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March 29, 2000


The opinion of the court was delivered by: June L. Green, District Judge.


This matter is before the Court on the parties' cross-motions for Summary Judgment pursuant to Fed.R.Civ.P. 56. For the reasons that follow, Defendant's motion is granted and Plaintiffs' motion is denied.


The material facts in this case are not disputed. (Joint Report at 2; Pls.' Mot. at 4; Defs. Mot. at 12.) The Plaintiffs are small business carriers who provide transportation services to Defendant U.S. Department of Defense ("DOD") under procurement contracts and their trade association, the American Moving and Storage Association. (Pls'. Facts at ¶ 12, 13.) In November 1998, the U.S. Army Military Traffic Management Command ("MTMC"), the component of DOD responsible for moving military goods, published a Notice in the Federal Register announcing it intended to make a significant procurement policy change. (Def's. Facts, ¶ 4.) The MTMC proposed to change its source for distance calculations for payments and audits in its transportation procurement programs from a previously used official mileage table to a new computer software product known as PC*Miler. (Id., 14.) The proposal followed the Fiscal Year 1996 Defense Authorization Act which eliminated the requirement that DOD keep an official mileage table, allowing the MTMC to use a commercial mileage product to calculate travel mileage distances. (Pls'. Facts, ¶ 1.)


The sole issue of law in this case is whether the RFA applies to the DOD procurement policy change. (Compl., ¶ 12; Joint Report at 2.) Plaintiffs allege that the Office of Federal Procurement Policy Act in its amended form ("OFPPA"), 41 U.S.C. § 401, et seq., required the DOD to publish a general notice of its proposed change from the official mileage table to the commercial mileage calculation product. (Pls'. Mem. at 5-10.) They argue that the policy change is a "rule" under the RFA, which imposes its flexibility analysis requirement on an agency's "proposed rule."*fn2 5 U.S.C. § 603(a). Defendant DOD, however, alleges that the policy change is not a "rule" as defined by the RFA and therefore no flexibility analysis is required. (Def's. Mem. at 23.)

A. OFPPA Publication Requirement

The RFA defines the term rule as "any rule for which the agency publishes a general notice of proposed rulemaking pursuant to section 553(b) of this title, or any other law. . . . "5 U.S.C. § 601(2) (emphasis added). Defendant DOD asserts that the OFPPA does not require it to publish a general notice of proposed rulemaking and thus the procurement policy change is not a "rule" under the RFA definition. Although DOD acknowledges that the OFPPA requires agencies to publish for public comment proposed procurement policies, regulations, procedures, and forms, it asserts that this requirement is distinguishable from one for general notice of proposed rulemaking.*fn3 41 U.S.C. § 418b; (Def's. Mem. at 23.) DOD raises several reasons why the OFPPA is distinguishable that the Court finds compelling.

First, the plain language of the publication requirement of the OFPPA does not apply to publication of rules, but rather to procurement policies, regulations, procedures, and forms. (Id. at 26.) Second, the Court finds that statutes that do impose general notice of proposed rulemaking requirements have publication, comment, and issuance requirements that are more stringent than the OFPPA and even the APA. (Def's. Mem. at 26, n. 9.) The Court believes that the OFPPA is textually distinguishable from the typical "organic" rulemaking statutes that are tailored to specific agencies as they, unlike the OFFPA, expressly require "notice of proposed rulemaking," or refer to "rulemaking" and the issuance of "rules." (Def's. Mem. at 25-26; Reply at 11-12.) For example, the Consumer Product Safety Act states that "the development of a consumer product safety rule" by the Consumer Product Safety Commission "shall be commenced by the publication in the Federal Register of an advance notice of proposed rulemaking." 15 U.S.C. § 2058. Similarly, the Federal Food, Drug, and Cosmetic Act provides that the Secretary of Health and Human Services "shall publish in the Federal Register a notice of proposed rulemaking for the establishment, amendment, or revocation of any performance standard for a device." 21 U.S.C. § 360(b)(1)(A). The Occupational Safety and Health Act of 1970, 29 U.S.C. § 655, articulates the manner in which the Secretary may "by rule" promulgate, modify, or revoke any occupational safety or health standard. The Federal Trade Commission Improvement Act of 1974, 15 U.S.C. § 57a, describes the authority of the Commission to "prescribe rules" and the procedures applicable to such rulemaking. The Department of Energy Organization Act of 1977, 42 U.S.C. § 7607(d), articulates the procedures for "rulemaking" under the Act. Third, the Court agrees with the DOD's analysis that procurement policies concerning contracts to purchase services from the private sector are functionally dissimilar to "rulemaking."*fn4 (Defs. Mem. at 28.)

For their part, Plaintiffs argue that the OFPPA's publication for comment procedure involves "rulemaking" as defined by the APA. They cite Batterton v. Marshall, 648 F.2d 694 (D.C. Cir. 1980), in which the Appeals Court explained that under the APA

[r]ulemaking must be accompanied by (1) advance publication in the Federal Register of the proposed rule or its substance; (2) opportunity for public participation through submission of written comments, with or without oral presentation; and (3) publication of the final rule, incorporating a concise statement of its basis and purpose, thirty days before its effective date.

Batterton, 648 F.2d at 700. Although the Plaintiffs analogize the procedures in OFPPA to APA rulemaking, it appears to the Court that the similarities fall short. For one, the OFPPA publication for comment requirement*fn5 does not reach the standard of APA "rulemaking." 41 U.S.C. § 418b(b), (c). The OFPPA does not require statements of basis and purpose to justify a final rule nor does it involve such an expansive level of public participation as rulemaking under APA, which affords the right "to petition for the issuance, amendment, or repeal of a rule." 5 U.S.C. § 553(c), (d).

Indeed, statutory delegation of authority to engage in general notice and comment rulemaking is rare. In Bowen v. Georgetown, 488 U.S. 204, 109 S.Ct. 468, 102 L.Ed.2d 493, (1988), the Supreme Court established "that an administrative agency's power to promulgate legislative regulations is limited to the authority delegated by Congress." Id. at 208, 109 S.Ct. 468; (Defs. Mem. at 28.) Insofar as the prerequisite of statutory delegation of authority makes general notice and comment rulemaking rare, the existence of mere publication ...

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