Task: songer_indigent

What follows is an opinion from a United States Court of Appeals. The issue is: "Did the court rule that the defendant's rights as an indigent were violated?" Answer the question based on the directionality of the appeals court decision. If the court discussed the issue in its opinion and answered the related question in the affirmative, answer "Yes". If the issue was discussed and the opinion answered the question negatively, answer "No". If the opinion considered the question but gave a mixed answer, supporting the respondent in part and supporting the appellant in part, answer "Mixed answer". If the opinion does not discuss the issue, or notes that a particular issue was raised by one of the litigants but the court dismissed the issue as frivolous or trivial or not worthy of discussion for some other reason, answer "Issue not discussed". If the opinion considered the question but gave a "mixed" answer, supporting the respondent in part and supporting the appellant in part (or if two issues treated separately by the court both fell within the area covered by one question and the court answered one question affirmatively and one negatively), answer "Mixed answer". If the opinion either did not consider or discuss the issue at all or if the opinion indicates that this issue was not worthy of consideration by the court of appeals even though it was discussed by the lower court or was raised in one of the briefs, answer "Issue not discussed". If the court answered the question in the affirmative, but the error articulated by the court was judged to be harmless, answer "Yes, but error was harmless". 

MERRITT, Chief Judge.
This case presents the jurisdictional question whether, under the Administrative Procedure Act (“APA”), 5 U.S.C. § 701(a)(2), a decision by the army to “privatize” or to “contract-out” the operations of its dining halls at Fort Knox is a decision “committed to agency discretion by law.” The complaint in this “wrongful privatization” case alleges that the Army miscalculated the comparative costs of in-house versus outside operation of its dining halls and therefore violated statutes and regulations governing the agency’s decision to contract with a private company.
The District Court held that it had no jurisdiction because the contracting-out decision at issue was “committed to agency discretion.” The Court then dismissed the plaintiffs’ case. For the reasons set out below, we reverse the judgment of the District Court on the issue of jurisdiction.
The parties also raised but the District Court did not reach the question whether displaced federal employees have standing to bring a complaint challenging the contracting-out decision. Therefore we do not reach the standing issue or any issue on the merits. We remand to the District Court for further proceedings, including development of the facts and law governing standing for the plaintiffs.
I. Overview
Because of the volume and complexity of statutes, regulations, policies, administrative decisions, and cases discussed below we summarize our conclusions at the outset.
To decide whether this dispute may be heard in federal district court, we begin with the presumption that this privatization decision, an agency action within the meaning of the APA, is reviewable under the Administrative Procedure Act unless we find that the action is “committed to agency discretion by law.” 5 U.S.C. § 701(a)(2). Agency action generally is considered committed to agency discretion when there is “no law to apply,” S.Doc. No. 248, 79th Cong., 2d Sess. 212 (1946) (hereinafter S.Doc. No. 248), when there are no “standards, definitions, or other grants of power [that] deny or require action... or confine an agency within limits as required by the Constitution.” Id. at 275.
A complex scheme of statutes and regulations governs federal procurement decisions. Underlying all these statutes and regulations is a requirement that agencies acquire goods and services at the lowest possible cost to the taxpayer. For example, Congress has set out the specific policy directive that federal agencies pursue economy and efficiency in making procurement decisions. See Office of Federal Procurement Policy Act, as amended, 41 U.S.C. § 401 et seq. See also the Budget and Accounting Act of 1921, as amended, 31 U.S.C. § 101 et seq. Further, Congress has directed the Department of Defense (“DoD”) to contract with the private sector for commercial supplies and services if the private sector can provide the supplies and services at a lower cost than the government can provide the same supplies or services. See 10 U.S.C. § 2462.
