Issue:

The purpose of this memorandum is to inform the Secretary and persons on the distribution list about the Board's 1996 fiscal year functions and activities.

Discussion:

The Board's Functions

During FY 1996, the Department issued over 13,000 contract actions obligating more than $2.1 billion for the procurement of supplies, services and construction to support agency operations. In addition, the Forest Service timber sale program resulted in approximately $500 million worth of contracts during the same period. The Board was established under the Contract Disputes Act, 41 U.S.C. §§ 601-613, and adjudicates claims arising under these contracts. The Board is empowered to grant the same relief in contract matters as the U. S. Court of Federal Claims. Board decisions are not reviewable within the Department, but contractors or the Department may appeal to the U. S. Court of Appeals for the Federal Circuit. Under the Equal Access to Justice Act, 5 U.S.C. § 504, the Board is authorized to award attorneys' fees and costs to prevailing parties when the Government's position in litigation was not substantially justified.

While the Board has jurisdiction over certain debarments and Standard Reinsurance

Agreements involving the Federal Crop Insurance Corporation, the Board's primary function is to hear and decide appeals from decisions of agency contracting officers. The agencies are represented before the Board by attorneys from the Office of the General Counsel. Contractors are generally represented by private counsel, although a number of contractors, particularly on small dollar value claims, represent themselves. Many of the appeals require formal evidentiary hearings with a Board member presiding.

The number of appeals on the Board's docket, and the agencies from which the appeals originated, are set forth in the table below.

The 84 appeals now on the docket were filed by contractors from 26 states. Examples of the type of contract, the nature of the appeals disposed of in FY 1996, and the affected agencies are set forth in Attachment 1. Attachment 1 also illustrates how the Department's agencies accomplish their mission through the procurement process. Examples of the legal issues considered are set forth in Attachment 2.

Workload Data

The Board received 114 appeals during FY 1996, 14 fewer than the 128 appeals received during FY 1995. The Board disposed of 118 appeals during the same period. The number of cases on the docket decreased from 88 to 84.

Of the 118 appeals disposed of, 33 were by decision or ruling. The remaining 85 appeals were disposed of by order of dismissal resulting from a variety of reasons, primarily settlement by the parties.

The Board has continued to take an active role in facilitating many of the settlements achieved. The Board has regularly engaged in telephone conference calls or prehearing conferences in which some form of informal or formal Alternative Dispute Resolution (ADR) occurs. The informal ADR frequently takes the form of addressing the relative strengths and weaknesses of the factual and legal positions of the parties, and giving the parties the opportunity for open and frank discussion. In other instances, the more traditional forms of ADR are used, such as mediation or a mini-hearing. Other efforts focus on achieving stipulations, minimizing discovery, or ruling informally on motions or proposed motions. These efforts have directly resulted in many of the settlements reported, as well as faster case processing of the unsettled appeals.

Legislation and Litigation

Last year, the House passed HR 1670, an Act to revise and streamline the acquisition laws of the Federal Government, to reorganize the mechanism in resolving Federal procurement disputes, and for other purposes, as an amendment to the National Defense Authorization Act of 1996. Among the Act's many provisions was one to consolidate the various boards of contract appeals, including the Agriculture Board, into a new civilian agency board and a new military board. This Department opposed consolidation. In Conference, Congress removed the consolidation provisions and stripped jurisdiction over Information Technology protests from the General Services Administration Board. Jurisdiction over the protests now resides with the U.S. General Accounting Office.

The Board rewrote its Contract Disputes Act rules to provide a uniform set of rules for Contract Disputes Act appeals and non-statutory appeals, such as suspensions, debarments, and the Federal Crop Insurance Corporation appeals. The Board deleted the non-statutory rules, thereby reducing the Board's regulations from 16-3/4 to 11-1/4 pages. The Board published the rules in final form on November 7, 1995. The revised rules implement the provisions of the Federal Acquisition Streamlining Act of 1994 that increased thresholds to $50,000 and $100,000 for Expedited and Accelerated appeals, requiring disposition within 120 days and 180 days, respectively.

In Public Law 104-121, Congress raised the amount of reimbursement for attorneys' fees under the Equal Access to Justice Act from $75 to $125. The change became effective on enactment, March 29, 1996.

On October 25, 1995, President Clinton issued Executive Order 12979, Agency Procurement Protests. The Order requires Executive Agencies to prescribe administrative procedures for the resolution of protests as an alternative to protests outside the agencies. The Order requires agencies to permit affected bidders to protest a contract award at a level above the Contracting Officer. Where a protest is filed within ten days after award or five days after a debriefing, the Order prohibits award or performance of the protested contract. The Board has offered its services to the Department to resolve such protests.

