Court Opinion

ID: 821105
Source: CourtListenerOpinion
Date Created: 2013-02-22 16:33:14.343798+00
Date Added: 2024-06-11T13:01:02.115961
License: Public Domain

United States Court of Appeals
      for the Federal Circuit
                ______________________

     SHARP ELECTRONICS CORPORATION,
                 Appellant,

                           v.

   JOHN MCHUGH, SECRETARY OF THE ARMY,
                   Appellee.
            ______________________

                      2012-1299
                ______________________

   Appeal from the Armed Services Board of Contract
Appeals in No. 57583, Administrative Judge John J.
Thrasher.
               ______________________

              Decided: February 22, 2013
               ______________________

     ANDREW KENNETH WIBLE, Cohen Mohr, LLP, of
Washington, DC, argued for the appellant. Of counsel
was ANDREW J. MOHR.

       NICHOLAS JABBOUR, Trial Attorney, Commercial
Litigation Branch, Civil Division, United States Depart-
ment of Justice, of Washington, DC, argued for appellee.
With him on the brief were STUART F. DELERY, Acting
Assistant Attorney General, JEANNE E. DAVIDSON, Direc-
tor, and HAROLD D. LESTER, JR., Assistant Director.
                 ______________________
2                   SHARP ELECTRONICS CORPORATION   v. ARMY

    Before DYK, PLAGER, and CLEVENGER, Circuit Judges.
      Opinion for the court filed by Circuit Judge DYK.
     Dissenting opinion filed by Circuit Judge PLAGER.
DYK, Circuit Judge.
    Sharp Electronics Corporation (“Sharp”), a federal
supply contractor, submitted a termination compensation
claim to the Department of the Army contracting officer
(“CO”), and thereafter brought a Contracts Dispute Act
(“CDA”) claim before the Armed Services Board of Con-
tract Appeals (“ASBCA”). Sharp alleged that because the
Army failed to exercise the entirety of the last option year
under a delivery order, Sharp was entitled to premature
discontinuance fees under its General Services Admin-
istration (“GSA”) schedule contract. The ASBCA dis-
missed Sharp’s appeal for lack of subject-matter
jurisdiction, concluding that the Federal Acquisition
Regulation (“FAR”), does not permit ordering agency COs
to decide disputes pertaining to schedule contracts. We
agree that under FAR 8.406-6, only the GSA CO may
resolve disputes that, in whole or in part, involve the
interpretation of disputed schedule contract provisions.
Because Sharp’s claim turns on such a dispute, it must be
submitted to the GSA CO, and the ASBCA has no juris-
diction. We therefore affirm.
                       BACKGROUND
                              I
    Historically, government agencies entered procure-
ment contracts and purchased supplies and services on an
individual basis. Contract disputes were initially directed
to the agency contracting officer, and appeals went to an
agency Board of Appeals under the contract’s disputes
clause, or, if the contract had no pertinent clause, to a
district court or what is now the Court of Federal Claims.
 SHARP ELECTRONICS CORPORATION    v. ARMY                 3
See generally 4 Report of the Commission on Government
Procurement 11–28 (1972); Joel P. Shedd, Jr., Disputes
and Appeals: The Armed Services Board of Contracts
Appeals, 29 Law & Contemp. Probs. 39 (1964).
    Over time, federal contracting became more central-
ized. The Federal Property and Administrative Services
Act of 1949, Pub. L. No. 81-152, 63 Stat. 377, created the
GSA to standardize federal procurement processes and
procure, store, and distribute supplies to federal agencies.
See generally James F. Nagle, A History of Government
Contracting, 450–52 (2d ed. 1999); 3 Report of the Com-
mission on Government Procurement 10–11; 27–37 (1972).
Under the current version of the GSA Schedules Program,
also called the Federal Supply Schedule Program or
Multiple Award Schedule Program, see FAR 8.402(a),
GSA “acts as the contracting agent” for the federal gov-
ernment, negotiating base contracts with suppliers of
commercial products and services.          Multiple Award
Schedule Procurement, 47 Fed. Reg. 50,242-244 (Nov. 5,
1982). Each supplier publishes an Authorized Federal
Supply Schedule Pricelist listing the items offered pursu-
ant to its base contract, as well as the pricing, terms, and
conditions applicable to each item. See FAR 8.402(b).
Individual agencies issue purchase orders under the base
contract as needed. See FAR 38.101(a); 8.405-1. The
terms of the base contract, referred to as the “schedule”
contract, are incorporated by reference into the order.
     Schedule contracts are intended to simplify the ac-
quisition process. However, they have generated jurisdic-
tional uncertainty with respect to disputes, which may
involve (1) the correct interpretation of the schedule
contract; (2) the correct interpretation of the agency’s
order; (3) the facts relating to the parties’ performance; or
(4) some combination of these issues. Prior to 2002, the
regulations established that only the schedule office CO
(here, the GSA CO) could issue a final decision in a dis-
pute pertaining to an order under a schedule contract.
4                  SHARP ELECTRONICS CORPORATION    v. ARMY
See FAR 8.405-7 (2000) (“The ordering office shall refer all
unresolved disputes under orders to the schedule con-
tracting office for action under the Disputes clause of the
contract.”).
    Effective July 2002, the FAR was amended, 1 authoriz-
ing ordering COs to resolve certain “disputes arising from
performance of the order.” FAR 8.405-7(a)(1)(i) (2002); see
also Federal Acquisition Regulation; Federal Supply
Schedule Order Disputes and Incidental Items (final rule),
67 Fed. Reg. 43,514, 43,514 (June 27, 2002). The current
FAR provision is set forth below. As before, the GSA CO
has sole authority over the schedule contract; the ordering
CO must still refer disputes “pertaining to the terms and
conditions of schedule contracts” to the schedule CO for a
decision. FAR 8.406-6(b) (2012). Because the parties here
dispute the interpretation of both the schedule contract
and the purchase order, the question is which CO has
jurisdiction under the FAR.
                             II
      On September 18, 2001, Sharp and GSA entered into
a schedule contract, Multiple Award Schedule Contract
No. GS-25F-0037M (“Sharp’s Schedule Contract”), which
allowed agencies to lease or purchase office equipment
and supplies from Sharp’s Schedule Pricelist. The price-
list included Special Item Number (“SIN”) 51-58a, cover-
ing monthly lease plans for the operation and
maintenance of copier equipment, and setting forth addi-
tional terms and conditions applicable to such leases,