Office of Management and Budget (“OMB”) Circular A-76 and its accompanying Supplement set out an elaborate, mandatory process for comparing the costs of in-house and private production. It requires an administrative appeals process to adjudicate the claims of aggrieved citizens, a process not unlike the social security appeals process. The Defense Department must follow Circular A-76 in its comparison of costs. See 32 C.F.R. §§ 169 & 169a. See also 48 C.F.R. § 7.3. In its decision whether to provide its own commercial supplies and services or whether to contract with the private sector, the Army must compare costs and choose the least costly alternative. In this regime as a whole, with its directives to procure commercial supplies and services economically and save money for the taxpayer, we find law to apply, standards which confine an agency’s action in making the contracting-out decision. Wrongful privatization cases are in principle cases requiring an accounting, and courts have long dealt with disputes that required an accounting of one party or another.
Our view that these statutes and regulations provide law to apply and enable courts to review agency procurement decisions is reinforced by a number of legal developments by courts, Congress, and the Executive agencies that have developed the procurement regulations. After the enactment of the APA, courts found law to apply in procurement cases involving disappointed bidder protests. See, e.g. Scanwell Laboratories, Inc. v. Shaffer, 424 F.2d 859 (D.C.Cir.1970). The law to apply in the disappointed bidder cases is precisely the same set of laws and regulations as in disappointed in-house employee cases like this one. The Government Accounting Office (“GAO”) review of procurement decisions, including bid protests founded on lack of compliance with Circular A-76, illustrates that the procurement statutes and regulations create law to apply. See, e.g., Matter of: EPD Enterprises, Inc., 69 Comp.Gen. 46 (Oct. 30, 1989). Congress expressly has approved the disappointed bidder cases. See S.Rep. No. 275, 97th Cong., 2d Sess. 22-23, reprinted in 1982 U.S.Code Cong. & Admin.News 11, 32-33. Further, Congress has increased the remedial power of the Claims Court. See 28 U.S.C. § 1491(a)(3). In addition, Congress has reinforced the bid protest function of the GAO while making clear that the GAO’s jurisdiction is not to be exclusive of the jurisdiction of federal district courts and the Claims Court. 31 U.S.C. §§ 3551-3556. And Congress increasingly has provided other systems that allow review of the procurement process. See, e.g., 40 U.S.C. § 759(f) (General Services Administration Board of Contract Appeals). Finally, the OMB and the Department of Defense consider the cost comparison process as set out in Circular A-76 to be mandatory and have established an administrative process for the adjudication of contracting-out decisions. All directly affected parties, including federal employees, may bring an appeal under the administrative appeals procedure. See Circular Supplement, Part I, Chapter 2, 111; 32 C.F.R. § 169a.l8.
Courts of appeals cases that have held that the contracting-out process is not reviewable are not directly on point. See, e.g., Local 2855, Am. Fed’n of Gov’t Employees v. United States, 602 F.2d 574 (3d Cir.1979). These cases dealt with early, less formal, and highly discretionary versions of Circular A-76, prior to the Circular’s setting out mandatory criteria and prior to the Circular’s promulgation under 41 U.S.C. § 401 et seq. and 31 U.S.C. § 101 et seq. The Supreme Court has not dealt with APA review of a wrongful privatization case. Thus there is no Supreme Court case on point to guide our decision. The Court has, however, narrowly defined the exception, “committed to agency discretion,” to include cases involving prosecuto-rial discretion, Heckler v. Chaney, 470 U.S. 821, 105 S.Ct. 1649, 84 L.Ed.2d 714 (1985), and cases which implicate national security, Webster v. Doe, 486 U.S. 592, 108 S.Ct. 2047, 100 L.Ed.2d 632 (1988). Our case falls outside the parameters of such definitions of nonreviewability.
We conclude that there are standards guiding this agency action and our review of the action. Furthermore, nothing suggests that Congress does not intend judicial review of the Executive branch’s exercise of the spending power. Instead, the APA provides a compelling policy decision in favor of judicial review of agency action.
II. Contracting Out Process Generally And At Fort Knox
This dispute centers on the question whether the Army will save the money it says it will save by contracting-out the dining hall operation at Fort Knox rather than continuing to operate the dining halls with civilian employees. The plaintiffs are two federal civilian employees formerly employed by the Army as food service workers at Fort Knox. They brought suit against the Army and Colbar, Inc. (“Col-bar”), the private contractor awarded the contract, alleging that the Army did not include certain costs it should have included in its calculations of the cost of contracting-out the food service activity, and that if it had included these costs, the cost comparison would have failed to show the ten percent savings required as a justification for the conversion to private contract.
