Passenger Corp., 513 U.S. 374, 130 L. Ed. 2d 902, 115 S. Ct. 961 (1995). In Lebron. The Supreme Court determined that the National Railroad Passenger Corporation ("Amtrak") was an agency or instrumentality of the United States for purposes of individual rights guaranteed by the Constitution. In determining that Amtrak was an agency of the government, the Supreme Court considered that six of nine Amtrak board members are appointed by the President; the United States holds all of Amtrak's preferred stock; the United States subsidizes Amtrak's perennial financial losses; Amtrak is required to submit annual reports to the President and Congress; and Amtrak is established and organized under federal law for the very purpose of pursuing federal government objectives under the direction and control of federal government appointees. Lebron, 130 L. Ed. 2d 902, 115 S. Ct. at 967-974. The record currently before the court indicates that USIS is a private company owned by its employees, through the ESOP; none of the USIS employees will be employed in any manner or in any capacity by the government; the government will have no control over the USIS board of directors, management, or employees, except as provided for in the contract; the government will not own or have any rights or obligations to own any USIS stock; the government will have no right or ability to appoint members of the USIS board of directors; and, the government has no obligation to or intention to make payments to or otherwise financially assist USIS except as provided under the contract in payment for service performed under the contract. Based on the record and evidence before the court at this juncture, it is the court's conclusion that USIS appears to be a private corporation which was awarded a government contract, and not a corporation which is acting as a federal agency.
II. Irreparable Harm
"Irreparability of injury is a very high standard." American Coastal Line Joint Venture, Inc. v. United States Lines, Inc., 580 F. Supp. 932, 936 (D.D.C. 1983). In order to establish irreparable injury justifying preliminary relief, the plaintiffs must show that the injury is certain, great, and actual, not theoretical; injury must be imminent, creating a clear and present need for equitable relief to prevent harm. Housing Study Group v. Kemp, 736 F. Supp. 321, order clarified 739 F. Supp. 633 (D.D.C. 1990). Plaintiffs irreparable harm argument is premised on economic harm they will allegedly suffer absent injunctive relief and to their right to participate in a legally valid procurement process.
I. Economic Harm
"It is well ... settled that economic loss does not, in and of itself constitute irreparable harm." Wisconsin Gas Co. v. FERC, 244 U.S. App. D.C. 349, 758 F.2d 669, 674 (D.C. Cir. 1985). "Recoverable monetary loss may constitute irreparable harm only where the loss threatens the very existence of the movant's business." Id. Moreover, the movant must "provide proof . . . indicating that the harm is certain to occur in the near future" and that "the alleged harm will directly result from the action which the movant seeks to enjoin." Id.
The irreparable harm alleged by both plaintiffs is based on the assumption that OPM will refuse to delegate authority to agencies to contract for background investigations. However, Richard A. Ferris, OPM's current Acting Associate Director for Investigatory Services, states that he does not "intend to cancel or fail to renew any such existing delegations of authority to agencies to perform or contract for background investigations in order to support the workload of [USIS], or for any other purpose." Ferris Affidavit at P 11.
On March 18, 1996, plaintiff MVM was awarded a five year contract to conduct background investigations for the United States Customs Services. While performance of this contract has been stayed pending the resolution of a protest at the General Accounting Office, MVM estimates that this contract will account for ten percent or more of its revenues in 1996. MVM contends that it will be irreparably harmed if OPM eliminates this contract and awards it to USIS. MVM has presented no evidence which indicates that OPM will not delegate the necessary authority to the United States Customs Service to allow it to contract with MVM to perform background investigations. Further, even if MVM were to lose the contract to USIS a ten percent decrease in revenues would not threaten MVM's existence.
Plaintiff Varicon currently has a contract to conduct background investigations for the Drug Enforcement Agency. This contract is scheduled to end on September 30, 1996. Varicon's contract with the Drug Enforcement Agency accounts for approximately eighty percent of Varicon's business. Varicon avers that if this work is eliminated it will likely go out of business. Varicon, however, has presented no evidence that OPM will not renew its delegation of authority to the Drug Enforcement Agency to contract for background investigations.
As the plaintiffs have failed to provide proof which indicates that they are certain to suffer substantial economic harm in the near future as the result of the defendants' actions, they have failed to demonstrate irreparable economic harm.
2. Non-Economic Harm
"A disappointed bidder that claims illegality in a procurement alleges an injury beyond its economic loss of the contract. The disappointed bidder may also claim injury to its right to a legally valid procurement process. This right is implicitly bestowed on all bidders by the mandatory language of the federal procurement statutes ... and by the contractual invitation to bid embodied in the solicitation." National Maritime Union of America v. Commander, MSC, 263 U.S. App. D.C. 248, 824 F.2d 1228, 1237 (D.C. Cir. 1987)(citations omitted). Plaintiffs argue they have been deprived of a legally valid procurement process and have thus suffered a irreparable injury. The court rejects this argument in view of the fact that plaintiffs have failed to persuade the court that they have presented a substantial case on the merits on their claim that the procurement process was legally invalid. See e.g., O'Donnell Construction Company v. District of Columbia, 295 U.S. App. D.C. 317, 963 F.2d 420 (D.C. Cir. 1992)(finding irreparable harm present in disappointed bidder action after determining plaintiff had demonstrated a strong showing that it was likely to prevail on the merits).
III. Balance of Harms
The defendants argue that the former OPM employees whose reduction in force notices become effective on July 6, 1996, and are to begin working for USIS when it proceeds on the contract on July 7, 1996 would be significantly harmed by the granting of an injunction. The plaintiffs contend that OPM has the power to cancel or stay the reduction in force notices, thereby eliminating any harm to third parties. Based on the evidence before the court at this juncture, the court is unable to determine if staying or canceling the reduction in force notices and the continuation of the Investigations Services Division of OPM is, logistically, a viable option at this late date. Accordingly, the court does not resolve this factor in favor of the plaintiffs.
IV. Public Interest
The plaintiffs contend that granting the injunctive relief sought would be in the public interest for two reasons. First, an injunction would serve the public interest by ensuring that the government's procurement of goods and services is done in a fair and legal fashion. Second, granting the injunction will prevent OPM from paying higher prices for investigatory services to USIS than it would have to pay if it awarded the contract on a competitive basis. The defendants argue that granting the injunction will result in a significant delay in the completion of background investigations for over one hundred federal entities.
Ferris Affidavit at P 16. As the court is not persuaded that the plaintiffs will be successful on the merits of their claims, it does not find that the granting of an injunction at this time would be in the best interest of the public.
Therefore, in accordance with this courts' order of June 28, 1996, plaintiffs' motion for a preliminary injunction be and is hereby denied.
DATE: July 8, 1996
RICARDO M. URBINA
UNITED STATES DISTRICT JUDGE