As indicated above, under the Contract Disputes Act, appeals from Board decisions must be made to the U. S. Court of Appeals for the Federal Circuit. The Federal Circuit dismissed the appeal of the Board's decision in Frankstown Fish Company, an appeal involving an Agricultural Marketing Service contract terminated for default for failure to deliver. The Board had found that claims for liquidated damages and excess costs were not timely appealed to the Board. The Federal Circuit dismissed the appeal for failure to prosecute. In White Buffalo Construction, the Board sustained Appellant's appeal from the Government's assessment of administrative expenses but denied a consolidated appeal for additional compensation because Appellant had failed to prove its case. The Federal Circuit sustained the Board's decision regarding the additional-compensation appeal.

LDG Enterprises, Inc., appealed the Board's decision denying its claim for an extension of its timber sale contract. The Board ruled that Appellant had not relied on any of the Government's actions and had received all the extensions it was due. Petersen Equipment appealed the Board's ruling that it did not have jurisdiction to award damages for the Forest Service's cancellation of equipment rental agreements because the agreements are not contracts until equipment is actually ordered. Jack L. Olsen, Inc., appealed the Board's decision denying recovery for attorneys' fees and expenses under the Equal Access to Justice Act because the Government's position before the Board had been substantially justified. The three cases appealed during the fiscal year remain pending; one case remains pending from FY 95. All case names and dates appear in Attachment 3.

Management

The Board continues to offer ADR and to encourage the parties toward informal or formal use of ADR to settle appeals, or to achieve a faster, more economical dispute-resolution process.

Summary:

The Board continues to provide, to the maximum extent practicable, informal, economical, and expeditious resolution of disputes.

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Attachments

Attachment 1
Examples of Agencies Involved, Types of Contracts, and Appeals Disposed of in FY 1996

ANIMAL AND PLANT HEALTH INSPECTION SERVICE (APHIS) RBW & Associates, of Portland, Oregon, involved appeals under a contract for 571,000 pounds of brewer's yeast to be used as a Mediterranean Fruit Fly-rearing medium. The fruit flies were to be sterilized by APHIS and released so that they could not propagate. The APHIS Field Servicing Office in Minneapolis, Minnesota, awarded the contract. After experiencing problems with rearing the fruit flies and concluding that torula yeast was a better rearing medium than brewer's yeast, the Contracting Officer (CO) terminated the contract for the convenience of the Government. After the contractual 1-year period for filing termination claims, Appellant filed claims for termination expenses and for the alleged improper deductions taken for conforming deliveries. A divided Board granted the Government's Motion to Dismiss, with the majority holding that all claims should have been filed within the 1-year time limit, including claims not based on the termination. Appellant's Motion for Reconsideration is pending. H.V. Lancon Construction Company of Kensington, Maryland, involved a contract for the construction of the Germplasm Quarantine Laboratory in Beltsville, Maryland. The Appellant claimed additional compensation for formwork, removal of tree stumps, delays, and refusal of the Government to allow it to use products equal to those specified. The appeal was settled after the Board scheduled a hearing.

AGRICULTURAL MARKETING SERVICE (AMS) Frankstown Fish Company, Inc., of Pittsburgh, Pennsylvania, involved an appeal from a contract for the purchase of 40,000 pounds of frozen chicken for the school lunch program awarded by AMS. Appellant did not deliver the chicken on time, and the CO terminated the contract for default. Appellant claimed the default was excusable because the Government improperly disapproved its initial supplier and its alternate supplier could supply only chicken cut into nine rather than eight pieces as required by the contract. The Board found that Appellant's failure to deliver was not excusable and denied the appeal.

AGRICULTURAL RESEARCH SERVICE (ARS) John C. Grimberg of Rockville, Maryland, involved an appeal under a contract for modernization of the Range Two Greenhouses at the ARS complex in Beltsville, Maryland. The appeal involved claims filed with the CO on behalf of an electrical subcontractor. The Board denied the Government's Motion to Dismiss and the case remains on the docket. Rust Remedial Services, Inc., of Bensalem, Pennsylvania, involved a contract for the cleanup of hazardous-waste contaminated soil at the Beltsville, Maryland, Agricultural Research Center. The appeal was settled. Biltwell Development Company of San Francisco, California, involved a contract for asbestos abatement and upgrading utilities at the ARS facility in Albany, California. The appeals involved questions of Government-caused delays and extended overhead. The appeal was settled after the Board scheduled a hearing.

DEPARTMENTAL ADMINISTRATION Synex, Inc., of Beltsville, Maryland, involved an appeal under a contract for support services for the USDA Info Share program awarded by the Office of Operations in Departmental Administration. The contract was terminated for the convenience of the Government, and Appellant filed a termination settlement proposal. The Board granted a Government motion for a stay of the proceedings to allow an audit, and the case remains on the docket. The Pruitt Corporation of White Post, Virginia, involved a contract for the branch circuit wiring replacement in the USDA Whitten Building, Washington, D.C. Appellant claimed compensation for a modification to the contract and for the ultimate termination for convenience of the contract. The appeal was settled after the Board held a Prehearing Conference.

