Elaine Hillard
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For
additional information contact: Elaine Hillard |
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Informational Memorandum for the Secretary
ISSUE: The purpose of this memorandum is to provide information on the Board
of Contract Appeals' (BCA) FY 2003 functions and activities. DISCUSSION: I. BCA's Functions During FY 2003, the Department of Agriculture (USDA) issued over 23,000
contract actions obligating more than $4 billion for the procurement
of commodities, supplies, services, and construction to support agency
operations. In addition, the Forest Service timber sale program resulted
in contracts it estimates were worth approximately $157 million through
September 30, 2003. BCA was established under the Contract Disputes Act (CDA), 41 U.S.C.
§§ 601-613, and adjudicates claims arising under these contracts. It
is empowered to grant the same relief in contract matters as the U.
S. Court of Federal Claims. BCA decisions are not reviewable within
the USDA, but contractors or USDA may appeal to the U. S. Court of Appeals
for the Federal Circuit. Additionally, under 7 CFR 24.4(b) and 400.169, the BCA has jurisdiction
over appeals from final administrative determinations issued by the
Risk Management Agency on behalf of the Federal Crop Insurance Corporation
(FCIC) arising under Standard Reinsurance Agreements (SRA's) involving
the Federal Crop Insurance Act, 7 U.S.C. § 1501 et.
seq. Under 7 CFR 24.4(c),
BCA has jurisdiction over certain suspensions and debarments. Under
the Equal Access to Justice Act, 5 U.S.C. § 504, it is authorized to
award attorney fees and costs to prevailing parties when the Government's
position in litigation was not substantially justified. After an appeal to the BCA
is taken, the agencies are represented by attorneys from the Office
of the General Counsel, and contractors are generally represented by
private counsel although a number of contractors self-represent, particularly
those with small dollar value claims. Many of the appeals require a
board member presiding over a formal evidentiary hearing, where witnesses
are subject to examination and cross-examination. BCA proceedings are
generally conducted in accordance with the Federal Rules of Civil Procedure
and the Federal Rules of Evidence. The BCA presently operates
with three judges. Consequently, each judge not only handles all cases
on their respective dockets, but also participates on the panel for
all other cases before the board. Panel involvement will vary depending
on the appeal; however, as evidenced by the number of concurring opinions
and dissents at this board, the panel members take an active role in
both the review and decision of appeals. Accordingly, panel participation
constitutes a significant commitment of time for each judge. II. Workload Data The number of appeals on the BCA's docket, and the agencies from which the appeals originated, are set forth in the table below.
All the BCA's FY 2003 decisions
and rulings are posted on the website at http://www.usda.gov/bca/.
They are also published in a number of reporting services such as Westlaw,
LEXIS, and CCH's, Board
of Contract Appeals Decisions. Among
contract issues before the board during FY 2003, were appeals involving
termination of leases; rights of the parties as to timber damaged prior
to cutting; estimating of timber quantities; jurisdiction of the BCA;
quantity of commodities; and the obligation of the Government to resell
after termination. Because BCA decisions are readily available from
the above-cited reporting services, this report does not list nor summarize
individual Board CDA or FCIC decisions. The
board received 96 appeals during FY 2003, and disposed of 90 appeals.
This compares to 55 appeals filed during FY 2002. During FY 2003, 45
of the appeals were disposed of through BCA decisions or rulings. The
remainder were settled by the parties, often after Alternative Dispute
Resolution (ADR) action by the board. The number of appeals on the BCA's
docket at the end of the year increased from 98 to 99. While FY 2004
appeals are still being submitted, the board expects a total of between
95 to 100 appeals, similar to FY 2003 numbers. The board has continued
to take an active role in facilitating many of the settlements achieved,
and regularly offers ADR, which often is conducted by telephone conferences
with the parties. When appropriate and desired by the parties, the board
conducts face-to-face ADR, generally using mediation or neutral evaluation.
While the BCA makes available options such as mini trial, it has been
the board's experience that parties prefer the informality and lower
cost of more informal types of ADR. III. Motions Practice In addition to the 45 cases
the BCA disposed of through either decision or ruling, it also spent
considerable time and resources in deciding motions submitted by both
the Government and contractors, where the end result was not a dispositive
ruling. These motions generally fell into two categories: 1) Motions
challenging Board jurisdiction, or 2) Motions for Summary Judgment.
In a Motion for Summary Judgment, the moving party is contending that
there are no disputes over material facts and that the board, as a matter
of law, should rule in that party's favor on the record. During FY 2003,
the board granted 1 and denied 11 motions involving appeals. The rulings
on these decisions required varying degrees of effort on the part of
the participating judges. IV. Legislation This year Congress made
no significant legislative changes affecting claims before the Board. V.
Appeals of Board Decisions to the U. S. Court of Appeals for the Federal
Circuit As with the decisions of
the U. S. Court of Federal Claims, which has concurrent jurisdiction
with the board over CDA appeals, decisions are subject to appeal to
the U. S. Court of Appeals for the Federal Circuit by the contractor
or the Government. Only one BCA decision, Bill
J. Copeland,
was appealed to the Court of Appeals in FY 2003. That appeal was decided
at the close of FY 2003. 1. Bill J. Copeland AGBCA Nos. 1999-182-1, 1999-184-1,
1999-186-1 and 2000-147-1, 02-2 BCA ¶ 32,049 In
the Bill J. Copeland
appeal, Copeland
asked the Court to overturn a board decision sustaining the Forest Service
termination of Copeland's
contract, and the board's denial of Copeland's
claim for additional money due to labor withholding for alleged underpayments
to workers. Such withholdings were later found unsupported by the Department
of Labor. The Court upheld the BCA's decision. VI.
Cases Before a U. S. District Court of Appeals Decided by the AGBCA
on FCIC Appeals. All of the suits involving
board decisions currently before various U. S. District Courts, involve
FCIC insurance claims. FCIC matters (disputes under the Standard Reinsurance
Agreement) are appealed to the board by reinsurers, pursuant to 7 CFR
24.4, and not under the CDA. Board decisions are final within the USDA.
Since FCIC appeals are not before the board under the CDA, suits addressing
BCA decisions on FCIC matters do not go to the Court of Appeals for
the Federal Circuit. Rather, all actions to date, regarding a decided
BCA decision, have been filed by insurers (identified as Appellants
at the BCA and Plaintiffs at the U. S. District Court) in one of the
Federal District Courts. During FY 2003, no BCA decision on an FCIC dispute was the subject of an appeal to District Courts. Three cases remained on appeal during FY 2003. Those are listed below and were previously described in last year's report. Two of the appeals, as noted below, have been settled by the parties during FY 2003. 1. Rain and
Hail Insurance Service, Inc. v. Federal Crop Insurance Corp. 2. American
Growers Insurance Company v. Federal Crop Insurance Corporation 3. Rain &
Hail Insurance Service, Inc. v. Federal Crop Insurance Corporation This matter had been sent back to the board under Order of May 1, 2002, for the Appellants to exhaust their administrative remedies. Thereafter, during FY 2003, the parties settled the matter before the board.
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