March 01, 2017 Public Contract Law Journal

Empowering the Agency Attorney: Presenting the Case for an Incremental Improvement in the Dispute Resolution Process

by Dominick P. Weinkam

Dominick P. Weinkam (dweinkam@law.gwu.edu) 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.

I.  Introduction

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

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