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|Christian Doctrine and the Buy American Act|
Anonymous Posted on
Tuesday, December 02, 2003 - 06:40 pm:
The Buy American Act clause was inadvertently left out of a current construction contract. Could we support, based on the Christian Doctrine principles, that the BAA is applicable although not in the contract? And if so would a unilateral modification be in order?
Ron Posted on Tuesday, December 02, 2003 - 08:39 pm:
The Court of Appeals for the Federal Circuit has held
that the Christian Doctrine will support the inclusion of
the BAA clause for construction contracts, in S.J. Amoroso
Const. Co., Inc. v. U.S., 12 F.3d 1072 (C.A.Fed.1993).
ji20874 Posted on Wednesday, December 03, 2003 - 06:46 am:
I recommend a bilateral modification, because the
contractor will likely suggest cost changes because he might
no longer has access to cheaper foreign materials.
joel hoffman Posted on Wednesday, December 03, 2003 - 09:00 am:
Anonymous and ji20874,
For mandatory clauses, the theory is that the bidder/offeror
should have known that the Buy America Act/Trade Agreement
Acts are standard construction contract requirements. If the
contractor has previous experience, it already is aware of
this. Odds are that it didn't read the standard clauses,
before bidding/proposing, anyway. The problem probably
surfaced during execution.
Vern Edwards Posted on Wednesday, December 03, 2003 - 10:04 am:
I agree with Joel. Even a letter from the CO to the
contractor expressing the CO's interpretation of the
contract as including the clause should suffice.
Timothy Inman Posted on Wednesday, December 03, 2003 - 10:17 am:
If the contractor isn't opposed and he has no cost
impact, incorporate the clauses bilaterally and press.
Vern Edwards Posted on Wednesday, December 03, 2003 - 10:57 am:
I agree with Timothy that bilateral acknowledgement
of the clause is the best course of action, if possible, but
I would not call the acknowledgement a "modification." If
the government's position is that the clause is already
included by operation of law, then it should not say that
the clause is being "added" or that the contract is being
dave Posted on Wednesday, December 03, 2003 - 12:30 pm:
Because of the exceptions to the BAA that are available, I'm leery that the Christian doctrine can be enforced on the Ktr unilaterally. What if the Ktr believed a determination of nonavailability had been made by the HCA and the Ktr relied on the absence of the clause as indicative that the an exception to the BAA existed?
Vern Edwards Posted on Wednesday, December 03, 2003 - 12:34 pm:
If an exception applies, then why are we having this discussion?
dave Posted on Wednesday, December 03, 2003 - 12:44 pm:
Vern, I don't know if an exception applies, I was just offering a potential problem trying to add a clause unilaterally under the CD because exceptions do exist, I don't believe one time HCA exceptions are publicized like the list of nonavailable products in Part 25. It does talk about the KO forwarding the determination with attendant documentation for inclusion on the list if future buys will be affected.
ji20874 Posted on Wednesday, December 03, 2003 - 12:58 pm:
The Christian doctrine first applied to the termination clauses -- these clauses give some protections to the contractor and theoretically there is no harm to the contractor by adding a termination clause to the contract after-the-fact because (1) the clause gives protections to the contractor; and (2) the right to terminate is a soverign right that is fundamental. However, imposing the BAA clause on the contractor actually damages the contractor. If the contractor agrees to add it, good -- but if not, the contracting officer must prepare for a claim.
Vern Edwards Posted on Wednesday, December 03, 2003 - 01:11 pm:
If no exception applies, then I think that a board or
court would apply the Christian Doctrine to read the
relevant clauses into the contract. The clauses are
required-when-applicable and clearly implement an important
Vern Edwards Posted on Wednesday, December 03, 2003 - 01:16 pm:
Ron Posted on Wednesday, December 03, 2003 - 01:58 pm:
Admittedly, opinions can differ on whether a clause helps
or hurts a contractor. But realistically, there wouldn't be
any Christian Doctrine cases if the clause that the
government wanted to add benefitted the contractor. Why
would a contractor appeal the addition of a clause that
Inquisitive_ Ed Posted on Wednesday, December 03, 2003 - 02:09 pm:
Vern Edwards Posted on Wednesday, December 03, 2003 - 02:17 pm:
ji20874 Posted on Wednesday, December 03, 2003 - 02:20 pm:
The BAA is not like the terminations clause -- the
terminations clause goes in everything, and there is no
agency or contracting officer discretion -- and
theoretically, the terminations clause does no harm to the
contractor (if lost profit equals no harm). However, there
is discretion associated with the BAA clause, and imposing
the clause after-the-fact can harm a contractor.
