INTERNATIONAL GRAPHICS,




                       THE UNITED STATES,

                           No. 586-83C

4 Cl. Ct. 186

Robert D. Wallick, Washington, D.C., attorney of record for
plaintiff. Steptoe & Johnson, of counsel.

William Dickey, Washington, D.C., attorney of record for

Stephen Bergenholtz, Washington, D.C., with whom was Assistant
Attorney General J. Paul McGrath, for defendant.


GIBSON, Judge: This is a bid protest case brought on September
22, 1983, by plaintiff, International Graphics, an unincorporated
division of Moore Business Forms, Inc., to restrain an award, and
thereafter to restrain the cancellation of a solicitation issued
by the Government Printing Office (GPO) under "Program 114-S"
respecting the procurement requirements of the Commerce Business
Daily (CBD). 1 Following the filing by plaintiff in this court of
its complaint for a declaratory judgment, and its motions and
applications for temporary, preliminary, and permanent
injunctions, the contracting officer cancelled the solicitation
on October 3, 1983.  This was done ostensibly because retention
of the activity in-house would effect a $1.2 million savings to
the government over the life of the contract.

Jeffries Banknote Company (intervenor), also a bidder herein, on
September 29, 1983, moved, and was allowed, to intervene in this
action.  Since plaintiff's complaint contended that intervenor
was non-responsive, intervenor initially sided against plaintiff.
However, upon the cancellation of the solicitation by GPO, and
for purposes of the present dispositive issues before the court,
intervenor sides with the plaintiff.

On October 3, 1983, in response to the initial pleadings by
plaintiff to restrain the award of Program 114-S, GPO also filed
in this court Defendant's Motion To Dismiss In Part, Or In The
Alternative, For Summary Judgment And Opposition To Plaintiff's
Motions For Injunctive And Declaratory Relief.Following the
cancellation of the solicitation, defendant filed in this court
on October 20, 1983, a supplemental motion for summary judgment.
This latter motion, on the cancellation issue, was premised on
the grounds that, as a matter of law, the GPO could cancel said
solicitation, pursuant to the regulations, for a "compelling
reason" and/or for no reason in that it reserved the right to do

In the interim, on September 22, 1983, Judge Harry Wood of this
court denied plaintiff's motion for a TRO as moot and unnecessary
in view of defendant's stipulation not to award the contract
prior to October 5, 1983.  He also recused himself from subject
case on September 30, 1983, pursuant to 28 U.S.C.   455(b)(4).
However, before a hearing could be held on the preliminary
injunction, following reassignment to this court, regarding the
award issue, defendant abruptly cancelled the
solicitation.Following subsequent pleadings by plaintiff seeking,
thereafter, also to restrain the cancellation of the
solicitation, this court granted plaintiff's motion on October 7,
1983, by issuing a preliminary injunction restraining the award
and the cancellation of the solicitation under Program 114-S.

Jurisdiction over this action in this court is premised upon 28
U.S.C.   1491(a).  Plaintiff further contends that 28 U.S.C.  
2201 and 2202 are also supportive thereof.

This opinion addresses only the issues raised in defendant's
motions to dismiss and for summary judgment filed on October 3
and 20, 1983.  Because this court finds that substantial genuine
issues of material fact exist, defendant's motions for summary
judgment are denied.  Additionally, defendant's motion to
dismiss, premised on lack of jurisdiction, is also denied for the
reasons delineated hereinafter.


Defendant, acting through the Government Printing Office (GPO),
issued a solicitation styled Program 114-S on February 24, 1982.
Said solicitation, as reflected in the letter of transmittal to
prospective bidders, advised as follows:

This letter concerns the requirements for procurement of the
"Commerce Business Daily" advertised as Program 114-S....  The
Government Printing Office is doing a feasibility/cost analysis
for the requirements of the "Commerce Business Daily." This will
be accomplished as outlined in OMB Circular No. A-76. (Emphasis

This solicitation is in part for information and planning
purposes and consequently, it may be that the Government will not
award a contract on the basis of this solicitation.  The
Government in no event intends to pay for the information herein

A pre-bid conference was subsequently held on Program 114-S on
March 9, 1982, which was attended by prospective bidders,
including plaintiff.  Pertinent to the issues herein, inter alia,
the following bidder questions and GPO responses occurred:

Q.  Can you provide a copy of OMB Circular No. A-76 referred to
in your letter of February 24, 1982?

A.  Yes.

Q.  Will provisions of A-76 be used as criteria for proposals?

A.  GPO is not bound by OMB A-76 but adopts its theory in
principal [sic]. (Emphasis added.)

Threshold informative and instructive data contained in the
February 24, 1982 solicitation included, but was not limited to,
the following:

The Government Printing Office (GPO) intends to issue a Single
Award Term Contract for the publication and distribution of the
Commerce Business Daily (CBD) for the Department of Commerce by
the method known as Two-Step Formal Advertising.

Two-Step Formal Advertising is a method of procurement conducted
in two phases.

STEP ONE: The first step consists of the solicitation,
submission, evaluation and, if necessary, discussions of a
technical proposal, without pricing, to determine the
acceptability of the proposal offered.

STEP TWO: The second step consists of the issuance of formal
Invitations for Bids (IFB's) to those Offerors that submitted
acceptable technical proposals under STEP ONE.

* * *

The contract when awarded will include all bid prices plus all
unrestricted narrative responses of the selected offeror....