    1  At the time of amendment, the applicable regula-
tion was FAR 8.405-7; it has since been renumbered as
FAR 8.406-6. See Federal Acquisition Regulation; Federal
Supply Schedules Services and Blanket Purchase Agree-
ments (BPAs), 69 Fed. Reg. 34,231, 34,239 (June 18,
2004).
 SHARP ELECTRONICS CORPORATION   v. ARMY               5
including provisions pertaining to payment, lease terms,
the exercise of options, and early termination fees.
    On December 1, 2005, the Army issued delivery order
No. W91ZLK-06-F-0028 to Sharp “in accordance with and
subject to terms and conditions” of Sharp’s Schedule
Contract. J.A. 18. The order provided for a four-year
lease of copier equipment, including one Base Year and
three Option Years, with the last Option Year ending on
December 1, 2009. Sharp’s Schedule Pricelist stated that
with respect to delivery order leases of this type, “the
Government intends to exercise the renewal options
contained herein and lease the Equipment for the entire
Lease Term.” Option Years One and Two were exercised
in full; on November 20, 2008, the Army and Sharp exe-
cuted Modification No. P00011 (“Mod 11”), which “partial-
ly exercise[d] option year three” for six months. J.A. 3.
The parties subsequently executed Modification No.
P00012 (“Mod 12”), which extended the lease for three
more months. The lease finally ended on August 31,
2009. Mods 11 and 12 were silent as to the reservation or
release of claims associated with the modifications.
    Sharp viewed the Army’s failure to fully exercise Op-
tion Year Three as a premature cancellation, entitling
Sharp to fees under the termination provisions of its
schedule contract. In January 2011, Sharp filed a formal
claim with the Army CO, citing the termination fee provi-
sions of its schedule contract, and seeking $67,928.63 in
early termination fees (representing four times the base
monthly charge for each unit). The Army CO did not
respond, and did not refer Sharp’s claim to the GSA CO
responsible for Sharp’s Schedule Contract. After sixty
days, Sharp appealed the deemed denial of its claim to the
ASBCA. See FAR 8.406-6(c).
    The ASBCA “sua sponte[] raised the issue of its juris-
diction to decide th[e] appeal.” Sharp Elecs. Corp.,
ASBCA No. 57583, 12-1 B.C.A. ¶ 34,903, at 171,621
6                   SHARP ELECTRONICS CORPORATION     v. ARMY
(“ASBCA Decision”). The jurisdictional issue that con-
cerned the ASBCA arose from the regulatory division of
CO authority in disputes involving federal supply service
contracts. Under the CDA, codified at 41 U.S.C. §§ 7101–
7109, and its implementing regulations, the FAR, a
contractor’s claim must be submitted in writing to the
appropriate federal CO for a final decision. 41 U.S.C.
§ 7103(a)(1); see also FAR 52.233-1. As discussed above,
in disputes involving schedule contracts, FAR 8.406-6, as
amended, allocates authority among ordering and sched-
uling COs. The question here is whether FAR 8.406-6
authorized the Army CO to decide Sharp’s claim. If the
Army CO was not authorized to decide the claim, the
deemed denial was not a valid basis for ASBCA jurisdic-
tion. Case, Inc. v. United States, 88 F.3d 1004, 1009 (Fed.
Cir. 1996); see also 41 U.S.C. § 7105(e)(1)(A) (defining
ASBCA jurisdiction). The ASBCA concluded that its
jurisdiction “turn[ed] upon whether or not this dispute
pertains to the contract terms and conditions of the
schedule contract or arises from performance of the [de-
livery order],” and invited the parties to brief the issue “in
light of FAR 8.406-6(b).” ASBCA Decision, at 171,622.
    The parties agreed that the termination fees Sharp
sought were authorized, if at all, by provisions in Sharp’s
Schedule Contract with GSA. Sharp invoked the “Prema-
ture Discontinuance Provisions” of its 2005 GSA-approved
schedule pricelist. These provisions, set forth at Special
Item Number 51-58a, ¶ 21N(2), and included in Modifica-
tion No. 32 to Sharp’s Schedule Contract, stated in rele-
vant part:
    If the Government terminates a FMV lease prior
    to its expiration . . . the Government shall pay all
    amounts due the Contractor as of that date and a
    “Premature Discontinuance Fee” (“PDF”). The
    PDF is the monthly equipment component, for
    each unit/accessory being terminated times the
    number of months remaining in the FMV Lease.
 SHARP ELECTRONICS CORPORATION    v. ARMY                7
For its part, the Army contended that because Mod 11
represented a bilateral agreement to shorten Option Year
Three to six months, the lease was not terminated “prior
to its expiration,” and the discontinuance provisions were
inapplicable.
    In their jurisdictional briefings to the ASBCA, both
parties argued that the Army CO could resolve the dis-
pute. The Army argued that the dispute pertained solely
to the parties’ contractual obligations under Mod 11, an
issue that could be decided by the Army CO responsible
for the delivery order. Sharp argued that the relevant
termination provisions needed only to be applied to the
facts, and that this application constituted an issue of
performance under the delivery order, which could be
decided by the Army CO.
    The ASBCA rejected both parties’ arguments. It de-
termined that the “fundamental issue under this appeal is
the applicability of the terms and conditions of the Sched-
ule Contract”—i.e., the termination for convenience
provisions—“not performance under the [delivery order].”
ASBCA Decision, at 171,622. The ASBCA determined
that it “d[id] not have jurisdiction to hear appeals from
ordering activity COs where ‘the dispute . . . is related
solely to the validity and/or applicability of the terms and
conditions of the’ schedule contract, not performance of
the [delivery order].” Id. (quoting Sharp Elecs. Corp.,
ASBCA No. 54475, 04-2 BCA ¶ 32,704, at 161,796).
Because “the Army CO lacked authority to resolve this
dispute,” the ASBCA dismissed Sharp’s appeal. Sharp
timely appealed to this court. We have jurisdiction under
28 U.S.C. § 1295(a)(10) and 41 U.S.C. § 7107(a)(1).
                       DISCUSSION
    In accordance with the CDA, 41 U.S.C. §§ 7101–7109,
we review the ASBCA’s decisions on questions of law de
novo. See 41 U.S.C. § 7107(b)(1); Ra-Nav Labs. v. Wid-
nall, 137 F.3d 1344, 1346 (Fed. Cir. 1998). “Whether or
8                  SHARP ELECTRONICS CORPORATION     v. ARMY
not the Board has jurisdiction is a question of law.”
Arnold M. Diamond, Inc. v. Dalton, 25 F.3d 1006, 1010
(Fed. Cir. 1994).
    The CDA requires that “[e]ach claim by a contractor
against the Federal Government relating to a contract
shall be in writing,” and “shall be submitted to the con-
tracting officer for a decision.” 41 U.S.C. § 7103(a)(1)–(2).
“Under the CDA, a final decision by a CO on a ‘claim’ is a
prerequisite for Board jurisdiction.” Reflectone, Inc. v.
Dalton, 60 F.3d 1572, 1575 (Fed. Cir. 1995) (en banc).
The CDA gives the ASBCA jurisdiction to “decide any
appeal from a decision of a [CO] of the Department of
Defense, the Department of the Army, the Department of
the Navy, the Department of the Air Force, or the Nation-
al Aeronautics and Space Administration relative to a
contract made by that department or agency.” 41 U.S.C.
§ 7105(e)(1)(A). With certain exceptions not relevant
here, the ASBCA’s counterpart, the Civilian Board of
Contract Appeals (“CBCA”), has jurisdiction to decide
appeals from decisions by COs of other agencies, including
GSA. Id. at § 7105(e)(1)(B).
    Pursuant to statutory mandate, the Federal Acquisi-
tion Regulatory Council is required to promulgate the
