Issue:

The purpose of this memorandum is to inform the Secretary and persons on the distribution list about the Board's Fiscal Year 1997 functions and activities.

Discussion:

The Board's Functions

During FY 1997, 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 $492 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 70 appeals now on the docket were filed by contractors from 27 states. Examples of the type of contract, the nature of the appeals disposed of in FY 1997, 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 105 appeals during FY 1997, 9 fewer than the 114 appeals received during FY 1996. The Board disposed of 119 appeals during the same period. The number of cases on the docket decreased from 84 to 70. Of the 119 appeals disposed of, 58 were settlements by the parties.

The Board has continued to take an active role in facilitating many of the settlements achieved. The Board regularly as part of its procedure holds telephone conference calls and prehearing conferences with the parties. During these conferences, the Board regularly engages in some form of informal or formal Alternative Dispute Resolution (ADR) aimed at facilitating settlement. 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

After significant activity affecting Federal procurement in passing the Clinger-Cohen Act of 1996, Congress this year made fewer changes, and those mainly affected defense contractors. In the Administrative Dispute Resolution Act of 1996 (Pub. L. No. 104-320), Congress reauthorized the Administrative Dispute Resolution Act, retaining so-called Scanwell jurisdiction in the U.S. District Courts, which allows disappointed bidders to file bid protests in those courts (although the provision will sunset in 2001). Congress also amended the Act to eliminate the right of Federal agencies to disavow arbitration decisions with which they disagree, to eliminate the obligation of contractors to certify claims below $100,000 for ADR proceedings, and to add provisions protecting communications to and from ADR neutrals from disclosure under the Freedom of Information Act (FOIA).

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 affirmed the Board's decision in LDG Timber Enterprises, Inc., denying its claim for $173,459, alleging that the Forest Service wrongfully refused to extend the completion date of its timber sale contract. Appellant claimed that it had relied on certain actions of the Contracting Officer (CO) and that the Forest Service was estopped from refusing to extend the timber sale. The Board ruled that Appellant had not been justified in relying on the CO's actions, that there had been no estoppel, and that, in any event, Appellant had received all the extensions it was due. The court found, contrary to the Board's findings, that the CO was acting within his authority, and that therefore, Appellant was justified in relying on the CO. However, the court affirmed the Board's decision on the basis that the contractor had received all the extensions it was due, as the Board had concluded.

The court also affirmed PLB Grain Storage Corp., an appeal of damages based on breaches of a grain storage agreement. Appellant had filed a $15,472,362 claim for the alleged wrongful termination of the agreement. The Government had filed a $5,122,938 claim because of quantity and quality deficiencies regarding the grain while in the care and custody of PLB. The Board denied Appellant's motion for summary judgment, and granted the Government's motion for summary judgment, limited to the question of Appellant's liability. The Board had also conducted a hearing to consider the amount of damages that the Government was entitled to. The parties raised issues about general grain warehousing procedures, data and recordkeeping discrepancies, shortages on particular loading orders (there were thousands of loading orders), acceptance of lower graded grain than shipping documents indicated, shortages in so-called Identity-Preserved grain, valuation of various grades of grain, Appellant's entitlement to storage charges for "empty storage," additional storage charges for grain stored between a stop-storage-date and the actual shipment date, credits due Appellant for load out charges, and Weight Inspection Protein (WIP) charges. In affirming the Board's decision, the court found no errors in any of the factual determinations supporting the Board's conclusion that PLB owed the Government $1,021,067. The court also affirmed the Board's legal conclusions that the Government's termination of the agreement was proper and that the CO had authority to render the decision to terminate.

The court also affirmed, without opinion, the Board's decision in Petersen Equipment 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.

Jeff Holland Logging appealed the Board's decision denying a $305,150 claim. See page 4 of Attachment 2. This case remains pending. The only other case on appeal, Jack L. Olsen, Inc., has been pending since FY 96. 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 1997

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. After the Court of Appeals for the Federal Circuit issued a decision at odds with the majority's opinion, Appellant filed a Motion for Reconsideration. The Board vacated its decision and reinstated the appeal. The appeal was settled.

AGRICULTURAL RESEARCH SERVICE (ARS) John C. Grimberg of Rockville, Maryland, involved appeals under a contract for modernization of the Range Two Greenhouses at the ARS complex in Beltsville, Maryland. The appeal involved claims for additional expenses for constructing mechanical-equipment pits and demolishing existing footings. After a hearing under the Board's Expedited Procedure, the Board sustained the appeals. In two additional appeals filed by Grimberg on behalf of an electrical subcontractor on the same contract, the appeals were settled. In E&G Contractors, Inc., of Pocatello, Idaho, the contract was for the removal and replacement of oil tanks at the ARS Sheep Experiment Station in Dubois, Idaho. The contract allowed the contractor to salvage the oil remaining in the old tanks, which had been represented as full. Appellant claimed the difference in the value of the oil between the full tanks and the oil actually remaining. The Board denied the claim because Appellant failed to prove its damages. R. J. Crowley, Inc., of Laurel, Maryland, involved a contract for expansion of the National Bonsai and Penjing Museum at the National Arboretum in Washington, D.C. Appellant filed a claim for removal and replacement of unsuitable soil for which it was not adequately compensated. The appeal was settled.

DEPARTMENTAL ADMINISTRATION Sprint Communications Co., L.P., of Herndon, Virginia, involved a contract awarded by the Office of Operations for broadcast and other services for the Agricultural Marketing Service. The contract was known as the Market News Telecommunications System. Appellant filed a claim to recover credits assessed by the Government for late performance by Appellant. The appeal was settled. Aaron B. Floyd Enterprises, Inc., of Alexandria, Virginia, involved a task-order contract with the Office of Operations for installation of computer and telecommunication systems under the Infoshare program. The Government claimed that Appellant was indebted to the Government for overpayment for work completed. The appeal was settled. Write for You, of Gaithersburg, Maryland, involved an Office of Operations contract for calligraphy services for various certificates. The Appellant claimed additional compensation because the Government did not order the estimated quantity. The Government conceded that it had placed orders outside the contract and that demand for calligraphy services had declined because of desktop publishing. The appeal was settled. Synex, Inc., of Columbia, Maryland, involved an Office of Operations contract for an indefinite quantity of "InfoShare Acquisition Support Services." After an Inspector General audit, the Government issued a claim for an alleged overcharge on a task order. At the request of the parties, the Board dismissed the appeal.

