Issue:

The purpose of this memorandum is to inform the Secretary and persons on the distribution list about the Board's Fiscal Year 1998 functions and activities.

Discussion:

The Board's Functions

During FY 1998, the Department issued over 17,500 contract actions obligating more than $2.5 billion for the procurement of supplies, services, and construction to support agency operations. In addition, the Forest Service timber sale program resulted in contracts worth approximately $366 million through September 30, 1998. The present 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. Additionally, the Board has jurisdiction over appeals from certain debarments and from Standard Reinsurance Agreements involving the Federal Crop Insurance Corporation. 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.

After an appeal to the Board is taken, 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 a Board member presiding over a formal evidentiary hearing where witnesses are subject to examination and cross-examination. Board proceedings are subject to the Federal Rules of Civil Procedure and the Federal Rules of Evidence.

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 112 appeals now on the docket were filed by contractors from 27 states and Puerto Rico. Examples of the type of contract, the nature of the appeals disposed of in FY 1998, 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 102 appeals during FY 1998, 3 fewer than the 105 appeals received during FY 1997. The Board disposed of 60 appeals during the same period. The number of cases on the docket increased from 70 to 112. Of the 60 appeals disposed of, 20 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 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 recent years, Congress this year made few changes, and those mainly affected defense contractors, e.g., limited reimbursement of executive compensation, limited allowability of restructuring costs, and authorization of shipbuilding capability preservation agreements.

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 without opinion the Board's decision in Jeff Holland Logging denying a $305,150 claim. The appeal involved a lump-sum timber sale of 1,071 cords of wood for $589.05. After a bridge washout limited access to the site causing several years’ delay, the Contracting Officer (CO) proposed to modify the contract to increase the timber volume and change the sale to a scaled sale with a value of over $70,000, and Appellant agreed. 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 in excess of $10,000 without advertising the sale. The Appellant claimed $305,149.52 in damages for loss of the sale. The Board held that any alleged 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.

In Jack L. Olsen, Inc., Appellant had been the prevailing party under its appeal for additional costs related to a contract for construction of a 5.5-mile road in the Superior National Forest in Minnesota. In allowing recovery, the Board concluded that the Forest Service withheld a materials report that the Forest Service had used to design the road and to estimate the cost of construction. Under the Equal Access to Justice Act (EAJA), prevailing parties such as Appellant may recover attorney fees and costs if the position of the Government in the underlying litigation was not substantially justified. Appellant requested such attorney fees and costs. The Board majority denied Appellant’s request holding that the Government’s position in withholding the report was substantially justified. In a concurring opinion, one Board member set forth evidence not included in the Board’s original decision, that after receiving the report, Appellant admitted that the report showed vastly different materials than those encountered, and that therefore, Appellant had not been prejudiced by the Government’s failure to disclose. Appellant appealed the Board’s denial of its request for attorney fees and costs to the Court of Appeals for the Federal Circuit. The appeal was dismissed on November 5, 1998, pursuant to an agreement of the parties.

All names and dates of cases on appeal appear in Attachment 3.

Management

Three of the Board’s five judges retired in FY 1998. Consequently, there was a reduction in the number of case dispositions from 119 in FY 1997 to 60 in FY 1998, and an increase in the number of cases on the Board’s docket from 70 to 112. Two judges have been hired. Joseph A. Vergilio joined the Board on November 9, 1998. Judge Vergilio had been a judge on the General Services Administration Board of Contract Appeals. Anne W. Westbrook joined the Board on January 4, 1999. Judge Westbrook was the Senior Assistant District Counsel in the Savannah, Georgia, District of the U.S. Army Corps of Engineers.

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. Under the Boards of Contract Appeals Sharing of Neutrals Agreement, Judge Howard Pollack mediated a settlement of a contract dispute between the U. S. Postal Service and one of its contractors.

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 1998

AGRICULTURAL RESEARCH SERVICE (ARS) Fairfax Opportunities Unlimited, Inc., of Alexandria, Virginia, involved an appeal under a requirements contract for providing staffing, services, equipment, and other support for operation of a mail room, supply room, and copy center for the Economic Research Service (ERS). Appellant claimed that the Government ordered far fewer copies than the Government had estimated it would order, causing Appellant to be unable to recover all its fixed copying costs. Appellant claimed that the timing of the bidding and award allowed the Government to provide a more current estimate of the number of copies than the estimate provided by the Government. The Government alleged that it used due care in preparing the estimate. The Board found that the Government had more current information regarding the number of copies, and that this information should have been provided to the bidders, especially where bidders had specifically requested this data. The Board concluded that the Government failed to use due care in preparing the estimate of the number of copies, and sustained the appeal.

DEPARTMENTAL ADMINISTRATION Synex, Inc., of Columbia, Maryland, involved a task order contract with the Office of Operations for "Info Share" services, a project to improve and consolidate information systems. Appellant filed a claim related to a task order. At one time, the Government was considering making an administrative claim under the Program Fraud Civil Remedies Act. During the pendency of the appeal, the Board ruled on motions, scheduled and canceled two hearings at the request of the parties, and considered a request for a protective order. The parties settled the appeal. However, the settlement had numerous contingencies that prevented it from becoming final for some time. The Board thus dismissed the appeal without prejudice under Board Rule 30. Rule 30 dismissals become dismissals with prejudice if not reinstated within finite times.

FARM SERVICE AGENCY (FSA) Farmers Elevator Company of Outlook, of Outlook, Montana, involved an appeal of the termination of a Uniform Grain and Rice Storage Agreement (UGRSA) by the Commodity Credit Corporation because of deficiencies in inventory, accounting, and daily position reports. Later CCC inspections resulted in finding a fire hazard and financial deficiencies. Appellant requested reinstatement of its UGRSA but no money damages, and CCC moved to dismiss the appeal for failure to state a claim on which relief could be granted, because the Board can award only money damages. CCC offered to issue a new UGRSA if Appellant met all applicable conditions. Appellant then withdrew its appeal. Riteway Magic Supply Company of Kansas City, Missouri, involved a contract for janitorial services for the Federal Building in Kansas City. Appellant filed a claim for payment of deductions made by the Contracting Officer (CO) for unsatisfactory cleaning of toilet room floors. Appellant claimed the unsatisfactory cleaning was the result of the improper installation of the floors rather than its fault. The appeal was settled.

