Dominick P. Weinkam (email@example.com) is a J.D. candidate at The George Washington University Law School and Senior Articles Editor of the Public Contract Law Journal. He would like to thank Professor Collin Swan and Velika Nespor for their incomparable guidance in writing this Note, as well as Karleigh Ash, and his parents, Lou and Dawn Weinkam, for their invaluable support during the writing process.
Picture yourself as a principal officer of a large construction firm working on a lucrative contract with a federal government agency. A dispute arises during the performance of this contract and you assert your rights under the Contracts Disputes Act of 1978 (CDA) to appeal to the appropriate board of contract appeals (BCA).1 Eager to return your focus to performing the contract successfully, you authorize your attorney to settle the pending dispute, and your attorney productively engages with the agency attorney assigned to the case. After lengthy discussions with the agency attorney, your attorney calls with good news; your case has settled! The presiding judge is notified and you take a deep breath, relieved to put the matter behind you. Unfortunately, your elation is short lived. The agency attorney is back on the phone and regrets to inform you that the Contracting Officer (CO) never explicitly authorized the settlement agreement, and therefore, the agency refuses to honor it. Determining the validity of the agreement requires time- consuming and expensive litigation. If the settlement agreement is invalid, then you are back to square one and forced to continue litigating the original dispute on the merits.
This set of facts is a distilled version of the case in Marino Construction Co., in which the Veterans Affairs Board of Contract Appeals2 determined that the settlement agreement was invalid in the absence the CO’s explicit approval.3 Who is to blame for this litigation arising from litigation that accomplished nothing more than determining that the parties must turn back the clock and continue as if nothing happened?
The jilted contractor likely would assign the blame to the agency attorney. How could he or she not know the rules and proper procedure? From the agency attorney’s perspective, this rule is not always as clear in practice as it appears in the regulations. In Marino, the CO had instructed the attorney that he would like the matter settled at a reasonable cost.4 It is not so difficult to interpret that statement as a delegation of settlement authority to the agency attorney. If that is not sufficiently convincing, compare the previous example with another case — this time from a CO’s perspective. In Fentress Bradburn Architects, the CO for the litigating agency met with a principal officer of the contractor and discussed a settlement of the pending litigation.5 After proposing a dollar amount to settle all claims between the parties, which the contractor accepted, the CO shook the contractor’s hand and said something to the effect of, “Nice doing business with you, I am glad to get this settled, see you soon.”6 Once again, it is not difficult to interpret these words to mean the case had been settled, avoiding costly litigation. But in this case, even though the CO had the warrant and full authority to bind the government to a settlement agreement,7 the default under the Federal Acquisition Regulation (FAR),8 the board judge invalidated the agreement and reinstated the contractor’s appeal on the merits.9
In short, these cases illustrate a problem: under the current contract performance dispute resolution process, settlements can be overturned for lack of actual authority. But as these examples show, the blame for this problem is not readily assignable to any particular party.10 This suggests a latent structural defect, which invites further investigation to determine whether contract performance litigation can be avoided through settlement agreements in a more efficient and effective manner.
Generally, settlement of disputes without resorting to full litigation on the merits is a worthy goal in the world of government contracts as well as in the context of general civil practice. Litigation is expensive and time-consuming. Litigation arising from an attempt to end litigation through a settlement agreement reflects a disastrous departure from the original intentions of the parties. In 2002, Professor Steven Schooner identified nine goals of government contract law, and while he did “not suggest that this list is exhaustive,”11 it is not surprising to find that confusion, duplicated roles, inefficient distribution of responsibility, and scarce human resources did not make the cut.12
A system that desires efficiency should not tolerate the outcomes outlined above, but the aforementioned cases prove that in the context of the federal procurement disputes, it has. A regulation should be adopted that transfers the authority to settle cases from the CO to the agency attorney. This shift in authority would reflect the stated goals of the CDA,13 ease the burden on COs by allowing them to focus on their primary roles, empower agency attorneys to use the full amount of their experience, knowledge, and skills, as well as simplify the dispute resolution process to the benefit of less sophisticated contractors.
The procurement system tends to promulgate reform primarily in response to public and newsworthy scandals.14 From this perspective, it is easy to write off and overlook the Marino and Fentress examples as tolerably rare occurrences and accept the structure of responsibility and authority detailed above as functional and satisfactory to all involved parties. Responses to scandals should not be the only method of improving the procurement system, even when recognizing the difficulty in overcoming the inertia of complacency manifesting the reality that “comfort with the status quo effectively stifles wholesale change.”15 This Note does not propose that reform should be implemented solely because of the unacceptable results produced in the sample cases. Instead, it seeks to unveil the latent structural conflicts within the current procurement dispute resolution process and to examine the goals and objectives of the CDA and the procurement system on the whole. Taking this approach, this Note proposes that the government should never cease to examine and evaluate the effectiveness of its procedural structures. The procurement community should aid in developing solutions wherever it finds structural deficiencies rather than acting only through reactionary impulses to obvious and exposed corruption and scandal.
This Note demonstrates that the current delegation of authority and responsibility within the current contract performance dispute resolution process does not comport with the original goals of the CDA or the objectives identified by Professor Schooner.16 There is a shortage of skilled COs within the acquisition workforce, a problem amplified by the growing complexity of their numerous responsibilities.17 Agencies have a talented pool of employees to ameliorate this problem. To steer the procurement system closer to its intended goals, emphasizing efficiency, uniformity, and best value, this Note proposes a new regulation that will reassign the authority to settle cases before the BCAs from COs to agency attorneys. This proposed reform will benefit all parties involved in government contract disputes. The regulation will allow COs to focus on the administration of contracts; empower agency attorneys by recognizing their status as the most experienced, trained, and skilled litigators employed by the agency with an official grant of authority; and provide clarity to government contractors. Further, the regulation will achieve these results in accordance with bureaucratic theory — without running afoul of the attorney-client relationship in the context of a federal government agency.
Part II of this Note provides a survey history of the CDA, outlines the development of the dispute resolution process and the BCAs, as well as offers a brief foray into bureaucratic theory and the attorney-client relationship as applied to the agency attorney. Part III shows how shifting the settlement authority from COs to agency attorneys will benefit the three major affected parties: COs, agency attorneys, and government contractors.
