Document: 386 U.S. 503 87 S.Ct. 1177 18 L.Ed.2d 256 CROWN COAT FRONT CO., Inc., Petitioner,v.UNITED STATES. No. 371. Argued Feb. 13 and 14, 1967. Decided April 10, [Syllabus from pages 503-504 intentionally omitted] Edwin J. McDermott, Philadelphia, Pa., for petitioner. David Rose, respondent. Mr. Justice WHITE delivered the opinion of Court. 1 The standard disputes clause in government contracts requires that 'any dispute concerning a question fact arising under this contract,' not disposed by agreement, shall be decided contracting officer, with right appeal within 30 days to department head or his representative (normally board contract appeals) whose decision final 'unless determined court competent jurisdiction have been fraudulent, arbitrary, capricious, so grossly erroneous as necessarily imply bad faith.'1 'arising under' claims subject administrative determination are those asserted other clauses calling equitable adjustment purchase price extensions time upon occurrence certain events.2 One these is so-called 'changes' which permits officer make changes scope contract, provides if any change causes an increase decrease cost of, required performance work, 'an made delivery schedule,' states failure agree meaning clause.3 2 This case involves claim adjustment, rejected Armed Services Board Contract Appeals. contractor brought suit District Court 28 U.S.C. § 13464 alleging was capricious supported substantial evidence. dismissed barred 2401(a) 'Every civil action commenced against United States unless complaint filed six years after first accrues. * *' principal here whether 'right action' respect accrues at earlier date. 3 facts quite simple. On May 1956, petitioner contracted furnish specified number canteen covers were lined mildew-resistant felt specifications. Government, authorized inspect materials used tested samples purchased because they allegedly did contain quantities mildew inhibitors. Petitioner agreed reduction, however, permitted complete contract. Final delivery, originally scheduled October 11, on December 1956. Allegedly, March 1959, discovered nature tests had performed felt. Claiming use such contemplation constituted specifications, 1961, demanding form refund reduction compensation increased costs occasioned delay resulting Government's rejection samples. denied claim. February 28, 1963, Appeals affirmed officer's decision. July 31, more than completed Board's arbitrary evidence it entitled provided States, among things, time-barred 2401(a). Without deciding arose clause, statute limitations. Appeals, sitting en banc, five-to-four Cir., 363 F.2d 407. Relying McMahon v. 342 25, 72 17, 96 L.Ed. 26, its own Marine Corp. Delaware 283 776, Suits Admiralty Act, majority below concluded accrued no later date disputed covers, therefore disagreed Third Circuit Northern Metal Co. 350 833, which, like Marine, supra, involved Act. 41 Stat. 525, amended when bar begins run but held tolled during pendency proceedings. Because apparent conflict, we granted certiorari, 385 811, 87, 17 52. We reverse. 4 Since below, Claims has Nager Electric Co., Inc. 368 847, 177 Ct.Cl. 234, unanimous exhaustive Judge Davis dealing application 'first accrual' language 25015 both breach typical conclusion would adhere what considered long-standing rule: (1) proceedings contractor's extend beyond completion final,6 before, (2) well only contract.7 As will evident do reach case. But one essentially reasons articulated. 5 1. start obvious: Section limit bringing actions States. 'civil referred jurisdiction. Cf. Unexcelled Chemical 345 59, 73 580, 97 821. Such seemingly bring prior filing suit. Our initial inquiry is, therefore, accrued. In our opinion, contemplated provisions 6 With effect convert otherwise might into adjustment. example, Government breaches They give rise adjustments agrees make, changed. extent questions answered methods itself. must present appealed representative, Until acted, adjudication courts.8 then, he existence claimed process upon. But, said, speaks file courts Under here, administrative, judicial, instance, resort making determination. 