OMB Circular A-76 sets out a mandatory process for Executive agencies to follow when they contract-out commercial activities. Each Executive department periodically reviews its commercial activities to determine whether its own operation is the most economical provider of commercial services and supplies or whether a private contractor could provide those services and supplies more economically. Circular A-76, If 5. An agency conducting such a review develops a “performance work statement,” see Circular Supplement, Part II, which analyzes the task to be done. The agency then prepares a “most efficient organization” description, see Circular Supplement, Part III, which outlines the way the work described in the “performance work statement” can be done most efficiently by the agency. The agency then does a cost estimate for the government performance. See Circular Supplement, Part IV. After arriving at its own cost estimate, the agency must compare its costs to private costs to decide whether it should contract-out a commercial service. Generally, agencies are directed to rely on private enterprise “if the product or service can be procured more economically from a commercial source.” Circular A-76, ¶ 5. In order to make this comparison the agency solicits bids from private contractors. Circular Supplement, Part IV, Chapter 1, 11 C. The agency then begins the comparison by selecting the best private bid. OMB’s Cost Comparison Handbook, Circular Supplement, Part IV, sets out requirements for developing the estimates and comparing the agency cost with the private cost. As directed by the OMB, the agency makes various adjustments to the cost estimates. For example, the agency must adjust the private bid by adding any costs to the agency made necessary by the contract. Id. at Chapter 3, ¶ D. The agency also must subtract from the contractor bid price the federal income tax the contractor will pay. Id. at Chapter 3, IIG. Circular A-76 requires an independent review of the in-house and contract cost estimates. The Army Audit Agency does this review for Army commercial activity studies.
After adjusting the in-house and contractor calculations so as to arrive at real costs, the agency compares the in-house and contract bid figures. Then, if contracting-out will save more than ten percent of the in-house personnel related cost of doing the work internally, the agency tentatively awards the contract. The ten percent margin is added “to give consideration to the loss of productivity, the temporary decrease in efficiency and effectiveness, the cost of retained grade and pay, temporary operation of facilities at reduced capacity and other unpredictable risks that result any time a conversion is made.” Id. at Chapter 4, ¶ A. The cost margin established by Circular A-76 “must be exceeded before converting an in-house commercial activity to contract.” Id. The agency makes public very detailed information on its decision, and interested parties, including employees and their unions, may appeal the cost comparison in an administrative review process. Circular Supplement, Part I, Chapter 2, 111.
The Army followed this process for evaluating whether to privatize the food service activity at Fort Knox, Kentucky. According to the narrative provided by the parties and the General Accounting Office, Fort Knox began a study of its maintenance and supply activities in 1981. In 1983 Fort Knox was authorized to study and solicit the food service activity separately from other commercial activities. Following development of a plan, Fort Knox solicited bids and did cost comparisons several times during the next several years. Interested parties contested the process. One contract award to Colbar was cancelled and bids were resolicited because a Congressional Inquiry questioned compliance with the Small Business Administration regulations. Another award to Colbar was withdrawn following a protest by a disappointed bidder filed with the GAO. The GAO sustained the protest and directed an award to the protesting bidder. A solicitation was re-issued in May 1988, resulting in a tentative award to Colbar. This award, the subject of this litigation, was supported by the Army’s calculation that it could save $6 million or almost 20% over 55 months: in-house costs of $33 million as compared to $27 million on Colbar’s bid.
The Union, AFGE, Local 2302, appealed the award decision in November 1988, asserting that certain costs should have been included in the Army’s calculations of the cost of contracting-out. The Administrative Appeals Board denied the Union’s appeal in December 1988. The Review Board accepted the Army’s assertion that the costs at issue were not within the scope of the Circular A-76 process or any resulting contract.