FEDERAL CROP INSURANCE CORPORATION (FCIC) Rain and Hail Insurance Services, Inc. (AGBCA No. 97-182-F), of West Des Moines, Iowa, was an appeal that arose under a Standard Reinsurance Agreement (SRA). Under the SRA, Rain and Hail sold crop insurance in furtherance of the Government’s crop insurance programs. The appeal involved a claim for reimbursement of almost $13 million in prevented planting indemnity payments and over $5 million in premiums during fiscal year 1996. Appellant’s position was that because of FCIC changes to the SRA, the claimed expenses were not adequately reimbursed. The Board made a number of rulings on motions filed by the parties, but has not yet decided the merits of the appeal.

Under the SRA, FCIC reimburses reinsurers’ administrative expenses, including legal expenses, as a percentage of the insurance premiums. In addition, under FCIC Manager’s Bulletin (MGR) 93- 020, special litigation expenses incurred as a result of litigation initiated by insureds are reimbursed if the litigation involves an attack on FCIC-approved procedures, regulations, or policies, and if the litigation involves the probability of a court establishing a precedent detrimental to the crop insurance program. In a series of appeals brought by Rain and Hail, the entitlement to the special litigation expenses reimbursement under MGR 93-020 was extensively litigated. The Board held, among other things, that settlement of the underlying litigation did not preclude reimbursement , so long as the other requirements for recoupment were met under MGR 93-020. In another appeal, the Board held that a challenge to the language of a Michigan State Endorsement did not preclude litigation expense recoupment, because FCIC was advised of the endorsement and could have insisted on its own endorsement language. In other appeals, the Board held that litigation limited to specific factual disputes generally did not qualify for litigation expenses recoupment under MGR 93-020. These included disputes relating to the method of computing the size of the harvest, and whether the insured was affiliated with other farming entities.

In Rain and Hail Insurance Services, Inc. (AGBCA No. 96-170-F), the appeal arose under a 1993 SRA. At issue in the appeal was an indemnity payment Appellant made to an insured for a crop failure on land that had been classified as "summerfallow" (as opposed to continuous cropping) for the previous crop year. Summerfallow would have allowed greater crop yields, and therefore, the possibility of greater indemnity losses. Based on an anonymous complaint, FCIC investigated and determined that the land was improperly classified as summerfallow, because there had been no continuous weed control, and thus that Appellant had overpaid the indemnity. FCIC disallowed $66,525 in reinsurance as well as $2,629 in premium overstatement. The Board’s review indicated that the insured had not previously farmed the land itself. Appellant concluded that the Agricultural Stabilization and Conservation Service (ASCS) had classified the land as summerfallow. Appellant alleged that it then verified with FCIC officials that it was proper for it also to classify the land as summerfallow based on the ASCS classification. The Board found that the Appellant failed to demonstrate several of the legal elements necessary to bind the Government to that classification. The Board also found that the SRA provided that the insurer can be required to refund the reinsurance where the classification does not meet the summerfallow criteria. In a concurring opinion, one judge noted that requiring FCIC to reinsure the indemnity would essentially be requiring FCIC to reinsure a nonexistent risk, i.e., the production from the nonexistent summerfallow yield. The Board denied the appeal. Appellant has requested reconsideration.

FOREST SERVICE Appeals arose from contracts for construction. Harry and Keith Mertz Construction, Inc., of Inyokern, California, involved a contract for toilet building rehabilitation in the Sequoia National Forest in California. The Board had previously sustained the appeal of a termination for default, and the Appellant applied for attorneys' fees and expenses on the basis that the Government’s position was not substantially justified. Because the underlying appeal contained close questions of law and fact, the Board found the Government's position to have been substantially justified, and denied the application for attorneys' fees and costs. Land-Tech Montana, Inc., of Bozeman, Montana, involved a contract for trail construction and reconstruction. Appellant claimed additional compensation for defective specifications and changes, and appealed the CO's denial of the claim. The appeal was settled after the Board scheduled a hearing. Bill J. Copeland of Beaumont, California, involved construction of the Serrano Comfort Station and the Santa Ana River Trail in the San Bernardino National Forest in California. The appeals concerned default terminations and numerous claims under the two contracts. The appeals involved matters within the exclusive jurisdiction of the Department of Labor (DOL), regarding wage payments to workers allegedly not made by Appellant, and the need for the Forest Service to have withheld such payments. Appellant alleged that the withholding delayed its progress and caused the terminations. Action on the appeals was suspended pending a decision by the DOL on Appellant’s claim that the wage payments had been made and that the Forest Service’s withholdings had not been justified. Gerard J. Pelletier of Mt. Shasta, California, involved a road maintenance contract on the Siskiyou National Forest in Oregon. The CO terminated the contract for default after expiration of the contract period with only half of the work being completed. Appellant challenged the termination, alleging excusable delays due to severe weather and fire-precaution restrictions. The appeal was settled. J.V. Bailey Co., Inc., of Rapid City, South Dakota, involved a contract in the Black Hills National Forest for replacement of the Harney Peak lookout tower and installation of a lightning-protection system. The appeal was settled. Northwest Trails, Inc., of Bellingham, Washington, involved construction of recreation facilities in the Mount Baker-Snoqualmie National Forest, Washington. Appellant filed a claim alleging that it had been required to perform work not required by the contract. The appeal was settled.