* * *

...  Each bid price must be based on the bidder's own

* * *

...  The Contractor shall be legally obligated to perform in
strict accordance with its Technical Proposal submitted
hereunder.  Failure to comply with the requirements will be
grounds for "Termination for Default" under the
contract.(Emphasis added.)

On July 29, 1982, plaintiff submitted its initial Technical
Proposal as required by "Step One," which was revised, consistent
with the solicitation, on November 11, 1982.

Following the formal approval of plaintiff's revised technical
proposal on April 29, 1983, defendant forwarded the GPO's formal
request to plaintiff, by letters dated August 15, 1983, which
invited compliance with "Step Two" of the solicitation, i.e.,
submission of price bids.  To said letter was affixed a nine-page
attachment entitled:

Part Two Invitation For Bids
Program 114-S, Commerce Business Daily
Single Award.

The Invitation For Bids (IFB)2 disclosed, inter alia, that (a)
"award will be made" to the responsive, responsible bidder whose
total aggregate cost results in the lowest bid; and (b) bids must
be submitted for all lots and for all items therein; however,
defendant reserves the right to award "by lots or any combination

The lots, upon which bids were required, were delineated into
four categories as follows:

Lot    Description of                Services Currently
       Services Sought               Performed By

1      Editorial                     DOC3
2      Typesetting ADP Capability    Commercial Contractor
3      Printing/Binding              GPO
4      Subscription Management       SOD

Pursuant to the IFB, plaintiff submitted two separate bid
packages respecting the foregoing descriptive services on
September 15, 1983, consisting of a "Total Package Bid"
as authorized by Amendment No. 2, and an individual lot
bid as follows:

Bid     Description        Plaintiff's Bid Prices
Lots    of Services      Aggregate   Individual Lots

1       Editorial        $ 308,581      $ 345,823
2       Typesetting
        ADP Capability     715,434        801,315
3       Printing/
        Binding          2,335,567      2,335,572
4       Subscription
        Management         116,138        125,269
                        $3,475,900     $3,607,979

The contracting officer opened all bids on September 16, 1983,
and the following determinations were made with respect to each

                             Contracting Officer's
Bidder                       Determination

(1) Des Plains               "did not bid all items
    Publishing Co.           and is therefore non-

(2) R. R. Donnelly &         "bid on lot four only
    Sons                     and is therefore non-

(3) Western Publishing Co.   "submitted a no bid"

(4) International            "submitted a base bid
    Graphics                 and an alternate bid"

(5) Jeffries Banknote        "submitted a base bid
    Company4                 and an alternate bid"

(6) GPO n4                   "submitted one bid from
                             the Central Office and
                             four bids from the
                             Chicago Regional Plant.
                             In all of the GPO bids
                             the low contractor bid
                             price was used for lots
                             one and two for evaluation

Stemming from information and belief, plaintiff reasoned that
defendant imminently contemplated awarding the contract pursuant
to Program 114-S as follows:

Lot #     Prospective         Estimate/Bid

1         Jeffries            $ 300,600
2         Jeffries              614,895
3         GPO (in-house)      2,078,261
4         GPO (in-house)        266,263

Against said background and harboring the conclusion that "the
solicitation has departed in material respects from the
requirements of OMB Circular A-76 and that the government
estimates should be disregarded," plaintiff so advised the
contracting officer in a letter dated September 20, 1983, by:

(a) protesting, anticipatorily, the award of a contract under
Program 114-S to anyone other than International Graphics;

(b) requesting the administrative review/appeal mandated by  11,
OMB Circular A-76; and

(c) requesting that no action be taken on subject solicitation
until the protest/review/appeal are resolved.

In a separate letter also dated September 20, 1983, plaintiff
protested any contemplated award to Jeffries on the grounds that
it was not responsive in that the company did not sign or submit
GPO Form 910 which is essential to creating a legal obligation.5
Whereas defendant did not honor plaintiff's request for a
review/appeal respecting the perceived action of defendant as
viewed by plaintiff, the complaint and motions for injunctive
relief were filed in this court on September 22, last, seeking to
enjoin award of the contract under Program 114-S to anyone other
than plaintiff.  And following said filed complaint and motions
for injunctive relief, defendant cancelled the solicitation on
October 3, 1983, the linchpin being an anticipated "[savings of]
$242,506 per year or $1,212,530 over the 5 year contract life."


Plaintiff's suit is based upon the claim that the GPO's
determination that $1.2 million would be saved by cancelling
subject solicitation is arbitrary, capricious, and without a
rational basis.  It alleges that the GPO was obliged to follow
the principles of Office of Management and Budget (OMB) Circular
A-76 (sometimes referred to as A-76), either as a matter of law
or as an integral part of the solicitation under Program 114-S,
and that the GPO did not comply with said obligation.  Plaintiff
also challenges the GPO's determination that $1.2 million would
be saved, regardless of whether the agency has complied with
A-76.  Defendant's response to this claim, in its motions to
dismiss and for summary judgment, contends that this court has no
jurisdiction over plaintiff's claim; that the government reserves
the right to cancel all solicitations without liability for no
reason; and that in any event, this court cannot review whether
the GPO has complied with the provisions of A-76.  Moreover, it
concludes that its judgment that a $1.2 million cost savings
would be effected from cancellation of subject solicitation must
be upheld as a matter of law, since it constitutes a "compelling
reason" under applicable regulations.

