Originally published in The Government Contractor Vol. 49, No. 34 September 19, 2007
Focus
¶ 349
The General Services Administration issued a July 5 interim rule setting forth rules of procedure for the Civilian Board of Contract Appeals. Comments on the rule are due September 28. 72 Fed. Reg. 36794. The Board was established by the National Defense Authorization Act for Fiscal Year 2006 to hear disputes from multiple agencies under the Contract Disputes Act of 1978 and certain other statutes. The CBCA consolidated the existing boards at GSA and the departments of Agriculture, Energy, Housing and Urban Development, the Interior, Labor, Transportation, and Veterans Affairs, and took their cases as of January 6. The Bush administration proposed such a consolidation in 2002 to help small businesses seeking relief before the boards.
The interim rule results from GSA's review of the predecessor civilian boards and maintains most of those basic rules. The new rules of procedure are located in 48 CFR chapt. 61, pts. 6101–6105. The Board expects to issue final rules next year. 49 GC ¶ 264. In its first opinion, issued January 18, the CBCA stated that holdings of the predecessor boards and the U.S. Court of Appeals for the Federal Circuit would be binding as precedent. However, GSA's interim rule departs significantly from those holdings by forfeiting the power of the Board to enforce, if not to issue, subpoenas to Government agencies.
Subpoena Power—GSA, reportedly in coordination with the Office of Management and Budget, see 49 GC ¶ 22, states in the preamble to the interim rule that the new regulations do not provide the CBCA with subpoena power over Government agencies. GSA's interpretation is legally incorrect, does not promote due process and should be reconsidered.
In the past, cooperation by Government agencies in cases before the boards has been critical to the administration of justice. Although predecessor boards rarely needed to issue subpoenas, before a CBCA without subpoena authority, agencies—particularly those not party to the proceeding—might lack the incentive to comply with orders to produce documents. An agency that is party to the proceeding might be subject to an adverse inference, but that is no substitute for evidence. GSA should reverse course and change its position in the final rule.
Section 11 of the CDA, codified at 41 USCA § 610, broadly states that "a member of an agency board of contract appeals may ... require by subpoena the attendance of witnesses, and production of books and papers." The second sentence authorizes the agency board, in the case of refusal "by a person" to obey a subpoena, to apply through the attorney general to a district court to issue "the person an order requiring him to appear before the agency board or a member thereof, to produce evidence or to give testimony, or both." In addition, "Any failure of such person to obey the order of the court may be punished by the court as a contempt thereof."
New § 6101.16(a) encourages voluntary cooperation in lieu of a subpoena, including by securing third-party cooperation when practicable. Paragraph (b) states that a subpoena may be issued "that commands the person to whom it is directed" to attend a deposition or hearing, or to produce documents and electronic records. This section should reflect the subpoena power provided in CDA § 11. The new provision mimics the prior subpoena rule of the GSA Board of Contract Appeals; both contain an enforcement provision for "persons" based on § 610.
GSA states in the interim rule that
72 Fed. Reg. 36795.
New 48 CFR § 6101.16 authorizes subpoenas directed to a "person." If "person" does not include the U.S., then a subpoena cannot be directed to the U.S. That interpretation cannot be correct because it is contrary to the broad subpoena authorization in the first sentence of § 610. The CBCA should not interpret GSA's statement to prevent it from issuing subpoenas to agencies.
GSA's statement is a reaction to a 2006 decision by the Agriculture Board of Contract Appeals to sanction DOJ when the agency did not respond to an AGBCA subpoena in Mountain Valley Lumber Inc., AGBCA 2003-171-1, 06-2 BCA ¶ 33339. Because the CBCA has indicated that it will follow precedent, the ruling in Mountain Valley Lumber would otherwise confirm subpoena authority over federal agencies. However, GSA's preamble to the interim rule effectively surrenders that authority and is at odds with the AGBCA holding. GSA and OMB sided with DOJ, even though DOJ lost its arguments in Mountain Valley Lumber. GSA's interpretation is unreasonable and contrary to the statute.
AGBCA Precedent—Even if DOJ were right in Mountain Valley Lumber that the subpoena could not be enforced, GSA's position could go even further. As the AGBCA noted, the first sentence of 41 USCA § 610 gives the Board broad subpoena power, and only the subsequent provision for enforcement through DOJ and the courts makes reference to a "person." 06-2 BCA ¶ 33339 at 165,308. GSA's interpretation of its regulation could allow an agency to argue that the interim rule prevents the CBCA from issuing a subpoena to an agency, in addition to preventing the enforcement of that subpoena through the courts, as DOJ sought to prevent in Mountain Valley Lumber.
In Mountain Valley Lumber, the AGBCA requested that the U.S. Forest Service produce documents in the possession of DOJ and the Council on Environmental Quality. After DOJ refused, the AGBCA issued a subpoena, and DOJ replied that it was not required to respond. The appellant then filed a motion for sanctions against the Forest Service, and the AGBCA requested that the attorney general and U.S. attorney for the District of Columbia enforce the subpoena through a district court pursuant to 41 USCA § 610. 06-2 BCA ¶ 33339 at 165,304–308.