A. The Contract Disputes Act of 1978
A brief history of the CDA reveals how the current procurement system has failed to live up to its well-intentioned original goals. Congress passed the CDA in 1978 to codify and reorganize a performance dispute resolution process that previously had developed in a relatively ad hoc manner.18 The CDA aimed to implement “a fair, balanced, and comprehensive statutory system of legal and administrative remedies in resolving [g]overnment contract claims.”19 The statute remains the backbone for the dispute resolution process, subject to modification by subsequent statutes and regulations.20 Prior to the enactment of the CDA, the resolution of contract claims relied on the insertion of clauses within individual contracts and agency regulations, a system that Congress recognized as having “developed in an unplanned manner.”21 Congress resolved to design a more efficient process for the resolution of disputes in response to an increasingly complex procurement landscape.22 The CDA reflects a conscious recognition of the importance that negotiation should play in reaching this desirable goal of efficiency through an increase in settlements, as opposed to protracted and costly litigation,23 in addition to bringing structure and uniformity to the procurement system as a whole.
In the years following the enactment of the CDA in 1978, the importance of federal government contracts to the nation’s economy continued to increase.24 This increase led in part to a corresponding rise in the number of procurement performance disputes.25 With this increase in the caseloads for judges, many practitioners and scholars began urging the government to live up to its promise of creating an efficient dispute resolution framework.26 There were numerous suggestions for achieving this goal, some of which were successful.27 However, this Note focuses on a vocal group of proponents focused on prioritizing the CDA’s stated goal of avoiding costly litigation through the expanded use of alternative dispute resolution (ADR) methods and encouraging settlement of claims at the earliest possible stage.28 Despite limited success,29 more work is needed to bring the dispute resolution process into full conformance with the original intent of the CDA.
B. The History and Development of the Boards of Contract Appeals
The various BCAs developed as an alternative forum to litigation in federal court.30 The CDA officially recognized the importance of these administrative law bodies to the dispute resolution process and granted them the ability to issue all remedies available within the federal court system.31 The BCAs provide a desirable alternative to courts for government contractors because the judges on the boards are veteran experts in procurement law.32 In contrast, the U.S. Court of Federal Claims (CoFC) handles a number of areas of law linked only by the commonality of claims against the federal government.33
There are several active and distinct BCAs.34 The first BCAs developed to serve the needs of individual agencies, but by 1979 all agency boards had adopted uniform procedural rules that “remain substantially intact today.”35 As early as 1979, scholars and policymakers began to suggest that the various agency boards should consolidate into one or two main entities.36 In 2006, Congress finally recognized these calls and passed the National Defense Authorization Act for Fiscal Year 2006, which authorized the consolidation of the civilian boards into the Civilian Board of Contract Appeals (CBCA).37 After consolidation, the two primary remaining boards are the CBCA and the Armed Services Board of Contract Appeals.38 While there are some remaining smaller boards,39 this Note considers the boards as a single category.40
The various BCAs have long been ahead of the curve in ADR procedures to promote dispute resolution without litigation.41 Government policy encourages agencies to “use ADR procedures to the maximum extent practicable.”42 ADR and settlement discussions are not identical, but stem from the same desire of the parties to avoid litigation and resolve disputes in an expeditious manner.43 The ADR technique known as non-binding mediation blurs the line between ADR and settlement discussion.44 The fact that mediation is the “most popular form of ADR used at the BCAs”45 suggests contractors that file their appeal with the appropriate board are open to engaging in productive discussions with the agency regarding the legal merits of the matter, with the goal of avoiding litigation through a settlement agreement. The BCAs long have represented an alternative to the courts and formal litigation proceedings.46 Even though the CoFC effectively offers all the same ADR procedures,47 the BCAs have history on their side as the forum for parties who are open to alternative methods of resolution and settlement,48 which makes the outcomes observed in Marino and Fentress even more intolerable.49
C. Contracting Officers: The Overburdened Foundation of the Procurement System
COs serve as fundamentally critical agents of the government and the foundation of the procurement system. The FAR grants COs the authority to enter into contracts up to their designated warrant.50 This contract formation role requires a vast knowledge of the needs, available resources, and strategic direction of the agency, in addition to a strong working knowledge of the applicable statutes and regulations.51 After entering into the contract, the CO takes the lead role in its administration.52 In short, this duty requires establishing a relationship with the contractor to monitor the contractor’s performance in accordance with the terms of the contract.53 The CO serves as a strong advocate for the agency while managing the performance of a contract.54 This entails ensuring that the contractor strictly complies with the terms of the contract to give the agency the exact result for which it bargained.55 When a dispute arises, this role becomes murkier as the CDA and the FAR obligate the CO to put aside the agency advocate perspective and “ensure that contractors receive impartial, fair, and equitable treatment” when issuing the CO’s final decision (COFD).56
Upon a CO’s denial of a contractor’s claim and subsequent appeal to the appropriate BCA, the CO forfeits the authority to adjudicate the claim on its merits, but retains the sole authority to enter into a settlement agreement on behalf of the agency.57 With the introduction of a third-party adjudicator on appeal, the CO (and thus those within the CO’s office) becomes the primary source of the underlying facts for the ongoing litigation.58 The CO’s duty to manage contract performance continues unabated during this process despite the need to juggle many tasks and perspectives.59
One of the most distinctive rules of procurement law is that, under the CDA and the FAR, a government contractor must continue performing under the contract while disputes are resolved at risk of defaulting on the contract, absent a breach of contract by the government or a grant of declaratory relief.60 As a result, the CO must maintain a productive relationship with the contractor to promote effective contract administration even while the dispute creates an adversarial posture between the contractor and the agency regarding the disputed claim.61 As noted by several commentators on the topic, the increase in the complexity of the procurement system has placed a severe burden on COs, resulting in a pronounced shortage of well-trained, skilled, and experienced acquisition personnel.62
For at least the past decade, scholars and commentators have searched for a solution to a variety of problems facing the acquisition workforce.63 These problems include an aging workforce where many of the experienced personnel are nearing retirement, an increasingly complex procurement system, a rising volume of work, and inadequate training.64 As recently as 2013, Professor Steven Schooner and David Berteau expressed the hope that “it is time to fundamentally rethink and revise current human capital strategies, including planning, development, performance management, and, in some cases, structures.”65 Unfortunately, this statement follows an admission that “it is difficult to be optimistic about major investment in the acquisition workforce in light of the current economic realities.”66 Faced with these realities, if agencies are to solve their “human capital crisis,”67 they must rely on increasing efficiency rather than hold out hope for a miracle influx of funding.