Given the foregoing, the court views defendant's motions and
plaintiff's responses thereto as presenting the following three
major issues:

1) Whether this court has jurisdiction over plaintiff's complaint
for equitable relief against the cancellation of the solicitation
under Program 114-S;

2) Whether a "compelling reason" was necessary for the GPO to
cancel its solicitation under Program 114-S; and

3) Whether, as a matter of law, plaintiff can judicially
challenge defendant's determination of cost savings (i.e., raise
a genuine issue of material fact), and if so, whether this court
can review the charge that said determination did not comply with
the principles of OMB Circular A-76.

For the reasons stated below, the court is of the firm opinion
that each of the foregoing questions must be answered in the

I.  Jurisdiction

Defendant has strenuously contended that this court has no
jurisdiction over plaintiff's claim for equitable relief with
respect to the GPO's cancellation of its solicitation, on the
following grounds:

a) that this court lacks jurisdiction, ab initio, over contract
claims in which the government has discriminated against all
private bidders equally;

b) that Congress intended this court to exercise its injunctive
powers only when a contract will be awarded, and no contract will
be awarded here; and

c) that the relief plaintiff seeks, i.e., an order enjoining the
cancellation of the GPO's solicitation, would be tantamount to
the court's affirmative award of a contract to plaintiff.6

The court finds each of these contentions to be without merit.

We observe, at the outset, that defendant has noted correctly
that the equitable jurisdiction of this court under 28 U.S.C.  
1491(a)(3)7 can only be invoked when there is a breach of the
implied contract to fairly and honestly consider all responsive
bids.  United States v. Grimberg, 702 F.2d 1362, 1367 (Fed. Cir.
1983); Ingergoll-Rand Co. v. United States, 2 Cl. Ct. 373, 375
(1983). Defendant is likewise correct in its assertion that
Congress's waiver of sovereign immunity in  1491(a)(3) is to be
strictly construed and may not be expanded by implication.  Speco
Corp. v. United States, 2 Cl. Ct. 335, 336-37 (1983); see also
United States v. Testan, 424 U.S. 392, 399, 96 S.Ct. 948, 47
L.Ed.2d 114 (1975).

The points relied on in the cases cited by defendant to support
such theory8 are inapposite.  A number of the decisions cited by
defendant have affirmatively stated that this court has
jurisdiction when the government has discriminated among bidders.
See, e.g., Heli-Jet Corp., 2 Cl. Ct. at 618; Essex Electro
Engineers, Inc., 3 Cl. Ct. at 281 n. 3. No decision of this
court, as we read them, has gone so far as to hold, however, that
jurisdiction is lacking because a complainant alleges that the
government has denied all bidders, rather than one or more
individual bidders, the chance to compete fairly for a contract.
And, to the extent that any Claims Court case can be reasonably
so read, we would respectfully disagree with such a holding.
This court has in fact declined to so hold in other cases when
plaintiffs have protested the government's cancellation of a
solicitation.  Northern Virginia Van Co. v. United States, 3 Cl.
Ct. 237 (1983); P. Francini & Co., Inc. v. United States, 2 Cl.
Ct. 1, 6 (1983).

The decision relied upon most heavily by defendant in support of
its proposition is Quality Furniture Rentals Inc., 1 Cl. Ct. at
140. Quality Furniture is significantly distinguishable from the
instant case in that it involved a challenge to an agency's
authority to award a contract.In justifying its holding that the
Claims Court had no jurisdiction to enjoin the award, the
decision interpreted the legislative history accompanying the
Federal Courts Improvement Act (FCIA) of 1982 as indicating that
Congress intended this court to consider "only those
irregularities which would deny a contractor a fair opportunity
to compete." 1 Cl. Ct. at 140. The court ruled that it lacked
jurisdiction because the government would not be denying any
bidder the opportunity to compete for the award, even if such an
award was unauthorized. This holding contrasts significantly with
defendant's sweeping contention that the court lacks jurisdiction
whenever the government equally denies all bidders the
opportunity to compete for an award, without regard to whether
such denial was violative of its obligation to treat all bids

Moreover, defendant's theory is premised upon an unduly narrow
interpretation of the legislative history of the FCIA.  The
Senate Report accompanying the FCIA quoted by Quality Furniture
specifies that the substantive law of jurisdiction over bid
protest cases, as enunciated in the Scanwell doctrine, was
intended to be left intact.  S. Rep. No. 275, 97th Cong., 1st
Sess. 23 (1981); see CACI, Inc.-Federal v. United States, No.
83-742, slip op. at 12 (Fed. Cir. October 28, 1983).  The
decision of our predecessor court that adopted the Scanwell
doctrine, Keco I, stated that the court's jurisdiction should not
be limited "only to those situations involving favoritism or
discrimination" by the government.  192 Ct. Cl. at 780. Instead,
the court adopted the holding of Scanwell permitting judicial
review over all agency actions that are arbitrary and capricious
-- i.e., those that "exceed the legal perimeters" of agency
discretion.  See id. at 782; Scanwell, 424 F.2d at 874.

The factual setting of the instant case also compels a finding of
jurisdiction here, notwithstanding defendant's contention that
this court's equity jurisdiction obtains only when a contract
remains to be awarded. Plaintiff in this case clearly invoked the
jurisdiction of this court by filing for a temporary restraining
order against the award of a contract under Program 114-S to
other bidders on September 22, 1983, while subject solicitation
was still outstanding.  A subsequent cancellation of the
solicitation by defendant, like the subsequent award of a
contract, does not act as a bar to the "long-standing rule in the
Federal courts that jurisdiction is determined at the time the
suit is filed and, after vesting, cannot be ousted by subsequent
events, including action by the parties." F. Alderete General
Contractors, Inc. v. United States, 715 F.2d 1476, 1480 (Fed.
Cir. 1983); see Dean Forwarding Co., Inc. v. United States, 2 Cl.
Ct. 559, 564 (1983), and cases cited in n. 9 therein.  Alderete
supplemented Grimberg by establishing that the statutory language
affording equitable relief in this court "for claims brought
before the contract is awarded" should be given its plain meaning
so as to preclude subsequent agency action from divesting this
court of jurisdiction, once jurisdiction is established.  715
F.2d at 1481. Because similar policy considerations to those
guiding the court in Alderete apply here (see id. at 1480),
defendant's argument that this court loses jurisdiction upon the
cancellation of the solicitation, "when there is no longer a
contract to award," is thoroughly misplaced under the facts of
the instant case.