FARM SERVICE AGENCY (FSA) Cytron Investment Co., of Lewiston, Idaho, involved the lease of an office building. After termination of the lease, FSA continued to occupy the building on a month-to-month basis. After vacating the building, Appellant claimed compensation for necessary repairs. The appeal was settled. Snow Hill Grain, Inc., of Snow Hill, Maryland, involved an appeal of the termination of a Uniform Grain and Rice Storage Agreement by the Commodity Credit Corporation because of a shortage of soybeans in Appellant's warehouse and inadequate recordkeeping. Appellant withdrew the appeal. Automation & Telecommunications Solutions, Inc., of Annapolis, Maryland involved a claim on an FSA contract. The Board dismissed the appeal because the claim had not first been submitted to the CO.

FEDERAL CROP INSURANCE CORPORATION (FCIC) CNA Insurance Companies of Overland Park, Kansas, involved an alleged indemnity overpayment and premium underestimate on a rice insurance policy. FCIC concluded that the company failed to apply yield adjustments and premium rates properly to its insured. Appellant withdrew the appeal. Producers Lloyds Insurance Company of Amarillo, Texas, appealed a final administrative determination denying expense reimbursement under the Standard Reinsurance Agreement (SRA), because Appellant had failed to timely deliver contractually-required data. The Board held an Alternative Dispute Resolution (ADR) proceeding with the parties that resulted in settlement of the appeal. In Rain and Hail Insurance Service, Inc., of West Des Moines, Iowa, the dispute involved the terms of the SRA and FCIC Manager's Bulletin MGR-93-020, which allows reinsurers to recoup litigation expenses incurred in administering crop insurance policies. FCIC moved to dismiss appeals of its refusal to pay Appellant's claim for litigation expenses under MGR-93-020, arguing that final determinations of such claims are not within the Board's jurisdiction. The Board found that it has jurisdiction over disputes relating to MGR-93-020 and the SRA because MGR-93-020 affects the SRA.

FOREST SERVICE Appeals arose from contracts for construction. Tri-West Contractors, Inc., of Lehi, Utah, involved a contract for the construction of a trail bridge across Buck Creek in the Six Rivers National Forest, California. The Forest Service waived concrete specifications for a portion of the work, and the Appellant claimed compensation for additional concrete work when it was later required to comply with the specifications. The Board found that the Forest Service was under no obligation to continue the waiver in the situation where it received no consideration and the contractor did not rely on the waiver. The Board denied the claim, as well as claims for relocation of bridge footings and delays. Harry and Keith Mertz Construction, Inc., of Inyokern, California, involved a contract for toilet rehabilitation on the Sequoia National Forest in California. The Forest Service terminated the contract for default when Appellant did not complete the contract on time. Appellant claimed that it had been improperly required to repaint toilet partitions to a high-gloss finish, which prevented timely completion. The Board found that the specifications did not require a high-gloss finish, that the requirement for repainting was therefore improper, and that the Appellant could have otherwise finished on time. The Board sustained the appeal. Ritterbush Construction of Chadron, Nebraska, involved the Sand Creek and Hudson-Meng Road projects, Nebraska National Forest. Appellant claimed additional compensation for blading a road used to reach the project roads; the Government claimed that Appellant was a volunteer. The Board found that the blading was necessary for timely completion, that the Government was aware that Appellant was claiming additional funds when approximately half the extra work was performed, and awarded Appellant half its claimed damages. Contractors Northwest, Inc., of Coeur d'Alene, Idaho, involved design and construction of a recreation complex in the Hells Canyon National Recreation Area in the Wallowa-Whitman National Forest in Oregon. Appellant claimed damages for a suspension due to fire danger. The Government claimed that the suspension was a sovereign act and moved for summary judgment; Appellant claimed that it had taken additional fire-prevention measures, that it should have been allowed to perform certain work notwithstanding fire restrictions, and that its damages were caused by mismanagement and constructive acceleration rather than sovereign acts. Because the Board found disputed issues of material fact, the Government's Motion was denied. After further proceedings and scheduling a hearing, the appeal was settled. T & T Construction of Orleans, California, involved a contract to decommission a road in the Six Rivers National Forest in California. Appellant filed a claim for extra work. The appeal was settled. Lechner Contracting of Dafter, Michigan, involved a contract for reconstruction of 3.86 miles of the North Rexford Road in the Hiawatha National Forest, Michigan. The appeal was settled after the Board scheduled a hearing. High Mountain Excavation of West Valley City, Utah, involved a contract for placement of 1,500 lineal feet of gravity-flow sewer line in the Spruces Campground. The Board dismissed the appeal when the parties failed to respond to a Show Cause Notice. Lloyd H. Kessler, Inc., of Vancouver, Washington, involved a contract for installation of an 80-foot-long bridge in a new location in the Mt. Hood National Forest, Oregon. Appellant claimed additional compensation for having to drag the bridge almost 3 miles rather than being able to transport the bridge by truck. The Board found that a site visit would not have revealed the impossibility of using a truck, and sustained the Appellant's claims on this issue. In other appeals by Lloyd Kessler, the contract involved reconstruction of the Eagle Creek Trail in the Gifford Pinchot National Forest, Washington. Appellant claimed additional compensation for work allegedly not required by the contract such as slough removal, use of filter cloth, and constructing an embankment. The appeals were settled during the hearing held by the Board. Bellfree Contractors, Inc., of Redlands, California, involved construction of the Splinters Cabin Trailhead in the San Bernardino National Forest, California. Appellant claimed additional compensation for resurveying, and changes in the location and length of water bars allegedly caused by Forest Service errors in project design. The appeal was settled. Armendariz Construction Co. of Delta, Colorado, involved a contract for construction of the Grande Mesa visitors' rest room in Colorado. Appellant claimed compensation for having to excavate more rock than anticipated and for installing outdoor lighting allegedly not required by the contract. At the hearing, Appellant withdrew its rock claim. The Board found for Appellant on the lighting claim. Sierra Summit, Inc., of Lakeshore, California, involved a contract to clear land for expansion of a ski area. Appellant filed a claim for an underrun in anticipated timber volume. The appeal was settled. Mike Kaiserski of Reseda, California, involved a contract for the Bullard's Loop Trail project on the Tahoe National Forest in California. The CO terminated the contract with 5 days of time remaining, concluding there was no reasonable chance that Appellant could finish on time. Appellant appealed, claiming unusually severe weather. The appeal was settled. Mark Guiton & Associates of Redding, California, involved rehabilitation of the Alpine View Campground on the Shasta-Trinity National Forest in California. Appellant claimed entitlement to additional compensation for placing shoulders on campground roads and for grouting restroom doors. The Government conceded entitlement but disputed the amount of the claims. The appeal was settled after the Board scheduled a hearing.

Appeals arose from Forest Service contracts for forest-fire suppression. GHR Fire Management Services, of Bend, Oregon, involved a claim for damage to the cab of a pickup truck being used under the contract. The CO denied the claim because of possible negligence by Appellant being the cause of the damage. The appeal was settled. Professional Slashbusting Services, of Blue Lake, California, involved a contract for mechanical site preparation and slash treatment on the Tahoe National Forest. The Forest Service assessed damages of almost $5 million against Appellant for negligence resulting in the Crystal Peak fire. The parties requested a suspension of the Board's proceeding because of ongoing litigation in the U.S. District Court, which the Board granted.