7 It now crystal clear seek relief courts. Joseph A. Holpuch 328 66 1000, 90 1192, exhaust construction bars him recover damages. did. According Court, 8 'is clear, unambiguous provision applicable all times binding parties No justified disregarding letter spirit. creates mechanism whereby may errors corrected level, thereby permitting mitigate avoid large damage created. Blair, 321 730, 735, 64 820, 823, 88 1039. mechanism, moreover, exclusive nature. Solely through operation adjudicated matters And absence some procedure inadequate unavailable, pursued exhausted before can heard complain court.' 239—240, 1003. 9 See also 1039 Callahan Walker 317 56, 61, 63 113, 115, 49, where procedures described 'only avenue relief.' 10 2. Even contractual scheme course free court, demand de novo support presented administratively record there reviewing court. Carlo Bianchi & 373 709, 83 1409, 652; Utah Construction Min. 384 394, 86 1545. performs principally function. Only alleged proved refuse honor it. much itself Wunderlich Act.9 statute, 'An Act permit review *,' 68 81, Congress widened judicial same recognized finality absent grounds setting aside. focus validity made, cannot know vulnerable. then matures and, 'the payment hallmark accrual F.2d, 859, Ct.Cl., 252. 11 3. To hold six-year period runs insists, unfortunate impact. compelled protracted last continue thereafter. If starts running date, could thus finally decided. true wins loses appeals. prevailed sought, immune enforce award passed since appealing result, nor view, intended. evidences congressional purpose insure adequate decisions contracts; very doubtful anticipated proceedings, compulsory contractor, continued contract's date.10 12 suggests easily untoward results timely protective remain inactive pending legally ask adjudicate original matter. Nor sensibly yet made. He cannot, honesty, necessary allegations until agency known. quiescent rendered, sheer formality event—a procedural trap unwary additional complication who manage dockets Certainly help contractors whom already too late suit, case.11 4. challenges rule found past cases. asserts many cases purported sifted involve state way dictum only. think fairly reflected thrust tenor opinions.12 At least, based cases, ordinary wholly concluding Nor, aside case, appeals Tucker (24 505) contrary followed Claims. 14 5. brings us relied: 26; Soriano 352 270, 77 269, 306 None them involving injured seaman negligence unseaworthiness. two cause arises.' Clarification 57 45, 50 App. 1291(a), seaman's ambit disallowed, sets body. limitations ran injury, disallowance saw indications passing intended postpone usual disallowance, claimant indefinitely commencement statutory period. 15 pointed out hazards inherent attempting define purposes 'cause 'accrues.' words 'interpreted light general provisions, due regard practical ends served limitation brought.' Reading Koons, 271 58, 62, 46 405, 406, 70 835; see Dickinson, 331 745, 748, 67 1382, 1384, 91 1789. Cases claims. prevent unnecessary litigation providing notice injury opportunity settle administratively. while 'disallowed,' regulations 60 filing, deemed disallowed There chance consume entire 16 action, await, occur When does, measured performance. does unlimited discretion clause13 most their Where true, unreasonably presenting follows. Electric, 864, 259. control requisitioning foodstuffs equipment Philippine guerilla forces Army Service. expressly prerequisite Likewise, Unexcelled, duty Walsh-Healey (49 2036), rather liquidated damages seems payable, without resorting remedies. 6. Finally, relies Public Law 89—505, 80 304, 2415 (1964 ed., Supp. II), enacted 18, 1966, established tort suits money founded express implied. 'six year rendered law.' example relevant committee reports hearings mentioned contained contracts. H.R.Rep.No.1534, 89th Cong., 2d Sess., 4; S.Rep.No.1328, 3; Hearing H.R. 13652 Subcommittee House Committee Judiciary, (1966) U.S.Code Congressional Administrative News, p. 2502. Based new provision, argues assumed situations Otherwise need one-year following order save limitation. What amounts to, says, similar older private 2501. argues, precludes holdings 19 argument force. power limits waiver sovereign immunity. convinced issue determinative 2401 formulating 2415. Neither hearing 2401, existing situation desiring sue clause. bill recommended Department litigating ultimately took position Claims, favor rule—that termination Given litigative history issues understood impact applied allowance allowing grace mind litigant governed 2401. hesitant believe aimed equalizing opportunities between parties14 consciously extended saving overcome effects refused contractor. least sufficiently prefer await somewhat clearer signal Congress. 