In January 1989 the General Accounting Office received a Congressional request to study the award to Colbar. The GAO study, as more fully explained below, seemed to support the substance of the allegations in the Union appeal. In response to the GAO study the Army conducted an Inspector General investigation, concluding that the GAO study was mistaken and that even taking into account the problems raised by the GAO, the Colbar contract would save the requisite ten percent. The Under Secretary of the Army said that no more investigation was necessary and that the contract should be awarded. The decision was announced to Congress on January 2, 1990.
The central complaint leveled against the award to Colbar arose from the failure of the Army to include in the cost of contracting-out the cost of supervising recruits doing KP (now called “dining facility attendants”). Under the in-house system Army civilian cooks supervised the recruits at no additional cost to the Army. Under the contract with Colbar, the Army must provide supervision because Army regulations do not allow this supervision to be done by contractor personnel. This supervision issue was raised throughout the contracting-out process. Fort Knox originally included $2.9 million to cover these costs. (The GAO said this calculation was too low because it was not computed according to Circular A-76 guidelines.) The Army Audit Agency said the figures should not be included because military personnel from the Army training brigade could supervise the KP’s without additional cost to the Army. Fort Knox still believed the figures should be included because the training brigade did not have the extra personnel, and in any case, this supervision cost would be an additional cost made necessary by contracting-out. The United States Army Organization and Efficiency Review Agency agreed with the Army Audit Agency. Fort Knox took the supervision cost out of its calculations of the cost for contracting-out, and the Army proceeded with the cost comparison and award.
Acting on the request of Kentucky’s senators, the GAO examined the cost comparison and concluded that the supervision cost should be included in the cost of contracting-out. The GAO calculated the supervision cost to range from $4.6 million to $5.6 million, depending on whether the supervision provided was civilian, military, or a combination of these. The GAO recognized that part-time supervisors might be used, thus lowering the cost, but noted that the Army had not analyzed the Fort Knox operation so as to know whether part-time supervision might suffice in some parts of the food service operation. As part of its investigation, the GAO talked to the Efficiency Review Agency official who had said the supervision cost did not have to be included. The official said that he gave that advice based on the Army Audit Agency’s assumptions, but that if additional supervisors had to be hired, the cost should be added to the cost of contracting-out.
The GAO also concluded that the Army had overstated the in-house costs and understated other costs of contracting-out, thus understating the net cost of contracting-out by an additional $1.5 million, indicating that it would be cheaper to operate the dining halls in-house. Finally, the GAO reported that supporting documentation was not available for some portions of the commercial activity review. The GAO was thus unable to evaluate those portions.
The GAO recommended that the Army reexamine the cost it projected for in-house performance and develop more realistic figures to use in a cost comparison. The GAO study further recommended that a new comparison be done with these more realistic figures and that unless the required savings could be shown, the Army should retain the food service activity in-house.
The Army re-considered its cost figures, but concluded that its own figures were valid and proceeded with the award to Col-bar.
III. Federal Procurement Statutes and Regulations
The Army, an agency of the federal government for procurement purposes within the meaning of 41 U.S.C. § 403(1)(B), is governed by procurement statutes and regulations when it uses the procurement process to decide whether to produce necessary supplies and services or contract-out that production.
Two of the statutes at issue define national policy for government procurement: the Budget and Accounting Act of 1921 (the 1921 Act), as amended, 31 U.S.C. § 101 et seq., and the Office of Federal Procurement Policy Act Amendments of 1979, as amended, 41 U.S.C. § 401 et seq. The OMB cites both these statutes as authority for Circular A-76 (1983 revision). The 1921 Act has only a general relation to contracting-out. It established both the Bureau of Budget, the precursor of the OMB, and the General Accounting Office. See 31 U.S.C. § 501(OMB) and § 702(GAO) for current provisions. It created these offices in the interest of coordinating the budgeting process from the executive and the legislative branches. See 59 Cong.Rec. 7949 (1920) (statement of Bep. Good) (describing proposed bill as a way to eliminate overlapping and duplication in Government and to place the operation of Government “upon a business basis”).
