ursini Oct. 2, 1994 Decl. ¶ 24. Sato therefore alleges a "causal

USCA Case #94-5401 Document #209528 Filed: 07/05/1996 Page 4 of 12
<<The pagination in this PDF may not match the actual pagination in the printed slip opinion>>

relationship" between its injury and the challenged conduct. Moreover, a favorable decision would

likely redress Sato's injury to itsright to a legally valid procurement process. Although one result of

a favorable decisionwould be the transfer of unofficial travel concession feesfromthe various Morale

Funds to the United States Treasury, another would likely be the elimination of unofficial travel

concession fees as a factor in the procurement selection process, thus ensuring a "legally valid

procurement process," precisely what Sato seeks.

Because Sato brought this action under the Administrative Procedure Act, 5 U.S.C. § 702

(1994), it must also establish that it has "prudential standing" by showing that its interests are

"arguably within the zone of interests to be protected or regulated by the statute ... in question."

Clarke v. SecuritiesIndus. Ass'n, 479 U.S. 388, 396 (1987) (quoting Association of Data Processing

Service Orgs., Inc. v. Camp, 397 U.S. 150, 153 (1970)). Because Sato is neither a government

official nor the United States Treasury, it is clearly not within the zone of interests "regulated" by the

Miscellaneous Receiptsstatute. It must therefore show that it is arguably within the zone of interests

"protected" by the statute. A party may demonstrate this in one of two ways: "if it is among those

[who] Congress expressly or directly indicated were the intended beneficiaries of a statute,"

Hazardous Waste Treatment Council v. Thomas, 885 F.2d 918, 922 (D.C. Cir. 1989) (HWTC IV),

or if it is a "suitable challenger" to enforce the statutethat is, if its "interests are sufficiently

congruent with those of the intended beneficiaries that the litigants are not "more likely to frustrate

than to further ... statutory objectives.' " First Nat'l Bank & Trust Co. v. National Credit Union

Admin., 988 F.2d 1272, 1275 (quoting Clarke, 479 U.S. at 397 n.12) (alteration to conform to

Clarke ).

We thus first ask whether Congress explicitly intended an entity such as Sato to be a

beneficiary of the statute. The answer quite clearly is no. Originally enacted in 1849, the

Miscellaneous Receipts statute and its legislative history indicate that Congress did not expressly

intend to benefit a third party such as Sato. See Act of Mar. 3, 1849, ch. 110, § 1, 9 Stat. 398. Prior

to the statute's enactment, some Executive branch officials had failed to deposit in the Treasury the

entire amount ofGovernment moneytheyreceived, instead deducting varioussums before depositing

USCA Case #94-5401 Document #209528 Filed: 07/05/1996 Page 5 of 12
<<The pagination in this PDF may not match the actual pagination in the printed slip opinion>>

the remainder in the Treasury. The primary example cited by the statute's drafters was the authority

of customs officersto deduct collection expenses, including their own salaries, fromthe import duties

received in the course of their jobs. As opposed to a system by which government officials deposit

the entire amount in the Treasury and then draw their expenses from funds appropriated for that

purpose, the practice prior to the statute's enactment allowed customs officials effectively to

determine their own salaries. CONG.GLOBE, 30thCong., 1st Sess. 464 (1848). Congress's objective,

then, was primarily to ensure that such expenses resulted from proper appropriations, rather than

depending on the whims of executive branch officials. Congress sought both to account for such

expenses and to control them. While this legislative history may support Sato's claim that the

concession fees for unofficial travel at issue in this case violate the statute, we have found nothing in

the legislative history indicating a direct intent to benefit third parties such as Sato. Nor do any of

the subsequent amendments to the statute, all of which involved essentially technical revisions,

indicate an express intent to benefit anything other than the public fisc and Congress's appropriation

power. See Act ofJan. 12, 1983, Pub. L. No. 97-452, § 1(10), 96 Stat. 2467, 2468; Debt Collection

Act of 1982, Pub. L. No. 97-365, § 13(a), 96 Stat. 1749, 1757; Act of Sept. 13, 1982, Pub. L. No.

97-258, 96 Stat. 877, 948.