The third jurisdictional ground proferred by defendant is that
this court has no authority to enjoin the cancellation of a
solicitation, because such a remedy would be tantamount to
directing the award of a contract to a particular bidder.
Although we have no misgivings that this court's jurisdiction is
not so broad as to contemplate the affirmative award of a
contract to a particular bidder, defendant has failed to show how
this impediment applies to deprive the court of jurisdiction to
enjoin the cancellation of the solicitation.  In CACI, Inc.-
Federal, slip op. at 15, the Court of Appeals for the Federal
Circuit stated that:

Scanwell... recognized that a disappointed bidder has "no
right... to have the contract awarded to it in the event the...
court finds illegality in the award of the contract...." 424 F.2d
at 864.

The court in CACI then went on to hold, however, that:

The injury [plaintiff] here asserts is that the government's
breach of its implied contract to deal fairly with all bidders
denied [it] the opportunity to have its bid considered solely on
its merits.  An injunction barring the award would correct the
alleged injury since it would require the government, if it wants
to go ahead with the procurement, to repeat the bidding process
under circumstances that would eliminate the alleged taint of the

Id. at 15-16.

In the instant case, plaintiff demands that the court enjoin the
GPO's October 3, 1983 cancellation of its solicitation, because
allowing the cancellation to stand would breach the implied
contract of fairness that attaches to all government
procurements.  If plaintiff succeeds on the merits in this suit,
the solicitation under Program 114-S would be restored and the
award enjoined to any unentitled bidders.  In such circumstances,
the remedy envisaged in CACI, supra, would conceivably become
available here.  Because in such instance the court would not be
affirmatively awarding a contract to a particular bidder, this
court has jurisdiction to grant the remedy sought by plaintiff.

II.  Compelling Reason For Cancellation

The rule governing the cancellation of IFBs is stated as follows
in the regulations applicable to the GPO:

Preservation of the integrity of the competitive bid system and
prevention of unnecessary exposure of bid prices dictate that,
after bids have been opened, award must be made to that
responsible bidder who submitted the lowest responsive did,
unless there is a compelling reason to reject all bids and cancel
the invitation.  (Emphasis added.)

GPO Printing Procurement Regulation,  IV.2.9 Accordingly,
plaintiff contends that the government is only entitled to cancel
its solicitation, under the facts here, if it can demonstrate a
compelling reason for doing so.  Defendant responds by asserting
that no compelling reason was necessary, for essentially the
following two reasons:

a) The government "retains, in its discretion, the right to
reject all bids without liability"; and

b) The solicitation under Program 114-S was "for informational
and planning purposes," rather than an "Invitation for Bids," and
therefore was not subject to the regulations governing the
cancellation of IFBs.

The court accepts plaintiff's contention and rejects those of

The primary support for defendant's first argument is derived
from language contained in three opinions of our predecessor
court.  See American General Leasing, Inc. v. United States, 218
Ct. Cl. 367, 374, 587 F.2d 54 (1978); Keco Industries, Inc. v.
United States (Keco II), 203 Ct. Cl. 566, 577, 492 F.2d 1200
(1974); and Robert Simmons & Associates v. United States, 175 Ct.
Cl. 510, 517, 360 F.2d 962 (1966). The references made in these
cases to the agencies' ability to reject all bids without
liability cannot be interpreted as giving the government carte
blanche to cancel solicitations inimical to applicable
regulations, however.  To the contrary, the discussion of an
agency's right to cancel a solicitation in each case was tempered
with specific references to the above-cited FPR and DAR that
require a compelling reason for cancellation, American General
Leasing, 218 Ct. Cl. at 375; Keco II, 203 Ct. Cl. at 577, or to
an analogous caveat that an agency's cancellation of a
solicitation would not be upheld if it is arbitrary, capricious,
or in bad faith.  Simmons, 175 Ct. Cl. at 517. The Court of
Claims decision on point that most accurately delineates the
standards for cancellation is still Massman Construction Co. v.
United States, 102 Ct. Cl. 699, 718-19, 60 F.Supp. 635 (1945),
which states:

To make the system work without undue delays and without the
opening of the bids being used unfairly to obtain a disclosure of
what competitors are offering, it is necessary that the bids be
firm bids, backed by a guaranteed willingness to sign a contract
at the bid price.  To have a set of bids discarded after they are
opened and each bidder has learned his competitor's price is a
serious matter, and it should not be permitted except for cogent
reasons. (Emphasis added.)