FAR, “a single Government-wide procurement regula-
tion,” 41 U.S.C. § 1303(a)(1); this regulation implements
statutes like the CDA that concern federal procurement
contracts, see Essex Electro Eng’rs, Inc. v. United States,
960 F.2d 1576, 1580–81 (Fed. Cir. 1992), overruled on
other grounds by Reflectone, 60 F.3d at 1579.
    As amended, FAR 8.406-6 distributes authority to re-
solve contract disputes with schedule contractors between
the ordering agency CO and the GSA CO, depending on
the nature of the dispute:
    (a) Disputes pertaining to the performance of or-
    ders under a schedule contract.
 SHARP ELECTRONICS CORPORATION    v. ARMY                  9
       (1) Under the Disputes clause of the schedule
       contract, the ordering activity contracting of-
       ficer may—
           (i) Issue final decisions on disputes arising
           from performance of the order (but see
           paragraph (b) of this section); or
           (ii) Refer the dispute to the schedule con-
           tracting officer.
       (2) The ordering activity contracting officer
       shall notify the schedule contracting officer
       promptly of any final decision.
   (b) Disputes pertaining to the terms and condi-
   tions of schedule contracts. The ordering activity
   contracting officer shall refer all disputes that re-
   late to the contract terms and conditions to the
   schedule contracting officer for resolution under
   the Disputes clause of the contract and notify the
   schedule contractor of the referral.
FAR 8.406-6 (2012) (emphases added).
     The regulation clearly authorized the ordering CO to
decide routine disputes about order performance not
involving interpretation of the schedule contract, such as
whether the contractor’s default was excusable. See FAR
8.406-4(b) (2012) (“If the contractor asserts that the
failure was excusable, the ordering activity contracting
officer shall follow the procedures at 8.406-6, as appropri-
ate.”); see also Spectrum Healthcare Res., 2006-2 B.C.A.
¶ 33,377, 165,469 (“FAR 8.406-4 . . . authorized [the
ordering] CO, in appropriate circumstances, to determine
whether the default was excusable.”). However, the
regulation also created uncertainty as to whether the
ordering CO could decide disputes requiring interpreta-
tion of the schedule contract. See, e.g., BearingPoint, Inc.
v. United States, 77 Fed. Cl. 189, 194 (2007) (the ordering
CO could not resolve a dispute pertaining to an order
10                 SHARP ELECTRONICS CORPORATION     v. ARMY
under a schedule contract); United Partition Sys. v. Unit-
ed States, 59 Fed. Cl. 627, 635-37 (2004) (the GSA CO, not
the agency CO, had sole authority to evaluate the contrac-
tor’s excusability defense under the schedule contract);
GTSI Corp. v. Equal Opportunity Emp’t Comm’n, CBCA
Nos. 2718, 2719, 12-2 BCA ¶ 35,141 (slip op. at 4-5)
(noting that “FAR 8.406-6 proved problematic in several
appeals, particularly where performance disputes require
some interpretation or application of a[ schedule contract]
clause,” and concluding that a “purely factual” dispute is
appropriately addressed by the ordering CO).
     On its face, FAR 8.406-6 does not authorize an order-
ing agency CO to issue decisions interpreting the schedule
contract. Though the regulation allows ordering COs to
“issue final decisions on disputes arising from perfor-
mance of the order,” FAR 8.406-6(a)(1)(i), their authority
is expressly restricted by “paragraph (b) of this section,”
id. Paragraph (b) expressly requires that all “[d]isputes
pertaining to the terms and conditions of schedule con-
tracts” shall be referred to the GSA CO: “[t]he ordering
activity contracting officer shall refer all disputes that
relate to the contract terms and conditions to the schedule
contracting officer for resolution.” Id. at 8.406-6(b) (2004)
(emphases added). “Shall” is “mandatory” language.
Andersen Consulting v. United States, 959 F.2d 929, 932
(Fed. Cir. 1992); see also FAR 2.101 (“Shall denotes the
imperative”). The regulation’s plain language leaves an
ordering CO no discretion to interpret the schedule con-
tract. FAR 8.406-6 thus requires that all cases requiring
interpretation of the schedule contract must be resolved
by a single entity—the GSA CO. Finally, the relevant
regulatory history describes FAR 8.406-6(b) as authoriz-
ing ordering COs to decide only those “disputes pertaining
solely to performance of schedule orders.” Federal Acqui-
sition Regulation; Federal Supply Schedule Order Dis-
putes and Incidental Items, 65 Fed. Reg. 79,702, 79,702
(Dec. 19, 2000) (proposed rule) (emphasis added).
 SHARP ELECTRONICS CORPORATION    v. ARMY               11
     In theory, the FAR could provide for bifurcation—that
is, the portion of a dispute relating to the schedule con-
tract would be referred to the schedule contract CO, and
the portion of a dispute requiring interpretation of the
order would go to the agency CO. But this procedure
would be highly inefficient, and the FAR evidently con-
templates that a dispute that involves the interpretation
of both contracts, as well as pertaining to performance of
the order, would go to the scheduling CO. That is why the
FAR allows the ordering CO to “[r]efer . . . dispute[s]
[pertaining to the performance of the order] to the sched-
ule contracting officer.” 8.406-6(a)(1)(ii).
     Thus, we conclude that the FAR creates a bright-line
rule—all disputes requiring interpretation of the schedule
contract go to the schedule CO, even if those disputes also
require interpretation of the order, or involve issues of
performance under the order. “Bright line rules upon
which the parties’ expectations may be firmly established”
are particularly valuable in contracting. Bowsher v.
Merck & Co., 460 U.S. 824, 841 n.18 (1983). The FAR and
CDA were intended in part to promote uniformity, con-
sistency, and fairness across all contracting agencies. See,
e.g., Newport News Shipbuilding & Dry Dock Co. v. Gar-
rett, 6 F.3d 1547, 1551 (Fed. Cir. 1993); FAR 1.102. Re-
quiring that all schedule contracts must be construed by
the GSA CO maintains a clear, predictable allocation of
jurisdiction between agency contracting offices and GSA.
     Furthermore, a bright-line rule here will maintain ju-
risdictional clarity among the Boards, which is particular-
ly important with respect to contractors that supply both
civilian and military agencies. If ordering COs could
issue decisions interpreting suppliers’ schedule contracts,
appeals to the Boards would produce two independent
lines of interpretive caselaw: appeals from civilian agency
ordering COs would go to the CBCA, while appeals from
12                 SHARP ELECTRONICS CORPORATION    v. ARMY
military ordering COs would go to the ASBCA. 2 See
generally 41 U.S.C. § 7105(e) (defining the jurisdiction of
the Boards). Because Board precedents do not bind other
Boards, this result would undermine the policy of con-
sistency embodied in the FAR and CDA.
     We hold that FAR 8.406-6 does not authorize an or-
dering CO to decide a dispute requiring interpretation of
schedule contract provisions, in whole or in part, regard-
less of whether the parties frame the dispute as pertain-
ing to performance. 3     However, the ordering CO is
certainly authorized to construe the language of the order
(or its modifications). Because an order’s details—not
merely price, quantity, and specifications, but also per-
missible variation in quality or quantity, hours and
location of delivery, discounts from schedule pricing,
etc. 4—are arranged between the schedule contractor and

