Opinion ID: 688710
Heading Depth: 3
Heading Rank: 2

Heading: Legislative History Supports Board Jurisdiction

Text: 27 Our holding that a reformation claim based on illegal government actions occurring before award of a CDA contract can relate to that contract is supported by the legislative history of the CDA, exhaustively reviewed by one of our predecessor courts in Paragon Energy Corp. v. United States, 645 F.2d 966, 227 Ct.Cl. 176 (1981). The legislative history supports a holding that agency boards have jurisdiction over all appeals from contracting officer decisions on reformation claims relating to a CDA contract. As the Paragon court stated, agency boards of contract appeals have authority under the Contract Disputes Act to grant equitable reformation. Id. at 975, 227 Ct.Cl. at 191. Thus, the Court of Claims saw the agency boards' reformation power as plenary. The legislative history supports that view. 28 The initial House and Senate bills contained an all disputes clause providing that each executive agency was: 29 authorized to settle, compromise, pay, or otherwise adjust any claim by or against, or dispute with, a contractor relating to a contract entered into by it or another agency on its behalf, including a claim or dispute initiated after award of a contract, based on breach of contract, mistake, a misrepresentation, or other cause for contract modification or rescission. 30 H.R. 11002, Sec. 4; S. 3178, Sec. 4(a) (emphasis added) (quoted in Paragon Energy Corp., 645 F.2d at 973, 227 Ct.Cl. at 187). The House Report explained the intent of the all disputes clause. 31 The provisions of section 4 implement the Procurement Commission's recommendation that executive agencies be empowered, with very limited exceptions, to pay any claim or otherwise resolve any dispute growing out of or in connection with a Government contract. 32 H.R.Rep. No. 95-1556, 95th Cong., 2d Sess. 17-18 (1978) (emphasis added) (quoted in Paragon Energy Corp., 645 F.2d at 973, 227 Ct.Cl. at 187). 33 Although the all disputes clause was deleted from the proposed CDA, related language was added to section 8(d) that is even broader: In exercising this jurisdiction, the agency board is authorized to grant any relief that would be available to a litigant asserting a contract claim in the [United States Court of Federal Claims]. (Codified as amended 41 U.S.C. Sec. 607(d) (Supp. V 1993). With this amendment, Congress enacted the CDA. As the Court of Claims explained in Paragon, the purpose of the amendment was not to eliminate types of contract disputes from the scope of a board's jurisdiction under the CDA, forcing contractors to go to the court. Rather, the amendment was only meant to clarify that the CDA did not authorize contracting officers or agency boards to settle or compromise claims independent of their legal or contractual merits. Paragon, 645 F.2d at 974-75, 227 Ct.Cl. at 188-90. 34 After its review of the CDA's legislative history, the Court of Claims broadly summarized the jurisdictional scope given to the agency boards of contract appeals under the CDA: 35 Congress could not have expressed itself more clearly to the effect that all contractor claims based upon a valid contractual theory fall within the procuring agencies' jurisdiction under the Contract Disputes Act. This was essential to Congress' design that all contract disputes be resolved according to the same set of procedures, beginning with the decision of the contracting officer. 36 Id. at 975, 227 Ct.Cl at 190. As the Court of Claims explained, the CDA gave the agency boards jurisdiction over all contractor claims based upon a valid contractual theory. Id. LaBarge brings a contractor claim based upon the valid contractual theory of reformation due to alleged illegal government conduct. See Chris Berg, Inc., 426 F.2d at 317, 192 Ct.Cl. at 183. Moreover, the reformation claim cannot fall outside a class defined as all contractor claims, for there is no dispute that LaBarge is a CDA contractor. 37 Finally, our holding is consistent with the congressional intent underlying passage of the CDA. The CDA was enacted, in part, to end the fragmentation of mechanisms for the resolution of claims in connection with Government contracts. Paragon Energy Corp., 645 F.2d at 972, 227 Ct.Cl. at 185. Complete relief was made available both at agency boards of contract appeals and in the Court of Federal Claims precisely to alleviate the fragmentation problem. The government's rationale, however, ignores this basic change wrought by the CDA, indeed undercuts it by limiting the reformation claims a contractor may bring before an agency board. Such a result is contrary to Congress' design that all contract disputes be resolved according to the same set of procedures.... Id. at 975, 227 Ct.Cl. at 190. 38 The result urged by the government is also contrary to the statutory provision which authorizes an agency board to grant any relief that would be available to a litigant asserting a contract claim in the United States Court of Federal Claims. 41 U.S.C. Sec. 607(d). Section 607(d) and its legislative history make clear that a contractor, at its free election, may bring a CDA claim either in the Court of Federal Claims or before the Board, as LaBarge has done. S.Rep. No. 1118, 95th Cong., 2d Sess. 2 (1978), reprinted in 1978 U.S.C.C.A.N. 5235, 5236 (The contractor may choose one of two available routes for appeal from an adverse contracting officer's decision. First, he may take his appeal to the appropriate board of contract appeals ... [or he may] proceed directly to the Court of Claims for resolution of any dispute.). 39 As shown by the legislative history, although the Board would not have jurisdiction over a pre-award claim based on the implied contract to treat bids honestly and fairly, which cannot relate to a CDA contract, LaBarge's reformation claim does relate to a CDA contract, giving the Board jurisdiction over the claim.