Vern Edwards Posted on Wednesday, December 03, 2003 - 02:53 pm:
Timothy Inman Posted on
Wednesday, December 03, 2003 - 03:36 pm:
From what I remember, the Christian Doctrine says that a
mandatory contract clause that expresses a significant or
deeply ingrained strand of public procurement policy is
considered to be included in a contract by operation of law.
The questions isn't whether the clause was intentionally or
inadvertently omitted, but rather on whether procurement
policies are being avoided or evaded, deliberately or
negligently, by contracting officers.
Is there another case, other than Amoroso, where the courts
have determined BAA to be "christianable"? Seems like some
BAA clause is normally included, but Vern listed a lot of
exceptions. Do these exceptions apply to the termination
clauses? Are BAA clauses like unto termination clauses for
Christian purposes? I'm not sure. I am reasonable sure,
however, that Amoroso isn't a good case to cite, if I
understand that case correctly.
Timothy Inman Posted on
Wednesday, December 03, 2003 - 04:04 pm:
It is true that in Boeing Defense & Space Group,. ASBCA
No. 50048, 98-2 BCA 29, 779, aff’d on reconsid. 98-2 BCA
29,927, the ASBCA cited the Christian doctrine and its
holding that a procurement regulation issued under statutory
authority has the force and effect of law. But this does not
mean that all FAR mandatory clauses are incorporated by
operation of law if left out.
My source is dated--Lockheed Martin Librascope Corporation, ASBCA No. 50508, 29 Oct 1999.
Roy Posted on Wednesday, December 03, 2003 - 04:17 pm:
Per FAR 25.1102, either the clause at 52.225-9 or 52.225-11 must be included in solicitations and contracts for construction even if there are exceptions. The CO is required to include, within in the clause, any exceptions to the requirement of the Buy American Act, that only domestic (or "NAFTA Country" if the clause at 52.225-11 is used) construction materials be used in performing the contract.
Vern Edwards Posted on Wednesday, December 03, 2003 - 04:34 pm:
I know of no exceptions to inclusion of an appropriate
termination clause. However, note that all of the FAR
termination clauses are "required-when-applicable," not
ji20874 Posted on Wednesday, December 03, 2003 - 05:45 pm:
Vern Edwards Posted on Wednesday, December 03, 2003 - 05:56 pm:
joel hoffman Posted on Wednesday, December 03, 2003 - 06:56 pm:
Anonymous, the clause is required for construction
contracts. There are procedures for contractors to request
exceptions for individual construction materials, during
administration of the contract. They do it all the time.
Forget about the "exception" argument being a reason why the
clause wouldn't be mandatory. There are a jillion individual
pieces of equipment and materials involved in a construction
project. The exception argument doesn't apply carte blanche
to all materials on a CONUS construction contract.
Anonymous, a bilateral mod is not appropriate or applicable
for this situation. If you don't want to issue an admin mod,
you can inform the contractor that the BAA is applicable by
operation of law, as suggested by Vern.
Vern Edwards Posted on Wednesday, December 03, 2003 - 07:29 pm:
joel hoffman Posted on Thursday, December 04, 2003 - 08:35 am:
Oops, in my earlier post, I was referring to contracts
awarded after March 31, 1989, not 1984!
ji20874 Posted on Thursday, December 04, 2003 - 10:02 am:
Here, I see a difference between the BAA clause and a
termination clause -- as a matter of deeply ingrained public
policy, everyone knows that a contract must have a
termination clause, the termination clauses all have
built-in protections for the contractor, and everyone
bidding on a Government contract should know the
Government's stand regarding the right to terminate a
contract for its convenience. Everyone doing business with
the Government should also know about the BAA, but they
might also know that agencies do have a little discretion in
applying the BAA. If an agency head or HCA did make a
determination such as at FAR 25.101(a) or (b), there would
be no evidence of such determination in the RFP except for
the absence of the BAA clause (FAR 25.1101(a)(1)(ii)).