Defendant's second theory that a compelling reason is not
required is premised on the contents of the GPO's February 24,
1982 letter of transmittal, which states that the solicitation
was "in part for information and planning purposes," that "it may
be that the Government will not award a contract," and that "[t]
he Government in no event intends to pay for the information
herein solicited." Defendant concludes that, given these
provisions, the GPO's solicitation was "identical" to a procedure
permissible under FPR  1-1.314. Said regulation permits
"requests for informational or planning purposes," provided that
such requests "shall clearly state [their] purpose, explaining
that the Government does not intend to award a contract on the
basis of the request, or otherwise pay for the information

Defendant's argument falls wide of the mark for several reasons.
First, the GPO Printing Procurement Regulations do not
contemplate a "solicitation for informational or planning
purposes." (The provisions of the FPR by their own terms are not
binding on the GPO.10) Second, even if the GPO could proceed
pursuant to FPR  1-1.314 under a principle of the "federal norm"
in procurement as suggested by defendant, its solicitation in
program 114-S was clearly at gross variance with the terms and
intent of the regulation.  Contrary to the regulation's
requirements, the solicitation in the instant case was only in
part for informational and planning purposes.  More importantly,
the solicitation contained no clear statement of agency intent
not to award a contract.  Instead, the letter of transmittal
stated only that it may be that the agency will not award a
contract, and the attached RFP noted that the GPO "intends to
issue a... contract for the publication and distribution of
the... (CBD)," under the Two-Step Formal Advertising method, if a
private bid was acceptable.  Indeed, the RFP effectively
compelled all bidders to treat the entire solicitation as an IFB,
because it "legally obligated [bidders] to perform in strict
compliance with [their] Technical Proposal [t]hereunder" should
any of their bids have been selected as acceptable.

Plaintiff has proffered additional uncontroverted evidence that
throughout the 18-month period of the solicitation, the GPO
expressed an unmistakable intent to award a contract if a private
bid was found acceptable.  See Plaintiff's October 31, 1983
Opposition Memorandum, Attachment B; Tr. 303; Plaintiff's Exhibit
20.Moreover, the fact that the GPO hastily "cancelled" its
solicitation on October 3, 1983 indicates that the agency did not
consider its solicitation to be merely a request for information,
for which no cancellation would have been necessary.

The language of the GPO's February 24, 1982 letter of
transmittal, quoted on page 3 supra, might be tortuously read to
indicate that the solicitation in Program 114-S was not an IFB,
and therefore not subject to the provisions of GPO Printing
Procurement Regulation  IV.2.  Nevertheless, such a hospitable
reading of same will not give defendant comfort in view of the
fact that under the maxim contra proferentum, ambiguities in
contracts should be construed against the maker of the contract,
particularly where, as here, a contrary reading would conflict
with the policy of the government procurement system as expressed
in Massman, supra, as well as the subsequent actions of the
parties. The court therefore holds that the GPO's solicitation
under Program 114-S was an IFB subject to the "compelling reason"
requirement of GPO Printing Procurement Regulation  IV.2.

III.  The Challenge To The GPO's Determination

Defendant next contends that if a "compelling reason" is
obligatory as a basis for rejecting all bids, its compelling
reason is established by the cost savings of $242,506 per year,
or $1,212,530 over the five-year life of the contract, that would
be realized by the cancellation.11  Plaintiff claims that said
determination was arbitrary, capricious, and without a rational
basis.  An important but not exclusive ground for this challenge
proffered by plaintiff is that the GPO did not comply with the
provisions of OMB Circular A-76, which it claims the agency was
bound to follow, either because it was directly applicable to the
GPO or because said provisions were a part of the implied
contract. Defendant vociferously objects to review by this court
of the question whether the agency complied with the provisions
of the OMB Circular.12

In opposition to defendant's motion, plaintiff has alleged,
pursuant to RUSCC 56(e), a number of specific facts which
forcefully bring into dispute defendant's cost estimate.  See
Plaintiff's October 31 memorandum at 15-17.  We note that
defendant does not object to plaintiff's right to challenge its
alleged $1.2 million savings if OMB Circular A-76 were not at
issue in this case in any regard.  In view thereof, the court
must hold that a genuine issue of material fact exists with
respect to the accuracy of the GPO's estimate that a $1.2 million
cost savings would be effected by cancelling its solicitation.

In its insistence on its entitlement to summary judgment,
defendant's specific claims, with respect to the GPO's
determinations under OMB Circular A-76, are premised on the
following arguments:

a) The GPO is not bound by the provisions of A-76, and even if it
is so bound, all agency decisions pursuant to A-76 are committed
by law to agency discretion;

b) Plaintiff lacks standing to assert any violations of A-76 by
the GPO;

c) The provisions of A-76 are in no way incorporated into the
terms of the solicitation under Program 114-S; and

d) Even if A-76 is somehow incorporated into the solicitation,
all of its provisions should be given effect, including the
paragraph stating that the Circular shall not be the basis for a
private right of action against an agency.

The court agrees with defendant's first contention, that the GPO
is not legally bound to follow A-76 per se. This conclusion
follows because the GPO appears to be a unit of the legislative
branch, not subject to the dictates of the Circular, which
applies only to "Executive Departments and Establishments." In
fact, the GPO has functioned in practice under the direct
supervision of Congress's Joint Committee on Printing.
Discussion of the GPO's role in government, both in Congress and
by GPO officials themselves, has consistently indicated that "the
Joint Committee on Printing... constitute[s], in fact, a board of
directors" for the GPO, and that the GPO "is, and was, designed
to be primarily under the control of Congress." 48 Cong. Rec.
3192, 3193 (1912) (remarks of Senator Smoot); see H.R. Rep. No.
1, 68th Cong; 1st Sess. 23 (1924); quoted in 41 Op. Atty. Gen.
282, 286 (1956); Government Printing Office, 100 GPO Years,
1861-1961 163 (1961) (remarks by Public Printer Carter in 1928
Congressional testimony).  Hence, recent court and General
Accounting Office (GAO) decisions that have discussed the role of
the GPO have considered it to be a legislative agency.  McKenzie
v. Sawyer, 684 F.2d 62, 68 (D.C. Cir. 1982); Thompson v. Sawyer,
678 F.2d 257, 264 (D.C. Cir. 1982); Photo Data, Inc., B-208272,
March 22, 1983, 83-1 CPD 281 (OMB Circular A-76 inapplicable to
GPO because it is a legislative agency); see also United States
v. Allison, 91 U.S. 303, 307 (1875).