FARM SERVICE AGENCY Continental Grain Company of Portland, Oregon, involved an appeal under Commodity Credit Corporation contracts for the purchase of soft white wheat and hard red wheat to be shipped to Bangladesh. The dispute concerned damages incurred when the Appellant could not load the grain because longshoremen in Portland refused to cross a picket line. The Board granted a Government Motion to Dismiss one claim for indemnification, and the parties settled the remaining claim after the Board scheduled a hearing. The Means Company of Lewiston, Idaho, involved an appeal under a Uniform Grain Storage Agreement (UGSA) awarded by the Commodity Credit Corporation. The dispute concerned payment for alleged shortages of grain in Appellant's warehouse. The appeal was settled after the Board denied the Government's Motion to Dismiss.

FEDERAL CROP INSURANCE CORPORATION Rain and Hail Insurance Services, Inc., of West Des Moines, Iowa filed the first appeal under the Board's jurisdiction over standard reinsurance agreements. The issue involves whether the insurer properly applied the summerfallow practice to two policies covering wheat. Producers Lloyds Insurance Company of Amarillo, Texas, appealed a final administrative determination denying expense reimbursement under the standard reinsurance agreement. Both appeals remain on the Board's docket.

FOREST SERVICE Appeals arose from contracts for construction. Wakeham-Baker, Inc., involved construction of the Children's Forest Trail in the San Bernadino National Forest in California. Appellant failed to provide necessary information and the Board dismissed the appeal for failure to prosecute. Tree-O Construction of Corbett, Oregon, involved the construction of the Santiam Wagon Road in the Willamette National Forest in Oregon. The Appellant claimed additional compensation for differing site conditions, delays, and changes. The Board awarded Appellant a portion of its claimed amounts based on a jury verdict. Toloff Construction involved a contract for driving piles across a marsh in the Chugach National Forest, Alaska. Appellant claimed compensation for removing additional dirt, furnishing mats for the pile-driving equipment due to thawing of the marsh, and increased surveying. The Board denied the appeal, finding no differing site condition or defective specifications. RINS Development Company, Inc., of Minden, Nevada, involved a contract for the removal of the Echo Summit Ski Lift in the Eldorado National Forest in California. Appellant requested compensation for damages assessed against it when an equipment operator damaged buried utility cables. The appeal was settled. Lee's Equipment Engineering of Houston, Missouri, involved two Forest Service road-construction contracts on the Shawnee National Forest. Appellant claimed compensation for placing additional rock and slash removal. The appeal was settled after the Board scheduled a hearing. Ruidoso Paving Company, Inc., of Ruidoso, New Mexico, Anderson Reclamation and Construction, Inc., of Mesa, Arizona, Morrissette Construction, Inc., of Mammoth Lakes, California, and Montane Contracting Inc., of Littleton, Colorado, involved contracts for campground construction in the Lincoln National Forest in New Mexico, the Cibola National Forest in New Mexico, the Toiyabe National Forest in Idaho, and the Rocky Mountain Region in Colorado. Appellants claimed damages due, among other things, to defective specifications. After extensive Board involvement, the appeals were settled.

Appeals arose from Forest Service contracts for forest fire suppression. In Petersen Equipment of Old Town Station, California, the Board denied reconsideration of its decision that it had no jurisdiction to award damages for the cancellation of agreements to provide fire fighting equipment because the agreements, standing alone, were not contracts. Chrisella McDermott of Boise, Idaho, involved a contract for a pickup truck and driver to haul equipment and tools to fight wildfires. Appellant filed a claim for damage to her pickup truck when she fell asleep at the wheel after ferrying firefighters to a different camp. The appeal was settled. Western Catering involved a contract for providing mobile food service to fire fighters awarded by the National Interagency Fire Center, Boise, Idaho. Appellant filed a number of claims including premature cancellation of a food service order, failure of the Forest Service to pay for services rendered, and damages for wrongful cancellation of the contract. The appeals were settled. Cliff Nystrom Trucking of Wenatchee, Washington, involved a contract for equipment to be used in fighting the Tyree Fire in the Wenatchee National Forest. The appeal was settled.