     2  To be sure, claimants can avoid the Boards entire-
ly by appealing to the Court of Federal Claims (“CFC”),
which has a mechanism to maintain consistency: if multi-
ple suits arising from a contract are pending in the CFC
and one or more Boards, the CFC may order their transfer
or consolidation. See 41 U.S.C. § 7107(d).
     3   To the extent the ASBCA’s caselaw might be read
to endorse ASBCA jurisdiction over all disputes not
“‘related solely to the validity and/or applicability of the
terms and conditions of the’ schedule contract,” see
ASBCA Decision, at 171,622 (quoting Sharp, ASBCA No.
54475, at 161,796) (emphasis added), we disapprove that
reading. Any claim which disputes the interpretation of
the terms and conditions of the schedule contract must go
to the scheduling CO, even if there are other disputed
issues as well.
     4  FAR 8.406-1 instructs that orders “shall include
the following information in addition to any information
required by the schedule contract”: free on board (FOB)
 SHARP ELECTRONICS CORPORATION     v. ARMY                13
the ordering CO, the ordering CO is able to construe these
commonly disputed terms as long as the dispute does not
involve interpretation of the schedule contract. We also
see no reason why an ordering CO resolving a dispute
cannot apply the relevant provisions of the schedule
contract, as long as their meaning is undisputed. For
example, an ordering CO who resolves a dispute over
whether goods are conforming may apply schedule con-
tract provisions governing replacement of nonconforming
goods. See FAR 8.406-3(a) (2012) (“If a [schedule] con-
tractor delivers a supply or service, but it does not con-
form to the order requirements, the ordering [CO] shall
take appropriate action in accordance with the inspection
and acceptance clause of the contract, as supplemented by
the order.”). The dispute only need go to the GSA CO if it
requires interpretation of the schedule contract’s terms
and provisions.
    In this case, the dispute turns on whether the Army
incurred premature discontinuance fees when it did not