Timothy Inman Posted on Thursday, December 04, 2003 - 10:26 am:
I think that we would all agree that modifying the contracts back then to include the new version of the clause was essentially a formality or a convenience. (Joel's post, 8:35 a.m. today.) Since the new clauses were already considered incorporated by operation of law, presumably they would also be included in any covered contracts on which the office inadvertently failed to make the change. So making the change on the paper contract was for purposes of clarification and information only, making the paper copy reflect a change that had already incontestably occurred. I agree with Joel that administrative mods were appropriate then.
But in the 1989 example, the updated clauses were not incorporated by operation of law under Christian; there was no deeply ingrained public policy at play. Rather they were incorporated by operation of law by the express terms of Public Law 100-46. I'm not sure that the distinction has great importance, but for the original anonymous in this discussion Joel's example of changing contracts unilaterally by admin mod because of a change in statutory law is not exactly solid precedent for him or her to change a contract unilaterally by admin mod citing Christian. It is informative, it does have some value, but it isn't an exact fit. This isn't a criticism; it's only for refining.
Vern Edwards Posted on Thursday, December 04, 2003 - 11:48 am:
I don't fully understand Joel's remarks about the 1989 admin
mods to insert a clause into contracts. It sounds as though
he's saying that he modified contracts to incorporate a
clause that became mandatory after the contracts had been
awarded. In my opinion, the government cannot unilaterally
modify a contract to add a clause that became mandatory
after the contract was awarded. If Joel unilaterally
modified contracts based on a law enacted or a regulation
promulgated after contract award, then he got away with it
either because the contractors didn't know their contractual
rights or they liked the clause; I suspect the former.
Timothy Inman Posted on Thursday, December 04, 2003 - 11:58 am:
Vern, that was my assumption based upon what Joel wrote, 3 December 6:56 p.m, followed up today 8:35 a.m. by his post citing P.L. 100-46. I'm not personally familiar with the law's 1989 implementation, but based on what Joel wrote I assumed that the law required all contracts awarded after 1 April 1989 to have certain updated clauses. FAR changes took a long time back then, not only to get them through the FAR Council but printed and distributed, so they really didn't know about the changes until after 1 April 1989, and they had already awarded some contracts with the old versions of the clauses. Joel, is that a fair recapitulation?
joel hoffman Posted on Thursday, December 04, 2003 - 01:55 pm:
Timothy and Vern, yes we only modified contracts that
were awarded on or after April 1, 1989 with the old
(incorrect) payment clause. We didn't know about the new
prompt payment clauses until sometime in the summer of 1989.
We didn't modify any contract awarded before April 1.
Timothy Inman Posted on Thursday, December 04, 2003 - 02:13 pm:
Joel, so you were "correcting" the CO's lack of knowledge as to which clauses applied after 1 April 1989. The law had changed effective 1 April, but your buyers and COs (and review people, evidently) were clueless until later in the summer. So your management sent out a letter directing you to administratively incorporate the new clauses. You did, and one contractor filed a claim, and he was persuaded to withdraw it. Sometimes keeping good relations is more important than fighting for a relatively minor right--but Congress didn't say that the new clauses would trump what was already in existing contracts. They told us to use the new clauses after a certain date, and we didn't. I don't hardly see how changing the payment process to stop a prime's retainage of subcontractor payments is a deeply ingrained public procurement policy. I also don't know if I agree that the new clauses were in force by operation of law, certainly not in the way that I understood in my 10:26 posting this morning. This was not a case of Congress telling us to changing existing contracts; it was a case of us not knowing our own law. It would have been interesting for your contractor to have pursued his claim--I wonder if a court would have read the new clauses into the contract under Christian.
joel hoffman Posted on Thursday, December 04, 2003 - 02:36 pm:
Timothy, I don't remember why the contracts didn't
contain the new clauses. All I know is that USACE Office of
Counsel said that the new clauses were effective for new
contracts or solicitations, as of 1 April and to replace all
old clauses by admin mod or by amendment. All open or
unawarded solicitations had to be amended. The Statute said
something to the effect that the new rules were effective 90
days after publishing the final rule in the Fed. Register.
That happened to be April 1, 1989.
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