Appeals arose from Forest Service contracts involving environmental considerations. Frank Dufour of Twain Harte, California involved an old growth inventory on the Sequoia National Forest in California. The dispute involved whether Appellant was entitled to extra payment for contract termination after sampling a total of 254 stands of timber rather than the 320 covered by the contract. The Board found that Appellant had been paid for all the points sampled and denied the appeal. The appeal of Phyllis Wolf of Hemphill, Texas, arose under a contract for a heritage resources inventory on the Black Hills National Forest in South Dakota. Appellant claimed that she had encountered a differing site condition because she discovered historic and prehistoric sites of significantly greater number and density than she had been led to expect based on the contract maps and specifications. The Board found no differing site conditions and denied the appeal. Evergreen Helicopters, Inc., of McMinnville, Oregon, involved a contract for aerial herbicide application in the National Forests in Oregon and Washington. Appellant allegedly failed to provide accurate cost data regarding its subcontractors, thereby causing the Government to have paid an inflated contract price. After extensive Board involvement, the appeal was settled. Davidson Industries, Inc., of Mapleton, Oregon, involved a Timber Sale contract on the Siuslaw National Forest in Oregon that was temporarily suspended for environmental reasons concerning the northern spotted owl and marbled murrelet. After the suspension the Government substituted other timber for a portion of the timber withheld for environmental reasons. Appellant claimed damages for the reduced quantity of timber. The Board held that when a contract is closed after withdrawal of a portion of the timber for environmental reasons, the Government is obligated to pay the contractor for damages occasioned by the withdrawal. The appeal was settled after the Board's remand to determine the amount of damages. The Board's decision in Davidson served as a precedent for the settlement of five Mayr Brothers Company appeals involving over $10 Million in the same type of claim presented in Davidson. Jim Dobbas, Inc., of Newcastle, California, involved a Forest Service contract to place boulders and logs in the Truckee River in California to create a structural trout habitat. The appeal was settled. Raleigh Consultants of Council, Idaho, involved a Forest Service contract to conduct a basinwide fish habitat survey on the upper Weiser River drainage system in the Payette National Forest. Appellant appealed the default termination, Government assessment of excess costs, and the denial of a claim for increased compensation. The appeal was settled. Steven P. Trask dba Bio-Surveys involved a contract for stream surveys in the Siuslaw National Forest in Oregon. The appeal was settled.

Appeals arose from Forest Service silvicultural work. Dunlap Enterprises of Soulsbyville, California, appealed the CO's threatened assessment of reprocurement costs on a terminated tree-thinning contract on the Plumas National Forest in California. The Board dismissed the appeal for lack of jurisdiction. SWEAT of Pensacola, Florida claimed damages on a tree-planting contract on the Savannah River Forest Station in South Carolina because it was required, among other things, to plant the trees in standing water. The Board found the specifications defective, but granted only a portion of Appellant's claims because the damage calculations were not well supported. Farwest Reforestation, Inc., of Monmouth, Oregon involved a tree-planting contract in the Wallowa-Whitman National Forest in Oregon, and H.K. Crosby of Millboro, Virginia, involved a contract for tree release in the Monongahela National Forest, West Virginia. The Government terminated the contracts and assessed damages in both cases. After discussions to schedule hearings the appeals were settled. Peter A. Merkes and Janet D. Merkes dba P & J Equipment of Elliston, Montana, involved a contract for site preparation and brush disposal on the Beaverhead National Forest, Montana. Appellant claimed it was not paid for all work done. The appeal was settled after the Board scheduled a hearing.

Appeals arose from a variety of other types of Forest Service contracts. Kent Kitterman, Inc., of San Jose, California, involved a contract to install utility truck and tanker bodies on Government-owned cabs and chassis, and return them to various National Forests in California. Appellant disputed the type of paint it was required to apply, the requirement to redo some trucks that did not meet size specifications, and a reduction in the number of trucks covered by the contract. The appeal was settled after the Board scheduled a hearing. Stephen Strickland of Milton-Freewater, Oregon, involved a contract for equipment rental with operator on the Mt. Hood National Forest. Appellant claimed damages due to a constructive suspension of work. The appeal was settled after the Government filed a Motion for Summary Judgment and the Board scheduled a hearing. Biospherics of Beltsville, Maryland, involved a contract to provide a complete telephone reservation service for campgrounds and campsites at specific facilities in the National Forest system. The appeal was settled. EarthInfo, Inc., of Boulder, Colorado, involved a contract for a CD-ROM subscription for geologic information in the Tongass National Forest. Appellant claimed entitlement to additional subscription payments because Forest Service staff failed to return one CD on time. The appeal was settled after the Board scheduled a hearing. Lawrence A. Koepke of Sacramento, California, involved the lease for the supervisor's office in the Mendocino National Forest. Appellant claimed numerous items of damage to the premises after the Forest Service vacated the building. The appeal was settled after the Board scheduled a hearing. Don and Diane McNulty of Troy, Montana, arose when a contractor dumped a load of Forest Service-owned gravel in the parking lot of the McNulty's Hellroaring Saloon. The Forest Service instructed Appellant not to move the gravel, and Appellant filed a claim for storage charges for the gravel on the basis of an implied-in-fact contract. The appeal was settled. Wales Water Works of Ketchikan, Alaska, involved a contract for logging yellow cedar logs. The Government filed a monetary claim for the value of logs in Appellant's possession that it refused to return to the Forest Service. The appeal was settled.