delivery point (i.e., origin or destination); discount terms;
delivery time or period of performance; quantity and any
variation in quantity; number of units; unit price; total
price of order; points of inspection and acceptance; other
pertinent data (e.g., delivery instructions or receiving
hours and size-of-truck limitation); marking require-
ments; and level of preservation, packaging, and packing.
FAR 8.406-1(d) (emphasis added). Furthermore, the
delivery order must include “a statement of work for
services, when required, or a brief, complete description of
each item (when ordering by model number, features and
options such as color, finish, and electrical characteristics,
if available, must be specified).” FAR 8.406-1(d)(8); see
also FAR 8.405-2(b) (defining the contents of a statement
of work).
14                 SHARP ELECTRONICS CORPORATION    v. ARMY
fully exercise Option Year Three. These fees are a con-
tractual remedy provided in Sharp’s Schedule Pricelist,
set forth in Modification No. 32 to Sharp’s Schedule
Contract. As discussed above, the Army argues that the
discontinuance provisions are inapplicable because Mod
11 bilaterally specified a new end date for Option Year
Three before it was exercised, so there was no premature
discontinuance. Sharp does not argue that the Army was
contractually obligated to exercise Option Year Three.
Rather, Sharp contends that the Army’s partial exercise
of Option Year Three constituted a premature discontinu-
ance under the relevant contractual provisions. The
parties’ dispute does not merely pertain to the facts of the
dispute—indeed, the facts here are undisputed. Rather,
the disagreement concerns whether a partial exercise (or
a bilateral modification) is a premature discontinuance as
defined by Sharp’s Schedule Contract. It is clear that this
requires construction of Mod 11, but more importantly, it
also requires interpretation of the relevant provisions of
Sharp’s Schedule Contract. Thus, the dispute in this case
must be decided by the GSA CO. 5
    We recognize that the distribution of contracting of-
ficer authority (compelled by the way FAR 8.406-6 is
written) is less than perfect. The old regime left no au-
thority with the ordering CO, even where no genuine
dispute under the schedule contract existed. The new
regime vests the ordering CO with authority to decide
contract disputes, so long as the disputes do not require
interpretation of the schedule contract. This is so even
though many aspects of a dispute requiring interpretation
of the schedule contract can involve matters on which the

     5  Here, it does not matter if the provisions of
Sharp’s Schedule Contract are incorporated in the order
expressly or by reference; either way, the provisions are
those of the schedule contract agreed to by Sharp and the
GSA CO.
 SHARP ELECTRONICS CORPORATION   v. ARMY                15
ordering CO clearly has a better command of the facts
than would the schedule contract CO. But any perceived
fault in the distribution of contract officer authority
derives from the carefully articulated language of FAR
8.406-6. If expanded authority for the ordering CO is
desired, FAR 8.406-6 can be amended to that end.
     Sharp correctly notes that the Army CO failed to refer
Sharp’s claim to the GSA CO as required by FAR 8.406-
6(b). But Sharp’s contention that this failure waives any
jurisdictional deficiencies is meritless, because an essen-
tial prerequisite of Board jurisdiction—a final decision by
an authorized CO—is absent, see Reflectone, 60 F.3d at
1575, and jurisdictional deficiencies cannot be waived.
    Because Sharp’s claim cannot be resolved without in-
terpreting the premature discontinuance provisions in
Sharp’s Schedule Contract, the Army CO has no authority
to decide the claim or issue a deemed denial, and the
ASBCA lacks jurisdiction of Sharp’s appeal. Since the
CDA’s six-year statute of limitations has not yet run, see
41 U.S.C. § 7103(a)(4)(A), Sharp may timely resubmit its
claim to the GSA CO, and appeal if it is dissatisfied with
the result.
                        AFFIRMED
  United States Court of Appeals
      for the Federal Circuit
                ______________________

     SHARP ELECTRONICS CORPORATION,
                 Appellant,

                           v.