AlthoughCongress did not expresslyintend to benefit government contract bidders, Sato may

nonetheless have standing if it is a "suitable challenger[ ] to enforce" the statute. First Nat'l Bank &

Trust, 988 F.2d at 1276. Because this "test is not meant to be especially demanding," a would-be

plaintiff is outside the statute's "zone of interests" only "if the plaintiff's interests are so marginally

related to or inconsistent with the purposesimplicit in the statute that it cannot reasonablybe assumed

that Congress intended to permit the suit." Clarke, 479 U.S. at 399. We think Sato satisfies this

standard. Because it claims that the requirement to pay a percentage of unofficial travel proceeds to

Morale Funds adversely affects it relative to its larger competitors, Sato is in effect arguing that its

competitors are benefitting from an agency's scheme to raise money at Treasury's expense. Sato's

"interests are [thus] sufficiently congruent with those of the [Treasury's] that [Sato is] not "more

likely to frustrate than to further ... statutory objectives.' " First Nat'l Bank & Trust, 988 F.2d at

USCA Case #94-5401 Document #209528 Filed: 07/05/1996 Page 6 of 12
<<The pagination in this PDF may not match the actual pagination in the printed slip opinion>>

1275 (quoting Clarke, 479 U.S. at 397 n.12) (alteration to conform to Clarke).

Our decision in Hazardous Waste Treatment Council v. Thomas, 885 F.2d 918 (D.C. Cir.

1989) (HWTC IV), is not to the contrary. There, an organization of companies that treated hazardous

waste and then marketed products derived from that waste sued under the Resource Conservation

and Recovery Act, 42 U.S.C. §§ 6901-6992k, to force the EPA to adopt stricter environmental

regulationsfor other companies. We held that the organization was not a suitable challenger because

its members' interests were not "systematically" aligned with those of the statute. HWTC IV, 885

F.2d at 924. We were concerned that the treatment firms' interests were " "more likely to frustrate

than further statutory objectives.' " Id. at 925 (quoting Clarke, 479 U.S. at 397 n.12). Since the

"ultimate interest of those firms [was] in making money, ... there [was] not the slightest reason to

think that [their] interest in getting more revenue by increasing the demand for their particular

treatment services [would] serve [the statute's] purpose of protecting health and the environment."

HWTC IV, 885 F.2d at 924. Their interest, rather, was "to pursue regulation that encourages the

alternatives with the greatest profit potential [for them] at the expense of others (say, recycling or

incineration) that might be less profitable." Id. at 924-25. Fromthe treatment firms' standpoint, then,

"treatment is good and more treatment is betterwhether the effect on health and the environment

is good, bad, or indifferent." Id. at 925.

In First National Bank & Trust, we noted that the distinction between Hazardous Waste

Treatment Council IV on the one hand and the Supreme Court's decisions in Investment Company

Institute v. Camp, 401 U.S. 617 (1971), and Clarke on the other was that in the latter cases, where

the Court found prudential standing, "the potentially limitless incentives of competitors were

channelled by the terms of the statute into suits of a limited nature brought to enforce the statutory

demarcation." First Nat'l Bank & Trust, 988 F.2d at 1278. This is precisely what we have here.

Sato's interests cannot diverge from the Miscellaneous Receipts statute as the interests of the

challengersinHazardous Waste TreatmentCouncilIVdiverged fromtheResource andConservation

Recovery Act because the former statute contains inherent limitations not present in the latter. The

Miscellaneous Receipts statute requires depositing certain funds into the Treasury. Either the funds

USCA Case #94-5401 Document #209528 Filed: 07/05/1996 Page 7 of 12
<<The pagination in this PDF may not match the actual pagination in the printed slip opinion>>

at issue in this case are covered by the statute or they are not. There is no possible gradation in the

statute'srequirement. Because a "statutory demarcation" thus limits what Sato can request, "we run

[no] risk that the outcome could ... in fact thwart the congressional goal," Hazardous Waste

Treatment Council v. United States EPA, 861 F.2d 277, 284 (D.C. Cir. 1988).

III.

Turning to the merits, we first address the appropriate standard of review. The district court

ruled that because this case involves an APA challenge to a procurement decision, Sato had to show

that the agency's policy had " "no rational basis' " or " "involved a clear and prejudicial violation of

applicable statutes or regulations.' " Scheduled Airlines Traffic Offices, Inc. v. Department of

Defense, No. 94-2128,slip op. at 5 (D.D.C. Dec. 9, 1994) (quoting Kentron Hawaii, Ltd. v. Warner,

480 F.2d 1166, 1169 (D.C. Cir. 1973)). A narrow standard of review, the district court concluded,

was particularly appropriate due to " "the application of technical, and often esoteric, regulations to

the complicated circumstances of individual procurements.' " Id. (quoting M. Steinthal & Co. v.

Seamans, 455 F.2d 1289, 1301 (D.C. Cir. 1971)). Sharing this view of the appropriate standard of

review, the Government argues that cases challenging the merits of government contract awards

control here. We disagree.