D. Untangling the Red Tape: Theories of Efficient Bureaucratic Management
Shifting settlement authority via the proposed regulation will eliminate unnecessary bureaucratic hurdles and therefore significantly improve agency efficiency.68 Just as it is a general goal for the procurement system,69 bureaucracies should seek to eliminate red tape and become as efficient as possible while remaining effective and true to their purpose.70 One of the most important hurdles in creating an efficient bureaucratic agency is the unavoidable tension created by an agency that has multiple, sometimes conflicting, missions.71 Agencies often are viewed as unitary institutional actors; the reality is that they are composed of various departments, which are themselves composed of individuals.72 Theories of bureaucratic efficiency seek to create a balance to protect the missions of the agency through the creation of effective hierarchies and division of independent decision-making authority.73 It is important to distill the various theories into a unifying principle, one that should guide any analysis of improving efficiency. According to James Q. Wilson, that principle is “[t]he only way to decide whether an agency is truly inefficient is to decide which of the constraints affecting its action ought to be ignored or discounted.”74 Requiring COs to approve settlement agreements prevents agencies from managing litigation in the most efficient and effective manner possible; hence this bureaucratic hurdle should be removed by shifting the settlement authority to agency attorneys.
E. The Muddled Attorney-Client Relationship for the Government Attorney
Shifting settlement authority to agency attorneys inherently requires entering the muddled area of scholarship regarding the appropriate classification of the attorney-client relationship in the context of federal government agencies. When a contractor appeals a COFD to the appropriate BCA, the agency attorney becomes a prominent agent for the government.75 Before this point, the agency’s Office of General Counsel plays an important advisory role while the CO evaluates the merits of the dispute prior to issuing a final decision.76 But once a contractor appeals the CO’s decision, the agency attorney’s role greatly increases.77 The agency attorney serves as counsel for the client, who is the CO in the current organization structure.78 The agency attorney’s expert legal knowledge, experience in negotiation, and potential familiarity with the judge presiding over the appeal justifies his or her increased role once litigation reaches the appropriate BCA.79 To explore this topic fully, it is necessary to turn to the debate about the unique ethical issues that arise for the agency attorney in contrast to those faced in purely private arenas.
A scholarly debate exists regarding the proper formulation of the attorney- client relationship within the context of the federal government agency.80 The two most prominent theories are the agency dominance and the public interest models.81 Under the agency dominance theory, the attorney serves as the advisor to the agency as a whole.82 While this theory provides a conceptually “nice and clean” answer to this surprisingly difficult question, implementation issues remain, especially when bureaucratic theories are taken into account.83 Under this conception of the attorney-client relationship, the agency possesses the power to delegate the label of “client” to particular agency employees, and as a result, the relationship between these clients and the agency attorney functions in a reasonably similar manner as in a private practice context.84
Alternatively, under the public interest theory, the attorney holds a broader responsibility to the nebulous concept of representing the government as a whole, and according to some, representing the public good.85 This is a controversial view of the relationship because it implies the attorney is the ultimate interpreter of the public interest and may have a great deal of discretion in acting upon it.86 The attorney-client relationship in the context of the current dispute resolution framework most closely resembles the agency dominance model, with the agency having delegated the role of the client to the CO.87 The agency could delegate the client role to another position in the agency, including members of the Office of General Counsel, while remaining within the agency dominance model and without straying into the controversial territory of vesting attorneys with the power to act on their own interpretation of the public interest.88
A. Reviving the Original Intent of the Contract Disputes Act with a Novel Solution
Vesting the authority to settle disputes before the BCAs in agency attorneys rather than in COs will further the stated goals of the CDA,89 as well as general procurement policy goals, by creating an atmosphere more conducive to reaching equitable settlement agreements. Reform should seek to create an environment that enables both parties to apprise their best legal positions and avoid costly litigation whenever possible. While avoiding litigation through a settlement agreement is a worthy goal,90 it is not possible in all situations, and not all regulatory reforms should expect to achieve this goal. Transferring settlement authority from COs to agency attorneys will create a more settlement-conducive environment in many ways. First, this reform would emphasize the finality of the COFD. Second, this reform would promote symmetry in the dispute resolution process, which currently provides two paths for a contractor’s appeal, with diverging roles for the CO dependent solely on the choice of the contractor.
The proposed reform would restore the COFD’s stated importance,91 which in turn would create a stronger incentive for both the CO and the contractor to engage in meaningful negotiations and amicably settle potential disputes without resorting to litigation. As stated in the FAR, “[t]he [g]overnment’s policy is to try to resolve all contractual issues in controversy by mutual agreement at the contracting officer’s level.”92 This is a logical policy because it is the last chance the government has to resolve a dispute before turning the ultimate authority on appeal over to an independent judge.93 An effective procurement policy should reflect the finality of this decision as well as the implications of a failure to resolve the issue at this level.
The current dispute resolution framework regrettably does not respect the intended finality of a COFD in every case. Shifting settlement authority from COs to agency attorneys would improve the dispute resolution process by creating desirable symmetry between the two paths the contractor may choose when appealing a COFD. If the contractor receives an unsatisfactory COFD, the contractor may choose to file its appeal either with the CoFC or with the appropriate BCA.94 If the contractor elects to appeal to the CoFC, the U.S. Department of Justice (DoJ) will handle the litigation and the CO no longer will have the authority to settle the case.95 But if the contractor appeals to the appropriate BCA, the CO retains the sole authority to settle the dispute.96
This dichotomy creates a readily identifiable distinction between the two available options that turns solely on the contractor’s discretion.97 Three options come to mind as potential solutions to this unsatisfactory result. A reform either could vest the authority over these cases entirely with the DoJ, or in the alternative, with the CO and the contracting agency. These first two options would alter the dispute resolution process radically and would create symmetry at the expense of a tremendous shift in the responsibilities of all government actors.98 Yet by choosing a third option and removing the CO’s authority to settle the case on appeal to the BCAs, the dispute process would achieve a high degree of desired symmetry without a corresponding massive shift in the responsibilities and workload of the acquisition workforce. If adopted, this reform would place the authority to settle appeals in the hands of experienced government attorneys regardless of the forum the contractor elects and at the same time would not place the fate of CO’s role in the contractor’s hands.