DOJ responded to the enforcement attempts by arguing that although the board had authority to issue subpoenas under the CDA, the enforcement provision allowed DOJ to seek enforcement through the courts only against a "person" and that, in this context, the presumption applied that a Government agency is not a "person." 06-2 BCA ¶ 33339 at 165,307. DOJ relied on Al-Fayed v. C.I.A., 229 F.3d 272, 274 (D.C. Cir. 2000), in which "person" was interpreted not to include a sovereign. DOJ argued to the AGBCA that this interpretation of the CDA was "the only way to avoid placing the Attorney General in the obviously paradoxical position of prosecuting an action that he would simultaneously be obligated to defend."
However, the AGBCA found affirmative evidence that Congress intended to include Government agencies in the CDA definition of "person." 06-2 BCA ¶ 33339 at 165,308–313. The AGBCA relied on Linder v. Calero-Portocarrero, 251 F.3d 178, 180 (D.C. Cir. 2001), which held that the issue is a matter of statutory interpretation and that federal agencies generally cannot claim sovereign immunity to avoid compliance with third-party subpoenas in the context of Rule 45 of the Federal Rules of Civil Procedure. The AGBCA examined Senate and House reports preceding the CDA that expressed congressional concern that the boards should have subpoena power. "No distinction was made between the federal government and contractors and if anything, the tone was aimed at providing contractors with the added due process." 06-2 BCA ¶ 33339 at 165,308–311. "To conclude that Congress intended to exclude the government from the scope of the subpoena runs counter to the expressed desire to enhance due process for the parties and to expand the authority of the Board." Id. at 165,312.
The AGBCA found that when the CDA was enacted, there was no question that "person" as used in Fed. R. Civ. P. 45 covered the Government. Id. at 165,311. The context of the Act and the intent to provide due process and to provide a parallel proceeding with the Court of Federal Claims, which has a subpoena rule conforming to the Fed. R. Civ. P., "make it clear that the CDA intended to give the board equal authority over subpoena, be it the government or a contractor. Any other reading is simply counter to the history and is illogical." Id. at 165,312. Under DOJ's position, "we are left with a circumstance, where USDA or any other department can force a party contractor or third party to provide documents and testify, by having the board go to the district court to enforce a valid subpoena; but, if the contractor wishes to bring in a government official who is not employed by USDA or some sister agency or wishes to secure documents from such a person or entity, the contractor has no similar tool." Id. at 165,312–313. Following the AGBCA decision, DOJ eventually produced a privilege log. In a subsequent decision in Mountain Valley Lumber, issued June 21, in CBCA 95, the Board held that it lacks jurisdiction to sanction the Government for its delay through monetary fines. See 49 GC ¶ 277.
In a similar case, one agency already took the next step by arguing that the boards have no authority to issue subpoenas, let alone enforce them. In Shawn Montee, Inc., dba Shawn Montee Timber Co., AGBCA 2003-132-1, Dec. 26, 2006, 2006 WL 3803639, the same administrative judge who authored the Mountain Valley Lumber decision responded when DOJ again refused to provide documents in response to subpoenas issued to DOJ and the Council on Environmental Quality: "I find the Board has authority to issue subpoenas to DOJ and CEQ and the authority to issue sanctions against the [Forest Service] if the subpoenas are not honored. Accordingly, the [Forest Service] is given 14 days to provide a log or the documents. If it does not, the Board panel will move to enter sanctions."
The Forest Service and DOJ disregarded the order to produce documents. The appellant sought some form of sanctions, but DOJ and CEQ were not motivated by sanctions against the Forest Service. In a June 4, 2007 letter to the CBCA, the Forest Service "respectfully restate[d] its position that the [AGBCA] lacked authority to issue the disputed subpoenas." See 49 GC ¶ 246.
A recent article in the Public Contract Law Review explains why the GSA interpretation is wrong. McGovern, Graham and Nibley, "A Level Playing Field: Why Congress Intended The Boards of Contract Appeals to Have Enforceable Subpoena Power Over Both Contractors and the Government," 36 Pub. Cont. L.J. 495 (Summer 2007). The authors note that U.S. Supreme Court caselaw indicates that the presumption that "person" does not include the sovereign can be overcome if the context, legislative history or the executive branch's past interpretation of the statute indicates an intent to include the Government.
Relying on Supreme Court doctrine, the U.S. Court of Appeals for the District of Columbia Circuit, in Yousuf v. Samantar, 451 F.3d 248, 254 (D.C. Cir. 2006), concluded that application of Rule 45 to the Government did not fall into those situations identified by the Supreme Court in which the Government was at common law presumed not to be a "person." Concluding that the presumption did not apply, the court turned to "the customary tools of statutory interpretation" to find the Government was a "person" under Fed. R. Civ. P. 45. 451 F.3d at 255. Similarly, the CDA's context and legislative history, as well as past executive branch interpretation, provide a strong basis for the argument that "person" in § 610 was intended to include the Government. As McGovern, Graham and Nibley correctly conclude, the legislative history shows that Congress intended the CDA and its subpoena provision to give the parties "equal footing," and to permit the boards to develop a full record and have powers comparable to the courts.
Conclusion—GSA's position is legally incorrect, does not promote due process and undermines confidence in the administrative process before the CBCA. Individual agencies should not be permitted to "game" the process by unilaterally deciding which documents they will produce in a case before the CBCA. GSA should reconsider and reverse its position when the final rule is released. In the meantime, agencies should continue to voluntarily cooperate with document requests as called for by § 6101.16(a), regardless of whether they are party to the case.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