Appeals arose from Forest Service contracts involving environmental considerations. Lyntek Services, Inc., of Denver, Colorado, involved a contract for excavation of contaminated mine wastes from campgrounds and roads in the Santa Fe National Forest. Appellant claimed compensation for extra topsoil placement, additional gravel, modification to a gate, and relocation of a fence to retain silt. The appeal was settled. Environmental Reclamation Associates, Inc., of Ligonier, Pennsylvania, involved hydroseeding of 1.8 miles of road in the Monongahela National Forest, West Virginia. The Government canceled the purchase order because the seed being used by Appellant was older than the contract allowed. Appellant appealed the cancellation. The Board denied the appeal.

Appeals arose from Forest Service silvicultural work. T.R.Y. -- General Engineering of Copperopolis, California, involved the Brush Ridge Deep Tilling Contract on the Stanislaus National Forest in California. Appellant claimed reimbursement of fines and late charges. The appeal was settled. Timber Rock Reforestation of Estacada, Oregon, involved the termination for default of a contract for herbicide application in the Stanislaus National Forest in California. Appellant claimed that the Forest Service unreasonably delayed its progress by requiring unnecessary California workers' compensation coverage and preventing herbicide application when not restricted by high ambient temperature. After a hearing, the Board sustained the appeal. John Blood of Flagstaff, Arizona, involved a contract for hand tree thinning on the Lolo National Forest in Montana. Appellant claimed the CO did not timely issue decisions on claims for unreasonable fire restrictions, inaccurate preaward information, defective specifications, and incorrect reinspections. After filing the pleadings and Appeal File, the appeal was settled. Shiloh Forestry of Eugene, Oregon, involved a contract for reforestation in the Willamette National Forest, Oregon. Appellant filed claims for amounts not paid, replanting costs, lost profits, and interest. After filing the pleadings and Appeal File, the appeal was settled. Dunlap Enterprises of Soulsbyville, California, appealed the CO's default termination of a contract for precommercial tree thinning on the Plumas National Forest in California. Appellant also filed claims for overinspection, differing site conditions, and Government delays. The appeals were settled after the Board scheduled a hearing. LS Reforestation of Grants Pass, Oregon, involved a contract for Winter/Spring tree planting in the Willamette National Forest, Oregon. Appellant filed a claim for replanting and administrative costs deducted for delays that were excusable. The appeal was settled after the Board scheduled a hearing. Dan Nelson of Juneau, Alaska, involved the default termination of Appellant's tree-thinning contract on the Tongass National Forest in Alaska. The Board dismissed the appeal because it was untimely. Campesino '95 of Redmond, Oregon, involved a contract for herbicide application in the Stanislaus National Forest, California. Appellant appealed the CO's termination of the contract for default and assessment of reprocurement costs. The appeals were settled and the Board dismissed them. Dakota Contracting, Inc., of Grants Pass, Oregon, involved a slash-treatment contract in the Sequoia National Forest, California. Appellant claimed increased costs, for decreased leave-tree spacing making use of mechanical equipment more difficult, for relogging in areas already treated, and for slow logging that delayed Appellant's slash crews. The appeal was settled after the Board scheduled a hearing.

Appeals arose from a variety of other types of Forest Service contracts. Interpretive Exhibits, Inc., of Salem, Oregon, involved a contract for the fabrication, delivery, and installation of exhibits for the Pactola Visitors' Center in the Black Hills National Forest. Appellant did not complete the contract on time, and the CO withheld administrative costs incurred by the Forest Service after the original completion date and site cleaning costs for site cleanup Appellant did not perform. In excuse of its failure to complete on time, Appellant alleged numerous Forest Service delays, including an audio-visual wall incorrectly depicted on the drawings, errors in the dimensions of exhibit displays and photographs, artifact-mounting problems, and errors in exhibit text. The Board sustained the appeal except for the cleanup costs. Employment Training Consultants, Inc., of Watertown, Wisconsin, involved a contract to provide an employee assistance program in Forest Service Region 9. Appellant claimed additional compensation for extra orientations, air fare, counseling referrals, and unused printed materials. Wellness 2000, Inc., of Medford, Oregon, involved a contract for an employee-assistance program on the Stanislaus National Forest, California. The appeals were settled. M.A.W. Company of Phoenix, Arizona, involved a contract for road maintenance on the Arapaho and Roosevelt National Forests. The Appellant never performed any work on the contract, which the Forest Service terminated for default. Appellant challenged the termination and the Government's assessment of damages for excess costs of reprocurement, claiming that the particular bulldozer specified in the contract was not commercially available. Because the Appellant did not provide adequate proof, the Board upheld the default. The Board sustained the appeal of the excess costs, however, because the Government failed to provide evidence to support its case. James Collins of St. Paul, Arkansas, involved contracts for road maintenance in the Ozark-St. Francis National Forests, Arkansas. Appellant appealed the termination of its contracts for alleged inappropriate behavior toward Forest Service employees. The appeals were settled. Pipeline Industries, Inc., of Santa Ana, California, involved storm-damage road repairs in the Angeles National Forest, California. Appellant claimed unabsorbed home-office overhead costs resulting from a suspension of work. The Board denied the appeal for lack of proof of damages. Valley Asphalt, Inc., of Spanish Fork, Utah, involved a contract to produce crushed aggregate from a Government-designated source on the Manti-LaSal National Forest, Utah. Appellant claimed additional compensation for a change in the site of the source material requested by Appellant. The Board found that the contract made Appellant responsible for all costs of drilling and blasting, and denied the appeal. Henderson Aviation of Junction City, Oregon, involved a contract to provide helicopter services on the Wenatchee and Malheur National Forests in Washington and Oregon. The appeal was settled after the Board set a briefing schedule. Jerry Sanger dba Sound Eco Adventures of Whittier, Alaska, involved a contract for the charter of a vessel for two trips. The contract was terminated for default after the first trip because the vessel was unsafe. Appellant filed a claim for the balance of the contract and appealed the CO's denial of its claim. The appeal was settled.

