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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).
I will leave the mechanics of the modification to others in this forum.

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.

If it is done unilaterally, one risks a claim. The question will be, should the contractor have priced its proposal based on the RFP? or should the contractor have based its price on the law?

I think that the error is the contracting officer's error, and not the contractor's error -- thus, I would recommend a bilateral modification.

joel hoffman  Posted on Wednesday, December 03, 2003 - 09:00 am:  

Anonymous and ji20874,

If the clause is operative by law, there is no basis for an equitable adjustment and the clause should be administratively added to the contract.

My guess is that it was only discovered that the clause was missing, after a problem arose. Even when the correct clause is included in the contract, Buy American Act problems are common nowdays during contract execution. Why? For one thing, many contractors don't obtain quotes on the basis of the Buy America Act, with it's endless permutations (e.g., the various treaties and trade agreements, confusing $$ limitations, supply vs. construction variations, etc.). And Government designers don't research availability of American made or trade agreement compliant products to list as exeptions to the requirements. The whole thing is a royal pain in the butt.

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.

Am I close to the actual scenario, Anonymous?
Is this a "new" contractor? Did the problem surface during routine contract administration?

Suggest that the admin mod state that the clause is being added by operation of law and cite the FAR prescription. happy sails! joel hoffman

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.

However, the admin mod or the letter should not say that the clause is being "added," but that the clause is, in fact, already there and that the purpose of the mod or letter is simply to give notice to the contractor that the clause is there.

Good sense dictates that the CO should check with his or her lawyer and then discuss the matter with the contractor in order to avoid a dispute, if that's possible.

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.

But if there is contractor disagreement, then acting unilaterally citing operation of law or the FAR is something a CO shouldn't do, for typically it is judges in court cases (not COs acting unilaterally) who implement the Christian Doctrine. The contractor should have an expectation that it can rely upon the Government to correctly put its requirements in Section I. The Government shouldn't be able to easily modify a contract unilaterally any time it decided that it forgot something, at least not without some room for price or other adjustment if warranted.

If the clause is operative by law, then there's no need to put it in the contract. It's already there, by "operation of law." If the Christian Doctrine is read so broadly as to include almost anything that is "operative by law" then the contractor is bound to act as if the clause were incorporated anyway, that clause plus who knows how many others. Good doctrine--it relieves contracting officers from any pressure to write a good contract up front!

I think that a bilateral modification is the best course if the clause is to be added to the contract. The original poster doesn't indicate that the contractor wants more money. If it can be done no cost bilaterally, then clearly that's the best way. Stay away from unilateral administrative modifications except for things that are administrative and don't affect the rights of the parties--things like changing a paying office address.

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 "modified."

If the contractor refuses to sign the acknowledgement, then the CO must either insert the clause unilaterally and prepare to deal with the likely claim or dispute or get out of the contract somehow, because the CO has no authority to ignore the Buy American Act and violation of that law during contract formation might render the contract void ab initio. All of this should be carefully explained to the contractor and to its lawyer.

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 public policy.

If the Christian Doctrine does apply, then I doubt that a board or court would grant the contractor an equitable adjustment. However, I suppose that anything is possible.

Vern Edwards  Posted on Wednesday, December 03, 2003 - 01:16 pm:


In the Christian case, the contractor clearly thought that the termination for convenience clause would cause it some harm, that's why it asked the court to prevent its inclusion and appealed the court's decision all the way to the Supreme Court (which refused to entertain the appeal).

Many legal writers have argued that the T for C clause is a harmful clause from the point of view of contractors.

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 helps it?

As for whether an exception could apply, the contractor needs to raise that with the CO before the clause is added, just as the contractor would do if the BAA and TAA clauses were in an RFP. I suppose the possibility of an exception could change the Christian analysis. After all, one step in the analysis is whether the clause is mandatory. If an exception applies, the clause is no longer mandatory.

I also doubt that the boards and courts would grant an equitable adjustment, even if the contractor claims it relied on the absence of the clause. The theory behind the doctrine is that the contractor is on notice of all public statutes and regulations. Furthermore, the contract is interpreted as though the clause was in the contract all along. It would be hard to make a claim under these circumstances.

Inquisitive_ Ed  Posted on Wednesday, December 03, 2003 - 02:09 pm:  


Could one interpret then that the Christian Doctrine will only apply if an omitted provision is harmless to both parties? Meaning, Limitation of Liability and the likes should arguably be a bilateral mod?

Vern Edwards  Posted on Wednesday, December 03, 2003 - 02:17 pm:   


No. The Christian Doctrine applies (1) when a clause has intentionally or inadvertently been omitted from a government contract in violation of a regulation that has the force and effect of law and (2) when the clause implements an important public policy.

The Doctrine is based on the idea that (a) lower-level government officials cannot ignore or otherwise fail to comply with laws and regulations imposed on them by Congress and higher-level officials and (b) firms doing business with the government are expected to know the laws and government regulations (ignorance of the law is no excuse).

Someone (usually the contractor) is almost always hurt when a clause is read into a contract pursuant to the Christian Doctrine.

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.