   JOHN MCHUGH, SECRETARY OF THE ARMY,
                   Appellee.
            ______________________

                      2012-1299
                ______________________

   Appeal from the Armed Services Board of Contract
Appeals in No. 57583, Administrative Judge John J.
Thrasher.
               ______________________

     ANDREW KENNETH WIBLE, Cohen Mohr, LLP, of
Washington, DC, argued for the appellant. Of counsel
was ANDREW J. MOHR.

       NICHOLAS JABBOUR, Trial Attorney, Commercial
Litigation Branch, Civil Division, United States Depart-
ment of Justice, of Washington, DC, argued for appellee.
With him on the brief were STUART F. DELERY, Acting
Assistant Attorney General, JEANNE E. DAVIDSON, Direc-
tor, and HAROLD D. LESTER, JR., Assistant Director.
                 ______________________
2                  SHARP ELECTRONICS CORPORATION     v. ARMY
PLAGER, Circuit Judge, dissenting.
    I respectfully dissent. Admittedly, the FAR dispute
provision under review lends itself to several competing
interpretations. The interpretation favored by the majori-
ty, though hardly dictated by the terms of the disputed
provision, if it had been an authoritative agency interpre-
tation under Chevron could be considered to be within the
range of reasonable interpretations. 1 As a judicial exer-
cise in regulatory construction, however, the majority’s
version of the rule does not comport with the purpose of
the Councils that drafted the rule, it adopts a procedure
that fails the “bright-line” test the majority claims for it,
and, most importantly, it dictates a result that falls short
of a common sense solution to the problem presented. 2
                             A.
    This is litigation about where to litigate a government
contract, and, as has famously been said, “Nothing is
more wasteful than litigation about where to litigate,
particularly when the options are all [boards] within the
same legal system that will apply the same law.” 3 What
appeared at first reading to be a straightforward exercise
in construction of a regulatory provision, upon closer
examination proved to be anything but straightforward.
And the consequence of choosing between competing
theories of how this contract dispute should be resolved—

    1  See Chevron, U.S.A., Inc. v. Natural Res. Def.
Council, Inc., 467 U.S. 837 (1984).
    2   “Common sense” has not always been a criterion
for judicial decisions, but has recently been legitimated
for that purpose. See KSR Int'l Co. v. Teleflex Inc., 550
U.S. 398 (2007).
    3   Bowen v. Massachusetts, 487 U.S. 879, 930 (1988)
(Scalia, J., dissenting). I have substituted the word
“boards” for the word “courts” in the original.
 SHARP ELECTRONICS CORPORATION    v. ARMY                 3
more accurately, who should resolve it—is of considerable
significance for the administration of government con-
tracts.
     The disagreement in this case is over which Contract-
ing Officer (CO)—the Army’s agency CO or the schedule
contract CO (the GSA CO), and derivatively which Board
of Contract Appeals—is the correct authority to decide
this particular contract dispute. As the majority ex-
plained, the schedule contract, negotiated with the sup-
plier by and prepared under the supervision of a GSA
contracting officer (GSA CO) responsible for government-
wide contracting for that group of products, describes in
general terms the range of such products being offered by
the particular supplier. The schedule contract spells out
the terms on which the products are being offered, and
the permissible parameters for any order (or delivery)
contract an agency contracting officer may wish to enter
into on behalf of the agency. 4 The agency CO with a need
for such products then initiates with the supplier an order
contract for the specific products desired for the particular
agency facility. This could be an outright purchase order,
or, as was the case here, a lease of products for a period of
years.
    The order contract may expressly incorporate the gov-
erning provisions of the schedule contract, as was done in
this case, 5 and is written to comply with its terms and

    4   A note on terminology—in the trade, the contract
made by the agency CO may be referred to as a “delivery
contract.” In the regulations, the term “ordering activity
contracting officer” is used, and hence the contract may be
called an “order contract.” They mean the same; I will use
the term “order contract” for consistency.
    5   See ASBCA finding #4 in Appeal of Sharp Elec-
tronics Corp., ASBCA No. 57583, 12-1 B.C.A. (CCH) ¶
34903.
4                   SHARP ELECTRONICS CORPORATION   v. ARMY
conditions. For example, the schedule contract might
authorize a range of years, such as 1 to 5, during which a
lease for the products could be made. The order contract
would be for a specific term within that range, say for one
year. If initial term extension options are desired, the
order contract will spell out those options consistent with
the provisions in the schedule contract for such term
extensions, up to a maximum of five years total. 6
     The uninitiated might say that the question of who in-
itially gets to decide the dispute is easily answered—it
depends on which contract’s provisions govern the alleged
breach. If the order contract, then the agency CO who
negotiated and administers the order contract with the
supplier has first dibs; if the schedule contract, then the
GSA CO who negotiated the authorizing schedule con-
tract. But when the two contracts are written to interact
intimately with each other and deal with the same legal
issues, and in places may have similar if not identical
terminology, it may not be obvious in a given dispute
which contract’s terms govern, and thus which contract-
ing officer first rules. What is needed is a governing
principle that draws a line between what are essentially
overlapping authorities, a default rule that can specify
which contracting officer is authorized to decide which
kind of dispute, preferably one that can be consistently
applied by parties and adjudicators.
    In this case, the contract dispute, the merits of which
are not now before us, turns on provisions in both the
order contract and schedule contract dealing with leases
and extension of the lease terms for additional option
years over the initial year provided in the order contract,

    6   See infra note 7.
 SHARP ELECTRONICS CORPORATION    v. ARMY                 5
plus modifications to the order contract later added. 7
Sharp alleges the Army prematurely cancelled the third
option year of the order contract, entitling it to the speci-
fied discontinuance fees, to which the Army responded
that the modifications to the order contract, agreed to by
the parties, authorized the early termination.
     Both parties understood that the current default
rule—FAR 8.406-6—indicated that their dispute should
go to the agency CO for decision. But after the supplier
filed with the agency CO, that official neither ruled on the
dispute nor took the opportunity to forward it to the GSA
CO, for which the rule provides. Having waited the
requisite time for a decision, Sharp, as permitted by the
Contract Disputes Act, deemed its request for relief
denied and appealed the denial to the Armed Services
Board of Contract Appeals (ASBCA), the appropriate
appellate board for an appeal from a decision of a military
agency CO. Again, both Sharp and the Army appear to
have been in agreement that that was the proper course
for obtaining a decision, though as noted they had differ-
ing views of how the merits of the contract dispute should
be decided.
    To the parties’ surprise, the ASBCA sua sponte ruled
that, since language in the schedule contract as well as in
the ordering contract dealt with the mechanics of term
extensions, the ASBCA did not have jurisdiction to decide
the dispute. In the Board’s view, the appropriate CO for
ruling on the dispute was the GSA CO and not the agency
CO. Sharp promptly appealed that ruling here. The issue
to be decided in this appeal is whether the ASBCA ap-
plied the proper default rule in refusing to decide the