The Procurement Policy Act articulated the policy of the United States Government in procurement: “to promote economy, efficiency and effectiveness.” 41 U.S.C. § 401. To carry out this policy, Congress created the Office of Federal Procurement Policy within the OMB and the position of Administrator of that Office to coordinate and oversee all federal procurement. See id. at §§ 402(b), 404. The statute describes the role of the Administrator as requiring that person to “provide overall direction of procurement policy.” Id. at § 405(a). Further, the Administrator is given the power and responsibility to write government-wide procurement regulations, binding on executive agencies, if the Department of Defense (“DoD”), the National Aeronautics and Space Administration (“NASA”), and the General Services Administration (“GSA”) cannot agree on or do not issue regulations. Id. at 405(b). Congress also gave the Administrator the power to rescind any procurement regulations issued by Executive agencies if those regulations are inconsistent with Congress’s explicit policy decision that the Government must pursue economy and efficiency in procurement. Id. at § 405(f).
In addition to defining general national policy for government procurement, Congress addressed the specific issue of Defense Department procurement of commercial supplies and services in 10 U.S.C. § 2462. In this statute Congress set out specific standards directing the DoD to contract-out if the private sector can provide commercial services at a lower cost than the DoD cost. The statute requires a cost comparison, using “realistic and fair” cost estimates. Id. The text of that statute is set out in the note below.
OMB Circular A-76, promulgated under the authority of the 1921 Act and the Procurement Policy Act, sets out explicit requirements for Executive agencies to follow in procuring supplies and services. See supra description of Circular’s operation generally and at Fort Knox. The Circular describes national policy as requiring government agencies to “achieve economy and enhance productivity.” ¶ 5. The Circular then sets out the requirement that agencies perform cost comparisons unless activities have been declared governmental functions and mandates contracting-out if a commercial source can supply the goods or services more economically than an in-house operation. Id. The Circular also mandates that “[a]n existing in-house activity shall not be converted to contract performance on the basis of economy unless the projected cost advantage to the Government is at least 10 percent of the in-house personnel-related cost for the performance period.” Circular Supplement, Part I, ¶ G. The Circular requires detailed records and documentation to support all elements of the cost study. See, e.g., Circular Supplement, Part IV, ¶ A.
The Defense Department has promulgated implementing regulations to guide the decision whether to contract-out commercial activities or retain them in-house. See Commercial Activities Program and Commercial Activities Program Procedures, 32 C.F.R. § 169 & § 169a. These regulations, written in response to OMB Circular A-76, set out Defense Department guidelines that both reiterate and incorporate Circular A-76. These regulations reflect the Congressional policy commitment of 41 U.S.C. § 401 et seq. in reciting a policy of pursuing “economy and quality through competition.” 32 C.F.R. § 169.-4(b). To carry out this policy commitment, the regulations provide for comparison of costs between contracting-out and in-house performance. Id. Further, the regulations provide that “DoD components shall rely on commercially available sources to provide commercial products and services” and shall not rely on in-house sources “if the products or services can be procured more economically from commercial sources.” Id. at § 169.4(d). The regulations incorporate by reference Circular A-76 in directing the military departments to conduct a cost comparison between a current in-house operation and commercial sources for the operation in accordance with appropriate provisions of Circular A-76. Id. at § 169.-al5(d). See also 48 C.F.R. § 7.3 (Federal Acquisition Regulation — subsection dealing with contracting-out).
IV. APA Review
The APA provides that “[a] person suffering legal wrong because of agency action, or adversely affected or aggrieved by agency action within the meaning of a relevant statute, is entitled to judicial review thereof.” 5 U.S.C. § 702. The APA further explains what actions are reviewable: “Agency action made reviewable by statute and final agency action for which there is no other adequate remedy in a court are subject to judicial review.” Id. at § 704. The discussions within the legislative history concerning the APA indicate Congress’s strong commitment to providing judicial review of agency action. The stated purpose of the APA was “to improve the administration of justice by prescribing fair administrative procedure,... [to be] a bill of rights for the hundreds of thousands of Americans whose affairs are controlled or regulated in one way or another by agencies of the Federal Government.” S.Doc. No. 248 at 298. It was not intended that “the Government... be unduly restricted by the bill.... [but] [t]he committee [took] the position that the bill must reasonably protect private parties even at the risk of some incidental or possible inconvenience to, or change in, present administrative operations.” Id. at 301.
