Alerts

FAR Clauses Are in the Contract Whether You Know It or Not: Federal Circuit Affirms Continuing Vitality of Christian Doctrine

Alerts / November 19, 2018

Since 1963, the federal government has relied on a doctrine first advanced in G. L. Christian & Assocs. v. United States to read certain terms and provisions into its contracts despite the lack of any express reference thereto. This “Christian doctrine” has been used to remedy errors and omissions by contracting officials who fail to include provisions satisfying two criteria: First, the provision must be mandatory, and second, it must reflect a “significant or deeply ingrained strand of public procurement policy.” Although this doctrine has historically had the effect of imposing substantial costs and obligations on unsuspecting contractors after the fact, the government’s reliance on this doctrine has waned in recent years. However, a recent decision from the U.S. Court of Appeals for the Federal Circuit reaffirmed the doctrine’s relevance, demonstrating the need for contractors to continue evaluating the completeness of their contracts.

K-Con, Inc. v. Secretary of the Army involved two contracts for the construction of prefabricated buildings to be installed at an Army facility in Massachusetts. The Army used commercial item procedures to solicit these buildings, omitting provisions of the Federal Acquisition Regulation (FAR) required for construction contracts, including FAR 52.228-15, Performance and Payment Bonds—Construction. But after awarding a contract to K-Con, the Army nonetheless insisted that K-Con obtain the bonds required under that clause, a process that delayed performance for nearly two years, resulting in significant cost and delay to K-Con. In response to claims filed by K-Con seeking compensation for those costs and delays, the government took the position that the contracts were for construction, and the bonding requirements were therefore mandatory, a position sustained by the Armed Services Board of Contract Appeals.

On appeal to the U.S. Court of Appeals for the Federal Circuit, K-Con advanced two arguments: first, that because the contracts had been solicited on a commercial item basis, they could not be treated as construction contracts, and second, that the bonding requirements of FAR 52.228-15 could not be read into the contracts as a matter of law regardless. The court disagreed, implicitly accepting K-Con’s argument that a commercial item contract could not also be a contract for construction, but nevertheless concluding the contracts at issue were indeed for construction, due to certain ambiguities in the underlying solicitations. Having concluded the contracts were for construction, the court then determined that the bonding requirements of FAR 52.228-15 must be read into such contracts under the Christian doctrine, because they were rooted in a 1935 law, commonly referred to as the Miller Act, that mandated their inclusion, and because the Miller Act’s longevity and purpose demonstrated this mandate is a deeply ingrained public procurement policy.

Like the Christian doctrine itself, the lesson of K-Con is easy to appreciate but may prove difficult for unwary contractors to heed. Contractors cannot always trust that government contracting officials have used the correct forms, or cited the correct clauses, when soliciting goods and services. As a consequence, contractors should maintain constant vigilance for potential government errors or omissions in solicitations that could impact contractors’ ability to perform. Failure to do so could result in substantial unexpected costs down the road, rendering contracts difficult – or even impossible – to perform.

For further information, contact Barron Avery at bavery@bakerlaw.com or 202.861.1705, William O’Reilly at woreilly@bakerlaw.com or 202.861.1745, or any member of BakerHostetler’s government contracts team.

Authorship Credit: W. Barron A. Avery and William B. O'Reilly

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