Appeals arose from Forest Service contracts for forest-fire suppression. Eagle Equipment of Tehachapi, California, involved an emergency equipment rental agreement with the Pacific Southwest Region of the Forest Service. Appellant claimed it had not been paid for unspecified equipment allegedly ordered for the Canyon Two Fire. Because the CO had not issued a final decision, the Board informed Appellant of the requirements for perfecting jurisdiction, and dismissed the appeal without prejudice. Special Operations Group of Corona, California, involved an emergency equipment rental agreement for bus service for transporting personnel to and from forest fire locations on the Kaibab National Forest, California. Appellant claimed entitlement to be paid for two unpaid invoices, which the Forest Service had refused to pay because Appellant did not provide original documentation as required by the Fire Business Management Handbook. After a conference call in which the Board questioned whether the Handbook had been made part of the contract, the appeal was settled.

Appeals arose from Forest Service contracts involving environmental considerations. The Wild Wood Associates, Inc., of Walhalla, South Carolina, involved a contract for a forest resource inventory of the Boise National Forest in Idaho. Appellant challenged the default termination of its contract and the CO's denial of four monetary claims. Appellant claimed numerous reasons for its failure to complete the contract and as justification for its monetary claims, including ambiguities in the contract, impossibility of performance, defective specifications, overzealous inspections, government delays, and inaccessibility of the site. The Board found that Appellant failed to prove any of its allegations, and denied the appeal. Mark Guiton and Associates of Redding, California, involved a contract for installation of watertight pond liners in four sewage-treatment ponds in the Lassen National Forest, California. The pond liners developed leaks after installation, and the Government sought repair under the contract’s warranty clause, or as latent defects. Appellant argued that the Government should instead pursue the pond liner manufacturer for repair. The parties settled the appeal. Echeco Environmental Services of Blackfoot, Idaho, involved a contract for a site investigation and remediation design of the Strawberry Point Landfill and Olsen Bay National Fisheries Research Station in Chugach National Forest in Alaska. A dispute arose as to whether Appellant’s work complied with the Comprehensive Environmental Response Compensation and Liability Act (CERCLA) and the Resource Conservation and Recovery Act (RCRA). The CO accepted the work as deficient and reduced the contract price. Appellant appealed. The appeal was settled after the Board scheduled a hearing.

Appeals arose from Forest Service silvicultural work. Staff, Inc., of Bend, Oregon, involved a contract for pre-commercial tree thinning on the Tongass National Forest in Alaska. The dispute involved whether Appellant was required to remove "whips" (secondary tree stems originating from the root collar), whether acreage that was substituted required more work than the acreage deleted, and whether rejection of certain work had been proper. Appellant claimed additional compensation. The Board found Appellant entitled to compensation for the whips and the substituted acreage claims, but not for the rejection of the work. 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. In FY 1997, the parties settled the appeals and the Board dismissed them. Appellant later moved to reinstate the appeals because it wished to pursue a claim for lost profits, and thus raised new matters the Board had not previously considered. The Board denied the Motion to Reinstate because the dismissed appeals were covered by a settlement agreement that left no dispute to reinstate. Regarding the claim for lost profits, the Board dismissed the appeal for lack of jurisdiction because the claim had not been presented to the CO. John Blood of Flagstaff, Arizona, involved a contract for tree thinning on the Helena National Forest in Montana. The CO terminated the contract for failure to make progress and denied Appellant's claim for additional compensation. Appellant filed additional appeals for extra compensation for an inadequate bid package and in opposition to the CO's assessment of reprocurement costs. The appeals were settled. Aaron V. Lund of Laramie, Wyoming, involved a contract for hand tree thinning in the Helena National Forest, Montana. The CO terminated the contract for default because Appellant abandoned the contract. Appellant did not appeal. The CO subsequently charged Appellant with excess costs of reprocuring the work. Appellant appealed this decision. Appellant subsequently paid the amount assessed by the CO and the Board dismissed the appeal. Second Growth, Inc., of Eugene, Oregon, involved reforestation services on the Fremont National Forest, Oregon. The CO terminated two contracts for default for Appellant’s failure to perform on schedule. Appellant claimed it had performed on time, and that virtually all its work had been accepted. Appellant further alleged that it had filed claims on which the CO had failed to act. The appeals were settled. Modoc Foresters, of Alturas, California, involved a contract for tree thinning and slash treatment on Modoc National Forest, California. The parties had agreed to limit slash piles to 8 inches at no cost. Appellant thereafter filed a claim for the slash pile limitation when it was charged for road resurfacing and for water for dust abatement. The appeal was settled. John A. Bloodgood of Iberia, Missouri, involved a contract for timber- stand improvement on the Mark Twain National Forest, Missouri. The CO terminated the contract for default for failure to make satisfactory progress. Appellant did not appeal. The CO reprocured the work and assessed Appellant the excess costs of reprocurement. Appellant appealed, alleging that the specifications were enforced less stringently in the reprocurement contract. The Board found that Appellant failed to prove disparate treatment, and that therefore, the reprocured work was similar to the work terminated, and that Appellant was liable for the Government’s extra costs. Wilson Contracting of Burns, Oregon, involved a tree-thinning contract in the Malheur National Forest, Oregon. After terminating the contract for default for failure to complete the work, the CO reprocured the work and assessed Appellant the excess costs of reprocurement. Appellant appealed, claiming that it had not been given credit for certain completed work, and that the reprocurement contractor could verify that this work had been completed. The appeal was settled. Windward Forestry of Quincy, California, involved a contract for a survival examination of tree plantings in the Plumas National Forest, California. The CO terminated the contract for default due to errors and discrepancies in every plot inspected. Appellant appealed on the basis that it was not given a 10-day cure notice as required by the contract. The appeal was settled.