    7  See J.A. 18-50, 71-76, 192-207, and 286-300 for the
relevant overlapping provisions of the Schedule Contract
and the implementing provisions in the Order Contract,
especially regarding option years and Amendment 11.
6                  SHARP ELECTRONICS CORPORATION   v. ARMY
merits issue that the dispute presented. I think the
Board erred; for the reasons I shall explain, I would
reverse the ruling of the ASBCA and remand the matter
to the ASBCA for decision on the merits.
                            B.
     The default rule presently in place is FAR 8.406-6.
The predecessor rule was FAR 8.405-7, which, after being
amended to its current form in 2002, was later renum-
bered as 8.406-6. Prior to being amended, the default
rule—original FAR 8.405-7—stated that “The ordering
office shall refer all unresolved disputes under orders to
the schedule contracting office for action under the Dis-
putes clause of the contract.” Since “the Disputes clause
of the contract” could refer either to a disputes clause in
the ordering contract or in the schedule contract, or both,
the rule and result were clear—the GSA CO decided
contract disputes.
     In 2000, the Civilian Agency Acquisition Council and
the Defense Acquisition Regulations Council (the Coun-
cils), which is the group responsible for such matters,
proposed to amend FAR 8.405-7 to give the ordering
agency CO more of a role in deciding contract disputes.
This made some sense, particularly when a dispute might
be more appropriate for the ordering CO to decide, such
as a dispute related primarily to the terms and conditions
of the order contract.
     But keeping a clear distinction between the order con-
tract and the schedule contract when writing the new rule
was not so easy. At the outset, in announcing the purpose
of the proposed amendment to the rule, the Councils
stated that it was “to permit the ordering office contract-
ing officer to issue a final decision regarding disputes
pertaining solely to performance of schedule orders.” The
use of the term “schedule orders” blended the two contract
descriptors together, and introduced the question of what
is “performance” of “schedule orders.”
 SHARP ELECTRONICS CORPORATION   v. ARMY                   7
     This blending problem was carried over into the
amended rule. As the issue in the case before us illus-
trates, and as the majority opinion correctly notes, since
its adoption FAR 8.406-6 has been a source of uncertainty
about the scope of authority of the agency CO’s vis-à-vis
the GSA Co’s. It is that uncertainty that we must attend
to, and if possible clarify as guidance for future cases.
                            C.
   I begin with the relevant language of the current rule:
   8.406-6 Disputes.
   (a) Disputes pertaining to the performance of or-
   ders under a schedule contract.
       (1) Under the Disputes clause of the schedule
       contract, the ordering activity contracting of-
       ficer may—
           (i) Issue final decisions on disputes arising
           from performance of the order (but see
           paragraph (b) of this section); or
           (ii) Refer the dispute to the schedule con-
           tracting officer.
       (2) The ordering activity contracting officer
       shall notify the schedule contracting officer
       promptly of any final decision.
   (b) Disputes pertaining to the terms and conditions
   of schedule contracts. The ordering activity con-
   tracting officer shall refer all disputes that relate
   to the contract terms and conditions to the sched-
   ule contracting officer for resolution under the
   Disputes clause of the contract and notify the
   schedule contractor of the referral.
FAR 8.406-6 (2012).
8                  SHARP ELECTRONICS CORPORATION     v. ARMY
    As a close reading reveals, and as I will further detail,
FAR 8.406-6 is not the clearest example of regulatory
drafting, and indeed might be used as an example of how
not to write a rule. This much at least is clear—the rule
is divided into two subsections with different titles:
subsection (a) is addressed to disputes “pertaining to the
performance of orders under a schedule contract”; subsec-
tion (b) addresses disputes “pertaining to the terms and
conditions of schedule contracts.”
     By its terms, subsection (a) addresses performance is-
sues arising under the terms of order contracts issued
pursuant to a schedule contract. The subsection consists
of instructions regarding actions to be taken by the order-
ing activity contracting officer (the agency CO), leaving no
doubt that the contracting party with a complaint—the
supplier here—is to address the complaint to that officer
in the first instance. In response to the complaint filed by
the supplier, the ordering activity contracting officer is
instructed to take one of two actions: (1) issue a final
decision under the Disputes clause of the schedule con-
tract on a dispute arising from performance of the order
contract; or (2) refer the dispute to the schedule contract-
ing officer (the GSA CO). 8 Note that the authority given
the ordering activity contracting officer is with regard to
the disputes clause of the schedule contract; the subsec-
tion says nothing about a dispute that relates to the
disputes clause, if any, of the order contract.
    Subparagraph (b) addresses disputes pertaining to
the “terms and conditions of schedule contracts.” But
again, the subsection describes only actions to be taken by
the ordering activity contracting officer, confirming the
point made about subsection (a)—it is the duty of the
agency CO, not the complainant supplier or the GSA CO,

    8  If the agency CO makes a final decision in the
matter per (1), the GSA CO is to be advised.
 SHARP ELECTRONICS CORPORATION     v. ARMY                 9
to determine whether it is necessary for the GSA CO to
become involved. The agency CO is to refer the complaint
to the GSA CO for resolution if the dispute “relate[s] to
the contract terms and conditions.” Though not entirely
clear, presumably the unqualified reference to contract
terms and conditions at this point in the text means the
schedule contract’s terms and conditions, since that is the
heading of the subsection and the provision would make
even less sense otherwise. 9
   The plain language of the rule tells us at least this
much:
   •    All contract disputes between a supplier and the
        ordering agency that relate to the Disputes clause
        of the schedule contract are addressed to the order-
        ing activity contracting officer (the agency CO) for
        initial decision;
   •    Nothing in either subsection (a) or (b) refers to dis-
        putes that might arise directly under an order con-
        tract and its disputes clause, if any;
   •    The agency CO may decide the dispute, even
        though it relates to the disputes clause of the
        schedule contract, or may refer the dispute to the
        GSA CO—the decision which to do lies with the
        agency CO;
   •    The only guidance given the agency CO about
        whether to decide or refer is that, if the dispute
        “relate[s] to” the “contract terms and conditions”
        (as noted presumably of the schedule contract), the
        agency CO shall refer it to the GSA CO.

