Congress has not forced Bush and Defense Secretary Donald Rumsfeld to make tough choices on Pentagon spending priorities.
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Decision echoes August ruling in case involving challenge to Homeland Security system.
Agency and union have 30 days to file proposals for a remedy.
Payments and job offers led to contract awards, according to court documents.
Auditors conclude that Congress should give the Homeland Security Department more power to regulate chemical facilities.
Acting acquisition commissioner says he wants to avoid RIFs but can’t guarantee it.
The $2.2 billion requested in the 2006 supplemental funding bill and Bush’s 2007 budget would fall short by $5 billion to $10 billion, research center finds.
President stands firm on policies, but pledges to do a better job of consulting with governors on issues including potential National Guard cuts.