Appeals arose from Forest Service Timber Sale contracts. Doug Jones Sawmill of Grand Junction, Colorado, involved a Timber Sale in the Grand Mesa, Uncompahgre, and Gunnison National Forests. Appellant claimed damages for the inaccuracy of the Government's estimate of the volume of timber contained in the sale. The Board denied the appeal because the contract contained a clear disclaimer of liability for the accuracy of the estimate and the Appellant knew that the estimating method used frequently resulted in an overestimate. Fletcher Forest Products, Inc., of Redding, California, involved an Insect Salvage Timber Sale in the Lassen National Forest in California. Appellant alleged that the Forest Service failed to sign the contract in a timely fashion and refused to mark timber for removal, resulting in increased costs due to delay and inefficient logging. The Board found that there were genuine issues of fact and denied the Government's Motion for Summary Judgment. Timberline Logging of Cold Springs, California, involved the Stage Timber Sale in the Stanislaus National Forest in California. The Forest Service terminated the contract for breach and retained Appellant's performance bond. The Board found the contract ambiguous, both parties partially at fault, and ordered a partial refund of Appellant's deposit. Bordges Timber, Inc., of Shingle Spring, California, involved five Salvage Timber Sales in the Eldorado National Forest in California. The appeals involved the Forest Service's failure to issue contract extensions due to environmental concerns; the Appellant claimed breach of contract. The appeal was settled after Appellant filed a Motion for Summary Judgment. Dinuba Timber Industries, Inc., dba Sequoia Forest Industries, Inc., of Dinuba, California, involved the Balsalm Helicopter Salvage Timber Sale in the Sierra National Forest. Because of numerous alleged errors in the contract, Appellant failed to sign the contract. After negotiating for over a year, the CO considered the contract repudiated and retained Appellant's bid guarantee as liquidated damages. The appeal was settled.

NATURAL RESOURCES CONSERVATION SERVICE (NRCS) Santee Modular Homes, Inc., of Santee, South Carolina, involved a contract for the removal of debris from the Flint River in Georgia awarded by the NRCS. The Government moved for Summary Judgment against all claims not specifically reserved by Appellant in a release for final payment. The Board denied the Motion, concluding that a Government deduction from the final payment abrogated the release. Vinson Grading & Hauling of Newnan, Georgia, involved a contract for removal of debris and sediment from the Yellow Water Creek in Butts County, Georgia. The CO had terminated the contract for default and assessed Appellant excess costs of reprocurement. The successor CO converted the termination to one for the convenience of the Government and the Board dismissed the appeals as moot. RJS Construction, Inc., of Peoria, Illinois, involved a contract for seeding and fencing two Rural Abandoned Mine Program sites in Cherokee County, Kansas. Appellant claimed compensation for changes and remission of liquidated damages. The appeal was settled after the Board scheduled a hearing.

RURAL DEVELOPMENT Max Castle of Ontario, Oregon, filed two appeals with the Board concerning the alleged improper termination of a lease. The Board dismissed both appeals because the claims had not been presented to the CO. Donald C. Nelson of Maumelle, Arkansas, involved contracts for chattel inspection and appraisal. The appeal was settled.

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Attachment 2
Examples of Legal Issues Considered in FY 1996

Under the Equal Access to Justice Act (EAJA), 5 U.S.C. § 504, the Board is empowered to grant attorneys' fees and expenses to certain prevailing parties, other than the Government, if the Government's position was not substantially justified. Jack L. Olsen, Inc., filed an application for attorneys' fees and expenses on the basis that Appellant had been the prevailing party in the appeal and that the Government's position had not been substantially justified. The Board had sustained the appeal, but limited the recovery of damages. After a successful appeal of part of the Board's decision to the Court of Appeals for the Federal Circuit, the parties settled the amount of additional damages on remand. The Government claimed that the settlement agreement barred Olsen from seeking fees and expenses, but the Board found this not to be the case. The Board denied the request for fees and expenses, however, because it found that the Government had been substantially justified because it had a reasonable basis for the positions it took on entitlement and quantum in the proceedings before the Board. Olsen's appeal of the Board's EAJA decision to the Court of Appeals for the Federal Circuit is pending. White Buffalo Construction, Inc., filed an application for attorneys' fees and expenses. The Board had denied the appeal, but White Buffalo appealed the Board's decision to the Court of Appeals for the Federal Circuit. The case was settled by the Department of Justice on appeal. For this reason White Buffalo maintained that it was a prevailing party before the Board and entitled to fees and expenses. In denying White Buffalo's application, the Board found that the settlement of the case on appeal did not result in White Buffalo being a prevailing party before the Board. Moreover, the Board found that the Government's position had been substantially justified. In another case, White Buffalo requested reconsideration of an EAJA decision issued last year where the Board had reduced Appellant's recovery for photocopying expenses because Appellant had not documented the expenses. Because Appellant provided no information that could not have been presented in its original application, the Board denied the Motion for Reconsideration.

