United States v. Utah Construction & Mining Co. - 384 U.S. 394 (1966)


U.S. Supreme Court

United States v. Utah Construction & Mining Co., 384 U.S. 394 (1966)

United States v. Utah Construction & Mining Co.

No. 440

Argued March 23-24, 1966

Decided June 6, 1966

384 U.S. 394

Syllabus

The contract whereby respondent agreed to construct a facility for the Atomic Energy Commission contained a disputes clause which provided that "all disputes concerning questions of fact arising under this contract" should be decided by the contracting officer subject to written appeal to the head of the department, "whose decision shall be final and conclusive upon the parties thereto." After completing the project, respondent filed claims seeking additional compensation and time extensions pursuant to the "changed conditions" clause of the contract. The Advisory Board of Contract Appeals, after hearings, (1) denied the request for time extension and damages for the "Pier Drilling" claim, finding that increased costs were incurred by a subcontractor, rather than respondent, and that the delay was caused by a dispute over the quality of government-supplied concrete aggregate, which was not before the Board for adjudication; (2) denied additional compensation, but authorized a time extension for the "Shield Window" claim; and (3) ruled that the appeal from the contracting officer's rejection of the claim for additional compensation for poor quality concrete aggregate was untimely, remarking however that, if the claim was one for unliquidated damages for breach of warranty or for delay, it had no jurisdiction to award monetary relief. Respondent brought this action in the Court of Claims for breach of contract, asserting government-caused unreasonable delay. That court held that the Pier Drilling and Shield Window claims were primarily for breach of contract, and ordered a trial de novo on the factual issues in those claims. On the concrete aggregate claim, the court ruled that, if the claim was one for breach of contract, rather than one "arising under" the contract, the factual issues should be resolved in a judicial trial.

Held:

1. The government contract "disputes clause" does not extend to breach of contract claims not redressable under other clauses of the contract. Pp. 384 U. S. 403-418.

(a) In decisions both before and after the execution of this contract, the Court of Claims had established that the jurisdiction

Page 384 U. S. 395

of Boards of Contract Appeals was limited to claims under specific contract provisions authorizing relief, and that contractors need not process pure breach of contract claims through the disputes machinery before filing suit. Pp. 384 U. S. 405-406.

(b) It was the settled practice of the Boards of Contract Appeals at the time of execution of this contract to refuse to consider pure breach of contract claims. P. 384 U. S. 406.

(c) While some Boards possess authority to make factual findings in cases where they have no jurisdiction to grant relief, such findings have no binding effect. Pp. 384 U. S. 407-411.

(d) Congress and the military procurement agencies recognize the jurisdictional limitations of the Boards by enacting alternative administrative remedies and by fashioning additional contract adjustment provisions to deal with claims for delay damages such as presented here. Pp. 384 U. S. 413-417.

(e) The development of these additional contractual provisions illustrates not only administrative acceptance of the narrow interpretation of the disputes clause, but also indicates the lack of any compelling reason to overturn that interpretation now. Pp. 384 U. S. 417-418.

2. Although the Board here lacked authority to consider delay damages under the Pier Drilling and Shield Window claims, it did have authority to consider requests for time extensions under specific contract provisions, and these requests called for findings of fact which, if they meet the Wunderlich Act standards, are conclusive on the parties not only under the contract provisions, but also in the court action for breach of contract and delay damages. Pp. 384 U. S. 418-423.

(a) Both the disputes clause and the Wunderlich Act provide that administrative findings on factual issues relevant to questions arising under the contract shall be final and conclusive on the parties. P. 384 U. S. 419.

(b) A party cannot compel relitigation of a matter once decided by merely couching a claim in breach of contract language. P. 384 U. S. 419.

(c) United States v. Carlo Bianchi & Co., 373 U. S. 709, held that administrative findings in the course of adjudicating claims within the disputes clause were not to be retried in the Court of Claims, but were only to be reviewed on the administrative record. P. 384 U. S. 420.

Page 384 U. S. 396

(d) This result is in accord with the principles of collateral estoppel. Pp. 384 U. S. 421-422.

(e) Since the Board was acting in a judicial capacity when it considered these claims, the factual disputes were relevant to the issues properly before it, and both parties had an opportunity to argue their version of the facts and to seek court review of adverse findings, there is no need or justification for a second evidentiary hearing on these matters. P. 384 U. S. 422.

168 Ct.Cl. 522, 339 F.2d 606, affirmed in part and reversed in part.



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