Appeals arose from Forest Service Timber Sale contracts. Hoh River Timber, Inc., and Hurn Shingle Co., Inc., involved four timber sales and $4 million in claims on the Olympic and Mt. Baker-Snoqualmie National Forests. McMc Resources, Inc., of Seattle, Washington, involved a timber sale on the Olympic National Forest in Washington. These sales were adversely affected by various measures the Forest Service was required to take because of environmental considerations. The parties stipulated to liability and damages, but the CO denied the claims on the basis of unavailability of funds. The parties asked the Board to enter judgment in accord with their stipulations, to allow payment from the Treasury Department's judgment fund, which the Board did. Vaagen Bros. Lumber, Inc., involved the Gatorson Timber Sale in the Colville National Forest, Washington. Appellant appealed the CO's failure to issue a decision on Appellant's certified claim for the Government's failure to proceed with the sale. The parties stipulated on the entry of judgment in Appellant's favor. Jeff Holland Logging of Sonora, California, involved a lump-sum sale of 1,071 cords of wood for $589.05 in the Stanislaus National Forest that Appellant could not log because the bridge providing access to the sale area was washed out. The Forest Service extended the sale for a number of years, and the bridge was repaired. Although Appellant did not log the sale in its remaining time, the CO proposed an additional modification changing the sale to a scaled sale with a value of over $70,000. The increased value was due in part to additional timber not originally included in the sale. The Timber Management Officer refused to approve the modification, and the Appellant appealed. The Board found that the CO did not have the authority to modify a sale by adding over $10,000 worth of timber without advertising, and denied the appeal. Gary Jokela, d/b/a Svinsaw Wood Products of Valdez, Alaska, involved the Johns Creek Timber Sale on the Chugach National Forest in Alaska. Appellant had failed to complete the sale. The Forest Service resold the remaining timber, receiving less than the value of such timber in Appellant's contract. The Forest Service claimed the difference in value. The Board dismissed the appeal for failure to prosecute. Klawock Timber Alaska, Inc., of Craig, Alaska, involved the Cove-Kitkun Bay Timber Sale in the Tongass National Forest, Alaska. The CO assessed damages for Appellant's failure to complete the contract. The appeal was settled after the Board scheduled a hearing. Columbia Timber Company, of Gainesville, Florida, involved a timber sale on the Osceola National Forest, Florida. The CO retained Appellant's bid bond because Appellant failed to provide financial information to the CO. The appeal was settled. J.A.C. Wood Products, of Rapid River, Michigan, involved the Mormon Creek Timber Sale in the Hiawatha National Forest, Michigan. Appellant claimed that certain disputed areas were included in the sale and claimed lost stumpage and profits. The appeal was settled. Pope & Talbot, Inc., of Spearfish, South Dakota, involved the EKA Breaks Timber Sale in the Custer National Forest in South Dakota. Appellant claimed additional "purchaser credit" for road construction because the Forest Service's estimate of road construction costs contained errors. The appeal was settled. Poston Logging of Sonora, California, involved the Fraser Timber Sale in the Stanislaus National Forest, California. A dispute arose whether marked trees greater than 30 inches DBH were included in the sale. The Board dismissed the appeal without prejudice because of procedural defects. Bennett Lumber Products, Inc., of Princeton, Idaho, involved the Clarkia Woods Timber Sale in the Idaho Panhandle National Forests. Appellant claimed that the CO had improperly applied a contract clause that provides for cash payment for ineffective purchaser credit resulting from ordered design changes. Relying on rules of contract interpretation, the Board sustained the appeal. Fletcher Forest Products, Inc., of Redding, California, involved the Cover Insect Salvage Timber Sale in the Lassen National Forest in California. The Forest Service assessed damages it incurred reselling the timber after Appellant failed to complete the logging. Appellant alleged that the Forest Service failed to sign the contract timely and refused to mark timber for removal, resulting in increased costs due to delay and inefficient logging. After a hearing, the Board denied Appellant's claims and sustained the Government's claim. Kurt Spencer, d.b.a. Spencer Logging, of Libby, Montana, involved the Rust Bucket Salvage Sale on the Kootenai National Forest in Montana. Appellant claimed that the timber volume figures the Forest Service provided were inaccurate and misleading. The appeal was settled after the Board scheduled a hearing. Minimum Impact Logging of Klamath Falls, Oregon, involved the Loop Salvage Timber Sale in the Fremont National Forest, Oregon. The Appellant claimed additional compensation for a timber volume shortfall due to Forest Service errors in preparing the sale. The Government then assessed damages against Appellant for failure to complete the logging, which the Appellant appealed. The appeals were settled. Darrah Logging of Mt. Shasta, California, involved the Bullion Special Salvage Timber Sale on the Klamath National Forest, California. The CO claimed the Appellant had repudiated the contract and assessed resale costs with interest. The Appellant requested ADR proceedings. The appeal was settled. Wescor Forest Products Co. of Tacoma, Washington, involved the Stag Timber Sale on the Okanogan National Forest in Washington. The Forest Service assessed damages for 592 MBF (thousand board feet) of timber cut but not moved by the completion date. Appellant claimed that its delay was excused because it lost a number of subcontractors and had equipment committed to other work. The Board found that neither of these conditions excused the performance failure, and denied the appeal. Keith Hoggard, Elk Ridge Logging Company and San Juan Timber Products of Blanding, Utah, involved an express contract for the North Elks IIA Timber Sale on the Manti-LaSal National Forest in Utah, and an alleged implied contract that if Appellants built a mill the Forest Service would sell Appellants 20 million board feet of timber over a 20-year period. The Government filed a Motion to Dismiss, and the parties stipulated to dismissal of the appeal.

NATURAL RESOURCES CONSERVATION SERVICE (NRCS) Santee Modular Homes, Inc., of Santee, South Carolina, involved three contracts for the removal of debris from the Flint River in Georgia awarded by the NRCS. The need for debris removal was caused by 1994 tropical storm Alberto. Appellant filed claims based on acceleration of the work, changes, and Government-caused delays. After having previously denied a Government Motion for Summary Judgment, the Board participated in an ADR proceeding and the appeals were settled. C & S Managing Service, of Albany, Georgia, involved a challenge to the Government's assessment of damages against the Appellant for late completion of its contract. Appellant filed its appeal via UPS so that the Board received it on the 97th day after Appellant received the CO's final decision. Use of a private delivery service is considered the same as hand delivery, and the appeal is not considered filed until it is in the Board's possession. The appeal was thus untimely filed and the Board dismissed the appeal for lack of jurisdiction. Chatham Construction Co., Inc., of Guntersville, Alabama, involved a contract for a channel improvement project in Talladega and Calhoun Counties, Alabama. The CO terminated the contract for Appellant's failure to provide required bonds. The appeal was settled. Bunce Construction, Inc., of Fayetteville, North Carolina, involved construction of sediment- and erosion-control measures at the Smith Lake Road, Fort Bragg, North Carolina. Appellant failed to submit a Complaint or to respond to the Board's Show Cause Order, and the Board dismissed the appeal for failure to prosecute. Gordon Construction, Inc., of Mahnomen, Wisconsin, involved surface water inlet work on the Burnham Creek Watershed in Polk County, Minnesota. Appellant filed a claim for an equitable adjustment. The appeal was settled after the Board scheduled a hearing.