Appeals arose from a variety of other types of Forest Service contracts. Mark J. Juel of Rhinelander, Wisconsin, involved a lease of a parking garage for the Nicolet National Forest Supervisor's office. The CO canceled the lease after the garage was shut down for building code violations. Appellant claimed compensation for damages to the building and the right to retain lease payments paid in error. Because Appellant had filed a claim with the CO, and the CO had not issued a proper decision on Appellant’s claim or on the Government’s claim for return of the lease payments, the Board dismissed the Appeal for lack of jurisdiction. Shasta Land Management Consultants of Redding, California, involved a contract to mark trees in preparation for a timber sale. The contract included a lump sum for marking, and Appellant claimed additional compensation for marking trees in excess of those covered by the contract. The Forest Service provided an estimate of the timber volume to be marked, but claimed it had no liability under the contract for marking in excess of this amount. After a hearing, the Board found the contract to be ambiguous, that Appellant's interpretation was reasonable, and thus awarded the Appellant additional compensation for its extra work. Thomas H. Owenby of Marietta, Georgia, involved a lease of office space. After expiration of the lease, the Forest Service continued occupancy on a month-to- month basis. Upon giving notice that it would vacate the premises, the Forest Service agreed to pay Appellant $1,900 in lieu of making repairs. Appellant claimed that, because of the time needed to complete the repairs, it was unable to rent the premises for two additional months. Appellant sought the two months’ rent, plus attorneys’ fees, which the CO denied. The appeal was settled after the Board scheduled a hearing. Gerald Cunningham of Bremerton, Washington, involved the lease of three buildings. During a snowstorm, the roof of one building collapsed and damaged paint the Forest Service had stored in the building. The CO assessed Appellant the cost of sorting the paint and its value. Appellant appealed. The Government alleged that the roof collapsed due to lack of maintenance, while Appellant claimed the collapse was due to the weight of the ice and snow. The Board found that the amount of snow on the roof was not unusual and that the evidence demonstrated that the roof had deteriorated, and that such deterioration was the proximate cause of the collapse. The Board found the Government’s claim to be somewhat inflated, and reduced the amount of recovery.

Appeals arose from Forest Service Timber Sale contracts. Bob & Wanda Dowdy, d/b/a B & W Forest Products, of Jelm, Wyoming, involved the Onionpatch and Wolverine Timber Sales on the Routt National Forest, Colorado. The parties agreed that Appellant could harvest additional trees that would require marking for purposes of identification. Appellant then claimed increased costs because the pace of the marking allegedly delayed its work. The Board found Appellant had agreed to the timing of the marking and the Board denied the appeals. Freres Lumber Company, Inc., of Lyons Oregon, involved the Ridgetop Timber Sale in the Willamette National Forest, Oregon. During performance of the contract, a fire destroyed nearly 2,000 thousand board feet (MBF) of merchantable timber. The CO concluded that the fire was an "operations fire," i.e., one caused by the contractor’s operations, and denied Appellant’s claim for the lost value of the destroyed timber. The CO’s final decision also found Appellant liable for over $200,000 in fire-suppression costs. Appellant’s Motion for Partial Summary Judgment was denied because of the existence of disputed material facts. John E. Gallno of Sonora, California, involved the Wrights Creek II Multi-Product Timber Sale on the Stanislaus National Forest, California. After a dispute developed regarding the definition of included timber, the Forest Service suspended the contract until Appellant agreed to operate the sale in accordance with the Forest Service’s interpretation of the contract. Appellant then assigned the contract to another contractor with Forest Service approval. Appellant filed a claim for lost profits, which the CO denied and Appellant appealed. The Government filed a Motion to Dismiss because it alleged that, after the assignment, Appellant was no longer the "contractor" as defined in the Contract Disputes Act. Appellant opposed the Motion, arguing that the Government represented to Appellant that he would not lose his right to claim damages after the assignment. The Board denied the Government’s Motion concluding that the issues raised related more to the merits of the appeal than to the Board’s jurisdiction. George W. Sidley of Milton Freewater, Oregon, involved the Warm Springs Butte #9 Bough Sale on the Willamette National Forest, Oregon. The contract covered 24,000 pounds of "noble" fir and other specie boughs. Appellant claimed that there was insufficient noble fir, and that red fir had an unacceptably short life span when cut. The Government contended that the sale area contained 241 noble fir trees per acre, which should have allowed Appellant to harvest sufficient noble fir boughs. The appeal was settled after the Board scheduled a hearing. Potlatch Corporation of Orofino, Idaho, involved the Lower Salmon Creek Sale on the Clearwater National Forest, Idaho. A severe storm resulted in many trees on the sale being blown down. Potlatch claimed that the Forest Service failed to use due care when it refused to allow it to remove several remaining large trees, one of which later fell and damaged Appellant’s line machine. The Board concluded that the Forest Service had acted reasonably and in good faith, finding that the tree did not have obvious damage that would have alerted a reasonable inspector to the danger of the tree falling. SDS Lumber Company of Bingen, Washington, involved the Blimp Timber Sale on the Gifford Pinchot National Forest, Washington. Appellant claimed additional compensation for Forest Service actions that delayed the contract in order to protect the northern spotted owl. Appellant moved for Summary Judgment. The Board found numerous material facts in dispute and denied the Motion. John R. Wood Trucking, Inc., of Grants Pass, Oregon, involved the Big Pine Density Management Timber Sale in the Siskiyou National Forest, Oregon. After harvesting, the Forest Service billed Appellant for escalations in stumpage rates. Appellant claimed that the sale was not an escalated sale, and filed a claim for the escalated rates it was required to pay. The Government moved for Summary Judgment because it claimed that the contract documents unambiguously represented the sale to be an escalated sale. Appellant raised questions regarding the documents provided it by the Forest Service and whether the solicitation language was ambiguous and susceptible of Appellant’s interpretation. The Board found these disputed facts to be material, and denied the Government’s Motion. Jackie McClelland of Shelby, Texas, involved a contract for the sale of timber on the National Forests and Grasslands, Texas. Appellant sold its rights to cut certain timber to a third party, who cut 208 trees not authorized to be cut and was convicted of theft. The CO issued a final decision assessing Appellant the value of the 208 trees. Appellant appealed, claiming it was not responsible for the criminal activity of another. The appeal was settled. Rocky Mountain Log Homes, Inc., of Hamilton, Montana, involved the Hazard Lake Salvage Timber Sale on the Payette National Forest, Idaho. The CO modified the contract to protect the Snake River Chinook salmon, which changed the design of certain roads, thereby increasing the amount of Appellant’s "purchaser credit." The purchaser credit was earned by constructing the roads and could be used in lieu of cash to pay for timber. However, purchaser credit could only be used for that portion of the timber price above base rates. During the sale, Appellant delayed harvesting saw logs until they deteriorated to the classification of cull softwoods, a much less expensive classification than saw logs, and a classification that was sold at base rates, thereby precluding use of purchaser credit for its purchase. Moreover, at the end of the sale, a fire destroyed timber that Appellant harvested, but had not removed. Appellant claimed that because of the fire, the value of the timber above base rates was an insufficient amount to allow Appellant to use all the purchaser credit it had earned. Appellant claimed that the ineffective purchaser credit should be paid to Appellant in cash. The Board concluded that the fire played only an insignificant role in purchaser credit becoming ineffective, and that Appellant’s delay in logging resulted in the more expensive saw logs becoming base-rate, cull softwood, timber precluding use of purchaser credit for their purchase. The Board also concluded that the contract did not guarantee payment in cash for ineffective purchaser credit, and denied the appeal.

