April 1997
Bifurcated & Multicount Claims: When is a Board of Contract Appeals Decision "Final" for the Purposes of Appeal?
Government Contract Costs, Pricing & Accounting Report
The agency boards of contract appeals have created informal procedures and practices to efficiently resolve disputes between contractors and the government under the Contract Disputes Act (CDA). One such procedure, bifurcation, allows the parties to litigate liability first, then either litigate quantum issues, or negotiate a settlement. Unfortunately, the bifurcation of disputes has raised questions about what constitutes a final decision for the purposes of appeal. The definition of a final decision is important because the United States Court of Appeals for the Federal Circuit has jurisdiction only over "final decisions of the boards of contract appeals." Thus, a contractor may face the Hobson's choice of appealing an adverse ruling on liability and risking that the appeal dismissed or waiting until the board decides all the issues and having the later appeal dismissed as untimely.
The final judgment rule requires that no appeal may be had until there has been "a decision . . . that ends the litigation on the merits and leaves nothing for the court to do but execute the judgment." The rule, however, primarily was designed for federal district courts, and may not be appropriate for boards of contract appeals. Federal Circuit cases interpreting the final judgment rule have noted the tension created by a rule that does not necessarily assist in furthering the objectives of the CDA.
A trilogy of cases issued on October 1, 1986 created the present controversy over the application of the final judgment rule. The three cases, Teller Environmental Systems v. U.S., Dewey Electronics Corp. v. U.S., and U.S. v. Boeing Co., provided conflicting rules for determine finality. The Teller court found that the scope of the contracting officer's decision determined the Board's jurisdiction. The Dewey court applied this principle in part, but then looked also to the purposes of the CDA. Finally, the Boeing court simply followed Dewey. Later cases, likewise, have interpreted finality inconsistently. Variously, the court will stress the scope of the contracting officer's decision or the balance between the costs of piecemeal litigation and the injustice of delay.
The inconsistent interpretation of the final judgment rule also has collateral estoppel implications. In Lockheed Corp. (Lockheed I), the ASBCA found during the liability phase of proceedings that certain information was pricing data under TINA. The government appealed this decision, but then withdrew its appeal. In a second case involving the same contractor (Lockheed II), the ASBCA found that its first decision was a prior judgment for collateral estoppel purposes. The Board, however, expressed its unease with its reasoning on the finality issue, describing the government's position as "arguable." The government had been a victim, in this case, of the Hobson's choice mentioned above.
The final judgment rule requires that no appeal may be had until there has been "a decision . . . that ends the litigation on the merits and leaves nothing for the court to do but execute the judgment." The rule, however, primarily was designed for federal district courts, and may not be appropriate for boards of contract appeals. Federal Circuit cases interpreting the final judgment rule have noted the tension created by a rule that does not necessarily assist in furthering the objectives of the CDA.
A trilogy of cases issued on October 1, 1986 created the present controversy over the application of the final judgment rule. The three cases, Teller Environmental Systems v. U.S., Dewey Electronics Corp. v. U.S., and U.S. v. Boeing Co., provided conflicting rules for determine finality. The Teller court found that the scope of the contracting officer's decision determined the Board's jurisdiction. The Dewey court applied this principle in part, but then looked also to the purposes of the CDA. Finally, the Boeing court simply followed Dewey. Later cases, likewise, have interpreted finality inconsistently. Variously, the court will stress the scope of the contracting officer's decision or the balance between the costs of piecemeal litigation and the injustice of delay.
The inconsistent interpretation of the final judgment rule also has collateral estoppel implications. In Lockheed Corp. (Lockheed I), the ASBCA found during the liability phase of proceedings that certain information was pricing data under TINA. The government appealed this decision, but then withdrew its appeal. In a second case involving the same contractor (Lockheed II), the ASBCA found that its first decision was a prior judgment for collateral estoppel purposes. The Board, however, expressed its unease with its reasoning on the finality issue, describing the government's position as "arguable." The government had been a victim, in this case, of the Hobson's choice mentioned above.
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