Purchaser of Military Surplus Parts Allowed To Challenge Government DEMIL Classification

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The DC Circuit recently reversed a lower court decision which had found that a purchaser of government surplus military aircraft parts did not have standing to challenge the government’s demilitarization (DEMIL) classification of the parts at issue.  In reversing the lower court, the appellate court found that the contractor hired by the government to sell these parts, Government Liquidation, is merely a pass-through entity for the government’s surplus military equipment sales which are administered by the Defense Logistics Agency’s Disposition Services (formerly known as DRMS).  Government Liquidation had found that the plaintiff was the successful bidder for surplus parts, but the government then changed the classification of most of the parts so that they could not be sold to the plaintiff or any other member of the public.  The court held that the Plaintiff had shown that, if it prevailed, the government would likely sell the parts it was seeking.  Because a favorable court order would benefit the plaintiff, the court found that it had standing to challenge the government’s DEMIL classification of the parts.

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