B. Getting Back to the Basics: Allowing Contracting Officers to Focus on Contract Administration Rather Than Litigation
Vesting settlement authority regarding litigation before the BCAs in agency attorneys would allow COs to focus on their administrative duties, improving the procurement system on the whole. COs face enormous pressure to perform their duty to serve the government by performing a multitude of roles.99 Aside from their tasks relating to contract formation,100 COs are required to act as the agent of the procuring agency in ensuring successful performance of the contract. This includes inspecting the contractor’s work according to exacting government specifications,101 making decisions as to whether to adjust the contract through changes and delays,102 acting as an impartial judge in resolving disputes when responding to requests for equitable adjustments, determining whether to terminate a contract, and issuing a COFD.103 Relieving COs of the burden of ultimate responsibility for litigation before the BCAs would benefit the procurement system by creating a more natural distribution of human capital.
Shifting the settlement authority would ease the burden on an acquisition workforce that is already stretched thin, both in overall numbers as well as in training, by reducing the overall scope of responsibility of COs. Relieving COs of settlement authority before the BCAs would increase the proportion of contract administration related tasks performed by COs, the specialized realm of these personnel, as opposed to time spent overseeing ongoing and potentially complex litigation. The acquisition workforce is facing a shortage of experienced COs.104 A massive hiring spurt is highly unlikely to occur,105 and even if one did, it would be unlikely to address the root of the problem fully.106 Increasing the structural efficiency of the distribution of human capital already employed by the government is a potentially fruitful avenue by which to remedy the scarcity of experienced COs without creating new costs for procuring agencies. Shifting the authority to settle cases before the BCAs from COs to agency attorneys would create this desired efficiency in two ways.
First, the shift in authority would result in an overall reduction in workload for COs. This proposal acknowledges the reality that contract administration must continue with the same rigor during the dispute resolution process.107 This would allow for the currently employed acquisition personnel to utilize their skills and experience to reduce the need for additional hiring and training, easing the previously noted shortage. Removing the burden of staying current on the day-to-day108 developments of litigation from the CO’s shoulders would increase the time available to oversee contract performance as well as help to prevent the CO and contractor from developing hostile and adversarial positions if the appeal results in protracted litigation.109
Second, the shift in authority would reduce the number of roles for which new COs would have to be trained. New training efforts could target the most essential skills and base of knowledge required for acquisition personnel and therefore lead to a faster replenishment of the acquisition workforce “in a world in which budget pressures put training dollars at risk.”110 Instead of attempting to place the weight of bearing further responsibility on its foundation, COs, reform efforts should look to an available and untapped vein of talent, experience, and knowledge: agency attorneys.
C. Empowering Agency Attorneys
The proposed shift in settlement authority would empower agency attorneys to use their unique skills to their full potential. This would benefit the procurement system by promoting equitable settlements and avoiding unnecessary and protracted litigation. It also would bring the dispute framework into conformity with theories of bureaucratic management without infringing on the attorney-client relationship.
Agency attorneys possess a unique set of skills and experience that make them the best option the government has available to represent the agency in procurement disputes. Agency attorneys already bear responsibility for managing litigation before the BCAs.111 Through this experience, many attorneys are familiar both with the BCA judges and the attorneys representing contractors.112 Granting settlement authority to agency attorneys would allow the government to take full advantage of this knowledge to maximize positive results for the agency during litigation.
In addition, unlike many COs, agency attorneys have the requisite legal background to be able to view the case from a more objective, detached, and ultimately legal perspective.113 The BCA judge operates within this exact perspective when evaluating the case, and therefore, it would benefit the government to vest its ultimate authority in the party best able to match this viewpoint — the agency attorney.114 Lastly, outside of both experience and perspective, agency attorneys also are better versed in the precedents and procedures of the BCAs and are able to best approximate how a pending case would affect future cases if it were to be fully litigated on the merits.115 This knowledge is essential to making a fully informed decision regarding settlement of a case in the best interests of the agency as a whole.
It is true that the agency attorney already uses these skills in support of the CO within the current framework. A valid counterargument would question why change is necessary if the agency attorney already is making the decision and “[t]he CO’s signature is a formality.”116 However valid the assertions supporting this argument, the counterargument fails on the premise that if those shouldering the burden of the work had the requisite authority, the procurement system’s efficiency would increase substantially. If agency attorneys already are making these decisions, the regulations should reflect this reality to avoid confusion and unnecessary bureaucratic red tape. And even if agency attorneys are making most settlement decisions, a shift in official authority also would resolve the hypothetical outlier case where the more knowledgeable agency attorney encounters unjustified resistance from the CO. The agency attorney’s inherent advantage of knowledge, skills, and experience would be put to better use if he or she were not restrained by the burden of attempting to communicate all this knowledge to the CO. It would be more efficient if the attorney managing the litigation had the authority, and was fully empowered, to utilize these skills, knowledge, and experience to their full extent to the benefit of the procuring agency.
It is possible that this argument in favor of eliminating inefficiency may draw some skepticism from those claiming that an attorney’s primary responsibility is to provide counsel for a less knowledgeable client and to allow that client to make the final decision based on the attorney’s research and work product.117 Yet while this argument would most likely carry the day in the private sector because the attorney-client relationship is clear-cut, the answer is far more obtuse and theoretical in nature in the context of a government agency.118
Under the commonly accepted agency dominance theory, an agency attorney’s client is the agency where he or she is employed.119 Under this theory, the client status that the CO now holds in the current system is arguably delegable by the agency itself. The acceptance of this relationship is certainly entrenched, but there is no obvious legal mandate that it remain so. Borrowing from theories of bureaucracy, an agency should seek to create the most efficient organization possible by removing hurdles that do not serve a necessary purpose.120 Currently, the only clear purpose that COs serve as the ultimate authority over settlements before the BCAs is to monitor agency attorneys. This goal of providing oversight could be achieved by any number of means.121 Regardless of the means of supervision that would accompany the proposed shift in settlement authority, the most important considerations are to recognize the strengths, weaknesses, burdens, and responsibilities of the government actors in the dispute resolution process and to assign the authority to the agency attorneys for the benefit of the procurement system.
D. But What About Marino and Fentress? Providing Clarity to Contractors
The previous discussion has emphasized the various benefits the proposed reform would provide to the government by furthering several important procurement objectives. But it is important to remember there are two parties to every government contract and the disputes that arise out of the performance of government contracts. Any proposed reform would be lacking in judgment if it ignored the effects on the contractor. The contractor would benefit from the proposed reform in one key respect. The regulation would provide clarity regarding the authority of the counterparty in litigation without compromising the choice of forums between the CoFC and the appropriate BCA.
