Thursday, April 4, 2013


Occasionally, we've been asked if it is possible to sue the contracting officer personally.  For a lot of reasons, we discourage such an action, not the least of which is the questionable motivation for doing it.  Not too long ago, a contractor terminated for default decided to sue the contracting officer in U.S. District Court and the Court of Appeals for the Second Circuit very recently decided the appeal of that suit.  Let's take a look at the facts and briefly review what the circuit court decided.

The contractor sued the procuring contracting officer (PCO), the Chief of Contracting, the administrative contracting officer (ACO) and the Program Manager for the New York District Corps of Engineers.  The suit alleged that the contractor's contracts were terminated in retaliation for the contractor's criticism of the Corps' mismanagement of construction projects, that the terminations negatively impacted the contractor's business and that, as a result, the contractor was deprived of its constitutionally protected rights to free speech and substantive due process.  The contractor had appealed the terminations of its contracts to the Armed Services Board of Contract Appeals (ASBCA) but those appeals were dismissed (for reasons not germane here) without prejudice.

In a case called Bivens, the U. S. Supreme Court ruled in 1971 that a cause of action existed for victims of unreasonable searches and seizures against the government agents conducting the complained of searches and seizures.  The Court said it would infer a private right of action for monetary damages where no other federal remedy is available based on the principle that for every wrong, there must be a remedy.  Three Justices dissented, saying such "legislating" should be left to Congress.  Thus, there was born what became know as a "Bivens action" in court.  (The Second Circuit was reversed in Bivens.)

In revisiting the issue last month, the Second Circuit considered whether the Contract Disputes Act (CDA) of 1978 precluded the contractor's Bivens action.  It noted that other circuit courts had decided just such a preclusion existed.

The court started its discussion noting that precisely because the Bivens action is a judicially created remedy (not based on statute), federal courts have been reluctant to recognize a broad application of such implied judicial relief.  The remedy is an extraordinary thing that should rarely if ever be applied in new contexts.  If there is an alternative remedy available, the implied relief should not be granted.

The court concluded that in the face of the comprehensive CDA scheme of relief, federal courts should decline to infer new substantive legal liability without legislative aid.  Although the CDA does not allow contractors to bring actions against government employees in their individual capacities for alleged violations of constitutional rights, nevertheless, the CDA affords a meaningful and exclusive remedy against the government.  In effect, the CDA remedy is exclusive for all claims arising out of or related to government contracts.  Therefore, contractors cannot sue the government employees in their individual and personal capacities.

So contractors have an exclusive remedy under the CDA and cannot sue the contracting officer personally.  And if contractors still have retribution on their minds, they also should be wary of alleging bad faith.  Government employees are legally presumed to be acting in good faith and successfully overcoming that presumption requires a showing of well-nigh irrefragable proof.

And the obvious question:  can the contractor sue the PCO and others personally for pre-award actions and inactions?  We're looking for a case but it would seem the Competition in Contracting Act CICA) provides what may be described as a meaningful and exclusive remedy through the bid protest procedures.                           

No comments:

Post a Comment