Under the Contract Disputes Act, 41 U.S.C. § 605(c)(1), a contractor is required to certify all claims in excess of $50,000 prior to submission to the CO, and absence of such certification has been held to deprive the Board of jurisdiction over an appeal. In Dunlap Enterprises, the Board reviewed several claims by the Appellant that totaled $73,754.28. The Government moved to dismiss the claims for lack of certification, and the Board was required to evaluate whether the several claims were one "unitary" claim requiring certification or were instead distinct claims for less than $50,000 not requiring certification. The Board concluded that the claims involved separate and distinct facts and circumstances and denied the Motion to Dismiss. In this regard, the Federal Courts Administration Act of 1992 allows a defect in certification, i.e., incorrect language or lack of authority by the certifying official, to be corrected prior to final judgment. Further, the Federal Acquisition Streamlining Act of 1994 raised the certification threshold from $50,000 to $100,000. These changes, while helpful, would not have cured the lack of certification in Dunlap, which arose prior to the increase in the amount necessary for certification and involved a total lack of certification.

Under the Contract Disputes Act, 41 U.S.C. § 606, a contractor must appeal an adverse CO's decision within 90 days of its receipt to a board of contract appeals, or the appeal will be considered untimely. It has been held that an untimely appeal deprives the Board of jurisdiction. In John C. Grimberg Company, Inc., the Appellant filed an appeal of a decision signed by the Administrative CO more than 90 days after receiving the decision. Appellant claimed that the ACO did not have the authority to issue a final decision under a delegation of authority issued as a modification to the contract, and thus that it was timely appealing the CO's deemed denial of its claim. The Board evaluated the language of the contract and the modifications thereto and determined that the contract reserved to the CO the authority to issue final decisions. The Board denied the Government's Motion to Dismiss. Modoc Foresters, Inc., involved appeal of an assessment for resource damages under a tree-thinning contract in the Modoc National Forest. Early in the proceedings, Appellant informed the Board that it wished to "go back" to a previous dispute, a CO's denial of an earlier claim for a differing site condition, which Appellant had not appealed within 90 days. After the Board informed Appellant that consideration of the prior dispute was precluded, Appellant failed to respond to further Board orders. The Board dismissed the appeal for failure to prosecute; however, the Board granted a later Joint Motion for Relief from Judgment to allow the parties to implement a settlement agreement. Staff, Inc., involved three claims covered by two CO's final decisions. Appellant filed an appeal within 90 days of receipt of the second CO's decision, but more than 90 days after receipt of the first CO's decision covering two claims. Appellant claimed that the second decision covered all its claims because the CO had no right to separate the claims into separate final decisions. The Board found no support for this proposition and dismissed the appeal of the first two claims. Appellant later filed an untimely request for reconsideration, which the Board denied.

The Board does not have Contract Disputes Act jurisdiction over protests of contract awards. In Jay Cablk the Appellant was protesting the fact that the Forest Service awarded a trail-building contract to another bidder. The Board thus dismissed the matter for lack of jurisdiction. In Ray Morales, Appellant appealed the decision of a Forest Service CO denying its agency-level protest of award to another bidder. Notwithstanding the correct protest information provided by the CO's decision, Appellant appealed to the Board. The Board dismissed the matter for lack of jurisdiction.

In Doug Jones Sawmill, Appellant claimed damages under a Timber Sale contract for the inaccuracy of the Government's estimate of the volume of timber contained in the sale. Appellant claimed that the method used to estimate the volume, 2 tree trunk diameter measurements, was not as accurate as 3 tree trunk diameter measurements, and resulted in Appellant's monetary damages by overstating the estimated timber volume. The Board found that the Forest Service has broad discretion to determine the method of estimating it will use based on cost/benefit considerations. The Board denied the appeal because the contract contained a clear disclaimer of liability for the accuracy of the estimate and because the Appellant knew that the estimating method used frequently resulted in an overestimate and should have considered this in formulating its bid.

In Phyllis Wolf, the contract covered a heritage resources inventory on the Black Hills National Forest. Appellant claimed that she had encountered a differing site condition because she discovered historic and prehistoric sites of significantly greater number and density than she had been led to expect based on the contract maps and specifications. The Board found that the facts of the case did not meet the legal requirements for a differing site condition, and found that Appellant's "educated guess" that she could complete the contract for the amount bid was a business judgment. The Board denied the appeal.

Frankstown Fish Company, Inc., involved an appeal from a contract for the purchase of 40,000 pounds of frozen chicken for the school lunch program awarded by AMS under the Small Business Administration 8(a) program. The Appellant did not deliver the chicken on time, and the CO terminated the contract for default. Appellant claimed the default was excusable because the Government improperly disapproved its initial supplier and its alternate supplier could supply only chicken cut into nine rather than eight pieces as required by the contract. The Board found that it was Appellant's responsibility to ensure a supply of chicken to meet contract requirements, and that it did not prove that its failure to deliver was beyond its control and without its fault or negligence. The Board denied the appeal.