RURAL DEVELOPMENT (RD) Max Castle of Ontario, Oregon, filed an appeal with the Board concerning the alleged improper termination of a lease. The Government moved for summary judgment because the lease's terms permitted the Government to terminate. Appellant claimed, however, that Government officials promised a 5- or 10-year lease if Appellant would make certain improvements to the building, which Appellant made. The Board found that mixed issues of fact and law precluded granting summary judgment, and denied the motion. Eugene Manzi, t/a Gene's Services of Clementon, New Jersey, involved a contract to improve a Rural Development-owned property in Gloucester County, New Jersey. Appellant filed a claim for services rendered and materials provided, which the CO denied because there was no privity of contract between Rural Development and Appellant, who had been hired by the property owner. The appeal was settled.

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Attachment 2
Examples of Legal Issues Considered in FY 1997

Jurisdiction

Under the Contract Disputes Act (CDA), there are a number of conditions precedent to the Board's jurisdiction. An Appellant must file a written claim and timely appeal an adverse Contracting Officer's (CO's) decision within 90 days of the receipt of such decision. If the claim is in excess of $100,000, Appellant must provide a proper certification of the claim. If the CO fails to render a decision within 60 days on a claim of $100,000 or less, Appellant may properly appeal the "deemed denial" of such claim. If the Board renders a decision where it had no jurisdiction, such decision would be a nullity. Therefore, it is imperative for the Board to raise the question of jurisdiction if reasonable to do so, even if the parties do not.

In Max Castle, the Board concluded that claims filed with the Board or other Boards did not satisfy the requirement that the contractor file claims with the CO. Whether or not a claim was filed sometimes depends upon the definition of a claim within the meaning of the Federal Acquisition Regulation. In Poston Logging, the Appellant's letter to the CO disputing whether blue-marked trees greater than 30 inches in diameter-breast-high were included in the contract, was not considered a claim, because it lacked a monetary component. Similarly, in LeeRoy Couch, d/b/a Triangle "C" Logging, the Board declined to take jurisdiction over an appeal of a dispute about whether an expired timber sale should be extended, absent a claim for money damages. In Couch and in Darrah Logging, Appellants requested that the Board reinstate the expired contract, relief the Board had no authority to grant. Accordingly, these appeals were dismissed. Kathy Harris and Automation & Telecommunications Solution, Inc., are examples of appeals dismissed where there was no evidence of a written claim. Even where the Board has jurisdiction over a Government claim for damages because it had been appealed, the Board found it had no jurisdiction over a separate but related contractor counterclaim where the CO's decision on the counterclaim had not been appealed. Gary Jokela d/b/a Svinsaw Wood Products.

How the 90-day appeal period is calculated and what constitutes "filing" the appeal are issues that the Board must sometime determine. In C & S Managing Service, the Appellant filed its appeal by sending it via United Parcel Service so that the Board received it on the 97th day after Appellant received the CO's final decision. Use of a private delivery service is considered the same as hand delivery, and the appeal is not considered filed until it is in the Board's possession. Use of the U.S. Postal Service results in filing on the date of mailing. In this case, the appeal was untimely filed and the Board dismissed the appeal for lack of jurisdiction. The CDA, the Board's regulations, and the CO's instructions provide that an appeal must be filed with the Board. In Dan Nelson, the Board rejected an appeal sent via Federal Express that was received by the Board after the 90-day period. Appellant had also sent a timely appeal directly to the CO. However, the appeal directed to the Board was not timely filed, and the appeal was dismissed.

In Max Castle, the Board dismissed the appeal because, after filing its claim with the CO, Appellant did not wait until the expiration of the 60-day period prior to appealing. The Board could not hold that the claim was "deemed denied" by the CO. In Rain and Hail Insurance Service, Inc., the Board allowed an appeal of a deemed denied decision from a Federal Crop Insurance Corporation (FCIC) Standard Reinsurance Agreement (SRA). In FCIC appeals, the Board's jurisdiction is based upon a regulatory grant from FCIC rather than on the CDA.

Under the CDA, the Board's jurisdiction must be based upon an express or implied contract. Therefore, the Board does not have CDA jurisdiction over protests of contract awards. In Coyne Textile Services the Appellant requested that the CO reconsider a determination that its bid for linen services for the Forest Service was nonresponsive because the contractor was unable to meet the contract's starting date. Appellant advised the Board that this request should be considered an appeal. The Board dismissed the matter for lack of jurisdiction, because there was no claim based upon an express or implied contract.

Rain and Hail Insurance Service, Inc., appealed the denial of a claim for litigation expenses incurred in a dispute with a producer. Under Manager's Bulletin 93-020 issued by the FCIC, reinsurers such as Appellant could recoup certain litigation expenses if the Bulletin affected the terms of the SRA. FCIC moved to dismiss the appeal, claiming that the Bulletin did not affect the SRA. After examining the SRA and concluding that it did not require Rain and Hail to litigate producer's claims, the Board concluded that the Bulletin could affect Rain and Hail's decision to litigate under the SRA, and that, therefore, the Bulletin affected the SRA. Accordingly, the Board denied FCIC's Motion to Dismiss.

Generally, under the CDA, only a contractor may file a claim with the CO and appeal an adverse decision to the Board. A subcontractor's appeal must be sponsored by the prime contractor, and a contractor who has no privity with the Government generally has no rights under the CDA. In Eugene Manzi, t/a Gene's Services, Appellant made improvements on a Rural Development (RD)-owned property and filed a claim for $21,500 for services and materials rendered. The RD claimed the Board had no jurisdiction because there was no privity between Manzi and the Government. RD had set up a bank account and funded the improvements. However, the improvements were made pursuant to a contract between the property owner and Manzi. RD asserted that there was no jurisdiction because there was no privity, i.e., Manzi was not a contractor within the meaning of the CDA. The parties settled the appeal and the Board was not required to decide whether RD's involvement in funding the work was sufficient to allow Manzi to be considered a contractor.

Termination for Default/Excess Reprocurement Costs

Generally, termination for default is appropriate if a contractor fails to deliver on time, or if a contractor fails to make satisfactory progress so as to endanger timely completion. The failure to make progress or complete on time is excusable if it is without the fault or negligence of the contractor and beyond its control. Where the Government terminates a contract for default, it may reprocure the incomplete work and assess the excess reprocurement cost against the defaulted contractor. In doing so, however, the Government must mitigate its damages. It must also offer proof that the reprocurement contractor has completed the work and has been paid.