Whatever lingering doubt might exist as to the general status of
the GPO,13  it is clear beyond cavil that the GPO acts as a
legislative agency in its procurement decisions for printing,
binding, and blank-book work.  See 44 U.S.C. 502, 504 (1979).

From the foregoing, it is apparent that the Government Printing
Office is not legally bound to comply, per se, with OMB Circular
A-76.  Consequently, the argument raised by defendant, that
decisions made by the GPO pursuant to A-76 are committed to
agency discretion by law, is merely a response to a hypothetical
question that this court need not address.  Because A-76 does
not, per se, apply to the GPO, there is also no need to address
the question raised by defendant of whether plaintiff has
standing as a party falling within the "zone of interests" of

Plaintiff has not simply claimed that the GPO has violated the
provisions of A-76.  Rather, it has made a prima facie showing,
as a disappointed bidder, that the GPO has breached its implied
contract to consider all bids fairly and honestly.  Under the
Federal Circuit and Court of Claims decisions in Grimberg and
Keco, respectively, plaintiff undeniably has standing to raise
such a claim.

The question that this court must address in preaward contract
claims such as plaintiff's is whether the contracting officer's
application of statutes, regulations, and the terms of the
procurement had a rational basis.  Essex Electro Engineers, Inc.,
3 Cl. Ct. at 281 n. 3; M. Steinthal & Co. v. Seamans, 455 F.2d
1289, 1301 (D.C. Cir. 1971). The parties vigorously contest
whether the provisions of OMB Circular A-76 constitute material
terms of subject procurement.  Plaintiff argues, in this
connection, that the Circular should be fully incorporated into
the procurement, primarily because of the statement in the GPO's
letter of transmittal that the "cost/feasibility analysis" would
be conducted "as outlined in OMB Circular A-76." Conversely,
defendant argues that the Circular was not at all incorporated
into the procurement, primarily because of the statement made in
the pre-proposal conference by a GPO official that the agency "is
not bound by OMB Circular A-76 but adopts its theory in
principle." At a minimum, defendant asserts that the above two
statements, when examined together, indicate an ambiguity in the
terms of the solicitation which should be interpreted in the
government's favor, because plaintiff never sought clarification
of this "ambiguity" and has not demonstrated sufficient reliance
on its interpretation.

The court sees little, if any, ambiguity in the meaning of these
two statements, however, especially when they are considered in
conjunction with the purpose of the solicitation, as elicited by
the affidavits and admissions of GPO officers on the record.  It
is clear that the purpose of the solicitation under Program 114-S
was to determine whether a private bidder was able to produce the
Commerce Business Daily cheaper and more efficiently than the
GPO.In making this determination, the Commerce Department
insisted to the GPO that the agency should utilize a methodology
that would "compare apples with apples." The solicitation and
accompanying affidavits show only one methodology that the GPD
chose to utilize -- the agency would apply the comparative cost
principles of OMB Circular A-76.

Indeed, all pertinent statements by GPD officials during and
after the initial solicitation, including their testimony in the
October 7, 1983 hearing, indicate that while the agency did not
consider itself to be strictly bound by OMB Circular A-76, it
commit itself to apply the cost-comparison principles contained
therein for the purpose of determining whether to out-source the
CBD. In view of the GPO's various ante litem motam concessions
and the maxim contra proferentum, this court therefore holds that
those principles of OMB Circular A-76 that pertain specifically
to cost comparisons were incorporated by reference into the
solicitation under Program 114-S.  Therefore, as a matter of law,
such principles became terms of the implied contract of fairness
running between the government and all bidders.  This holding
does not mean that the government will be considered to have
incorporated the "four corners" of OMB Circular A-76 into the
solicitation.  Instead, it shall simply mean that if the GPO in
fact deviated from the fundamental cost-comparison principles of
A-76 in such a way as to afford no rational basis for its
determination of cost savings (thus violating the implied
contract of fairness), this court can find that a "compelling
reason" for the cancellation on October 3, 1983 did not exist and
permanently enjoin same.

Defendant's contention appears to suggest that in no instance can
a court inquire into whether an agency's actions are consistent
with OMB Circular A-76. The government cites for this proposition
a number of cases which it claims to have unanimously held that
agency decisions under A-76 are internal managerial decisions to
continue in-house production that are not subject to judicial
review. See AFGE, Local 2017 v. Brown, 680 F.2d 722 (11th Cir.
1982); Local 2855, AFGE v. United States, 602 F.2d 574 (3d Cir.
1979); AFGE v. Hoffmann, 427 F.Supp. 1048 (N.D. Ala. 1976); AFGE,
Local 1872 v. Stetson, 86 Lab. Cas. (CCH) 33,819 (D.D.C. 1979).
None of these cases, however, involved a claim by a disappointed
bidder, as here, that the terms of A-76 were incorporated by
reference into the implied contract of a particular

To the contrary, subject case is analogous to a number of recent
GAO decisions that have sustained bid protests under A-76.  In
one such case, it is worthy to note that the Comptroller General

We generally do not review an agency decision to perform work in-
house rather than to contract out for the services because we
regard the decisions as a matter of policy within the province of
the executive branch.  Crown Laundry and Dry Cleaners, Inc.,
B-194505, July 18, 1979, 79-2 CPD 38. Where an agency, however,
utilizes the procurement system to aid its decision, specifying
the circumstances under which a contract will or will not be
awarded, we will review an allegation that the agency did not
follow established cost comparison procedures, since a faulty or
misleading cost comparison which would materially affect the
decision whether or not to contract out would be abusive of the
procurement system. MAR, Incorporated, B-205635, September 27,
1982, 82-2 CPD 278. (Emphasis added.)