The procurement cases relied on by both the district court and the Government are

inapplicable here because this case does not require us to review a technical procurement decision

involving the exercise of agency expertise or discretion. Instead, we face a pure question of statutory

interpretation independent of the complex factual determinations or policy judgments particularly

within agencies' expertise. The question under the APA is not whether the Department acted

arbitrarily or capriciously, as in ordinary challenges to procurement decisions, but rather whether it

acted "in accordance with [federal] law." 5 U.S.C. § 706(2)(A). Although this may sound like a case

for Chevron deference, see Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467

U.S. 837, 842-44 (1984), such deference is inappropriate here because the Defense Department has

not been entrusted to administer, and thus has no authority to interpret, the Miscellaneous Receipts

statute. See Professional Reactor Operator Soc. v. United States NRC, 939 F.2d 1047, 1051 (D.C.

USCA Case #94-5401 Document #209528 Filed: 07/05/1996 Page 8 of 12
<<The pagination in this PDF may not match the actual pagination in the printed slip opinion>>

Cir. 1991) (no Chevron deference owed to agency interpretation of statutes "outside the agency's

particular expertise and special charge to administer"). Nor are we persuaded by the Government that

deference is appropriate because the General Accounting Office ruled in the Department's favor.

While "[w]e regard the assessment of the GAO as an expert opinion, which we should prudently

consider ... we have no obligation to defer" to it. Delta Data Systems Corp. v. Webster, 744 F.2d

197, 201 (D.C. Cir. 1984). Rather, "it is "the court [that has] the last word and [it] should not shrink

from exercis[ing] its power.' " Id. at 202 (quoting Wheelabrator Corp. v. Chafee, 455 F.2d 1306,

1316-17 (D.C. Cir. 1971)) (alterations in original). The appropriate standard of review is thus de

novo.

This brings usto the central issue in this case: whether the solicitation's requirement that the

successful bidder pay a concession fee to the Morale Fund rather than the Treasury violates the

Miscellaneous Receipts statute. The statute's requirement that a Government official "receiving

moneyfor the Government fromanysource" deposit the money in the Treasury, 31 U.S.C. § 3302(b),

derives from and safeguards a principle fundamental to our constitutional structure, the

separation-of-powers precept embedded in the Appropriations Clause, that "[n]o Money shall be

drawn from the Treasury, but in Consequence of Appropriations made by Law," U.S. CONST. art. I,

§ 9, cl. 7. See 10 Comp. Gen. 382, 383 (1931) ("The requirement of [this] statute[ ] is nothing more

than in furtherance of the [Appropriations Clause]."); Kate Stith, Congress' Power of the Purse, 97

YALEL.J. 1343, 1364 (1988) (noting that the MiscellaneousReceiptsstatute "articulatesthe Principle

of the Public Fisc[, that a]ll monies of the federal government ... be claimed as public revenues,

subject to public control through constitutional processes"). By requiring government officials to

deposit government moniesin the Treasury, Congress has precluded the executive branch fromusing

such monies for unappropriated purposes.

Mindful of both the plain language of the Miscellaneous Receipts statute and its underlying

purpose to preserve congressional control of the appropriations power, we have no doubt that

concession fees for unofficial travel constitute "money for the Government" within the meaning of

the statute. Travel agents pay the fees pursuant to contracts awarded by agencies of the United

USCA Case #94-5401 Document #209528 Filed: 07/05/1996 Page 9 of 12
<<The pagination in this PDF may not match the actual pagination in the printed slip opinion>>

States, doing so in consideration for government resourcesthe right to occupy agency office space,

to utilize government services associated with that space, and to serve as the exclusive on-site travel

agent. The Supply Center's policy of requiring as a condition of awarding contracts that successful

bidders pay concession feesinto Morale Fundstherefore violatesthe Miscellaneous Receiptsstatute.

Other courts have reached the same result. In a case virtually identical to this one, a

disappointed bidder for an Air Force contract for commercial air travel challenged a provision of the

solicitation requiring the contractor to contribute a portion of its proceedsto the local Morale Fund.

Reeve Aleutian Airways, Inc. v. Rice, 789 F. Supp. 417 (D.D.C. 1992). Unhesitatingly, the court

found that the contracting scheme "violate[d] the expressterms of 31 U.S.C. § 3302(b)" by requiring

the deposit of public monies into a local Morale Fund. Id. at 421. Similarly, in Motor Coach

Industry v. Dole, 725 F.2d 958 (4th Cir. 1984), the Federal Aviation Administration diverted

airport-user fees, money ordinarily deposited in the Treasury pursuant to the Miscellaneous Receipts

statute, into a trust that it created to finance the purchase of airport buses. A disappointed bidder for

the bus contract then sued the FAA for failing to follow government procurement regulations.

Finding the agency had engaged in an "end-run around normal appropriation channels ... enabling it

effectively to supplement its budget by $3 million without congressional action," id. at 968, the

Fourth Circuit affirmed a district court order invalidating the contract and directing the FAA to

deposit the trust's money into the Treasury.

