PSC Welcomes Supreme Court Action in Key Federal Contract Case

The Professional Services Council (PSC) issued the following statement following the April 20 action by the United States Supreme Court to deny a request from the Justice Department that the high court review a decision from the U.S. Court of Appeals for the Federal Circuit holding that the Department of Housing and Urban Development should have used a contract instead of a grant in making an award “for the best interest of the U.S. Government.” The Federal Circuit’s 2014 ruling upheld provisions of the 1977 Federal Grant and Cooperative Agreement Act that outlines the criteria under which a federal agency must use a contract or a grant. 



“PSC welcomes the finality of the U.S. Supreme Court’s action to uphold key principles of the Federal Grant and Cooperative Agreement Act, and to hold agencies accountable for their selection of the right choice of instrument—either a contract or a grant—in executing their work,” said Alan Chvotkin, PSC’s Executive Vice President and Counsel. “As the Federal Circuit made clear in its decision, the only test for an agency that matters in its choice of instrument is the purpose of the award, not the convenience of the agency, not the time it takes to make the award, and not the agency’s past practice,” Chvotkin said. “Whether at HUD, HHS’s National Institutes, USAID, or any other agency that uses a mix of contracts and grants, the courts have reaffirmed that there is one clear standard in the law that must be applied. Now is the time for the Office of Management and Budget to issue clear guidance to all federal agencies on the criteria to be applied in making this important choice of instrument determination. And OMB need look no further than the directly on-point guidance issued by the Agency for International Development. Finally, once that choice is made and the awards follow, agencies must be sure to implement the transaction according to the rules applicable to that instrument. Simply publishing the rules and reminding U.S. officials of them is insufficient.  Agencies need to establish greater transparency around their choice of instrument mechanisms and communicate publicly why the selection was made.” 



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About PSC: PSC is the voice of the government technology and professional services industry. PSC’s nearly 400 member companies represent small, medium, and large businesses that provide federal agencies with services of all kinds, including information technology, engineering, logistics, facilities management, operations and maintenance, consulting, international development, scientific, social, environmental services, and more. Together, the trade association’s members employ hundreds of thousands of Americans in all 50 states. Follow PSC on Twitter @PSCSpeaks and @StanSoloway.