Holmes & Narver Services, Inc., B-212191, November 17, 1983; see
Joule Maintenance Corporation, B-208664, September 16, 1983, 83-2
CPD 333; Serv-Air, Inc., 60 Comp. Gen. 44 (1980).

Mindful of the fact that this court is not bound by the views of
the Comptroller General, nor do they operate as a judicial
determination of the parties, Burroughs Corp. v. United States,
223 Ct. Cl. 53, 63, 617 F.2d 590 (1980), we adopt the reasoning
of these GAO decisions.  We note that incorporation of the cost
comparison principles of OMB Circular A-76 here in the implied
contract, as apparently intended, ab initio, is the only
pragmatic means of determining whether the GPO has lived up to
its implied contractual obligation to treat all bidders honestly
and fairly under the terms of its solicitation.

Finally, defendant has argued that if the principles of A-76 are
incorporated into the solicitation, then the following section
thereof should also become operative so as to preclude the
possibility of judicial review:

This Circular provides administrative direction to heads of
agencies and does not establish, and shall not be construed to
create, any substantive or procedural basis for any person to
challenge any agency action or inaction on the basis that such
action was not in accordance with this Circular, except as
specifically set forth in Section 11 below.15

OMB Circular No. A-76, 3.  This section offers defendant scant
comfort.  The GPO has repeatedly acknowledged that it did not
bind itself to all of OMB Circular A-76, but only to the thrust
of the operative comparative cost provisions.  It has long been
settled that "a reference by the contracting parties to an
extraneous writing for a particular purpose makes it part of the
agreement only for the purpose specified." Guerini Stone Co. v.
Carlin, 240 U.S. 264, 277, 36 S.Ct. 300, 60 L.Ed. 636 (1916);
Lodges 743 and 746, IAM v. United Aircraft, 534 F.2d 422, 441 (2d
Cir. 1975). The jurisdictional sections of the OMB Circular such
as those quoted above shall therefore be deemed not to have been
incorporated into the solicitation.


Plaintiff has set forth sufficient creditable facts to convince
this court that there exists a genuine issue of material fact as
to the efficacy of defendant's alleged $1.2 million cost
savings.Defendant's motions for summary judgment and its motion
to dismiss in part shall, for the foregoing reasons, be denied.
In the trial on the merits, plaintiff shall have the opportunity,
consistent with this opinion, to demonstrate, if it can, that the
GPO's decision to cancel the solicitation under Program 114-S had
no rational basis and that the agency deviated materially from
the cost comparison principles of OMB Circular A-76.  The court
would like to reiterate that the "clear and convincing evidence"
standard of proof enunciated in Baird v. United States, 1 Cl. Ct.
662, 664 (1983), is the linchpin to any injunctive relief on the

Finally, since this is an action for equitable relief which
should, to the extent appropriate, be given priority, the parties
are directed to appear in this court for a preliminary pretrial
conference on January 6, 1984, at 10:30 a.m.


December 23, 1983; As Amended January 10 and 23, 1984


Bid Lots            Jeffries' Bids
            Individual Lots    Aggregate

1             $ 300,600        $ 465,532
2               614,895          242,988
3             2,954,647        2,900,170
4                22,680            7,560
             $3,892,822       $3,616,249

Bid Lots               GPO's Bids
            Individual Lots    Aggregate

1           * $ 300,600      * $ 300,600
2             * 614,895        * 614,895
3             2,266,800 (#3)   2,078,260 (#4)
4               266,263 (#3)     266,263 (#4)
             $3,448,558       $3,260,018

* GPO did not submit a bid on Lots #1 and #2; instead, it simply
"adopted" the lowest commercial bid (Jeffries) on said lots.


1  The Commerce Business Daily is a publication issued by the
Department of Commerce, on a daily basis, listing in brief
descriptive paragraphs United States Government procurement
invitations, contract awards, subcontracting leads, and sales of
surplus government property.  For the past 33 years, the GPO has
printed this publication.

2  GPO executed two amendments to Part Two of the IFB in early
September 1983.The second amendment provided, inter alia, that
"in addition to the lot prices required the bidder at his/her
option may submit an alternate bid for a total package price."

3  DOC is the Department of Commerce.  SOD is the Superintendent
of Documents.

4  The bids of said bidders as to the respective lots are
scheduled in Attachment A.

5  Plaintiff filed a motion for summary declaratory judgment on
October 25, 1983, seeking a determination that Jeffries is
nonresponsive.  This motion will be disposed of at the
appropriate time.

6  Defendant also premised its "Motion To Dismiss In Part" upon
this court's lack of jurisdiction to review whether the GPO has
complied with the provisions of A-76.  This contention will be
discussed in part III, infra.