    9   The subsection then ends with the redundant di-
rection to the agency CO to notify the GSA CO of the fact
that a referral has been made to the GSA CO.
10                 SHARP ELECTRONICS CORPORATION   v. ARMY
     The reader at this point should have little problem
seeing that FAR 8.406-6 does little to solve the conun-
drum of which contract—or contracting officer—to give
priority when the terms and conditions of the order con-
tract and the schedule contract are in para materia,
literally as well as legally, and when the one may express-
ly incorporate the other. What FAR 8.406-6 leaves wholly
unclear is how, when certain contract performance duties
of the parties are necessarily spelled out in the terms and
conditions of the order contract, the ordering agency CO is
to draw the line between a performance breach under an
order contract in which “the Disputes clause” of the
schedule contract is implicated, which the agency CO
nevertheless is to rule upon; and a breach in performance
that “relate[s]” not to the order contract but to the “con-
tract terms and conditions” of the schedule contract,
which only the GSA CO can decide.
    Note that I refer to a performance breach in both sit-
uations though performance is mentioned only in subpar-
agraph (a).     Without an alleged breach in contract
performance by one of the parties, a contract dispute
would not seem to involve the terms and conditions of
either contract. That is, a dispute about whether a con-
tract was actually formed in the first instance would not
necessarily implicate subsequent performance of the
contract, but that kind of dispute seems not to be the kind
involved under the disputes clause of FAR 8.406-6.
    It is the search for how to draw that line—to find a
sensible default rule to be applied by the ordering con-
tracting officer in performing the tasks assigned by FAR
8.406-6—that is the conundrum in this case.
                            D.
    It is possible to read into the language of the rule a
meaning that any time the terms and conditions of the
schedule contract are relevant in any material way to the
dispute, even though the alleged breach is also a breach of
 SHARP ELECTRONICS CORPORATION    v. ARMY                11
the order contract’s terms, the dispute shall be referred to
the GSA CO by the agency CO. This would in effect
reinstall the earlier version of the rule before its amend-
ment in 2002, as if it read: “The ordering activity con-
tracting officer shall refer all disputes that relate, in any
way, to the contract terms and conditions of the schedule
contract to the schedule contracting officer . . .” (italics
added for clarity). I will refer to this as the “GSA
CO/default” rule.
     One alternative reading of the rule arrives at the op-
posite outcome, as if subparagraph (b) read: “The ordering
activity contracting officer shall refer only those disputes
that relate solely to the contract terms and conditions [of
the schedule contract] to the schedule contracting officer .
. . .” Put another way, a dispute that can be decided
under the terms of the agency ordering contract should be
decided by the agency CO, even if there is related lan-
guage in the schedule contract. I will refer to this as the
“agency CO/default” rule.
    What are the consequences of picking one or another
of these alternative readings? Turning first to the ‘GSA
CO/default’ rule, and given the likely overlap in purpose
and terminology of the two contracts, this rule would
again have the effect of sending most contract disputes to
the schedule contracting officer, the GSA CO. Even if a
case does not immediately invite that result, it may
provide the opportunity for forum shopping. A reasonably
creative attorney for a supplier who believes the agency
CO to be unfriendly can seek out some language in the
schedule contract that arguably relates to the dispute,
and then argue for a referral to the GSA CO.
    Furthermore, one wonders how many contract dis-
putes there are in which some language from the schedule
contract cannot be found relevant? That is to say, how
many contract disputes turn solely upon performance
requirements found only in the order contract, when the
12                 SHARP ELECTRONICS CORPORATION    v. ARMY
agency order contract is intentionally designed and writ-
ten to piggy-back on the terms and conditions of the
schedule contract? As earlier noted, there could be a few
such disputes. Others are suggested by the majority,
based on related provisions of the FAR which spell out
provisions that should be in an order contract, though
without indicating whether they may also be found in the
schedule contract. In any event, these kinds of disputes
are likely to be easily resolved with little litigation.
    The more difficult disputes, those for which a worka-
ble rule is needed, are those about issues that turn on
contract terminology, but terminology likely found both in
the agency contract and, in some form or other, in its
underlying schedule contract. This case is perhaps a good
example. Interestingly, both the agency and the supplier
thought this case was in fact one that turned on the term
extension provisions of the agency’s ordering contract as
subsequently modified, even though they disagreed as to
exactly which of the provisions controlled. Thus, when
the agency CO failed to act on the dispute, the parties
asked the agency contract appeals board—the ASBCA—to
decide the case.
    The ASCBA, ignoring its own precedents holding that
it had jurisdiction unless the dispute was related “solely
to the validity and/or applicability of the terms and condi-
tions of the [schedule contract],” In Re Spectrum
Healthcare Res., Inc., ASBCA No. 55120, 06-2 B.C.A.
(CCH) ¶ 33377 (citing In Re Appeal of Sharp Electronics
Corp., ASBCA No. 54475, 04-2 B.C.A. (CCH) ¶ 32704),
held that jurisdiction lay exclusively with the GSA CO
(and thus the Civilian Agency Board of Appeals) because
the merits related to language found in the schedule
contract. Under this GSA CO/default rule, the determina-
tion of who decides a contract dispute will turn on wheth-
er one can find language in both documents that seems to
bear somehow on the outcome of the dispute; if so, it goes
exclusively to the GSA CO. This suggests that, except in
 SHARP ELECTRONICS CORPORATION    v. ARMY               13
the simplest of disputes, the case will more often than not
be one in which there is some relevant language to argue
over, since the two contracts are inextricably intertwined.
A bright line this is not.
     Though only time will tell for sure, it would seem that
under the GSA CO/ default rule the GSA contracting
officers responsible for the overall schedule contracts will
again become immersed in any number of order contract
disputes that turn on local events and local understand-
ings, regarding which the agency contracting officers may
be better positioned to deal. Returning priority for dis-
pute resolution to the central agency GSA CO under the
GSA CO/default rule can only make contracting with the
Government more drawn out and complex, and therefore
more expensive; the Councils were correct in trying to find
a way to give more decisional authority to the ordering
agency CO, even though the Councils did not get it quite
right.
    The alternative default rule—agency CO/default—
means that a dispute that can be decided under the terms
and conditions of the agency order contract should be
decided by the agency CO, even if there can be found some
language in the schedule contract that appears presump-
tively relevant. This default rule seems better designed to
produce efficient and acceptable outcomes since it utilizes
the available knowledge and expertise of the agency
contracting officer. And a decision by the agency CO,
even if it necessarily implicates in some small measure
language in the schedule contract, remains controlling
only as to the facts of the local dispute, and does not
govern future application of the schedule contract in other
contexts. Thus the concern for uniformity in the interpre-
tation of the schedule contract is not implicated; ultimate-
ly, control over the broad meaning of the schedule
contract remains a matter for the GSA CO and the Civil-
ian Board of Contract Appeals.
14                 SHARP ELECTRONICS CORPORATION    v. ARMY
     Instructive on this point is a recent case, decided un-
der the current version of FAR 8.406-6 by the Civilian
Board of Contract Appeals: GTSI Corp. v. Equal Emp’t
Opportunity Comm’n, 12-2 BCA ¶ 35141, decided Sep-
tember 2012; the case was cited but not discussed in
detail by the majority. In GTSI, the issue was whether
the ordering agency (the EEOC) Contracting Officer or
the GSA’s Contracting Officer (under the schedule con-
tract) had jurisdiction over a dispute regarding renewal
under an option provision. GTSI had submitted identical
claims to both the agency CO and the GSA CO (one way
to solve the conundrum of who decides). The agency CO
denied the claim; the GSA CO did not respond. The cases
were consolidated on appeal before the Civilian Board of
Contract Appeals, which hears appeals in cases involving
civilian federal agencies, and is also the board that de-
cides cases on appeal from the GSA CO’s.
    The Civilian Board noted that “[a]s ordering agencies
increasingly use FSS [GSA schedule] contracts to fulfill
their needs, there is also an increased potential for dis-
putes arising out of the task and delivery orders issued by
the ordering agencies.” Id. The Board further noted that
oftentimes the facts giving rise to a dispute are best
known by the ordering agency, and that which FSS con-
tract provision applies to the dispute is only “a tangential
issue.” Id. The Board went on to explain that, “In the
appeal before us, it was not the terms and conditions of
the FSS contract clauses or their interpretation that
caused this dispute. Rather, it was the action (or inac-
tion) of the ordering agency, by refusing to exercise an
option, that caused the dispute.” Id. The Board held that
under FAR 8.406-6, jurisdiction lay with the agency CO,
not the GSA CO.
                            E.
    As presented, it is necessary in order for us to decide
the case before us to choose one or the other of these
 SHARP ELECTRONICS CORPORATION    v. ARMY                15
default rules, since the FAR itself does not. The rather
confused and redundant language of FAR 8.406-6 sup-
ports either version equally.
    Unlike my colleagues in the majority, I opt for the
rule that seems most likely to promote efficient, prompt,
and knowledgeable decisions, the rule that gives the
agency CO initial responsibility to decide the case pre-
sented to it unless it is necessary to invoke the special
expertise of the schedule CO to construe the schedule
contract provisions. Thus, if the issue is one which rea-
sonably turns on the performance requirements of the
order contract, regardless of whether it can also be said to
be within the terms and conditions of the schedule con-
tract as well, the agency CO should initially decide the
matter, with appeals taken to the agency CO’s applicable
contract appeals board.
    On the other hand, if the dispute directly raises the
terms and conditions of the schedule contract and cannot
be decided without a determination of the meaning of
those terms and conditions, then the agency CO should
refer the dispute to the appropriate schedule CO. This is
a default rule that requires little guessing, and is not
dependent on the lawyering skills of the parties.
     I say unlike my colleagues in the majority. As I un-
derstand it, we agree that the FAR does not authorize an
ordering agency CO to issue decisions interpreting the
schedule contract—all cases requiring interpretation of
the schedule contract must be resolved by the GSA CO.
See Maj. Op. at 10. However, if I read the opinion correct-
ly, the majority concludes that a dispute that involves a
party’s performance under the ordering contract, based on
an interpretation of the ordering contract, nevertheless
goes to the scheduling contract (GSA) CO if the dispute
may be argued to involve interpretation of related lan-
guage in the schedule contract—even if the dispute could
16                 SHARP ELECTRONICS CORPORATION     v. ARMY
be resolved without resorting to the latter interpretation
issue. Id. at 11.
    They try to soften what appears to be a classic GSA
CO/default position by noting that “the ordering CO is
certainly authorized to construe the language of the order
(or its modifications),” id. at 12, unless of course the
dispute also relates to language in the schedule contract
that would appear to be subject to interpretation. They
call this a “bright line” rule, but how bright it is can be
seen by asking, since the issue in the case before us is a
question of performance of the order contract and of
interpretation of the provisions of that contract as modi-
fied by the parties, why under the majority’s rule does
this case not fall within the purview of the agency CO? Is
it because there is language in the schedule contract that
may also relate to the issue, as noted in the margin above
(see supra note 7), which as I earlier explained is likely to
be the case in many of these disputes? In which case we
are essentially back to the GSA/CO default position from
which the Councils were trying to escape.
    As the majority notes, should either my understand-
ing or the majority’s fail to capture the main thrust of
whatever it was the authoring Councils had in mind when
they amended the FAR by adding the revised 8.406-6,
they are of course free to rewrite the rule; nothing pre-
cludes the Councils from amending the FAR to more
clearly state their intention.
     Given my understanding of FAR 8.406-6, and in light
of what the Councils presumably were attempting to do,
the position of the ASBCA in this case is in error. The
ASBCA was of the view that, because there is language in
the schedule contract to which the dispute could refer, the
decision authority necessarily was the schedule contract
officer. That is not the correct test. The correct test is,
assuming there is language in the schedule contract to
which the dispute could refer, is the interpretation of that
 SHARP ELECTRONICS CORPORATION    v. ARMY                17
language necessary to the resolution of the dispute? If
not, that is, if the dispute can be resolved by the agency
contracting officer under the provisions of the order
contract and without directly engaging the terms and
conditions of the schedule contract, then it is the duty of
that officer under FAR 8.406-6 to decide the dispute.
    On the record before us, this is such a case, a conclu-
sion regarding which the parties were from the outset in
agreement: the merits of this contract dispute should be
resolvable under the terms and conditions of the order
contract since the scope of the contract extension provi-
sion and the modification at issue were essentially ques-
tions regarding the order contract. But what if the
appearance from the record, and the parties, are in error,
and the schedule contract’s interpretation is an essential
ingredient in the resolution? The appeal from the deci-
sion of the agency CO properly is before the ASBCA, and
one of the issues subject to appeal is whether, applying
the correct test, the agency CO had authority to decide
the case—that is, whether the case cannot be decided
without a determination of the meaning of the applicable
terms and conditions of the schedule contract. The
ASBCA exercising its appellate powers is of course free to
make such a determination, as it purported to in this
case.
    Under FAR 8.406-6 referral of this dispute to the
agency CO for decision in the first instance was correct.
Because of the deemed denial, appeal to the ASBCA was
also correct. The matter belongs before the ASBCA, both
for determination of the jurisdiction question, if that is at
issue under the correct test, and, assuming the Board
retains jurisdiction, for decision on the merits.
18                 SHARP ELECTRONICS CORPORATION   v. ARMY
    I would reverse the decision of the Board preemptive-
ly denying jurisdiction over this dispute. 10

     10 I note that the majority opinion concludes with the
statement that Sharp may timely resubmit its claim to
the GSA CO. Since as discussed above, the FAR Disputes
clause makes no provision for direct submittal of a dis-
pute to the Schedule CO, it would seem that under FAR
8.406-6 (and absent some other authority permitting such
a direct submittal) Sharp’s available route in response to
the majority’s outcome is to resubmit its claim to the
ordering agency CO in hopes of something other than
inaction and a deemed denial. But see GTSI, discussed
earlier, apparently permitting direct submission to the
GSA CO.