This grant of the right of review is limited by the threshold provision which says that “[t]his chapter applies... except to the extent that — (1) statutes preclude judicial review; or (2) agency action is committed to agency discretion by law.” 5 U.S.C. § 701(a)(1), (2). The legislative history makes clear that these threshold conditions cover a narrow band. As to preclusion of judicial review, the first exception, the House Report notes that withholding review is rare and says that if a statute is meant to preclude review, it either will specifically withhold review or will “upon its face give clear and convincing evidence of an intent to withhold [review].” S.Doc. No. 248 at 275. See also Senate Report, id. at 212 (describing the conditions under which review would be withheld as rare). The statutes relied upon by the plaintiffs do not address the question of judicial review. Thus the presumption that the agency action is reviewable is not weakened by any directive in the relevant statutes. The parties do not argue that there is any explicit directive that review should be precluded. Neither do they argue that on the face of any of these statutes there is “clear and convincing evidence of an intent to withhold [review].” Therefore, we must address the question of review in terms of the second exception. The House Report notes, as to the second exception, that judicial review requires “standards, definitions, or other grants of power [that] deny or require action in given situations or confine an agency within limits as required by the Constitution.” Id. at 275. The absence of such standards and limits exempts agency action from judicial review. Id. The Senate Report also addresses the second exception, “committed to agency discretion by law”:
The basic exception of matters committed to agency discretion would apply even if not stated at the outset. If, for example, statutes are drawn in such broad terms that in a given case there is no law to apply, courts of course have no statutory question to review.
Id. at 212.
In using these explanations of the second exception from the legislative history to frame our inquiry, we rely on the three principal Supreme Court cases elucidating the exception: Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 91 S.Ct. 814, 28 L.Ed.2d 136 (1971); Heckler v. Chaney, 470 U.S. 821, 105 S.Ct. 1649, 84 L.Ed.2d 714 (1985); and Webster v. Doe, 486 U.S. 592, 108 S.Ct. 2047, 100 L.Ed.2d 632 (1988). See infra, discussion of cases.
V. Applicability of APA in Federal Procurement Decisions
Our inquiry whether this agency decision to contract-out is “agency action... committed to agency discretion by law” centers on whether there is “law to apply,” whether there are “standards, definitions, or other grants of power [that] — confine an agency within limits.”
To decide this wrongful privatization case, we look first to the general procurement statutes, then to the statute dealing with DoD contracting-out, and finally to the regulations issued pursuant to these statutes as sources of law and examine whether they create “law to apply” and provide standards against which a court may judge whether an agency has complied with applicable law.
Congress established the need for economy and efficiency early in this century in the 1921 Budget Act. 31 U.S.C. § 101 et seq. The 1974 Procurement Act, 41 U.S.C. § 401 et seq., and later amendments to the Act make clear that Congress continues to intend that there be a national commitment to economy and efficiency in procurement. When the Procurement Policy Act states that it is the policy of the United States “to promote economy, efficiency and effectiveness” in procurement decisions, 41 U.S.C. § 401, this language is not general, hopeful, precatory language; it is rather specific, directional language. Congress did not leave the administration of this policy to internal agency structure. Instead, to carry out these goals Congress created an Office of Federal Procurement Policy to oversee procurement policy. Id. at § 402. Congress revisited this statute in 1979, 1983, and 1988, the last time creating continuing funding for the Office of Procurement Policy, thus reiterating the national policy commitment to economy and efficiency in procurement. Furthermore, Congress made clear that these policy objectives are measurable and enforceable by giving the Procurement Policy Administrator the power to deny promulgation of or rescind any agency regulations that are inconsistent with these objectives. Id. at § 405(f). While Congress did not authorize the Procurement Policy Administrator to interfere with an agency’s determination of a need for supplies and services or with specific award actions, see id. at § 405(c), nevertheless, the policy directive to pursue economy and efficiency implicates numbers, measurement, and accountability and supplies a meaningful standard against which to evaluate an agency’s exercise of discretion.