Attempting to distinguish these cases, the Government argues that the district court here

correctly determined that the unofficial travel concession fees did not constitute "money for the

Government" within the meaning of the statute because the money "derived solely from unofficial

travel purchased with private funds." Scheduled Airlines,slip op. at 7. This argument is inconsistent

with the statute's unequivocal language. Government officials must deposit in the Treasury "money

for the Government from any source." 31 U.S.C. § 3302(b) (emphasis added). The original source

of the moneywhether from private parties or the governmentis thus irrelevant.

Urging us to interpret the Miscellaneous Receipts statute "in harmony with the statutes

authorizing the funding of NAFIs [nonappropriated fund instrumentalities]" such as Morale Funds,

USCA Case #94-5401 Document #209528 Filed: 07/05/1996 Page 10 of 12
<<The pagination in this PDF may not match the actual pagination in the printed slip opinion>>

see, e.g., 10 U.S.C. § 2783(a) (1994), the Government also argues that the NAFI statutes implicitly

authorize payment of unofficial travel concession fees into Morale Funds. Seen in its best light, this

argument appears to consist of two parts: because the Defense Department has authority both to

finance Morale Funds outside of the normal appropriations process and to establish travel officesfor

military employees' personal needs, it presumably has authority to finance Morale Funds with

proceeds derived from such travel offices; and because considerations of efficiency favor combining

unofficial and official travel offices in a single procurement, the NAFI scheme implicitly permits

agencies to combine the two offices and deposit unofficial travel proceeds in Morale Funds.

We think the Government's argument ignorestwo crucialdetails. First, the Morale Fund plays

no role in the contracts at issue in this case; rather, the fees derive from procurements administered

by a government agencythe Supply Center or the Department of the Armyin compliance with

standard government procurement laws and regulations. The fees thus constitute money for the

Government, not for the Morale Fund. It is irrelevant whether agencies could establish unofficial

travel offices separate from their official travel offices and finance Morale Funds with proceedsfrom

the formerindeed, the Navy procures its travel services in just this way, see Ursini Nov. 8, 1994

Decl. ¶ 8since the Supply Center and Army have not done so here. Second, even assuming the

legality of the Navy's approach, the efficiency of combining the two offices can hardly justify reading

the Miscellaneous Receipts statute contrary to its plain language. See Estate of Cowart v. Nicklos

Drilling Co., 505 U.S. 469, 475 (1992) ("[W]hen a statute speaks with clarity to an issue judicial

inquiry into the statute's meaning, in all but the most extraordinary circumstance, is finished.").

Finally, not only does the travel scheme at issue here divert to Morale Funds revenues that

should be deposited in the Treasury, but it also creates incentives for government officials to reduce

even those funds that are deposited in the Treasury. By requiring contract awardees to deposit

unofficial travel concession fees in Morale Funds and by considering the unofficial travel fee

percentages when awarding contracts, agencies have an incentive to award contracts to bidders

whose unofficial concession fees are highest even where other bidders, by offering higher official

concession fees, would yield greater revenues for the Treasury. In one instance, the Department of

USCA Case #94-5401 Document #209528 Filed: 07/05/1996 Page 11 of 12
<<The pagination in this PDF may not match the actual pagination in the printed slip opinion>>

the Army awarded a contract to a Sato competitor who had offered an official travel concession fee

of 3.25 percent and an unofficial travel fee of 5.1 percent, even though Sato had offered a higher

official travelfee, 3.7 percent. Based on the government's estimated travel volume, Sato's bid would

have produced an additional $1.1 million for the Treasury. Ursini Oct. 2, 1994 Decl. ¶ 16.

The fact that the Supply Center amended its April 1994 solicitation to require that all bids

contain official fee percentages larger than their unofficial fee percentages hardly eliminates the

conflicting incentives. For example, if Company A bids 3 percent for unofficial travel and 6 percent

for official travel while Company B bids 5 percent for each, all other factors being equal, the interest

of the United States clearly favors Company A. Yet if government officials administering the

program seek to increase payments to Morale Funds, they will, to the detriment of the public fisc,

choose Company B.

IV.

Because we find that the Department's policy requiring payment of the portion of concession

fees deriving fromunofficialtravelto Morale Fundsrather than to the United States Treasury violates

the Miscellaneous Receipts statute, we need not address Sato's other arguments. We reverse the

judgment in favor of the Department and remand for the district court to enter judgment for Sato and

to grant such declaratory and injunctive relief as the district court deems appropriate.

So ordered.

USCA Case #94-5401 Document #209528 Filed: 07/05/1996 Page 12 of 12