An agency head can determine that application of the BAA is not in the Government's interests in a particular buy, or a HCA can make a determination of non-availability for a particular buy. Because the solicitation did not contain a BAA clause, the contractor can assert that it assumed either of these discretionary exceptions applied and it priced its offer accordingly. Indeed, the absence of the clause indicates that one of these two exceptions must apply--otherwise, the clause would be included. So while the Government may impose the BAA clause now, I tend to believe the contractor would prevail on a claim for a price adjustment on the basis of fairness (if it can make a case showing a dollar impact).

Vern Edwards  Posted on Wednesday, December 03, 2003 - 02:53 pm:


You are wrong. The Buy American Act clauses are not discretionary (optional). They are required when they are applicable and they must be inserted into contracts accordingly.

If an agency head properly determines that inclusion of the clause is not in the public interest, then the clause is not applicable. If an HCA properly makes a nonavailability determination, then the clause is not applicable. If the acquistion was synopsized and based on full and open competition and if no offer of a domestic item was received, then the clause is not applicable. If the contracting officer determines that the cost of a domestic end product would be unreasonable, then the clause is not applicable. If the contractor can convince the government that the clause is not applicable, then there is no issue.

Otherwise, a board or court will read the clause into the contract.

You can speculate as you like about the likelihood that a contractor will get money if a clause is incorporated into a contract by virtue of the Christian Doctrine. Do you know of an instance in which that has happened?


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.

The earlier citation of S.J. Amoroso Const. Co., Inc. v. U.S., 12 F.3d 1072 (C.A.Fed.1993), as support that the courts will read the Buy American Act clause into construction clauses, is not exactly on target. In that case, I believe that the construction contract had originally included the BAA clause for construction, but it had been stricken and erroneously replaced with the BAA clause for supplies. So the Amoroso contract did have a BAA clause in it, just not the right one.

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.

If a clause is generally required but there are exceptions like those Vern mentions, can a prudent contractor assume that an exception applies? A prudent contractor should expect to see some sort of termination clause in his contract. Is a prudent construction contractor under the same expectation regarding BAA?

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.

In seeking reconsideration in the Boeing case, the Government questioned whether the Board’s decision extended the Christian doctrine by incorporating the FAR provision as a matter of law without a finding or holding that any deeply ingrained strand of procurement policy so required.

In its decision upon reconsideration, the Board stated that it had not held that the FAR provision was incorporated into the contract as a matter of law. It stated that, instead, it had "unremarkably" applied an aspect of the Christian doctrine under which "a tribunal properly may consider for guidance any pertinent authority which has the force and effect of law pursuant to Christian," including the FAR provision in question there.

So every FAR clause isn't "christianable" just because it's required by the FAR and regulations like the FAR have force of law. For a required but omitted clause to be covered by Christian, there's still the "deeply ingrained strand of procurement policy" standard that has to be met. Does Buy American Act meet that threshold? Perhaps; I honestly don't know. But just because it's a required clause in the FAR doesn't automatically trigger Christian. At least that's what I've been taught.

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 "required."

I cannot think of many public policies more significant or deeply ingrained than "Buy American." It has been around for a very long time and figured prominently in this year's debate about DOD authorizations for 2004. See the articles at the Government Executive website:


A truly prudent contractor would not "assume" that an exception applies. Take a look at one of the most recent Christian Doctrine cases, decided this past July by the ASBCA:


Cibinic and Nash discuss the Christian Doctrine succinctly in Formation of Government Contracts, 3d ed, pp. 77-79, and identify some of the clauses that have been incorporated into contracts thereby. They have also discussed it in The Nash & Cibinic Report.

ji20874  Posted on Wednesday, December 03, 2003 - 05:45 pm:   


No, I do not know of a case. All I'm saying is that it is perfectly legal to have a construction contract without a BAA clause (which is not true for a termination clause) -- and a contractor could reasonably assert that it assumed the contracting officer correctly drafted the RFP and left out the BAA clause because of a valid exception, such as at FAR 25.103(a) or (b) (or 25.202(a)(1) or (2)). There is no requirement for the contracting officer to notify industry if an agency head or HCA determination has been received, and I think the contractor could assert that it relied in good faith on the RFP.

Should the contractor have advised the contracting officer that the RFP was in error? How could the contractor have known? For all the contractor knew, a valid exception might have existed.

In the July ASBCA case, the board was forced to resolve whether a particular contract was FFP or a T&M--that was the question. Once the ASBCA concluded that it was a T&M contract, then it said the required T&M payments clause must be invoked under the Christian doctrine. Although the ASBCA did not formally reach the question of equitable reformation of the contract, the board DID CONSIDER THE EQUITY of imposing the clause on the contractor -- and it said, "This is in line with the payment process referred to in the Time-and-Materials Payments clause, which the Government contends should be incorporated into the contract under the Christian doctrine (finding 6). THAT PROCESS IS NOT INEQUITABLE" (emphasis added). I think that if the ASBCA were hearing the current case, it might not conclude that imposing the BAA clause would not be inequitable (pardon the double negative). In the July case, there was no evidence in the record of "unpaid extra labor hours," so the contractor did not make its case of actual harm.