M.A.W. Company involved a contract to maintain 16 miles of road. The contract specified use of a Caterpillar D4 bulldozer with 80 horsepower and various other features and accessories. M.A.W. failed to perform any work under the contract, claiming that the specified equipment was not available in the general area where the work was to be performed. The evidence tended to prove that such equipment had been available and also that M.A.W. had significantly underbid the contract. The Board denied the appeal of the default termination, but sustained the appeal of the excess reprocurement costs because, although the Government provided proof that it had mitigated damages, it failed to provide proof that the reprocurement contractor had been paid. The Board could have reopened the record for the limited purpose of providing this proof, but exercised its discretion, citing various factors, to decline to do so.

Harry and Keith Mertz Construction, Inc., involved a contract to rehabilitate campground toilet buildings. The Mertz contract was terminated for failing to complete on time. During performance, Appellant was required to remove paint already applied, and to regrind and repaint to a high-gloss finish, 21 partitions and doors. The Board evaluated the evidence and interpreted the specifications, concluding that the rework was not warranted, and that, but for the rework Appellant was likely to have been able to complete all the work on time. Accordingly, the Board sustained the appeal. In this case the Government also introduced evidence pertaining to how long the reprocurement contractor took to complete the work as an indication that Appellant could not have completed on time. However, the Board concluded that the Government failed to account for differences in crew size, additional work required of the reprocurement contractor, and the fact that the reprocurement work was often interrupted by public access to the restrooms, and that Mertz's work had not been interrupted as much.

In Chatham Construction Co., Inc., the contract was terminated after Chatham failed to provide required performance and payment bonds within 10 days of award. Appellant asserted that it had not received the notice of award until almost 7 weeks after award, and that it had not been provided an opportunity to show cause why the contract should not have been terminated. This appeal was settled.

Mike Kaiserski involved a contract that was terminated after Appellant had completed only 30 percent of the work, with only 5 days remaining to complete the balance of the work. Appellant's bid had been 50 percent below the Government's estimate and 15 percent below the next low bidder. Appellant also lacked experience and equipment. The appeal presented issues pertaining to the propriety of the basic award (lack of responsibility), since Appellant had been so marginally responsible, versus the default termination. The appeal was settled.

Interpretive Exhibits, Inc., did not involve a termination for default. Here, Appellant failed to complete on time and the Government allowed Appellant to work in a "default status," charging Appellant for alleged extra administrative expenses, plus cleanup expenses for cleanup Appellant was obligated to perform, but did not perform. Appellant asserted it did not complete on time because of an audio-visual wall being incorrectly depicted on drawings, errors in dimensions of exhibit displays and photographs, artifact-mounting problems, and errors in the text. The Board's evaluation of the evidence provided by Appellant did not indicate that there were changes to the affected specifications, and that therefore, Appellant's delays were not excusable as ones caused by the Government. On the other hand, the Board's evaluation of the Government's administrative expenses failed to indicate that such expenses were in fact greater than the expenses would have been had the contract been completed on time. Therefore, except for cleanup costs, the Board sustained the appeal.

Consideration of Appeals on the Merits

Lloyd H. Kessler, Inc., involved a contract for moving an 80-foot bridge to a new location in the Mt. Hood National Forest, Oregon. Appellant claimed additional compensation for having to drag the bridge further than anticipated, as opposed to transporting the bridge to its new location by truck. After reviewing the manufacturer's instructions incorporated into the contract, as well as the specifications and drawings, the Board found that the radii of certain curves in the road precluded using a truck to transport the 80-foot bridge, and that a site visit would not have revealed this problem. The Board sustained Appellant's claim on this issue, but found no basis for Appellant's delay claim for having to work in winter weather, as the timing of the award made work in the winter inevitable.

Jeff Holland Logging involved a lump-sum sale of 1,071 cords of wood for $589.05. Appellant could not log the sale because the bridge providing access was washed out. The Forest Service extended the sale several times, and the bridge was finally repaired. Appellant did not log the sale in its remaining available time. By letter, the CO proposed to modify the contract by increasing the timber volume and changing the sale to a scaled sale with a value of over $70,000. Appellant signed and returned the letter to the CO. The Timber Management Officer refused to approve the proposed modification because the actual value of the timber was over $118,000 and the CO did not have the authority to issue a contract of that value without advertising the sale. The Appellant claimed $305,149.52 in damages for loss of the sale. The Board found that Appellant's claim was not precluded by contract language requiring filing of claims within 60 days of contract closure. The Board examined the prior dealings of the parties, the circumstances surrounding the issuance of the letter signed by both parties, and the precise wording of the letter itself and concluded that the letter constituted a request for an offer that Appellant made by signing the letter. The evidence indicated that the parties did not intend to be bound until a formal written contract modification was executed. Moreover, the Board also concluded that even if the letter constituted an agreement, such agreement was void or voidable because it exceeded the authority of the CO, who could not award a contract for the sale of timber in excess of $10,000 without advertising to assure the highest price. To do otherwise would violate 16 U.S.C. § 472a(d) and 36 CFR § 223.86. Finally, 36 CFR § 223.115 precluded contract extensions unless the approving officer finds that the purchaser diligently performed the contract or that an overriding public interest justifies the contract extension. Neither diligent performance nor public interest existed here. The Board denied the appeal.

In Tri-West Contractors, Inc., a contract to construct a trail bridge, the specifications did not allow premixing of cement with aggregate for the bridge footings. The CO's Representative (COR) nevertheless allowed Appellant to use a "premix" as long as Appellant provided certain structural certifications from the supplier. Appellant shipped the premix to the site and used it without providing the certification. The Board reviewed the evidence and concluded that although the COR had no authority to waive the specifications, the CO had acquiesced in the waiver and had ratified it, at least as far as the footings were concerned. However, Appellant wanted to continue to use the premix for the bridge abutments and wingwalls and filed a claim for increased costs when it was not allowed to do so. The Board concluded that the Government could retract a waiver unless Appellant had given consideration for the waiver or had detrimentally relied on it. The Board found no consideration or reliance in this instance. Another claim for relocation of the bridge footings was also denied by the Board. As a preliminary matter, the Board had decided that a modification signed by both parties was not an accord and satisfaction of this claim, and did not preclude recovery as a matter of law. The CO had paid a part of the relocation costs. After examining the evidence, the Board concluded that the reenforcing steel had not passed inspection at the time Appellant was directed to relocate the footings so that not all the work was attributable to Forest Service direction.

In Valley Asphalt, Inc., a contract to produce road aggregate, the Board denied the Government's motion to dismiss Appellant's claims because Appellant had failed to give notice of a change within 30 days of the alleged change taking effect as required by the Changes clause. The Board concluded that there was no presumption of prejudice to the Government from the late notice and that it was the Government's burden to prove prejudice as a condition of defeating a request for an equitable adjustment based upon a Government change to the specifications. On the merits, Appellant requested permission to move to another source for the road aggregate, and signed a modification allowing it to move, but at no increase in cost. At the new site, Appellant alleged that the Forest Service's approval of its blasting plan indicated that there would not be too much aggregate of excess size. The Board concluded that approval of the blasting plan had nothing to do with production of acceptable aggregate, and denied Appellant's claim.

