Document: 373 U.S. 709 83 S.Ct. 1409 10 L.Ed.2d 652 UNITED STATES, Petitioner,v.CARLO BIANCHI AND COMPANY, Inc. No. 529. Argued April 29, 1963. Decided June 3, David L. Rose, Washington, D.C., for petitioner. William H. Matthews, respondent. Mr. Justice HARLAN delivered the opinion of Court. 1 This case involves interpretation and application 'Wunderlich Act,' 68 Stat. 81, 41 U.S.C. §§ 321—322,1 an Act designed to permit judicial review decisions made by federal departments agencies under standard 'disputes' clauses2 in government contracts. The issue before us is whether, a suit governed this statute, court restricted administrative record on issues fact submitted determination or free receive new evidence such issues. 2 In 1946, respondent, Carlo Bianchi Company, entered into contract with Army Corps Engineers construction flood-control dam. Included work be performed was 710-foot tunnel, diversion water, lined concrete have permanent steel supports as protection 50-foot section at either end. specifications did not call throughout remainder tunnel but only '(t)emporary * where required safety workmen.' contained 'changed conditions' clause, authorizing contracting officer provide increase cost if contractor encountered subsurface conditions materially different from those indicated reasonably anticipated, also clause quoted, supra, note 2. 3 After had been drilled subcontractor, it concrete, respondent took position that unforeseen created extreme hazards workmen, requiring should compensated installing protection. decided compensation would made, pursuant timely appeal his decision taken Board Claims Appeals Engineers. While pending, installed completed tunnel. 4 An adversary hearing held Board, which each side offered its opportunity cross-examination. December 1948, issued against contractor, resolving certain conflicts favor Government holding substance there were no unanticipated use 5 Almost six years later, 1954, brought present action breach Court Claims, seeking substantial damages alleging 'capricious arbitrary so grossly erroneous necessarily imply bad faith, supported evidence.' At Commissioner 1956, question whether Board's entitled considered final, admissible except Board. But received de novo, including, over objection, amount He subsequently extensive findings concluded recover. 6 January 1959, accepted Commissioner's conclusions, ruling 'on consideration all evidence, officer's (as affirmed Board) cannot said support,' thus 'does finality.' 169 F.Supp. 514, 517, 144 Ct.Cl. 500, 506. On limited stated: 7 'In our Volentine Littleton v. United States, 145 952, 136 638, trial agency, we recognized logical weaknesses position. We concluded, however, intent Congress enacting Wunderlich accord conclusion, adhere conclusion case.' Ibid. 8 receiving additional damages, judgment $149,617.36. granted certiorari, 371 939, 321, 9 274, resolve conflict among lower courts3 important kind proceeding afforded cases Act. I. jurisdiction conferred 28 § 1491, since States 'founded' upon 'express implied States.' Ordinarily, when questions arise suits, function make appropriate facts dispute. long ago upheld validity clauses contracts delegating employee authority determinations disputed fact, given conclusive effect any subsequent absence fraud gross mistake implying faith. See Kihlberg 97 398, 24 L.Ed. 1106; Ripley 223 695, 32 352, 56 614. Thus matters give extremely decision, although scope somewhat expanded years,4 expressly Wunderlich, 342 98, 100, 72 154, 155, 96 113, determining departmental founded fraud, i.e., 'conscious wrongdoing, intention cheat dishonest.' rendered strong dissents, evoked considerable effort obtain legislation expanding beyond fraud. A number bills introduced Eighty-second Eighty-third Congresses; hearings Senate5 House Representatives;6 resulting statute known Act' ultimately approved both Houses 1954. quoted full 1, 'To heads involving arising contracts,' provides shall final accordance provisions 11 'unless same fraudulent capricious 12 Respondent has argued underlying controversy language sole issue, stated p. 710, respect take evidence. considering put one are involved case, normally require receipt outside their resolution, could proceedings even prior enactment statute. 13 It that, apart finality attached must rest solely department. based legislative history. 14 1. With used, designated review' reviewing ordinarily agency below based. Indeed, simply provided review, without setting forth standards used procedures followed, confined novo may held. Tagg Bros. & Moorhead 280 420, 50 220, 74 524; National Broadcasting Co. 319 190, 227, 63 997, 1014, 87 1344. And course, shown NBC themselves, can frequently original well appellate tribunal. 