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Techniarts Engineering v. United States
Citations: 51 F.3d 301; 311 U.S. App. D.C. 158; 1995 WL 217050Docket: 93-5304
Court: Court of Appeals for the D.C. Circuit; June 30, 1995; Federal Appellate Court
The United States Court of Appeals for the District of Columbia Circuit reviewed an appeal by the USIA against a district court's summary judgment favoring Techniarts Engineering regarding the production of "TV Marti" newscasts. The district court found that the USIA violated the Economy Act and the OMB Circular by not comparing costs before deciding to produce the newscasts in-house instead of renewing its contract with Techniarts. It also ruled that the USIA violated Federal Acquisitions Regulations by entering unauthorized private service contracts while internalizing production. However, the appellate court determined that the USIA was authorized by statute to move production in-house and to enter service contracts, thus reversing the district court's decision. The case originated after Techniarts filed a lawsuit on March 14, 1991, claiming that the USIA had not conducted the required cost comparisons and had improperly contracted with former Techniarts employees. On August 6, 1993, the district court ruled in favor of Techniarts, finding that the USIA violated three provisions and ordering a remand for cost comparisons in accordance with the Economy Act and OMB Circular. The court also mandated the cessation of in-house production and termination of existing personal service contracts. The USIA appealed, contending that its actions were authorized by the TV Marti Act, which preempted the requirements of the Economy Act and OMB Circular for cost comparisons. The TV Marti Act emphasizes maximizing the use of agency resources, thus making in-house production feasible as long as it does not significantly harm the TV Marti program. The court found no evidence suggesting that the Economy Act or OMB Circular required the USIA to consider the costs of commercial production before opting for in-house services. Additionally, the USIA's use of personal service contracts was deemed lawful, as it is expressly authorized by statute for temporary contracts lasting up to one year. Section 3109 allows agencies to contract for temporary or intermittent services of experts or consultants for up to one year, including stenographic services, with explicit authorization for the USIA to engage such services under the TV MARTI provisions. Techniarts argues that these contracts circumvent normal civil service processes; however, this argument is rejected as the USIA acted within its statutory authority to fulfill its obligations under the TV MARTI Act. The court reverses the district court's judgment, ruling in favor of the USIA, emphasizing that the agency was not required to favor Techniarts in contract allocations. Further, the Economy Act permits agency heads to order services from within or between agencies when not more conveniently or cheaply available from commercial sources. The OMB Circular outlines the government's policy regarding efficiency and productivity, emphasizing reliance on the commercial sector while allowing certain governmental functions to remain in-house. The USIA's duty to maximize the use of agency resources further supports the decision to produce in-house when feasible. Lastly, newer laws supersede the Economy Act when there is an inconsistency, and the OMB Circular is not applicable if it contradicts existing laws or agreements.