Report of the Commission on Government ... - Bayhdolecentral

Legal and Administrative Remedies
a contractor subsequent to a contracting <strong>of</strong>ficer
decision on a Government contract."
Characteristics and Problems
The boards derive <strong>the</strong>ir jurisdiction from
contract clauses. Under <strong>the</strong> present disputesresolving
system, <strong>the</strong> boards have jurisdiction
over all claims arising under <strong>the</strong> contract; that
is, claims covered by a contract clause covering
<strong>the</strong> particular act or failure to act." Acts or
failures to act not covered by such a clause
generate claims for breach <strong>of</strong> contract that
can only be resolved in <strong>the</strong> courts."
Although many disputes involving large
sums <strong>of</strong> money are adjudicated by <strong>the</strong> agency
boards <strong>of</strong> contract appeals, an analysis <strong>of</strong> some
2,800 disputes made by our Study Group 4
(Legal Remedies) showed that 63 percent <strong>of</strong>
disputes appealed to <strong>the</strong> boards involved
$25,000 or less." Thus, most board appeals involve
relatively small amounts <strong>of</strong> money.
Actual claim figures for certain boards were
as follows:
TABLE 2. AMOUNT INVOLVED IN BOARD
APPEALS
$25,000 $10,000 $1,000
Board or under or under or under
Armed Services 61% 48% 16%
AEC 73% 56% 13%
Commerce 38% 30% 15%
Corps <strong>of</strong> Engineers 49% 34% 11%
GSA 81% 65% 23%
Interior 61% 48% 17%
NASA 56% 37% 6%
Transportation 54% 36% 0
VA 96% 92% 83%
Overall 63% 51% 22%
Source: Study Group 4, Final <strong>Report</strong>, Feb. 1972, vol. H, pp. A-57,
A-58.
Although <strong>the</strong> boards can and do decide complex
issues <strong>of</strong> law when required to do so, <strong>the</strong>
same analysis showed that disputes brought
before <strong>the</strong> boards were essentially factual.
"" There are, however, some less formal boards designed to review
contracting <strong>of</strong>flcei- decisions in some agencies.
1$ See Bachtel', Resolution <strong>of</strong> Disputes Under Government Contracts,
2 Pub. Contract L.J. 363, 365 (1969).
14 United States v, Utah Conatr. & Mining Co.. 384 U.S. 394 (1966)
(hereinafter Utah).
1.'1 See Appendix A, n. 74.
Specifications were involved in 30 percent <strong>of</strong>
<strong>the</strong> disputes; contract changes in 26 percent;
while default terminations accounted for 16
percent <strong>of</strong> <strong>the</strong> appeals." All <strong>of</strong> <strong>the</strong>se are primarily
factual disputes.
In 36 percent <strong>of</strong> <strong>the</strong> board appeals that were
analyzed, no hearings were held, while in 29
percent hearings were held. Hearing data on
<strong>the</strong> remainder <strong>of</strong> <strong>the</strong> appeals analyzed were
unavailable. Approximately 40 percent <strong>of</strong> appeals
analyzed resulted in decisions on <strong>the</strong>
merits, while 38 percent were settled prior to
board decision. The contractor enj oyed some
success in 57 percent <strong>of</strong> appeals resulting in
settlements or decisions on <strong>the</strong> merits!'
THE JURISDICTIONAL SPLIT BETWEEN
ADMINISTRATIVE FORUMS AND COURTS
There are at present two general categories
<strong>of</strong> disputes. The first, and by far <strong>the</strong> most
common, is a dispute for which <strong>the</strong>re exists a
contract clause granting <strong>the</strong> procuring agency
jurisdiction over <strong>the</strong> dispute. This means <strong>the</strong>
contracting <strong>of</strong>ficer and, if necessary, <strong>the</strong> boards
adjudicate <strong>the</strong> dispute. There may <strong>the</strong>n be limited
judicial review <strong>of</strong> <strong>the</strong> board decision if
<strong>the</strong> contractor seeks such review. These disputes
are said to arise "under <strong>the</strong> contract." ia
The second category, which is relatively rare
under <strong>the</strong> present system, involves disputes for
which no contract clause grants jurisdiction to
<strong>the</strong> procuring agency. Contracting <strong>of</strong>ficers generally
issue decisions on <strong>the</strong>se disputes, but
since agency boards derive <strong>the</strong>ir jurisdiction
from contract clauses, <strong>the</strong>y refuse to hear such
disputes. The contractor must instead file a
suit directly in <strong>the</strong> Court <strong>of</strong> Claims or in a
U.S. district court after an adverse contracting
<strong>of</strong>ficer decision. These disputes are said to
be in "breach <strong>of</strong> contract." 19
Several problems result from this distinction.
First, <strong>the</strong> Court <strong>of</strong> Claims and <strong>the</strong> Comptroller
General differ with regard to <strong>the</strong>
authority <strong>of</strong> procuring agencies to settle and
pay claims for breach <strong>of</strong> contract. The Court
apparently has endorsed <strong>the</strong> conclusion that <strong>the</strong>
16 See Appendix A, PP. 72-73. O<strong>the</strong>r problem areas included
changed conditions, liquidated damages, and time extensions.
17 Ibid .. p- 75.
1>l Sachter, sUllra note 13.
in Utah, sUllra note 14.
15