7  This statute reads in pertinent part: "To afford complete
relief on any contract claim brought before the contract is
awarded, the court shall have exclusive jurisdiction to grant
declaratory judgments and such equitable relief as it deems
proper, including but not limited to injunctive relief."

   Defendant ventures beyond the realm of precedent, however,
   when it argues that this court lacks "bid protest"
   jurisdiction when alleged grievances relate to all bidders
   equally, without discriminating against one particular bidder.
   This transgression is particularly true because "[t]he
   obligation of the government upon the issuance of a
   solicitation is to treat all bidders fairly and to give full
   consideration to all bids." Heli-Jet Corp. v. United States, 2
   Cl. Ct. 613, 618 (1983); see Keco Industries, Inc. v. United
   States (Keco I), 192 Ct. Cl. 773, 780, 428 F.2d 1233 (1970);
   Heyer Products Co., Inc. v. United States, 135 Ct. Cl. 63, 69,
   140 F.Supp. 409 (1956). The reason for court enforcement of
   this obligation is to protect against arbitrary and capricious
   action by government agencies in the procurement process.  See
   Scanwell Laboratories, Inc. v. Shaffer, 424 F.2d 859, 864
   (D.C. Cir. 1970); quoted in Keco I, 192 Ct. Cl. at 780. The
   foregoing policy underlying this court's bid protest
   jurisdiction would lose some, if not all, of its force if this
   court had the power to review unfair treatment of a particular
   bidder but was powerless to review equally unfair treatment of
   all bidders by the government.

8  Quality Furniture Rentals, Inc. v. United States, 1 Cl. Ct.
136, 140 (1983); Cecile Industries, Inc. v. United States, 2 Cl.
Ct. 690, 693 (1983); Ingersoll-Rand Co., 2 Cl. Ct. 373; Downtown
Copy Center v. United States, 3 Cl. Ct. 80 (1983); Heli-Jet
Corp., 2 Cl. Ct. 613; and Essex Electro Engineers, Inc. v. United
States, 3 Cl. Ct. 277, 281 n. 3 (1983).

9  Virtually identical provisions are found in the Federal
Procurement Regulations (FPR), 41 C.F.R. 1-2.404-1(a)
(applicable to most civilian procurement) and the Defense
Acquisition Regulations (DAR), 32 C.F.R.   2-404.1(a)
(applicable to Department of Defense procurement). Each of these
regulations was promulgated under statutes that permit the agency
head to reject all bids upon a determination that rejection is in
the public interest.  See 41 U.S.C.   253(b) (1979); 10 U.S.C.
 2305(c) (1979).

10  This conclusion follows from FPR  1-1.004, 41 C.F.R.
1-1.004, which states that the FPR shall "apply to all Federal
agencies to the extent specified in the Federal Property and
Administrative Services Act of 1949," ([Pub. L. 81-152, 63 Stat.
377,] 40 U.S.C.   471 et seq.) or in other law." Section 302 of
that Act, codified at 41 U.S.C.   252(a), states that Title III
of the Act, which governs procurement procedures, shall apply to
purchases and contracts by the General Services Administration
and other non-military executive agencies. The Act's provisions
therefore do not apply to legislative agencies such as the GPO
(see infra).The apparent lack of any other law that delineates
the applicability of the FPR to the GPO (44 U.S.C.   502,
suggested by plaintiff, is inapposite) compels a finding by this
court that the GPO is not bound by the FPR.

11  The GPO used as a basis for cost comparison with private
bidders the bids of Jeffries Banknote Co. on Lots I and II, and
the bids of the government on Lots III and IV, which in its view
comprised in the aggregate the "otherwise successful low bid."
See Plaintiff's Exhibit 53.

12  OMB Circular A-76 was originally promulgated in 1966,
pursuant to statutes directing OMB to supervise expenditures by
executive agencies.  The Circular "establishes the policies and
procedures used to determine whether needed commercial or
industrial type work should be done by contract with private
sources or in-house using Government facilities and personnel."
See OMB Circular No. A-76, 44 Fed. Reg. 20,556 (1979), P1; 5
U.S.C.   305 (1979); 41 U.S.C.   401 et seq. (1979).  The
Circular was revised numerous times in intervening years, most
notably in 1979 when a detailed Cost Comparison Handbook was
added.  The most recent revision in August 1983 did not change
the 1979 version in any material respect pertinent to defendant's
summary judgment motion.

13  See 44 U.S.C.   102, 301 (1979).

14  Defendant also argues that the court should follow this line
of cases because agency decisions under A-76 involved "questions
of judgment requiring close analysis and nice choices." Local
2855 v. Brown, 602 F.2d at 580-81; quoting Panama Canal Co. v.
Grace Line, 356 U.S. 309, 318, 78 S.Ct. 752, 2 L.Ed.2d 788
(1958). The Brown court relied upon the 1967 version of A-76,
however, which contained a provision stating that "[n]o specific
standard or guideline is prescribed for deciding whether savings
are sufficient to justify continuation of an existing Government
commercial activity and each activity should be evaluated on the
basis of the applicable circumstances." OMB Circular No. A-76,
P7c(3) (Revised August 30, 1967); quoted in Local 2855 v. Brown,
602 F.2d at 581. The vitality of this aspect of Brown has been
diminished by the deletion of the foregoing portion of the
Circular in 1979 and its replacement in 1979 with the specific
and detailed Cost Comparison Handbook.

15  Section 11 of the Circular allows for an appeal process only
within the agency, stating, "This procedure does not authorize an
appeal outside the agency or judicial review."