20 conclude determination, ruled filed. answer complaint, characterized instead pure decide issue; we. matter open remand determine time-barred. 21 Reversed. remanded. provides: 'Except agreement Contracting Officer, reduce writing mail copy thereof Contractor. Within receipt copy, Contractor mailing furnishing Officer written addressed Secretary, Secretary duly shall, faith, conclusive; that, taken, conclusive. connection proceeding afforded offer appeal. Pending hereunder proceed diligently accordance Officer's decision.' For presently use, 32 CFR 597.103—12. sometimes herein 'breach' 403—418, 1545, 1550—1558, 642. contains excerpts here. standardized version fixed-price supply provides, entirety, that: 'The time, order, sureties, changes, following: (i) Drawings, designs, supplies furnished specially manufactured therewith; (ii) method shipment packing; (iii) place delivery. part work changed schedule, both, modified accordingly. Any notification change, provided, decides justify receive act property obsolete excess result included Contractor's prescribe manner disposition property. Failure 'Disputes.' However, nothing excuse changed.' 7.103—2. excerpted appears unreported substantially identical full quoted above. 1346 district jurisdiction, concurrent '* exceeding $10,000 amount, implied *.' 2501 follows: petition thereon accrues.' Claims' accrues, commences, acceptance (if latter contemplated).' 853, 242. summarized rulings co-existing 'Reading together, opinions show, think, 'disputes-clause' items 'breach-type' single standards controlled court: should various claim-items; ripened items, lose includes (by proper amendment, necessary, mature) action; end process, petition. sum, time-bar fall earlier, plaintiff taking risk split action.' 857, 248—249. refuses departs agreed-upon settling §§ 322 321. Limitation pleading contract-provisions relating finality; review. 'No entered conclusiveness pleaded limiting fraud official said alleged: Provided, That conclusive fradulent (sic) 322. Contract-provisions law. law official, board.' Report disaffirms intention confer rights refers specifically barring stale Government. report suggest purport alter disagree then-extant constructions either H.R.Rep. 1380, 83d Sess. 2191. heed Claims: known decades probably acted assumption keeping records retaining hand, say abruptly moment completion, regardless subsequent mandatory undoubtedly cut off scores who, relying decisions, waited ending process. reason disrupt expectations.' 860, 253—254. cited Boat 81 361, 367—368, cert. denied, 297 710, 56 573, 997; Austin Eng'r 559, 562—564; Holton, Seelye 65 F.Supp. 903, 907, 106 477, 501; Griffin 197, 206, 110 330, 372, 373, rev'd grounds, sub nom. Jones, 336 641, 69 787, 93 938; Art Center School 142 916, 921, 136 218, 226; Empire Institute Tailoring, 161 409, 411, 165, 168; International Potato 602, 604—605, 604, 606—607; Clifton Products, 169 511, 512—513, 144 806, 809; Cosmopolitan Mfg. 546, 547, 156 142, 144, Arlene Coats 371 818, 36, 60; Steel Improvement Forge 355 627, 631, 174 24, 29—30. dealt Aktiebolaget Bofors 153 397, 399, 139 642, 644, containing statements above 'Similarly, (and mass cases) left whenever likes. Disputes fix ordinarily substantive lead comparable Those specific usually built-in limits, unreasonably. Dawnic Steamship 537, 579 (1940). tribunals great difficulty handling belated contract-adjustment articles. Contractors able unduly unilaterally postponing process.' 259—260. noted Changes days; Changed Conditions calls immediate officer; Delays-Damages contemplates excusable delays; Price Adjustment Suspension, Delays, Interruption Work normal Constr. Mining 397—399 n. 1, 416 642 (1966).' 29, 259, 29. 30-day assert text 3, shortened procedure, 7.103—2, negotiations, 597.103—2. intent 'put parity litigants sue' 'to equalize litigants' evident. 9, (1966); 1534, S.Rep. 1328, Whether succeeded establishing exact equality another question. regard, interesting note addition institute 2415, subsection (e) 'In event section applies thereafter prejudice, recommenced dismissal, section. defendant interposing 2415(e) II).

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