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A Little "Christian Doctrine" For You

bob7947

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It's not a religious thing; it's a contracting thing — G. L. Christian style. We've all heard of the "Christian Doctrine." Here is how one judge of the Court of Federal Claims applied it to Bay County, Florida v. U. S., No. 11-157C, August 14, 2013 — released today. You can read the entire 11-page opinion or you can read the excerpt below.

"The government argues that Bay County waived its potential status as an independent regulatory body by including FAR § 54.241-8 in the Sewage Contract — ignoring the limitation of Subsection (a) on application, viz., “[t]his clause applies to the extent that services furnished hereunder are not subject to regulation by a regulatory body.” FAR § 52.241-8(a); see Hr’g Tr. 11:11 to 12:1. Pointing to the principle that this court must avoid contract interpretations that render the FAR or contract terms superfluous, the government contends that the only way to give meaning to the Sewage Contract is to treat Bay County as a non-independent regulatory body. Hr’g Tr. 11:13 to 15:3. In making this argument, the government implicitly urges that a contractual provision that is inapplicable by its own terms must take precedence over the FAR’s requirements. The court cannot accede to such a proposition.

When a contract subject to the FAR incorporates improper terms of the FAR, the correct provisions of the FAR control. See S.J. Amoroso Const. Co. v. United States, 12 F.3d 1072, 1075 (Fed. Cir. 1993); G.L. Christian & Assocs. v. United States, 312 F.2d 418, 426 (Ct. Cl.1963), mot. for rehearing and reargument denied, 320 F.2d 345 (Ct. Cl. 1963). “Under the so called Christian doctrine, a mandatory contract clause that expresses a significant or deeply ingrained strand of procurement policy is considered to be included in a contract by operation of law.” S.J. Amoroso, 12 F.3d at 1075. In S.J. Amoroso, as here, an improper clause was substituted for a proper clause. Id. As S.J. Amoroso held, “[a]pplication of the Christian doctrine turns not on whether the clause was intentionally or inadvertently omitted, but on whether procurement policies are being ‘avoided or evaded (deliberately or negligently) by lesser officials.’” Id. (citing G.L. Christian & Assocs., 320 F.2d at 351). The proper clause was consequently given effect. Id. at 1077.

In this instance, inclusion of the clause prescribed for unregulated utilities constitutes such an impermissible deviation. See FAR § 1.401 (“Deviation means . . . [t]he omission of any solicitation provision or contract clause when its prescription requires its use . . . [or] [t]he use of a solicitation provision or contract clause . . . if such use is inconsistent with the intent, principle, or substance of the prescription or related coverage on the subject matter in the FAR.”). The text of the FAR is unambiguous in its requirement for inclusion of the proper change of rate clause: “The contracting officer shall insert clauses substantially the same as the clauses listed below in solicitations and contracts under the prescribed conditions.” FAR § 41.501(d) (emphasis added). The prescribed condition for inclusion of FAR § 52.241-7 is that the utility services “are subject to a regulatory body.” Id. As established supra, Bay County qualifies as an independent regulatory body, and as such, FAR § 52.241-7 is a required term of the utility contract. Correspondingly, FAR § 52.241-8 is inappropriate. Although deviations may be authorized by the agency head for individual contract actions, such a deviation must be documented and justified in the contract file. FAR § 1.403. No such documentation or justification is present here.

Accordingly, the Christian doctrine applies and binds the contracting parties to the mandatory contractual term. See G.L. Christian & Assocs., 312 F.2d at 426 (“We are not, and should not be, slow to find the standard [regulation-mandated] article incorporated, as a matter of law, into plaintiff’s contract if the [r]egulations can fairly be read as permitting that interpretation.”). “Such regulations are law, binding on the contract parties” when otherwise applicable to the contract, Dravo Corp. v. United States, 480 F.2d 1331, 1333 (Ct. Cl. 1973), and “need not be physically incorporated into the contract,” First Nat’l Bank of Louisa, Ky. v. United States, 6 Cl. Ct. 241, 244 (1984) (citing Hills Transp. Co. v. United States, 492 F.2d 1394, 1396 (Ct. Cl. 1974)); see also Bethlehem Steel Corp. v. United States, 423 F.2d 300, 305 (Ct. Cl. 1970) (holding that the regulation need not be in effect when the contract was awarded so long as adoption of the regulation was remedial and intended to afford safeguards to the contractor). The court determines as a matter of law that the clause pertaining to independently regulated utilities, FAR § 52.241-7, is incorporated into the contract in place of the improper clause, FAR § 52.241-8, which is physically present."




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