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Attachment 2
Examples of Legal Issues Considered in FY 1998

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 Mark J. Juel, Appellant filed an appeal more than 90 days after a CO’s decision that denied Government liability for damages to Appellant’s parking garage under a lease, and that demanded a refund of overpayments made by the Government. The Board dismissed the appeal without prejudice, for lack of jurisdiction, because there was no evidence that Appellant had filed a written claim for its damages, and because the CO’s decision failed to advise Appellant of its appeal rights regarding the Government’s claim for a refund. Thus, the 90-day limit for filing the appeal had not begun to run. Campesino'95 involved a contract for herbicide application. The parties previously settled the appeals and the Board dismissed them. Appellant later moved to reinstate the appeals because it wished to pursue a claim for lost profits that had not previously been considered. The Board denied the Motion to Reinstate because the dismissed appeals had been settled, and because the claim for lost profits had not been presented first to the CO, and the Board therefore lacked jurisdiction over it. In Eagle Equipment, Appellant claimed it had not been paid for unspecified equipment allegedly ordered for the Canyon Two Fire under an emergency equipment rental agreement. Because there was no evidence of a written claim having been filed with the CO, or that the CO had issued a final decision, the Board informed Appellant of the requirements for perfecting jurisdiction, and dismissed the appeal without prejudice.

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 Hobo Construction Co., the Appellant complained about non-receipt of a Forest Service list for bidders. The Appellant was informed of the standards for jurisdiction and afforded the opportunity to show cause why the appeal should not be dismissed. Because the Appellant did not demonstrate that the appeal was based on an existing contract, the Board dismissed the appeal for lack of jurisdiction.

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 John E. Gallno a dispute developed regarding the definition of timber included in a Timber Sale, and the Forest Service suspended the contract until Appellant agreed to operate the sale in accordance with the Forest Service’s interpretation of the contract. Appellant then assigned the contract to another contractor with Forest Service approval. Appellant filed a claim for lost profits, which the CO denied and Appellant timely appealed. The Government filed a Motion to Dismiss, alleging that the Board lacked jurisdiction because, after the assignment, Appellant was no longer the "contractor" as defined in the CDA. Appellant opposed the Motion, arguing that the Government represented to Appellant that he would not lose his right to claim damages after the assignment. The Board concluded that the assignment agreement failed to clearly indicate that the legal rights that had accrued prior to the assignment had been transferred to the assignee, or had been extinguished, and that the question of what happened to Appellant’s rights was more of a question relating to the merits of the appeal, rather than to the Board’s jurisdiction. The Board also concluded that Appellant had raised a material question of fact regarding the representation of the Government that precluded granting the Government’s Motion in any event.

Motions Practice

When a party moves for summary judgment it is claiming that there are no material facts in dispute and that it is entitled to judgment in its favor as a matter of law. In evaluating such a motion, the Board considers the record before it and construes all facts in the light most favorable to the party opposing the motion.

Rain and Hail Insurance Services, Inc. , involved reimbursement for prevented planting indemnity payments during FY 1996 and administrative and other costs and expenses incurred thereon. Appellant moved for partial Summary Judgment on entitlement because FCIC failed to respond to requests for admissions in the time allowed by Board rules. FCIC objected to Appellant’s supplementation of the Rule 4 record, to Appellant’s request for a hearing, and to Appellant’s request for the production of documents. The Board found it inappropriate to grant the Summary Judgment because of the short delay in responding to discovery, also finding many disputed material facts. The Board granted FCIC's objections to supplementation of the Rule 4 record, but allowed Appellant to introduce the excluded documents at a hearing. The Board denied FCIC’s objection to a hearing, and allowed further discovery.

Another appeal by Rain and Hail involved a suit by an insured in a Michigan state court for which Appellant claimed reimbursement for litigation expenses under FCIC Manager's Bulletin 93-020 (MGR 93-020). In order to obtain reimbursement, the bulletin requires that the suit involve an attack on FCIC's policies that involves the probability of a legal precedent detrimental to the crop insurance program. The facts of the case were not in dispute and the parties filed cross motions for summary judgment. Appellant asserted the suit challenged FCIC’s requirement for hard data in determining crop yields under the Grower Yield Certification (GYC) Program. The Board concluded the insured asserted only that Appellant’s agent had failed to advise that GYC data were required. Appellant asserted the suit challenged FCIC’s state law pre-emption powers because the suit was filed after the 12-month requirement in the Multi Peril Crop Insurance (MPCI) policy. The Board concluded that the insured had not attacked FCIC’s state law pre-emption rights, since the suit was not based upon the policy, but upon the negligence of Appellant’s agent. Appellant also asserted that the suit involved an attack on FCIC regulations precluding recovery of certain types of damages, attorney’s fees and costs. The Board concluded that the insured’s mere request for these damages and expense, without more, was not an attack on FCIC regulations. The Board concluded that the suit did not meet the criteria for reimbursement under MGR 93-020, denied the Appellant's Motion for Summary Judgment, and granted that of the Government. In dismissing the appeal, the Board noted that settlement of a suit would not preclude recovery under MGR 93-020.