In John C. Grimberg Co., Inc., a contract to modernize four greenhouses at the Agricultural Research Center, Appellant filed a claim for being required to construct concrete pits to connect piping in the "headhouse." The drawings indicated that the headhouse was not in the contract. The Board reviewed the drawings and concluded that the Government's intent to require construction of the pits for connecting piping might have been clear to the designer, but was not clear to the contractor. The Board also held that Appellant was not required to demolish certain footings, even though there was an ambiguity in the drawings. The ambiguity was latent, not requiring Appellant to inquire. The Board sustained these appeals.

In Max Castle, the Board denied the Government's Motion for Summary Judgment on Appellant's claim under a lease even though the lease allowed termination with at least 120 days notice. Appellant alleged that certain Forest Service personnel had promised Appellant a 5-year lease in exchange for Appellant's making certain improvements that Appellant allegedly made. In denying the Government's motion, the Board concluded that Appellant had raised questions of fact regarding an implied contract that precluded granting the Government's motion.

Bennett Lumber Products, Inc., involved a timber sale contract that required road construction for removal of the timber. Appellant earned "purchaser credit" for the road construction that Appellant could use in lieu of cash to pay for the timber. Two events occurred that rendered a portion of Appellant's $567,109 in purchaser credits ineffective. First, the volume and value of the estimated timber decreased from $612,260 to $531,322. Second, the Forest Service changed the road design, increasing Appellant's net purchaser credit by $93,560 to $660,669, rendering $129,347 ineffective ($660,669 minus $531,322), because Appellant could not use it to pay for timber. A clause in the contract provided that Appellant could receive payment for "ordered" designs changes by the Forest Service as opposed to those that were "mutually agreed to." The Forest Service paid Appellant $93,560 under the clause and Appellant claimed an additional $16,352 based upon a different interpretation of the clause. The Board evaluated the parties' conflicting interpretations of the clause in various respects, concluding that Appellant's interpretation was reasonable. The Board sustained the appeal.

Fletcher Forest Products, Inc., involved a timber sale that Appellant failed to complete on time. The Forest Service resold the balance of the timber at a loss, assessing damages against Appellant for failing to complete the sale. Appellant's argument that no contract had come into being because Appellant did not provide the required bonding was rejected by the Board. The Board concluded that the contract provision in question was for the benefit of the Government and conferred no rights on Appellant. The Board rejected Appellant's argument that the Forest Service resource clerk was responsible for a delay, because of the clerk's lack of authority over the matter asserted by Appellant. The Board examined the evidence presented and the contract language, and rejected Appellant's argument that the Forest Service was required to mark all dead and dying trees. The Board accepted the Forest Service position that the contract only required marking sufficient timber to yield the estimated volume of designed species groups. Finally, the Board rejected Appellant's arguments regarding mitigation of the damages assessed by the Forest Service.

Contractor's Northwest, Inc., involved a contract for the design and construction of certain facilities in a Forest Service recreation complex. Appellant claimed increased expenses because of a suspension of work due to a fire precaution. The Government filed a motion for summary judgment contending it was not liable because the fire precaution suspension was a sovereign act. Appellant contended that it had taken additional fire-prevention measures and should have been granted a waiver from the suspension. The Board denied the Government's motion because of the existence of material disputed facts. The Board set the matter for hearing and the parties subsequently settled the appeal.

Producers Lloyds Insurance Company appealed an FCIC final administrative determination denying expense reimbursement under the Standard Reinsurance Agreement (SRA) because Appellant had been late in providing contractually-required reporting data. Appellant disputed that it was late in reporting the data, but claimed that even if it had been late, it should not be penalized for the errors, because the SRA included a clause excusing isolated and inadvertent delays or omissions. The dispute would require resolution of complicated questions of fact. Moreover, reporting data was being provided under a subcontract by a trade organization that had been approved by the FCIC for such purposes. The Board held an Alternative Dispute Resolution (ADR) proceeding with the parties that resulted in settlement of the appeal.

Cytron Investment Co., involved a claim pertaining to the lease of office space. After the premises were vacated, Appellant claimed that certain deterioration was in excess of normal wear and tear, and that therefore, the FSA was liable. Resolution of the appeal would have required the Board to evaluate conflicting evidence. The parties settled the appeal.

In Henderson Aviation, the contract involved providing helicopters for operation on the Wenatchee and Malheur National Forests in Washington and Oregon. The Appellant claimed additional compensation for inspection costs after the Forest Service grounded a helicopter after it struck a tree on both landing and takeoff while transporting firefighters. The Appellant claimed that the CO exceeded her authority in grounding the helicopter and in requiring inspection. The dispute was controlled by contract provisions pointed out to the parties by the presiding judge. The appeal was settled.

Pipeline Industries, Inc., and E&G Contractors, Inc., demonstrated the need and importance of proof of damages. In both cases, Appellants had clearly demonstrated Forest Service and Agricultural Research Service actions which might have resulted in a right to claim additional compensation. However, the Board denied both appeals because Appellants failed to either demonstrate the causal link to increased costs, or that increased costs had occurred.

In Wescor Forest Products Co., the Forest Service extended the Stag Timber Sale contract numerous times, but finally terminated the contract and assessed damages for timber cut but not moved by the final completion date. The Appellant claimed that its delay was excused by commercial impracticability because of the death of one, and the loss of other subcontractors. Appellant also claimed that the Government had breached its duty of good faith and fair dealing in not extending the contract. The Board found that although the Forest Service had in fact stated that it would not grant an extension, the Forest Service had granted Appellant extensions on prior occasions. Therefore, it was incumbent on Appellant to have at least requested the extension Appellant was now asserting the Forest Service failed to grant. Moreover, Appellant's commercial impracticability argument was not persuasive, because Appellant had made a business decision to work on an adjacent timber sale to the exclusion of the present sale. The Board denied the appeal.

Synex, Inc., involved a support service task order contract in which individual task orders were separately negotiated at fixed prices. An Inspector General audit had concluded that Synex had charged $59,584.66 to a task order for unrelated work. Synex countered that it was entitled to the negotiated fixed price for the task order ($492,101), irrespective of the number of hours actually worked. Resolution of the dispute depended upon the precise nature of the task order in issue, and whether it required completion of the task or merely the expenditure of a certain level of effort. The parties agreed to have the Board dismiss the appeal.