The legislative history of the Procurement Policy Act reveals this same firm and continuing commitment to the necessity for government procurement to be ruled by economy and efficiency. See H.R.Rep. No. 178, 96th Cong., 1st Sess. 1 reprinted in 1979 U.S.Code Cong. & Admin.News 1492, (noting that prior to the 1974 legislation the Commission on Government Procurement, which recommended establishing an Office of Procurement Policy, had as its chief goal bringing economy and efficiency to the government procurement process, id. at 1493; attesting to the Committee’s belief that the Office could “serve a worthwhile purpose in promoting efficiency and economy in the Federal procurement process,” id. at 1492; and reauthorizing the Office for three additional years, reiterating the Office’s mandate to “promot[e] economy and efficiency in the procurement process,” id. at 1499); S.Rep. No. 214, 98th Cong., 1st Sess. 1, reprinted in 1983 U.S.Code Cong. & Admin.News 2027 (reviewing history and purpose of the Procurement Policy Act in the 1983 reauthorization bill, reiterating the basic purpose of government procurement policy: “Although there are not direct savings associated with the establishment of an OFPP, the potential for savings as a result of the impetus the Office provides to the implementation of basic procurement reforms is almost unlimited,” id. at 2031).
In 1988 Congress once more looked to the need to reauthorize the Procurement Policy Office and “found... the need for a strong OFPP... even greater today than it was in the early 1970’s.” S.Rep. No. 424, 100th Cong., 2d Sess. 4, reprinted in 1988 U.S.Code Cong. & Admin.News 5687, 5690. Noting that federal procurement had grown to a 200 billion dollar policy issue, the Senate Report re-emphasized the need for simplification and efficiency as well as the need for economy and competitive practices. Id. The Senate Report again evaluated the performance of the Procurement Policy Office as “uneven” but pointed out some of its accomplishments. Among these accomplishments:
The improvement of the Government’s basic program to rely on commercial sources for the performance of commercial services. The Government’s policy for reliance on commercial activities set forth in OMB Circular A-76 has been improved by OFPP over the last 4 years. The A-76 program has been incorporated into the budget review process and Executive Order 12615 was issued in November of 1987.
Id. at 5692.
Concluding that the need for strong central leadership in procurement continued, Congress permanently reauthorized the Office in 1988. See id. at 5695-96. In this reauthorization, Congress reiterated the Administrator’s authority to initiate and direct procurement policy, even prescribing regulations if DoD, NASA, and GSA, the three agencies statutorily authorized to issue procurement regulations, cannot agree on or do not act to implement government-wide procurement policy. Id. at 5697. Moreover, the Committee said that while it did not “envision an Administrator asserting the authority [to prescribe regulations] without consulting the respective agencies, the Committee does intend the Administrator to have the authority to compel action on the part of the agencies if necessary.” Id. at 5698.
The 1974 Procurement Policy Act and its legislative history make clear that the policy commitment to economy and efficiency are mandatory, not discretionary. In addition to creating a mandatory policy to pursue economy and efficiency in procurement in this Act, Congress dealt more specifically with the Army’s obligations in the eon-tracting-out process in 10 U.S.C. § 2462. See text of statute at note 5 supra. The language of this statutory provision is mandatory (the Secretary of Defense “shall procure” supplies and services from the private sector), and there is a standard established to guide its administration by the Army (if the private sector “can provide such supply or service to the Department at a cost that is lower... than the cost at which the Department can provide the same supply or service”). In this legislation, Congress established a “real cost” approach by directing that the cost comparison be done “after including any cost differential required by law, Executive order, or regulation” and requiring that “all costs considered... [must be] realistic and fair.”
