Obstacles continue to hinder dispute-resolution process

In an era of procurement streamlining, one area with a spotty record is disputes

The slow but steady growth of alternative dispute-resolution techniques may be a bright
spot, but it is too early to tell. Why? This area has been and continues to be plagued by
procedural obstacles.

The objective is simple enough. If the parties cannot resolve their contractual
differences through negotiation, there should be an efficient and fair way to present the
matter to an independent decision-maker.

One obstacle was the conundrum of who could certify a claim. Although the Contract
Disputes Act seemed clear enough, implementing regulations introduced additional and
confusing limitations. The larger the corporation, the harder it was to tell--with
certainty--who could lawfully certify a claim. Untold hours were wasted litigating this
procedural quirk. Ultimately, Congress legislated this problem away.

Then court decisions confused the process of perfecting a claim. Before a claim could
be certified and decided by a contracting officer, it had to be "in dispute."
This set up a chicken-and-egg scenario for the vendor and the government. Many pending
cases were dismissed because the certification date or the contracting officer's decision
did not come after whatever appeared to be the start of a dispute. At last, the Court of
Appeals for the Federal Circuit in overturning an earlier ruling laid down clearer, more
commonsense rules.

The last stumbling block remains. It stems from another case decided by the same
appellate court, Decker v. West, 76 F. 3d 1573 (CACF 1996). The opinion describes
the situation as "one of those messy government contract dispute cases." The
ruling, however, leaves another mess for the government and its contractors to deal with.

The Contracts Dispute Act required a contracting officer to notify a vendor of its
appeal rights after the officer had issued a final decision in a dispute. Because of the
relatively short time limits for filing an appeal, it is important for the vendor to know
when to start counting. A long series of cases at the General Services Board of Contract
Appeals had held that failure to inform the vendor of its appeal rights meant that the
limitations period had not begun ticking away.

In the Decker case, the notice to the vendor about its appeal rights was flawed. It
informed the vendor that it could file at the GSBCA and the Court of Federal Claims when
only the board appeal was actually available to the vendor. The board held that the notice
did not start the clock for the appeals limit and so Decker's delayed filing with the
board was not deemed late.

But in the government's appeal of the GSBCA ruling, the appellate court concluded that
a defective notice was not enough to halt the start of the appeal limitations period. The
vendor would have to show that it had relied on the notice in making a decision to hold
off on filing an appeal motion with GSBCA or file suit in court. An unbroken series of
board decisions, however, had never required such a showing, and so the court's decision
reverses a long-standing precedent.

The dilemma created by this decision runs as follows: A vendor is either ignorant of
the proper form for a final decision or it is not. For the unknowing vendor, a faulty
notice induces delay by failing to tell the vendor it must appeal.

On the other hand, the vendor that understands that a final decision requires
notification of appeal rights is also misled. It will conclude that a decision lacking
this information is not really final and thus need not be appealed.

Either way, the vendor is lulled into a false sense of security. But the court ruling
seems to require some special proof that the vendor was led astray. What proof is required
and under what circumstances it is required must await future, and unnecessary,

Joseph J. Petrillo is an attorney with the Washington law firm of Petrillo &

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