Synex, Inc., involved an appeal under a contract for support services for the USDA Info Share program. The Contract was terminated for the convenience of the Government, and Appellant filed a termination settlement proposal. When the CO did not act on that proposal the Appellant converted the proposal to a claim and filed an appeal of the deemed denial of its claim. The Government moved for a stay of the proceedings to allow an audit, which the Appellant opposed. After weighing the competing interests of the Government for time to prepare the audit and Appellant for speedy resolution of its appeal, the Board granted the stay.

Barnes, Inc., involved a contract to widen 6 miles of the St. Joe River Road to a double lane gravel facility. The work involved survey and layout, staking, drilling and blasting, excavation and hauling, and construction. Appellant claimed compensation for removing and moving additional material in several locations, and the Government claimed that portions of Appellant's claims were barred by a release. After the presiding judge participated in a site visit and an Alternative Disputes Resolution process at the request of the parties, the appeal was settled

Evergreen Helicopters, Inc., involved a Forest Service contract for aerial application of insecticide for the Asian gypsy moth in Oregon and Washington. Appellant challenged a Government claim for $570,865, based on an audit by the Defense Contract Audit Agency that determined that cost or pricing data submitted by Appellant and its subcontractors were not accurate, complete, or correct as of the date of agreement on price. The Government alleged Appellant's proposal included inflated subcontractor costs when compared to cost information in the Government's possession. The subcontractors furnished the information directly to the CO, being reluctant to provide the data through Appellant because they were Appellant's competitors. The question presented was whether Appellant's contract required submittal of these data, so that Appellant was liable when it did not provide the data. At the Government's request, the Board issued a protective order covering pricing data submitted by Appellant's subcontractors but not in Appellant's possession. Appellant's original counsel requested leave to withdraw. After providing the Government the opportunity to object, the Board granted the Motion. Appellant's subsequent counsel was recognized subject to the protective order. After extensive discovery, including the issuance of subpoenas, and the Board's denial of Appellant's Motion for Summary Judgment, the appeal was settled.

RBW & Associates involved appeals under a contract for 571,000 pounds of brewer's yeast to be used as a Mediterranean Fruit Fly-rearing medium. The fruit flies were to be sterilized by APHIS and released so that they could not propagate. The APHIS Field Servicing Office in Minneapolis, Minnesota, awarded the contract. After experiencing problems with rearing the fruit flies and concluding that torula yeast was a better rearing medium than brewer's yeast, the CO terminated the contract for the convenience of the Government. After the contractual one-year period for filing termination claims, Appellant filed claims for termination expenses and for the alleged improper deduction taken for conforming deliveries. A divided Board granted the Government's Motion to Dismiss, holding that all claims should have been filed within the one-year time limit, including claims not based on the termination. Appellant's Motion for Reconsideration is pending. The issue pertains to whether the contract, regulations, statutes, or case precedent require claims unrelated to the termination to be merged with the termination-settlement proposal, which must be filed within one year of the termination, or whether the unrelated claims can exist independently and be filed in accordance with the time limits for claims where no termination has occurred.

Santee Modular Homes, Inc., of Santee, South Carolina, involved a contract for the removal of debris from the Flint River in Georgia awarded by the NRCS. The Government moved for Summary Judgment against all claims not specifically reserved by Appellant in a release for final payment. The Board denied the Motion, concluding that a Government deduction from the final payment abrogated the release. The Board's decision concluded that the Government could have avoided the abrogation of the release by simply setting forth the final payment amount it actually intended to pay and getting Appellant's signature, rather than setting forth one amount in the signed release and paying a smaller amount. The Board also held that the relatively small amount of withholding compared to the total amount paid was not a factor the Board would consider so long as the Government actually paid less than stated in the release.

Kennon Heard of Alturas, California, involved a Forest Service lease. The parties waived a hearing, and the Government supplemented the record and filed a timely brief. Appellant neither supplemented the record nor filed a brief. When Appellant failed the respond to a Board's Show Cause Order, the Board dismissed the appeal rather than issuing a decision on the merits.

Fletcher Forest Products, Inc., involved a salvage Timber Sale in the Lassen National Forest. Appellant alleged that the Forest Service failed to sign the contract in a timely fashion and further refused to mark dead or dying timber for removal resulting in increased costs due to delay and inefficient logging. The Government moved for Summary Judgment. The Board found that there were genuine issues of fact as to whether Appellant could begin logging before the contract was signed and whether the Forest Service had marked sufficient timber to allow progress on the contract. Genuine issues of material fact preclude summary judgment; the Board therefore denied the Government's motion.

