## Facts

- Timken Company operated a bearing plant and distribution center in Bucyrus, Ohio and held federal contracts subject to Executive Order 11246’s affirmative-action requirements.
- In September 1973, Defense Supply Agency (DSA) officials reviewed Timken’s proposed Affirmative Action Plan (AAP) for the Bucyrus facility and rejected it, despite acceptance of a materially similar prior-year plan.
- The dispute centered on Timken’s defined “recruitment” (hiring) area for analyzing minority utilization and setting goals and timetables.
- Timken’s defined hiring range did not include Mansfield, Ohio (about 25 miles away in adjacent Richland County), a larger city with a higher minority population.
- DSA asserted Mansfield was within “reasonable recruitment range” and faulted Timken for excluding Mansfield minorities, making Timken’s utilization analysis “unacceptable” and goals/timetables “unrealistic.”
- After Timken submitted revisions, DSA issued a show-cause letter (Dec. 27, 1973) and later notified Timken of proposed contract termination and debarment (June 10, 1974).
- An administrative law judge upheld DSA’s position; the agency issued a final Decision and Order on March 22, 1976 debarring Timken from eligibility for federal contracts and certain related contracting opportunities.
- Timken sued for review under the Administrative Procedure Act (APA), and the district court temporarily stayed debarment while consolidating proceedings for final resolution.
- Agency evidence for including Mansfield relied largely on distance/commute time (35–45 minutes), generalized commuting indicators, and limited data about employees living outside the stated recruiting area.
- Timken countered with localized evidence, including a survey of major Bucyrus employers showing very few Mansfield residents employed in Bucyrus, suggesting Mansfield was not a practical labor source for Bucyrus employers.

## Issues

1. Whether the agency’s determination that Mansfield fell within Timken’s “reasonable recruitment area,” and that the AAP was therefore deficient under Executive Order 11246, was supported by substantial evidence on the record as a whole under the APA.
2. Whether the resulting debarment sanction could stand if the underlying recruitment-area determination lacked substantial evidentiary support.

## Decision

- The court set aside the agency’s March 22, 1976 debarment order.
- The court held that the agency’s insistence on including Mansfield in Timken’s recruitment area was not supported by substantial evidence when the whole record, including contrary localized evidence, was considered.
- The court granted declaratory and injunctive relief preventing enforcement of the debarment and restoring Timken’s eligibility for covered contracting.

## Legal Principles

- Under the APA, reviewing courts assess whether agency findings are supported by substantial evidence on the record as a whole, considering evidence that supports and detracts from the agency’s conclusions.
- Substantial evidence requires more than speculative inference; it must be relevant evidence that a reasonable factfinder could accept as adequate in light of the entire record.
- In enforcing Executive Order 11246, an agency’s labor-market or recruitment-area definition must be grounded in evidentiary support concerning actual labor-market behavior, not solely geographic proximity and generalized commuting assumptions.
- Debarment is a severe procurement sanction and requires a solid factual predicate; when the key noncompliance finding lacks substantial evidence, the sanction must be vacated.

## Conclusion

The court invalidated Timken’s debarment because the administrative record did not substantially support the agency’s determination that Mansfield was within Timken’s reasonable recruitment area, undermining the finding of AAP noncompliance and eliminating the factual basis for the debarment sanction.


Timken Co. v. Vaughan, 413 F. Supp. 1183 (N.D. Ohio 1976)