Another appeal by Rain and Hail also involved the analysis of MGR 93-020 where the FCIC had denied reimbursement for litigation expenses. The case involved a dispute between Appellant and the insured over an interpretation of the MPCI policy language relating to the method of computing the size of the corn harvest. The facts of the case were not in dispute. FCIC acknowledged that the suit met the requirements for reimbursement except for the fact that the insured was challenging the provision of a Michigan State Endorsement rather than FCIC’s language. The Board found that FCIC’s allowance of the use of the Michigan State Endorsement precluded FCIC from denying recoupment of litigation expenses. The litigation met the requirements for reimbursement under MGR 93-020, and the Board granted Appellant's Motion for Summary Judgment.

Freres Lumber Company, Inc., involved the Ridgetop Timber Sale in the Willamette National Forest, Oregon. During performance of the contract, a fire destroyed nearly 2,000 thousand board feet (MBF) of merchantable timber. The CO concluded that the fire was an "operations fire," i.e., one caused by the contractor’s operations, and denied Appellant’s $1,125,000 claim for the lost value of the destroyed timber. The CO’s final decision also found Appellant liable for over $200,000 in fire-suppression costs. Appellant moved for Partial Summary Judgment because the Forest Service erred by failing to compute the timber value loss under precedent set by the Board of Contract Appeals in Fort Vancouver Plywood Co., AGBCA No. 89-109-1, 88-1 BCA ¶ 20,289, and because Appellant was not responsible for the actions of the company believed responsible for the fire, which it claimed was acting under Forest Service direction at the time of the fire. The Government opposed the Motion, claiming that Fort Vancouver was inapplicable because there the Forest Service had stipulated that it had negligently caused the fire, and that the party causing the fire here was operating as Appellant’s subcontractor at the time of the fire. Existence of disputed facts made Summary Judgment inappropriate, and the Board denied Appellant’s Motion.

SDS Lumber Company involved the Blimp Timber Sale on the Gifford Pinchot National Forest, Washington. Appellant claimed compensation for additional stumpage for Forest Service actions that delayed the contract in order to protect the northern spotted owl. Appellant moved for Summary Judgment because it claimed that two separate contract clauses provided for such compensation. The Board found numerous material facts in dispute regarding which clauses were applicable to the contract, as well as potential ambiguities in the contract clauses themselves that precluded the Board’s deciding the appeal on the record before it. The Board also found that there was a question of the reimbursement allowed by at least one of the clauses at issue.

In John R. Wood Trucking, Inc., the Forest Service billed Appellant for escalations in stumpage rates Appellant was required to pay in the Big Pine Density Management Timber Sale. Appellant claimed that the sale was not an escalated sale, and filed a claim for the increased rates it was required to pay. The Government moved for Summary Judgment because it claimed that the contract documents unambiguously showed the sale to be an escalated sale, and thus that it was entitled to judgment as a matter of law. Appellant raised questions regarding whether the Forest Service provided it with certain contract sections and whether such certain pages were included in the sample contract available for pre-bid inspection. The Appellant further questioned whether the solicitation language was ambiguous and susceptible of Appellant’s interpretation. The Board found these disputed facts to be material and denied the Government’s Motion.

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.

The Wild Wood Associates, Inc., involved a contract for a forest resource inventory of the Boise National Forest in Idaho. Appellant challenged the default termination of its contract and the CO's denial of four monetary claims. Appellant had used 90 percent of the contract period, but had completed none of the work to Forest Service inspectors satisfaction, which justified the default termination. Appellant claimed numerous reasons for its failure to complete the contract and as justification for its monetary claims, including ambiguities in the contract, impossibility of performance, defective specifications, overzealous inspections, government delays, and inaccessibility of the site. Appellant also alleged that the Government failed to enforce certain contract provisions against the reprocurement contractor as it had against Appellant. The Board found that Appellant failed to prove any of its allegations, and denied the appeal.

Wilson Contracting involved the default of a tree thinning contract on the Malheur National Forest in Oregon. The default termination does not preclude payment for acceptable work completed prior to the termination. Appellant alleged that it completed work for which it had not been paid and that the reprocurement contractor could verify that such work had been completed. After the appeal was docketed, the parties settled the appeal.

John A. Bloodgood involved a contract for timber-stand improvement on the Mark Twain National Forest, Missouri. The CO terminated the contract for default for Appellant’s failure to make satisfactory progress, which Appellant did not appeal. The CO reprocured the work and assessed Appellant the excess costs of reprocurement. Appellant filed a timely appeal. Appellant alleged that the specifications were enforced less stringently in the reprocurement contract. The Government claimed that Appellant’s arguments covered the propriety of the default, which the Board could not address because Appellant failed to appeal the propriety of the default termination. The Board concluded that even where the same specification had been used for the reprocurement contract as on Appellant’s contract, a significant change in the manner in which the specification is interpreted and enforced can result in the reprocurement being dissimilar to the original procurement thereby defeating the Government’s claim for the excess costs. Here, the Board concluded Appellant’s proof of disparate treatment was not persuasive and denied the appeal.

Consideration of Appeals on the Merits

Staff, Inc., involved a contract for pre-commercial tree thinning on the Tongass National Forest in Alaska. The dispute involved whether Appellant was required to remove plant growth known as "whips," whether substituted acreage was more difficult to work than deleted acreage, and whether certain work had been properly rejected. Appellant claimed additional compensation. The Board found that the contract was ambiguous regarding whips, but also that Appellant’s claim was greatly inflated. The Board allowed Appellant 10 percent of Appellant’s claimed damages. Regarding the substituted acreage, the Forest Service believed it had agreed with the Appellant to substitute the acreage at no increase in price, and argued that the work was no more difficult than the original acreage. The Board found that the lack of a signed modification negated the existence of an agreement, and further found that the evidence demonstrated that the substituted acreage was more difficult. The Board awarded Appellant its increased costs paid to its subcontractor, and used a jury verdict approach to compensate Appellant for its own costs. The Board found that the Government had properly rejected the disputed work and awarded no compensation for that claim.