As discussed at the outset of this Note, the current system can be confusing to contractors.122 One could argue that the problem stems more from a lack of communication of authority rather than from a flawed organizational structure. While to a certain extent this may be true, this assertion does not consider that the lack of communication regarding proper authority may in part be caused by an organizational structure that breeds inefficiency. While litigation proceeds under the jurisdiction of the BCAs, the agency attorneys likely will be the point of contact for the contractor.123 Marino and Fentress demonstrate the problems and miscommunications that can arise from this structure. Contractors that are motivated to settle a case should feel confident their discussions are moving them closer to that goal rather than leading them down a dangerous path toward a contested settlement agreement. Improving technology helps to bridge these divides from a logistical perspective and allows for near instantaneous communication if all parties are properly engaged. But the delegation of authority should reflect the reality that many times communication is not as instant as technology allows due to human limitations and should promote the most efficient channels between the parties.
It is likely that the large majority of sophisticated and experienced government contractors that have the resources to retain competent government contract attorneys will not suffer the consequences of this latent ambiguity in the current system. But the procurement system continuously has demon-trated an interest in promoting the interests of small businesses entering the federal marketplace,124 and these firms may not have the requisite experience on their own or the resources to hire experienced counsel.125 If the procurement system is serious about protecting the interests of smaller contractors and new entrants into the field, as its many set-asides for small business and other disadvantaged groups attempt to achieve,126 it is not enough to rely upon a common understanding of the delegations of authority. Procurement regulations should reflect the federal government’s express intent in protecting small businesses as well as other disadvantaged interests by adopting the proposed reform, which in the same stroke would simplify the lines of communication and increase effective communication.
Contractors also would benefit from a less hostile and adversarial position with the COs.127 Removing the CO’s control over settling a dispute once it has reached a BCA judge would allow for the contractor to maintain a better relationship with the CO and prevent future performance from being tainted by any issues that arise out of the litigation.128 Contractors currently may confront the unsatisfactory position of choosing the CoFC solely for the purpose of getting a new, more objective perspective on their case.129 If agency attorneys possessed the sole authority to settle cases before the BCAs, contractors could obtain this objective review without resorting to the CoFC.
Symmetry and uniformity are important goals in the procurement system.130 But these goals should not be exercised at the expense of maintaining a meaningful choice of forum between the BCAs and the CoFC. If there are going to be two forums available to the contractor,131 there should be a meaningful difference between them.132 The proposed reform would not alter any of the present procedural differences between these two adjudicatory bodies; while it would shift the settlement authority before the BCA to an agency attorney that would match arrangement in the CoFC,133 agency attorneys are distinct from DoJ attorneys in a number of ways.134 Any concerns about eliminating a contractor’s choice of forum through this proposed reform are not warranted; there are several overarching structural benefits for contractors that would stem from this proposal.
Empowering agency attorneys with the authority to settle cases pending before the BCAs will chip away at the latent structural defects that currently ail the dispute resolution process. This process is not fatally broken, but it is chronically inefficient. Increased monetary investment in the acquisition workforce would paper over some of these inefficiencies, but this investment is highly unlikely to occur.135 And even if it were a possibility, it would be preferable to untangle the problem at its root rather than construct a spending- fueled facade that merely would hide the defects. COs and agency attorneys should be free to focus on the tasks for which they have the most training and experience. This would provide the procuring agency with the best value from its workforce without increasing spending on hiring or training. Contractor are entitled to an efficient process for resolving performance-related litigation under the CDA. The shift in settlement authority would move the system forward toward these goals. This incremental approach to reform is preferable to putting out fires in response to scandals and will move the dispute resolution process closer to the goals identified by Professor Schooner136 and in the CDA itself.137 If Professor Schooner’s observation that “Congress seems significantly interested in reforming federal acquisition”138 is correct, it should begin by considering this proposal.
- 41 U.S.C. § 7104(a) (2012).
- The Veterans Affairs Board of Contract Appeals is now incorporated within the Civilian Board of Contract Appeals (CBCA). See discussion infra Part II.B.
- Marino Constr. Co., Inc. v. Dep’t of Veterans Affairs, VABCA 2752, 90-1 BCA ¶ 22,553, at 113,196, 113,200.
- Id. at 113,197.
- Fentress Bradburn Architects v. Gen. Servs. Admin., GSBCA No. 15898, 02-2 BCA ¶ 32,011, at 158,158.
- Id. at 158,160.
- Id. at 158,165–68.
- FAR 33.210.
- Fentress, 02-2 BCA ¶ 32,011, at 158,168.
- This Note condenses the procurement universe into three primary parties: (1) Contracting Officers (COs), (2) agency attorneys, and (3) government contractors.
- Steven L. Schooner, Desiderata: Objectives for a System of Government Contract Law, 11 PUB. PROCUREMENT L. REV. 103, 103 (2002).
- See id. (listing competition, integrity, transparency, efficiency, customer satisfaction, best value, wealth distribution, risk avoidance, and uniformity).
- See S. REP. NO. 95-1118, at 1 (1978).
- See Airon A. Mothershed, The $435 Hammer and $600 Toiler Seat Scandals: Does Media Coverage of Procurement Scandals Lead to Procurement Reform?, 41 PUB. CONT. L.J. 855, 879–80 (2012).
- Steven L. Schooner, What Next? A Heuristic Approach to Revitalizing the Contract Disputes Act of 1978, 28 PUB. CONT. L.J. 635, 635 (1999) (considering the notion that “further tweaking” of the system, rather than wholesale change may suffice). This Note starts from this premise and further suggests the procurement community always should be searching for such tweaks to improve the system.
- Contract Disputes Act of 1978, 41 U.S.C. §§ 7101–7109 (2012); see S. REP. NO. 95-1118, at 1; see also Schooner, supra note 11, at 103.
- See, e.g., Developments in Brief, 55 GOV’T CONTRACTOR ¶ 369, Nov. 20, 2013, at 9 (discussing some of the complex ambiguities that accompany certain contracting methods); Vernon J. Edwards, Throwing People at the Problem—Massive Hiring Will Not Revitalize the Acquisition Workforce, 51 GOV’T CONTRACTOR ¶ 278, Aug. 12, 2009, at 1–3 (noting the shortage of acquisition personnel and discussing the training issues preventing a simple solution).