Vern Edwards  Posted on Wednesday, December 03, 2003 - 05:56 pm:


The only sense that I can make out of what you're saying is that you think that a board or court might not apply the Christian Doctrine to incorporate the BAA clause because the clause is not required for all contracts, but only some. Is that what you're saying?

And are you also saying that you think a board or court would not incorporate a required clause if to do so would "hurt" the contractor?


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.

Back in the summer of 1984, our headquarters sent instructions to all Districts to administratively incorporate the new Prompt Payment and Payments clauses, which became effective for any contract awarded after March 31, 1984 (the PPA Amendments of 1988). I issued at least 10 admin mods to correct the contract. I'm sure that there were many across the other 24 Districts, too. Yeah, there were bunches of upset contractors. This ended their right to hold retainage from their subs (a common financing tool for primes). Was it "fair" to the primes to drop it on them? Most likely not. I imagine their lawyers told them what the case law says. There were no claims.

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.

When I get back to the office tomorrow, I'll check the wording that we used for the admin mods - if you are interested. happy sails! joel

Vern Edwards  Posted on Wednesday, December 03, 2003 - 07:29 pm:

Original Anonymous:

How did it happen that the clause was left out? Was it intentional or a mistake?

Did the solicitation for the contract contain the provision at FAR § 52.225-10?

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!

Here was the wording for block 14 of the admin mods we issued in the fall of 1989 to numerous contracts. Back then, it often took several months for FAR changes to reach the District Offices. Thank God for the Internet.

"This modification states the requirements of Public Law 100-46, Prompt Payment Act Amendments of 1988 (102 Stat. 2455"... etc., etc.) "and is effective as of April 1, 1989. That statute, by its terms, applies to contracts awarded on or after April 1, 1989, and its provisions are incorporated into the contract by operation of law. This modification is a no-cost, unilateral administrative change. Far Clause 52.232-5, in the solicitation/contract is revised. FAR clause 52.236-25 is replaced by 52.232-27, dated April 1, 1989."

In reviewing my old files, I discovered one claim submitted. Our Chief of Construction issued an "indicated decision letter" informing the Contractor of our findings and the claim was dropped, prior to a Contracting Officer's Decision.

happy sails! joel



ji20874   Posted on Thursday, December 04, 2003 - 10:02 am:  


I am not saying that a board will not impose a BAA clause in a claim situation, or that it will only impose a clause where it won't hurt -- indeed, I agree that it might impose a BAA clause, citing the Christian doctrine -- but I'm saying that the board might also consider the matter of equity and might agree, if the contractor can make a case for harm, that the contractor relied in good faith on the RFP and the agency's discretionary authority and that it bid a lower price than it otherwise would but for the now-apparent error of the contracting officer. If an error was made by the contacting officer, and if the contractor relied in good faith on the RFP, the board might impose the BAA citing the Christian doctrine but might also agree that an equitable adjustment is appropriate. The ASBCA did peripherally look at equity in its July 2003 case, but said the contractor did not make a successful case for actual harm. Although we cannot know for certain, I wonder what the board decision regarding equity would have been if the contractor had been successful in its case for actual harm.

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)).

Now, as I write I realize that there is a little difference between the BAA-Supplies and the BAA-Construction approach -- what I have said above applies to the BAA-Supplies approach. Since the matter at hand here is the BAA-Construction approach, it is true that the clause at 52.225-9 or similar should have been used with a (b)(2) fill-in of NONE or a listing the excepted materials. In this construction case, I now understand that the contractor should have expected a BAA clause (because of deeply ingrained public policy and the lack of agency discretion), and in the absence of the clause in the RFP, should have understood it applied as an operation of law with a fill-in of NONE.

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:   


You might be right that a board or court might compensate the contractor. I doubt it, but I don't know. It seems to me that if the position of the boards and courts has been that contractors should know what the rules are and that the clause is in the contract despite its absence from the contract document, then giving the contractor additional money for something that it should have known isn't logically consistent.

Also, keep in mind that the BAA clause implements statute, but that no statute requires the inclusion of a termination clause. One of the arguments made by the appellant in the Christian case was that no statute requires a termination clause. If a board or court would read a clause into a contract that implements an important public policy but that is not required by law, then I think it would read a clause into a contract that implements public policy established by statute.

Timothy and Joel:

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.

Did the law expressly empower agencies to unilaterally insert the clause into pre-existing contracts? Timothy, I think that's what you said. Is that the case?


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.

happy sails! joel

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.

By the way, it IS public policy to disallow primes' retainage of funds from subs and suppliers paid in progress payments. Congress specifically pointed out that the subcontracting and construction supply industry was being harmed by the primes'practice of physically retaining portions of progress payments that were due subs and suppliers. This was a common financing tool for government prime contractors (and still is in commercial construction). The congressional reports accompanying the legislation included reports of industry testimony and Congress's support for the subs and suppliers. The legislation included some requirement for GAO follow-up studies to see how to help them get paid. GAO even studied proposals to require direct payment to subs. I participated in interviews back in 1992 or 1993 in an effort to discourage such drastic action. happy sails! joel