Shasta Land Management Consultants involved a contract to mark trees in preparation for a timber sale. The contract included a lump sum for marking, the quantity of which the Forest Service had changed during the bidding of the contract. Appellant claimed additional compensation for marking trees in excess of the amount covered by the contract. In providing the estimate of the volume to be marked in the contract documents, the Forest Service claimed it had no liability for marking in excess of this amount because the amount was merely an estimate on which the contractor should not rely. After a hearing, the Board found the contract to be ambiguous, that Appellant's interpretation and reliance was reasonable, and thus awarded the Appellant additional compensation for its extra work.

Fairfax Opportunities Unlimited, Inc., involved an appeal under a requirements contract for providing staffing, services, equipment, and other support for operation of a mail room, supply room, and copy center for the Economic Research Service (ERS). Appellant claimed that the Government's estimate for the number of copies it would order greatly exceeded the number of copies actually ordered, and that therefore, Appellant could not recover its copying expenses. Appellant claimed that the timing of the bidding and award would have allowed the Government to provide additional historical copying information that would have provided a more accurate estimate of the number of copies. The Government alleged that it used due care in preparing the estimate. In providing a response to a bidder's question regarding the number of copies, however, ERS provided a figure for December that in fact reflected November's copying, and it provided no figures for the months between the time of that solicitation amendment and the receipt of offers. The Board found that, the Government must provide information that is readily available and reliable, especially where bidders have specifically requested such data. The Board concluded that the Government failed to use due care in preparing the estimate, and sustained the appeal.

Potlatch Corporation involved the Lower Salmon Creek Sale on the Clearwater National Forest, Idaho. The undisputed evidence showed that a severe wind storm had caused the blow down of a large number of trees in the sale area. Appellant claimed that the Forest Service failed to use due care when it refused to allow Appellant to remove several large remaining trees, one of which later fell and damaged Appellant’s line machine. Appellant claimed compensation for damages to its machine. Although the Board has no jurisdiction over pure tort claims, it does have jurisdiction to consider contract questions that may turn on the negligent manner in which the Government is alleged to have performed its contractual obligations. The Board thus considered whether the Forest Service’s evaluation of Appellant’s request to cut down the tree that caused the damage was made reasonably and in good faith. The Board found that the tree did not have obvious damage that would have alerted a reasonable inspector to the danger of the tree falling, notwithstanding Appellant’s argument that the inspector should have recognized the implicit and inherent hazardous nature of the trees after a previous storm. The Board concluded that Appellant did not demonstrate that reasonable practice mandated removing the trees subject to the storm or that trees that had been subject to wind are per se dangerous absent other signs of danger. The appeal was denied.

Rain and Hail involved an appeal under a Standard Reinsurance Agreement (SRA) and Manager’s Bulletin MGR 93-020. MGR 93-020 allows reimbursement of litigation expenses where the suit involves an attack on FCIC's policies that involves the probability of a legal precedent detrimental to the crop insurance program. In this case, an insured sued Appellant for failing to fully compensate the insured for a dry bean crop loss incurred under an MPCI policy. Appellant claimed the insured was not entitled to full payment because the insured failed to report a minority interest in a farming partnership that it owned in another county. The insured insisted that neither the FCIC prescribed MPCI policy nor the Loss Adjustment Manual required reporting of the minority interest created after it signed up for the insurance. This litigation was settled. FCIC had denied reimbursement for litigation expenses because the underlying case was settled. The Board found that settlement would not disqualify otherwise eligible litigation from recoupment of litigation expenses under MGR 93-02, and sustained the appeal.

Rocky Mountain Log Homes, Inc., involved the Hazard Lake Salvage Timber Sale on the Payette National Forest, Idaho. The CO modified the contract to protect the Snake River Chinook salmon. The modifications involved changes to the design of the roads needed to remove the timber. The changes increased the cost to construct the roads. Under the terms of the contract, Appellant earned "purchaser credit" for constructing the roads. The purchaser credit could be used in lieu of cash to pay for the timber. However, purchaser credit could only be used to pay for the portion of the timber price above base rates. Prior to the end of the sale, a fire destroyed timber that had been cut, but not removed from the sale area. Appellant filed a claim alleging that some of its earned purchaser credit became ineffective because there were no more logs to purchase because of the fire. Appellant sought the cash value of the ineffective purchaser credit. The Board found that Appellant had delayed harvesting some of the more expensive saw logs until they deteriorated into cull softwood, which could be harvested and paid for at base rates. The Board concluded that this was the primary reason Appellant’s purchaser credit became ineffective, not because of the fire. The Board also concluded that the contract did not insure that Appellant would receive payment in cash for purchaser credit that became ineffective, particularly where the ineffective purchaser credit resulted from Appellant’s logging procedure, involving delayed logging that resulted in the more expensive saw logs deteriorating to the cheaper cull softwood category.

In Rain and Hail the appeal arose under a 1993 SRA. Under the SRA, the FCIC agreed to reinsure companies for a percentage of MCPI indemnity payments properly made to insureds. At issue in the appeal was an indemnity payment Appellant made to an insured for a crop failure on land that had been classified as "summerfallow" (as opposed to continuous cropping) for the previous crop year. Summerfallow land results in greater crop yields and therefore greater indemnity liability than continuous cropping. After receiving an anonymous complaint, FCIC determined that the land was improperly classified as summerfallow because there was no continuous weed control, and thus that Appellant had overpaid the indemnity payment. The SRA provided that Appellant could be required to refund reinsurance for violations of MPCI policies. Implicit in this provision is the situation involving improper classification of the land. FCIC issued a final determination disallowing $66,525 reinsurance as well as $2,629 in premium overstatement. The insured had not previously farmed the land itself, and the Appellant had inquired of the Agricultural Stabilization and Conservation Service (ASCS), another USDA agency, as to how that agency had classified the land at issue. ASCS had classified the land as summerfallow. Appellant alleged that it then verified with FCIC officials that it was proper for it also to classify the land as summerfallow based on the ASCS classification. Appellant alleged that it was entitled to rely on the advice from FCIC officials as to the proper classification of the land, and to comply with custom and usage in relying on ASCS documents and the farmers’ certification that the land was summerfallow. The Board found that the Appellant failed to demonstrate several of the elements necessary to bind the Government in that the FCIC official had no independent knowledge of the condition of the land and had no intent to waive or change the FCIC requirements for summerfallow. The Board denied the appeal.