- Contract Disputes Act of 1978, Pub. L. No. 95-568, 92 Stat. 2383 (1978) (codified as amended at 41 U.S.C. §§ 7101–7109 (2012)); see S. REP. NO. 95-1118, at 1 (1978).
- S. REP. NO. 95-1118, at 1.
- See generally Adrian L. Bastianelli III & Lori Ann Lange, Litigating with the Federal Government, 20 CONSTR. LAW., Oct. 2000, at 24 (providing a general background of major modifications to the Contract Disputes Act (CDA) since its enactment in 1978).
- S. REP. NO. 95-1118, at 1–3. Congress’s assessment may have been overly generous as commentators have recognized that “[p]rior to the CDA, the ‘system’ for resolving federal contract disputes can best be described as a mess.” Clarence Kipps, Tom Kindness & Cameron Hamrick, The Contract Disputes Act: Solid Foundations, Magnificent System, 28 PUB. CONT. L.J. 585, 585 (1999).
- S. REP. NO. 95-1118, at 1–3. The CDA succeeded in creating an overarching statutory scheme that “lifted the disputes process out of the discretionary realm of agency clauses.” Kipps, Kindness & Hamrick, supra note 21, at 591.
- S. REP. NO. 95-1118, at 22, 33, 45.
- See Elon Crowell & Charles Pou Jr., Appealing Government Contract Decisions: Reducing the Cost and Delay of Procurement Litigation with Alternative Dispute Resolution Techniques, 49 MD. L. REV. 183, 184 (1990) (noting that by 1990, “the active docket of the Armed Services Board of Contract Appeals (ASBCA) virtually has doubled since 1979 without a concomitant increase in manpower”).
- See id. at 190–91 (listing several additional factors for the increase in disputes, such as “increased willingness to resort to litigation among many contractors and an expanding government contracts bar”).
- Id. at 194.
- See id. at 194–95 (noting a suggested reform for consolidating the boards of contract appeals (BCAs) into two boards).
- Id. at 195.
- The various BCAs originally developed as “an informal means of resolving disputes within the procuring agency and provided a cost-effective alternative for smaller claims.” See Kipps, Kindness & Hamrick, supra note 21, at 586; Nicholas “Chip” P. Retson & Craig S. Clarke, Overjudicialization of the Contract Disputes Process—Fact or Fiction, 28 PUB. CONT. L.J. 613, 619–21 (1999) (providing a detailed account of the procedures followed by the ASBCA prior to the CDA).
- 41 U.S.C. § 7105 (2012); S. REP. NO. 95-1118, at 1–3 (1978). Prior to the enactment of the CDA, the BCAs did not have full discovery and subpoena powers, which limited their effectiveness at resolving larger and more complex claims. See Thomas L. McGovern III, Daniel P. Graham & Stuart B. Nibley, A Level Playing Field: Why Congress Intended the Boards of Contract Appeals to Have Enforceable Subpoena Power over Both Contractors and the Government, 36 PUB. CONT. L.J. 495, 510 (2007); Kipps, Kindness & Hamrick, supra note 21, at 589–90.
- See, e.g., Judges, U.S. CIVILIAN BD. CONT. APPEALS, http://www.cbca.gsa.gov/board/judges.html [https://perma.cc/X5CJ-RSUC] (last visited Feb. 27, 2016) (providing brief biographies for the judges currently on the CBCA).
- See 28 U.S.C. § 1491 (2012). This Note does not delve deeply into the differences in procedure between the CoFC and the BCAs, which may lead to a genuine debate by the contractor over which forum to select. See Thomas C. Wheeler, Let’s Make the Choice of Forum Meaningful, 28 PUB. CONT. L.J. 655, 655 (1999).
- The Hon. Jeri Kaylene Somers, The Boards of Contract Appeals: A Historical Perspective, 60 AM. U. L. REV. 745, 753 (2011) (noting that at one point there were sixteen BCAs, but after consolidation this number has dropped substantially).
- Frederick Lees, Consolidation of Boards of Contract Appeals: An Old Idea Whose Time Has Come?, 33 PUB. CONT. L.J. 505, 524 (2004).
- Id. at 506 (providing a brief history of attempts of consolidation from the Office of Federal Procurement Policy in 1979 to George W. Bush’s proposed plan in 2002).
- Somers, supra note 34, at 755–56.
- Id. Consistent with a general theme of procurement law, the military side of the procurement system advanced at a faster pace than the civilian side; the ASBCA consolidated military appeals in 1949. See Crowell & Pou, supra note 24, at 187.
- Somers, supra note 34, at 755–56.
- Even prior to consolidation, the various BCAs followed a fairly uniform procedure making distinctions between the remaining boards further irrelevant to the thrust of this Note. See Lees, supra note 35, at 524.
- See Bernarde V. Parrette, The Contract Disputes Act and the Administrative Dispute Resolution Act: A Richness of Remedies, Finally Ready for Trial?, 20 PUB. CONT. L.J. 293, 298 (1991) (noting that even prior to the Administrative Dispute Resolution Act, all alternative dispute resolution methods had been “available in the public contract sector in BCA proceedings for some time”).
- FAR 33.204; see generally Robert J. Gomez, Mediating Government Contract Claims: How It Is Different, 32 PUB. CONT. L.J. 63 (2002) (providing a detailed evaluation of mediation in the government contracts context).
- See, e.g., Crowell & Pou supra note 24, at 184–85.
- Judge William A. Campbell et al., Practicing before the Federal Boards of Contract Appeals, 2012 A.B.A. SEC. PUB. CONT. L. 16–17 (explaining that the parties “exchange position papers addressing the facts and disputed issues, as well as their positions” and meet with a neutral judge in an attempt accurately “assess the strengths and weaknesses of each side and help identify settlement options”).
- Id. at 17.
- Id. at 1.
- See Donald P. Arnavas & Louis D. Victorino, Litigation or ADR: Choosing the Right Dispute Resolution Process, BRIEFING PAPERS, July 2009, at 14.
- Parrette, supra note 41.
- See discussion infra Part III.D.
- FAR 1.602-1 (“[COs] may bind the Government only to the extent of the authority delegated to them.”)