15 Moreover, adopted Act—'arbitrary,' 'capricious,' 'not evidence'—have consistently associated record.7 term 'substantial evidence' particular become art describe basis judged court. goes reasonableness what it, though refuted other presented decision-making body. 16 history customary meaning. true several witnesses representing contractors explained purpose proposed restoring rights Wunderlich,8 apparently practice covered clauses.9 seems clear context these meant cover more than conscious assumed Wunderlich. Indeed procedural significance test, leading contractor's representative 17 'result various feeling they will produce examine them, order some support go up court.'10 18 Report recommending bill enacted leaves little doubt intended record. H.R.Rep.No. 1380, 83d Cong., 2d Sess.; Code Congressional Administrative News 2191 et seq. explicit references Procedure Act, 60 243, 1009, Court's discussion Consolidated Edison New York Labor Relations 305 197, 229, 59 206, 216, 126, least indications. Even significant Committee's view, echoing witness above, remedy many failing acquaint Government's position: 19 'It believed condition corrected records officers hereafter contain testimony relied making decisions. possible justify retention unless conducted way party openly afford rebuttal.' H.R.Rep. Sess. 5; 2195. 20 sound clearly expressed frustrated withhold level then introduce proceeding. consequence procedure instances needless duplication evidentiary heavy burden time expense bring litigation began almost after completiton proceedings, liability until 1959. surely delay worst, loath condone need expeditious resolution ill-served. Here inconsistent directive. 21 contended power remand department concerned, cf. Jones, 336 641, 670—671, 69 787, 802—803, 93 938, defective inadequate, reveals commission prejudicial error, hold proceed judgment. There are, believe, two answers contention. First, undoubtedly situations warranted, record, granting further action. Second, existing warrant sustained laid down Congress, see reason why stay own pending involved. Cf. Pennsylvania R. 363 202, 80 1131, 1165. Such certainly justified failed adequate provision subjected scrutiny, part achieve uniformity respect. substantive defect inadequacy, sanction always available II. 22 argument here, urged hand, contends irregularities preclude giving effect. 23 Neither properly embraced within grant therefore called pass them. vacate conformity opinion. ordered. Judgment vacated remanded. 25 DOUGLAS, whom STEWART concurs, dissenting. 26 petition alleged changed install arch ribs liner plates, delayed completion project increased cost, reimbursed, rejecting claim 'caparicious' 'arbitrary.' 27 makes 'final conclusive' disputes exceptions I think arbitrary' because claimant he refute. permissible Claims. 29 found start temporary fall-ins done so, required. February hearing, letter Acting District Engineer Chief reported conversation Corps' resident engineer expert York's Bureau Mines. inference drawn report safe shortly bored later unsafe caused 'had foresight gunite exposed roof cement excavation progressed seal air slacking (sic) *.' Somehow, manner disclosed came hands Appeal appeal.* 30 learned expert's statements him testified inspection permanent, temporary, necessary beginning. As respects guniting served useful purpose. 31 issue—whether needed—was main case. When relies chance refute, becomes infected lacks fundamental fairness citizen expects Government. Willner Committee Character Fitness, 96, 1175; Gonzales 348 407, 75 409, 99 467; Morgan 304 58 773, 82 1129. irregularity points Judge Madden, writing Littleton, 954, 641—642: 33 '* so-called 'administrative record' mythical entity. statutory head personally entrust anyone else him. Whoever oath compel attendance production documents. transcript oral testimony. deciding may, maintaining most formal procedures, does, search out consult documents which, occurs him, enlightening, regard presence claimant.' 34 dealing, words, subnormal procedures. regulations governing published protective features (33 CFR 210.4), lack safeguards accorded claimants proceedings. specifically exempt 1004, 1006. exemption highlighted That part: 35 'Every right defense documentary submit rebuttal conduct cross-examination disclosure facts.' (Emphasis supplied.) 36 provision, applicable, reliance ex parte hearsay statement reversible error. Lax times do harm. where, vital obtained false, 'capricious' 'arbitrary' me unavoidable. 37 determine agency's obviously inappropriate, court, question. Since whereby rested 'faceless' secret witnesses, Like seeks reformation (cf. Blake Constr. 111 U.S.App.D.C. 271, 296 F.2d 393), place get courts. 321 provides: 'No relating conclusiveness duly authorized board dispute contract, pleaded now filed limiting official alleged: Provided, 322 law official, representative, board.' included 'Except otherwise concerning subject written days concerned whose parties thereto. meantime diligently directed.' below, compare, e.g., Allied Paint Color Works, 309 133 (C.A.2d Cir.); Wells Wells, 269 412 (C.A.8th Cir.). Mann Chemical Laboratories, 174 563 (D.C.D.Mass.). suits less $10,000, Courts concurrent claims contracts, 1346(a)(2), exclusive jurisdiction, 1345. See, Southern Shipyard Corp. 76 468; Needles Use Benefit 101 535. Hearings Subcommittee Senate Judiciary S. 2487, 82d H.R. 1839 al., 1st 1009; Fair Standards 52 1065, amended, 210; 49 453, 160. Hearings, 5, 32—35, 57 58. citing 535, 606—607, suggests 'live' matters, 'consciously decision.' 6, 79—80. $9,000 appeal. figure opinion, nowhere mentioned inaccurate.

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