Gerald Cunningham involved the Forest Service lease of three buildings. During a snowstorm, the roof of one building collapsed and damaged paint the Forest Service had stored in the building. The CO assessed Appellant the cost of sorting the paint and its value, and the Appellant appealed. The Government alleged that the roof collapsed due to lack of maintenance, while Appellant claimed the collapse was due to the weight of the ice and snow. The Board concluded it had jurisdiction notwithstanding the fact that the Forest Service claim included elements of tort law. The lease included several provisions that imposed affirmative obligations on Appellant to properly maintain the structure including the roof. On the merits, the Board found that the amount of snow on the roof at the time it failed was not unusual for the area, and that a properly maintained roof would have held such weight. The Board further found that the evidence demonstrated that the roof had deteriorated and that such deterioration was the proximate cause of the collapse. The Board found, however, that the Forest Service estimate for damages was somewhat inflated, and reduced the amount the Forest Service could recover.

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.

Bill J. Copeland involved construction of the Serrano Comfort Station and the Santa Ana River Trail in the San Bernardino National Forest in California. The appeals concerned the default terminations and numerous claims under the two contracts. Appellant alleged that Forest Service’s withholding of certain amounts from payments due Appellant for completed work was a contributing cause to Appellant’s failure to make adequate progress. The Department of Labor (DOL) had requested the Forest Service to withhold the monies because Appellant allegedly failed to pay certain employees. Appellant denied that it failed to pay these employees. These employee wage payment issues involved matters within the exclusive jurisdiction of the DOL and Appellant was seeking redress from DOL. Appellant had previously requested Rule 30 dismissals for a period of 3 years, which the Board granted. Since the 3 years was near expiration and there was no resolution by DOL, Appellant requested extension of those dismissals for another period of 3 years. The Board found that its rules do not provide authority for extending the period of the Rule 30 dismissal beyond 3 years. However, the Board found that its rules permit reinstatement of the appeals prior to the expiration of the 3-year period, which the Board did. After reinstatement, the Board had authority to apply Rule 30 again and dismiss the appeals for another period of 3 years, thus preserving Appellant’s right to adjudicate the propriety of its contract terminations.

Mark Guiton and Associates involved installation of watertight pond liners in four sewage- treatment ponds at the Eagle Lake Sewage Treatment site in the Lassen National Forest in California. After Appellant installed the liners, they developed leaks. The Forest Service requested that the Appellant make repairs under the contract’s Warranty Clause because the leaks occurred within 1 year of installation, or, if even outside the 1-year warranty period, because the leaks were Appellant’s responsibility as latent defects. Appellant refused to make repairs, arguing that the Forest Service should pursue instead the manufacturer of the liners. The parties notified the Board that they had tentatively settled the appeal, but would need a significant amount of time to finalize the agreement. The parties agreed to dismissal without prejudice of the appeal under Board Rule 30 for a period of 9 months. If neither party requests reinstatement of the appeal within that time, the dismissal will become one with prejudice.

Bugaboo Timber Company involved a Timber Sale on the Mt. Hood National Forest. Appellant filed a claim requesting that the Forest Service cancel a bill of collection, withdraw its claim that Appellant was in breach, lift the contract suspension, and award a contract term adjustment. Generally, when a contractor files for bankruptcy, the Government is precluded from pursuing claims against the contractor because of the "automatic stay" in the bankruptcy law. However, claims by the contractor against the Government are not affected by the automatic stay. However, these claims may be presented only with the permission of the trustee in bankruptcy. Appellant requested that the appeal be dismissed because it was involved in bankruptcy proceedings and the United States Trustee had not authorized prosecution of the appeal. Because Appellant did not specify whether the dismissal should be with or without prejudice, the Board dismissed the appeal without prejudice for a period of 6 months under Board Rule 30.

Equal Access to Justice Act

Under the Equal Access to Justice Act (EAJA), 5 U.S.C. § 504, the Board is empowered to grant attorney 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. In FY 1998, Harry and Keith Mertz Construction, Inc., filed an application for attorney fees and expenses, after the Board sustained its appeal from a termination for default. Because the underlying appeal contained close questions of law and fact, and thus required the Board to resolve close evidentiary questions, the Board found the Government's position to have been substantially justified, and denied the application for attorney fees and costs.

In Timber Rock Reforestation, the Board denied Appellant’s application for attorney fees and expenses under the EAJA. The Board had sustained Appellant’s appeal from a termination for default of its contract. The evidence showed that Appellant started work late, had failed to obtain necessary work licenses, and that its workers made slow progress while performing poor quality work. The Board considered these facts on balance against Government actions that the Board considered harmful and that had impeded Appellant’s performance. The Board concluded that the Government was substantially justified in litigating the appeal even though the Board held in Appellant’s favor in the underlying appeal. Appellant’s request for reconsideration of the Board’s decision denying Appellant’s EAJA claim was dismissed, because Appellant essentially reargued the original case without offering any new evidence or pointing out reversible Board errors.

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Attachment 3
Appellate Review of Board Decisions During FY 1998

Cases Decided on Appeal

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
Affirmed February 24, 1998

Jack L. Olsen, Inc. v. Secretary of Agriculture
AGBCA No. 95-119-10
Fed. Cir. No. 96-1198, appealed February 5, 1996
Dismissed by Agreement of the Parties November 5, 1998

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