- Karen DaPonte Thornton, Fine-Tuning Acquisition Reform’s Favorite Procurement Vehicle, the Indefinite Delivery Contract, 31 PUB. CONT. L.J. 383, 426 (2002) (“The toolbox of skills needed by [COs] today include interpersonal communication, active listening, planning and organizing, decision making, persuasion, and leadership.”).
- FAR 1.602-1, 1.601-2.
- FAR 1.602-2.
- See id. (“[COs] are responsible for ensuring performance of all necessary actions for effective contracting, ensuring compliance with the terms of the contract, and safeguarding the interests of the United States in its contractual relationships.”).
- FAR 1.602-2(b).
- Ralph C. Nash & John Cibinic, Settlement of Claims: Who Is Authorized To Do What?, 6 NASH & CIBINIC REP. ¶ 52, at 129 (1992).
- See, e.g., Christoph A. Mlinarchik, Crafting Compelling Contracting Officer’s Final Decisions, 40 REPORTER 55, 56 (2013) (detailing the CO’s role in collecting the relevant facts which will serve as the starting point for litigation).
- FAR 52.233-1; FAR 1.602-2.
- See Stoeckert v. United States, 391 F.2d 639, 645 (1968); FAR 52.233-1(i) (“The Contractor shall proceed diligently with performance of this contract, pending final resolution of any request for relief, claim, appeal, or action arising under the contract, and comply with any decision of the [CO].”).
- See Paige Spratt, Strict Compliance with Construction Contract Notice Provisions: Detrimental to Contractors and Taxpayers, 40 PUB. CONT. L.J. 911, 928 (2011) (stating that adversarial positions in contract administration can lead to even more litigation between the parties).
- Developments in Brief, supra note 17; Edwards, supra note 17.
- See, e.g., Shelley Roberts Econom, Confronting the Looming Crisis in the Federal Acquisition Workforce, 35 PUB. CONT. L.J. 171, 173–74 (2006) (stating “[t]he few remaining acquisition personnel face more work than they are capable of doing,” which in turn “threatens successful contract performance”).
- See id.
- Steven L. Schooner & David J. Berteau, Emerging Policy and Practice Issues, in WEST GOVERNMENT CONTRACTS YEAR IN REVIEW CONFERENCE COVERING 2013 CONFERENCE BRIEFS 9–11 (2014) (quoting PROF’L SERVS. COUNCIL, FROM CRISIS TO OPPORTUNITY: CREATING A NEW ERA OF GOVERNMENT, INNOVATION AND PERFORMANCE 4, 8 (2013)).
- Id. at 9-11.
- Econom, supra note 63, at 174.
- See generally JAMES Q. WILSON, BUREAUCRACY: WHAT GOVERNMENT AGENCIES DO AND WHY THEY DO IT (1989). The goal of this Note is to provide a practical solution to a perceived problem in the procurement dispute resolution process. Therefore, this discussion will not seek to serve as a definitive evaluation of the merits and subtle conflicts between some of the presented theories and acknowledges there is much room for continued scholarship in this area.
- Schooner, supra note 11, at 103.
- See HERBERT KAUFMAN, BROOKINGS INST., RED TAPE: ITS ORIGINS, USES, AND ABUSES 98 (1977) (concluding that while society is destined to live with red tape, it still should labor systematically to maximize its net benefits and minimize its net costs).
- See Margo Schlanger, Officers of Goodness: Influence without Authority in Federal Agencies, 36 CARDOZO L. REV. 53, 54 (2014) (introducing the concept that some offices of agencies check each other with structurally competing goals and missions).
- See, e.g., Elizabeth Magill & Adrian Vermeule, Allocating Power Within Agencies, 120 YALE L.J. 1032, 1032 (2011) (criticizing the trend of characterizing agencies as unitary actors).
- See Schlanger, supra note 71, at 54; Magill & Vermeule, supra note 72.
- WILSON, supra note 68, at 318.
- Brigadier General John L. Fugh & Lieutenant Colonel James F. Nagel, The Disputes Process—A Management Tool: Advice for Contracting Personnel, 1989 ARMY LAW. 4, 4 (1989).
- See id.
- Id. (noting that many COs “mentally transfer the case to the litigators” in spite of the explicitly granted critical authority they retain).
- Id. at 4–5.
- See Neil M. Peretz, The Limits of Outsourcing: Ethical Responsibilities of Federal Government Attorneys Advising Executive Branch Officials, 6 CONN. PUB. INT. L.J. 23, 27 (2006) (“Scholars have long debated who qualifies as the client of the government civil litigator.”); Elisa E. Ugarte, The Government and the Common Good, 40 S. TEX. L. REV. 269, 270–71 (1999) (arguing that while most scholars begin by attempting to analogize the government lawyer to private practitioners, this approach can lead to a number of different results).
- See Peretz, supra note 80; Ugarte, supra note 80, at 272–73.
- See Peretz, supra note 80; see also Ugarte, supra note 80, at 272–73.
- Ugarte, supra note 80, at 272; Gary Edles, Assessing “Who is the Client” in the Government Context, 31 ADMIN. & REG. L. NEWS 10, 12 (2005) (admitting that “the relationship among agency officials, managers, and lawyers is inherently complex, and the [identity] of the client may vary” based on considerations of “management efficiency or ethical considerations”); Geoffrey P. Miller, Government Lawyer’s Ethics in a System of Checks and Balances, 54 U. CHI. L. REV. 1293, 1297–99 (1987).
- See Peretz, supra note 80, at 37.
- Steven K. Berenson, Public Lawyers, Private Values: Can, Should, and Will Government Lawyers Serve the Public Interest?, 41 B.C. L. REV. 789, 794–95 (2000); Ugarte, supra note 80, at 272.
- See, e.g., Fred C. Zacharias, Structuring the Ethics of Prosecutorial Trial Practice: Can Prosecutors Do Justice?, 44 VAND. L. REV. 45, 48 (1991) (arguing vague standards to “do justice” lead government prosecutors to follow their own moral guidance and leads to inconsistent results); Miller, supra note 83, at 1294–95.
- See Peretz, supra note 80, at 37; see also Ugarte, supra note 80, at 270–73.
- See Peretz, supra note 80.
- See S. REP. NO. 95-1118, at 1 (1978).
- Id., at 22, 33, 45.
- FAR 33.210, 33.211.
- FAR 33.204.
- FAR 33.211 (guaranteeing the right to an appeal to an independent judge).
- 41 U.S.C. §§ 7104–7105 (2012).
