Federal Contract Law | Do government officials need extra legal help?

Three legal doctrines work together to shield the federal government from claims it has acted in bad faith. One, the presumption of regularity, assumes that officials act properly and in good faith. Second, to overcome the presumption, a claimant must produce very strong evidence. This doctrine has a cumbersome name: the 'well-nigh irrefragable proof' standard. Third, that proof must show that the motive for the action is a specific intent to harm the claimant.

These three doctrines presume that we can trust federal officials to do the right thing, virtually without exception. They further presume improper conduct only happens when an official abuses his or her power in order to hurt a particular person. And that is such an unlikely event, it requires the strongest possible proof.

In several recent cases, the U.S. Supreme Court has emphasized that when the U.S. enters into contract relations, its rights and duties are 'generally' governed by the law applicable to contracts between private individuals. However, courts have used the latitude implied by 'generally' to fashion exceptions like the three doctrines discussed above. The Acquisition Advisory Panel is considering a proposal by one of its members for a broad statutory change to make government contract laws and practices more like those of the commercial sector. It would limit exceptions to those required by the Constitution, a statute or a contract clause in the Federal Acquisition Regulation.

The idea that government officials are almost always above reproach would be an odd one to the Founding Fathers. Fearing the effect of too much power on human nature, they were careful to construct a government with checks and balances. As Madison said in Federalist No. 51, 'What is government itself, but the greatest of all reflections on human nature?'

But legal doctrines aren't theories of personality. Presumptions backed with high burdens of proof can determine who wins and who loses the cases. These three doctrines make it almost impossible to win a case charging that government officials acted in bad faith. By one estimate, based on published court opinions, only one out of 40 such cases are successful. Doubtless there are many more cases where the issue wasn't even raised because the proof, though strong, was less than overwhelming.

To put it bluntly, these presumptions define how much federal officials can get away with. Since proving bad faith is so hard, the government can do things without consequence that would make a private party liable for damages. This makes no sense to me. Because of the government's enormous power, we should expect and demand the highest standards of conduct. Ironically, the presumption that federal officials always do the right thing may turn out instead to foster the opposite.

Some may say that we need to protect the government from frivolous lawsuits. Perhaps. But as an attorney practicing in this area, I can tell you contractors are especially reluctant to endanger their good relationship with a customer by filing a protest or lawsuit. And why does a government that employs thousands of lawyers need extra protection against lawsuits?

So I agree that it is time to take another look at these legal doctrines and see if they are producing the conduct'and the government'that we want. If the government can't make a good case for special treatment, it should live with the same rules as the rest of us.

Postscript: In my May 15 column, I wrote about a Small Business Administration decision that put a large dent in the mentor-prot'g' program. In another decision involving the same companies, SBA has now ruled that it cannot use an approved mentor-prot'g' relationship as evidence of affiliation. If this latter decision holds, the program can escape the damage I predicted.

Joseph J. Petrillo is a lawyer with the Washington law firm Petrillo & Powell. E-mail him at [email protected].


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