Equal Access to Justice Act

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. The Application for the fees and expenses must be filed within 30 days of when the Board's decision on the merits becomes final. Timber Rock Reforestation filed an application for attorneys' fees and expenses more than 30 days after the Board had ruled for Appellant under the Expedited Procedure in a bench decision. A decision rendered under the Expedited Procedure may not be appealed except for fraud. Therefore, unlike other Board decisions, it becomes final once rendered. The Government opposed the application because it was not filed within 30 days of the bench decision and argued that the Government's position was substantially justified. The Board found the application was timely filed because it was filed within 30 days of Appellant's receipt of the official written copy of the bench decision, which, the Board concluded, starts the running of the time period. The Board found the Government's position to be substantially justified, however, because Appellant had started work late and had worked slowly. Therefore, the Government's litigation of the propriety of the default termination of Appellant's contract was not unreasonable. The Board thus denied the application for fees and expenses.

Delays in Appeal Processing

There are numerous reasons to suspend the processing of an appeal if it is impossible or inadvisable to continue for reasons beyond the Board's control. Where the suspension may continue for an inordinate length of time the Board may dismiss the appeal under Rule 30 for up to 3 years, without prejudice to its being reinstated during that time frame.

Lance Logging Co., Inc., dba Wolf Creek Industries and Wolf Creek Industries, Inc., involved nine timber sales where the Appellant claimed that the Forest Service timber volume estimates were negligently prepared or grossly inadequate. Appellant entered bankruptcy proceedings. Although the appeals brought by Appellant involved claims against the Government that would not have been affected by the bankruptcy "automatic stay," as when claims are filed against Appellant, the Board granted the parties' motion to dismiss the appeals under Rule 30. Professional Slashbusting Services involved a contract for mechanical site preparation and slash treatment on the Tahoe National Forest. The Forest Service assessed almost $5 million against Appellant for damages resulting from the Crystal Peak fire. Because of related litigation in the U.S. District Court, the parties requested a dismissal under Rule 30. The Board concluded that the district court litigation was not an impediment to the Board's processing the appeal. However, processing the appeal under the circumstances could have resulted in inconvenience to the parties and unnecessary expenses. For these reasons, the Board allowed the Rule 30 dismissal. In Sierra Summit, Inc., and John C. Grimberg Co., Inc., the Board dismissed appeals under Rule 30, where the Board had concerns that the settlements would not be consummated, requiring reinstatement of the appeals.

Claim Payment Problems

Generally, when the Board renders a judgment, the affected agency pays the judgment from the same fiscal year appropriation as the fiscal year in which the affected contract was awarded. However, the agency may not have sufficient funds from the prior years appropriations to pay these judgments. The CDA provides that Board judgments may be paid from the Department of the Treasury's Indefinite Judgment Fund. While the affected agency must reimburse the Judgment Fund, reimbursement can be accomplished with current fiscal year appropriations. In Hoh River Timber, Inc., Hurn Shingle Co., Inc., Vaagen Bros. Lumber, Inc., and McMc Resources, Inc., the Forest Service had adversely affected timber sale operations for environmental reasons by suspending operations, imposing operational restrictions, and/or substituting timber from other areas for timber from the sale area. The Forest Service conceded liability of approximately $10 million to these corporations, but denied their claims because the Forest Service lacked funding from prior years appropriations to pay the amounts owed. The Board rendered judgments on the appeals taken based upon the stipulated settlements of the parties. These Board judgments were used as a basis for payment from the Judgment Fund.

Post Dismissal Issues

Generally, once a dispositive decision or ruling in an appeal is rendered, the Board's involvement in the appeal process ends. Two exceptions to this general rule involve motions for reconsideration of a Board's decision, and forwarding the certified listing of the administrative record to the U.S. Court of Appeals for the Federal Circuit when a Board decision has been appealed. In fiscal year 1997, the Board became involved in the appeals described below for reasons other than reconsideration or appeal.

In RBW & Associates, the issue originally before the Board was whether claims unrelated to a termination for convenience were required to be filed within the same 1-year time period as the termination for convenience settlement proposal. A divided Board granted the Government's Motion for Summary Judgment and dismissed the appeal. In an unrelated case, the U.S. Court of Appeals for the Federal Circuit indicated that claims unrelated to the termination for convenience were not governed by the 1-year filing deadline. RBW filed a Motion for Reconsideration after the 30-day period specified in the Board's Rules for filing such motion. The Board used its inherent authority to reopen the record and reconsider its decision as outlined in the Federal Rule of Civil Procedure 60(b)(6). In this instance, the Board vacated its decision as it related to the claims in issue. The parties subsequently settled the appeal.

In Barnes, Inc., the Board dismissed the appeal based upon a settlement between the parties that was executory in nature. After the Board's dismissal, the settlement agreement was not effected. Each party accused the other of breach. Appellant then filed a motion to enforce the settlement agreement and the Government filed a motion to reinstate the original appeals. A divided Board concluded, as in RBW & Associates above, that it had inherent authority to consider the propriety of its decision dismissing the appeals. If a settlement agreement had been reached, then the Board's dismissal would be considered to have been proper. If a settlement agreement had not in fact been reached, the Board had inherent authority to set aside the decision and reinstate the appeals. After examining the record, the Board concluded that a settlement agreement had been reached, and that therefore, the Board's decision dismissing the appeals was proper. The Board concluded that since the settlement agreement was a viable agreement it should be given legal effect. However, the parties were asserting claims unrelated to the original claims, and the Board had no power or authority to enforce the settlement agreement in the manner that Appellant had requested. The Board could grant the remedy of reinstatement requested by the Government, but only if Appellant breached the settlement agreement. The Government must claim breach by Appellant and demand a CDA cognizable remedy, such as reinstatement, allowing Appellant to appeal such CO's decision to bring the matter before the Board. The Board advised Appellant that Appellant must file claims with the CO, cognizable under the CDA, for breach of the settlement agreement, and appeal the CO's denial. Appellant might have a remedy for injunctive relief before a U.S. District Court to enforce the settlement agreement. However, such court might also conclude that the parties had an adequate remedy at law as outlined by the Board.

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Attachment 3
Appellate Review of Board Decisions During FY 1997

Cases Decided on Appeal

PLB Grain Storage Corporation v. Secretary of Agriculture,
AGBCA No. 89-152-1
Fed. Cir. No. 95-1169, appealed January 19, 1995
Affirmed May 12, 1997

LDG Timber Enterprises, Inc. v. Secretary of Agriculture
AGBCA No. 91-213-1
Fed. Cir. No. 96-1139, appealed December 28, 1995
Affirmed June 4, 1997

Petersen Equipment Company v. Secretary of Agriculture
AGBCA No. 94-163-1, et al.
Fed. Cir. No. 96-1176, appealed February 1, 1996
Affirmed December 9, 1996

Cases Pending on Appeal

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

Jeff Holland Logging v. Secretary of Agriculture
AGBCA Nos. 95-183-1 and 97-115-R
Fed. Cir. No. 97-1250, appealed February 26, 1997

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