Davidson Industries, Inc., involved a Timber Sale contract on the Siuslaw National Forest in Oregon that was temporarily suspended for environmental reasons concerning the northern spotted owl and marbled murrelet. After the suspension the Government substituted other timber for a portion of the timber withheld for environmental reasons. Appellant claimed damages for the reduced quantity of timber. The Government contended that its substitution of timber was a "modification" under the terms of the contract's Protection of Habitat of Endangered, Threatened, and Sensitive Species clause, and that such clause limited the Forest Service's liability to a reduction of stumpage rates, but not below base rates. The Board looked to case precedent, the clause, and regulations, and concluded that the Forest Service could not escape liability for either the substitution or net deletion of timber caused by environmental factors, holding that when a contract is closed after withdrawal of a portion of the timber for environmental reasons, the Government is obligated to pay the contractor for damages occasioned by the withdrawal. The appeal was settled after the Board's remand to determine the amount of damages. The Board's decision in Davidson served as a precedent for the settlement of five Mayr Brothers Company appeals involving over $10 million in claims. Under the usual practice, when the parties settle an appeal, the CO issues a contract modification agreeing to pay the contractor the agreed amount, and the parties move to dismiss the appeal. Payment of the settlement amount is generally made from the same appropriation used to fund the contract, if available. This may result in difficulties in payment. In Davidson Industries, Inc., and Mayr Brothers Company, at the request of the parties the Board entered judgment in accordance with the stipulated settlements, rather than simply dismissing the appeals as settled. This allowed the damages to be paid from the Federal Government's Judgment Fund.

In Curt A. Madson, the Appellant appealed the default termination of a Forest Service contract. After Appellant filed a Complaint, the CO withdrew the termination decision, instead finding that the contract had expired by its terms. Appellant was hesitant to have the appeal dismissed because there was a dispute regarding a withheld payment. The Board concluded, however, that the only issue before the Board had been the default, and that issue was now moot. The Board ordered the Appellant to show cause why the appeal should not be dismissed. When the Appellant failed to respond to the Board's Order, the appeal was dismissed. If the Government's withholding was improper in light of the converted termination, Appellant could file a claim and recover the disputed amount plus interest.

Timberline Logging involved a Timber Sale in the Stanislaus National Forest in California. The Forest Service terminated the contract for breach for Appellant's improper disposal of slash and retained Appellant's performance bond; the Appellant challenged the termination and demanded return of its bond. The Board found the contract ambiguous on the issue of slash disposal, both parties partially at fault for the misunderstanding, and ordered a partial refund of Appellant's deposit.

Toloff Construction involved a contract for driving piles across a marsh in the Chugach National Forest, Alaska. Appellant claimed additional compensation for removing additional dirt, furnishing mats for the pile-driving equipment due to thawing of the marsh, and increased surveying. Regarding the thawing, the Board found that Appellant should not have assumed that conditions during the February bidding would prevail during April performance, and that Appellant did not prove that such April conditions were so unusual or materially different from what Appellant should have reasonably expected so as to have amounted to a compensable differing site condition. The Board denied the appeal.

In Petersen Equipment, the Board denied reconsideration of its decision that it had no jurisdiction to award damages for the cancellation of agreements to provide fire fighting equipment because the agreements, standing alone, were not contracts but merely a collection of terms and conditions that became applicable only when the Government placed an order for supplies.

In LDG Enterprises, Inc., the Board denied Appellant's Motion for Reconsideration of its decision that the Government was not estopped to deny an additional term adjustment because Appellant did not rely on representations of the CO, and that even if Appellant had relied, Appellant had not been damaged. Appellant's Motion contained arguments that the Board had entertained and rejected, and thus provided no basis for reconsideration. The Board's decision has been appealed to the Court of Appeals for the Federal Circuit.

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Attachment 3
Appellate Review of Board Decisions During FY 1996

Cases Decided on Appeal

Frankstown Fish Co. v. Secretary of Agriculture,
AGBCA No. 95-134-1
Fed. Cir. No. 95-1544, appealed September 28, 1995
Dismissed for Failure to Prosecute February 26, 1996

White Buffalo Construction, Inc. v. Secretary of Agriculture
AGBCA Nos. 92-199-1 and 93-113-1
Fed. Cir. No. 95-1122, appealed December 29, 1994
Affirmed November 3, 1995

Cases Pending on Appeal

PLB Grain Storage Corporation v. Secretary of Agriculture,
AGBCA No. 89-152-1
Fed. Cir. No. 95-1169, appealed January 19, 1995

LDG Timber Enterprises, Inc. v. Secretary of Agriculture
AGBCA No. 91-213-1
Fed. Cir. No. 96-1139, appealed December 28, 1995

Petersen Equipment Company v. Secretary of Agriculture
AGBCA No. 94-163-1, et al.
Fed. Cir. No. 96-1176, appealed February 1, 1996

Jack L. Olsen, Inc. v. Secretary of Agriculture
AGBCA No. 95-119-10
Fed. Cir. No. 96-1122, appealed February 5, 1996

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