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Christian Doctine and Performance/Payment Bonds
Todd Davis posted a topic in Contract Administration
Earlier this year the ASBCA concluded that the Christian Doctrine applies to performance and payment bond requirements. The case involved the construction of a pre-fab building. The CO used a GSA schedule contract to make award. The order did not include FAR 52.228-15, which implements the requirement for performance any payment bonds. Upon award the CO requested bonds. The contractor initially said it couldn't provide them, but ultimately did two years later! Upon providing the required bonds the CO provided equitable adjustment to compensate the contractor for the bonds that it said were to have been read into the contract to begin with. Upon completion of performance the contractor submitted a claim for delay costs among other things due to the two years that had passed between award and performance. One of the arguments the contractor made was that this was not a commercial contract and not a construction contract, so bonding wasn't required. The Board concluded the contract was for construction and that the Miller Act requirements still applied, even if the procurement was conducted as a commercial acquisition. The Board determined that inclusion of the clause was mandatory, even though the bonds statutes and implementing FAR regulation permit the CO to waive bonding. They reasoned that the CO could only waive the requirement in situations explicitly stated in the statute, which did not apply in this case (i.e., performance in a foreign country or authorized by another statute). The Board also concluded that bonding requirements are significant components of public procurement policy. In the request for reconsideration, the contractor cited a prior U.S. District Court case (Faerber Electric) as having held that the Christian Doctrine does not apply to the Miller Act. The Board distinguished this case from Faerber. It stated that the decision in Faerber was in the context of whether or not a subcontractor possessed a right of action against a prime contractor based on the presumption that the prime was required to have obtained a payment bond, despite both the CO and contractor having ignored the requirement. It also stated that Faerber did not decide address applicability of the Christian Doctrine. ASBCA Opinion http://www.asbca.mil/Decisions/2017/60686, 60687 K-Con, Inc. 1.12.17.pdf Request for reconsideration denied. http://www.asbca.mil/Decisions/2017/60686, 60687 K-Con, Inc. 5.8.17.pdf Prior related Wifcon discussion.