This statute provides standards against which to evaluate an agency’s exercise of discretion. The Secretary may not contract-out as a matter of discretion nor may the decision rest on whether the Secretary deems the contract or the in-house service to cost less. Instead, the statute requires a measurable, objective comparison of costs. The statute does not contain language allowing the Secretary to omit relevant costs in determining either set of figures.
We note the degree to which this portion of the statute provides an objective standard by contrasting these provisions with a discretionary provision of this same statute. The whole of § 2462(a), mandating contracting out if that process will save money, does not apply to “functions which the Secretary of Defense determines must be performed by military or Government personnel.” Here we find discretionary language: the Secretary may “determine” that some functions cannot be performed by contract. Apart from this standardless determination, Congress has required a mandatory cost-benefit analysis.
The Department of Defense regulations, “Commercial Activities Program,” at 32 C.F.R. § 169, and “Commercial Activities Program Procedures,” at 32 C.F.R. § 169a, are consistent with the statutory directives and create even more specific directives for DoD agencies in their contracting-out decision. These mandatory regulations, required by OMB Circular A-76, set out policy consistent with 41 U.S.C. § 401 et seq. as well as the specific directives of 10 U.S.C. § 2462, and create law to apply. In these regulations DoD agencies are directed not to “carry on any [commercial activities] to provide commercial products or services if the products or services can be procured more economically from commercial sources.” § 169.4(d). Part 169a makes clear that the procedures required for commercial activities programs “are mandatory for commercial activities... such as libraries, open messes and other morale, welfare and recreation activities.” § 169a.2(c). Part 169a sets out the cost comparison process, directing DoD agencies to follow the Supplement to OMB Circular A-76 “to determine if performance by DoD employees is justified on the basis of lower cost.” § 169a.l5(d). The cost comparisons must comply with the requirements of Part IV of Circular A-76. § 169a.l5(d)(4). The regulations require that all “significant” costs of Government and contract performance be accounted for in the cost comparison. Only “common costs,” that is, those that “would be the same for either in-house or contract operation need not be computed.” Id. Even in such a case, the common costs must be explained. See id. An agency may not include just the immediate costs to the agency. It must include income taxes gained or lost by the government and an allowance if contracting-out will free up resources and equipment that can be used somewhere else by the government. None of this is discretionary, and it all appears to be measurable. Read in conjunction with 41 U.S.C. § 401 et seq. and 10 U.S.C. § 2462, these regulations provide standards by which to judge an agency’s contracting-out decision.
The procurement statutes and regulations create measurable standards. There remains the question whether Circular A-76 itself creates “law to apply.” Plaintiffs in this case and in other cases have relied on the Circular as a source of law. See, e.g., Local 2855, Am. Fed’n of Gov’t Employees v. United States, 602 F.2d 574 (3d Cir.1979), and American Fed’n of Gov’t Empoyees, Local 2017 v. Brown, 680 F.2d 722 (11th Cir.1982), cert. denied, 459 U.S. 1104, 103 S.Ct. 728, 74 L.Ed.2d 952 (1983). The defendants have argued that the Circular is a mere unreviewable guideline. Courts have not been clear in their analysis whether Circular A-76 is a source of law. See Local 2855 v. United States, (first considering the 1967 version of the Circular as a source of law, but declaring that the Circular did not “provide meaningful criteria against which a court may analyze the Army’s decision,” 602 F.2d at 581, then suggesting in a footnote that the Circular, DoD Directives, and Army Regulations did not provide law to apply but rather provided “a loose managerial tool for implementing the government’s stated policy of relying whenever possible on private concerns to supply its needs,” id. at n. 28); Local 2017 v. Brown, (not considering whether Circular A-76 was itself law because the statutory provision under which plaintiffs claimed had incorporated portions of the Circular but declaring nonetheless that Circular A-76 was not a source of law).
In

Question: Did the court rule that the defendant's rights as an indigent were violated?
A. No
B. Yes
C. Yes, but error was harmless
D. Mixed answer
E. Issue not discussed
Answer:

Answer: E