- 5 U.S.C. § 3106 (2012); Michael Herz & Neil Devins, The Consequences of DOJ Control of Litigation of Agencies’ Programs, 52 ADMIN. L. REV. 1345, 1345–46 (2000).
- Nash & Cibinic, supra note 57, at 129.
- Bastianelli & Lange, supra note 20, at 24 (“The government has no input into the contractor’s forum selection.”).
- This Note does not suggest this would be an attainable, or even desirable solution due to these problems.
- See Edwards, supra note 17, at 1 (“Since 9/11, the workload of Government acquisition personnel has doubled, and it is widely acknowledged that they are suffering under the burden.”).
- Tasks relating to contract formation have become more complex through the introduction of new methods of contracting. See Econom, supra note 63, at 211–12 (specifically noting the expansion of the government purchase card program).
- FAR 1.602-2 (codifying the CO’s role of “ensuring compliance with the terms of the contract, and safeguarding the interests of the United States in its contractual relationships”).
- RALPH C. NASH, JR. & STEVEN W. FELDMAN, 3 GOVERNMENT CONTRACT CHANGES 335 (2007) (“[T]he constructive changes doctrine greatly increased the authority of the [CO] in the day-to-day administration of the contract.”).
- See Mlinarchik, supra note 58, at 56–57 (providing an in-depth guide of best practices for the responsibilities of contracting officers for performing their role in issuing contracting officer’s final decision). The CO’s dual, and necessarily conflicting, roles are pronounced particularly when determining whether to terminate a contract. See, e.g., Joshua I. Schwartz, Administrative Law Lessons Regarding the Role of Politically Appointed Officials in Default Terminations, 30 PUB. CONT. L.J. 143, 181–82 (2001).
- See, e.g., Econom, supra note 63, at 173 (“The cuts to the acquisition workforce have proven too severe.”).
- See Press Release, White House, Office of the Press Sec’y, Presidential Memorandum Regarding the Hiring Freeze ( Jan. 23, 2017), https://www.whitehouse.gov/the-press-office/2017/01/23/presidential-memorandum-regarding-hiring-freeze [https://perma.cc/PFM3-4X7G] (ordering “a freeze on the hiring of Federal civilian employees to be applied across the board in the executive branch”); see also Daniel I. Gordon, Feature Comment: Reflections on the Federal Procurement Landscape—Part II, 54 GOV’T CONTRACTOR ¶ 51, Feb. 22, 2012, at 1–3 (observing “acquisition workforce numbers are very much at risk going forward”).
- See Edwards, supra note 17, at 3.
- FAR 52.233-1 (codifying the contractor’s duty to continue performance during disputes, which reflects the contracting officer’s duty to do the same).
- Or even minute-to-minute, especially in the context of settlement negotiations.
- See Spratt, supra note 61, at 928.
- Gordon, supra note 105, at 3.
- Fugh & Nagel, supra note 75, at 4.
- Id. at 4–5.
- See, e.g., Ralph C. Nash & Vernon J. Edwards, Postscript II: The Role of the Contracting Officer, 24 NASH & CIBINIC REP. ¶ 14, at 47 (2010) (explaining “most COs do not know enough to cope with the complex legal issues associated with many protests and claims” and “the current generation of COs do not know the FAR well, much less case law”).
- Id. While it is true that an agency attorney can advise the CO based on this knowledge, constraints on communication or other factual circumstances may prevent the CO from fully appreciating the counsel’s advice and therefore hinder both length of time before a settlement can be reached and the chance that the parties will reach a settlement before trial. Id.
- See MODEL RULES OF PROF’L CONDUCT r. 1.2 (AM. BAR ASS’N 1983) (“A lawyer shall abide by a client’s decision whether to settle a matter.”).
- See discussion supra Part II.E.
- Edles, supra note 83, at 11–13.
- See WILSON, supra note 68, at 370–71.
- This Note does not seek to provide a single solution to this question. Instead, this Note identifies a structural issue and provides an option for redressing it: a transfer of settlement authority to agency counsel. The supervision of this authority could fall to several different government actors. First, the proposed regulation could require a certain amount of experience prior to gaining settlement authority. Second, the regulation could require approval at the General Counsel level. Both proposed solutions would place ultimate authority in the hands of the most skilled government actor for the job while freeing COs to focus on contract administration. This Note does not offer support for either plan and only seeks to begin a conversation regarding their respective merits.
- See discussion supra Part I.
- Fugh & Nagel, supra note 75, at 4.
- Andrew George Sakillaris, Note, Questioning the Sacred Cow: Reexamining the Justifications for Small Business Set Asides, 36 PUB. CONT. L.J. 685, 688–89 (2007) (providing a history of integrating social policies into procurement law).
- James A. Harley, Economic Duress and Unconscionability: How Fair Must the Government Be?, 18 PUB. CONT. L.J. 76, 180 (1989) (arguing that while contracts tend to be awarded to large firms “run by sophisticated businessmen and adequately represented by legal counsel,” the set-asides for small business open the door for smaller firms with less resources to contract with the federal government).
- See generally Sakillaris, supra note 124.
- See discussion supra Part III.B.
- This Note acknowledges no procedural mechanism can ensure an amicable relationship between parties with potentially divergent and adversarial positions and interests.
- See Herz & Devins, supra note 95, at 1346.
- See Schooner, supra note 11, at 103.
- See Steven L. Schooner, The Future: Scrutinizing the Empirical Case for the Court of Federal Claims, 71 GEO. WASH. L. REV. 714, 770 (2003) (presenting “the empirical feasibility of eliminating the COFC”).
- Wheeler, supra note 33, at 655.
- See Michael J. Schaengold & Robert S. Brams, Choice of Forum for Government Contract Claims: Court of Federal Claims vs. Board of Contract Appeals, 17 FED. CIR. B.J. 279, 312–14 (2008).
- Id. (providing a practical perspective on the differences between litigating with agency and U.S. Department of Justice attorneys).
- See supra note 105 and accompanying text.
- See Schooner, supra note 11, at 103.
- Contract Disputes Act of 1978, 41 U.S.C. §§ 7101–7109 (2012).
- Steven L. Schooner, Emerging Policy and Practice Issues, in WEST GOVERNMENT CONTRACTS YEAR IN REVIEW CONFERENCE COVERING 2014 CONFERENCE BRIEFS 9-7 (2015).