(e) DEPARTMENT OF COMMERCE

TITLE 15-COMMERCE AND FOREIGN TRADE

SUBTITLE A-OFFICE OF THE SECRETARY OF COMMERCE

PART 3-RULES OF PROCEDURE FOR HANDLING CONTRACT APPEALS

Part 3 is added to Title 15 of the Code of Federal Regulations to read as follows:

3.3 How to begin an appeal.

3.4 Duties of Contracting Officer and Government Counsel.

3.5 Duties of Board upon receipt of notice of appeal.

3.6 Service of papers.

3.7 Appellant's statement of claim.

3.8

Answer.

3.9 Prehearing conference.

3.10 Depositions, interrogatories, production of documents.

3.11 Settlement.

3.12 Hearings.

3.13 Decisions.

3.14 Reconsideration.

3.15 Optional accelerated procedure.

3.16 Extensions of time.

AUTHORITY: The provisions of this Part 3 issued under R.S. 161; 5 U.S.C. 22, Department Order No. 106 (Revised), 25 F.R. 2603, 3-26-60.

§3.1 Scope and authority.

(a) The standard forms of construction, supplies and services contracts used within the Department of Commerce contain provisions to the effect that disputes arising thereunder and not disposed of by agreement shall be decided by the contracting officer, subject to appeal by the contractor to the head of the Department, i.e., the Secretary of Commerce. This is a contractual method of resolving disagreement and can be invoked only where and to the extent a contract so provides.

(b) Pursuant to Revised Statutes, section 161 (5 U.S.C. 22) and sections 2 and 4 of Reorganization Plan No. 5 of 1950 (5 Ú.S.C. 133z-15), the Secretary has established an Appeals Board (Department Order No. 106 (R) 25 F.R. 2603, 3-26-60), within the Office of the Assistant Secretary for Administration, and has delegated to this Board authority to consider and decide disputes under contracts entered into by the several bureaus (other than the Maritime Administration) within the Department. There is no further administrative appeal within the Department of Commerce from decisions of the Board. (The Secretary has also authorized the Board to consider appeals from the public in respect to certain specified administrative and regulatory actions within the Department, e.g., under the Export Control Act, Parts 382 and 383 of this title, Defense Production Act,

Regs. 5 under Chap. VI of Title 32A, and Surplus Property Disposal Act, § 401.13, Chap. IV of Title 44.)

(c) The Appeals Board consists of a full-time Chairman and fifteen (15) to twenty (20) departmental officials specially qualified to serve as members and designated as such by the Secretary. The Chairman is the administrative head of the Board and is authorized to assign each matter on appeal to a panel of three (3) Board members. The Chairman may serve as a member of each panel, but in the event of his absence or unavailability for any other reason he may designate another Board member to serve in that capacity.

§ 3.2 Purpose.

It is the purpose of these procedures to provide for impartial, inexpensive, and expeditious handling of contract appeals, consistent with the contract terms and other requirements of law, the orderly conduct of the proceeding, and the necessity for making a complete record.

§ 3.3 How to begin an appeal.

(a) An appeal from the findings of fact and determination of the contracting officer shall be made by notice in writing in the manner and within the time specified in the contract.

(b) The notice of appeal shall indicate that an appeal is intended, identify the contract and the contracting officer, and the particular findings of fact and determination from which the appeal is taken. It shall be signed by appellant personally, if an individual, or if not, by an authorized officer of the appellant organization or by the appellant's attorney. The supporting statement of claim referred to in § 3.7 may be filed with the notice of appeal or it may be filed as set forth in 3.7.

§3.4 Duties of Contracting Officer and Government Counsel.

(a) Promptly upon receipt of a copy of the notice of appeal, the contracting officer shall notify and request the legal adviser of the agency administering the contract involved to designate a Government counsel to represent the interests of the Government. The Government counsel shall promptly file notice of appearance with the Appeals Board.

(b) Within thirty (30) days after receipt of the notice of appeal, the contracting officer shall compile and transmit to the Government counsel an appeal file consisting of:

(1) The findings of fact and determination and all documents upon which his decision was based;

(2) The invitation for bids, the contract, and all plans and specifications, amendments, change orders, directives, supplemental agreements, and work order records related to the dispute;

(3) Substantive correspondence between the parties;

(4) Map or other descriptive material of the subject matter.

(c) The Government counsel will forward the appeal file to the Board and so advise the appellant and that it may be examined at the office of the Board or the contracting officer.

§ 3.5 Duties of Board upon receipt of notice of appeal.

Upon receipt of notice of appeal, the Appeals Board shall docket the case by giving it an appropriate number and shall send a notice of

receipt and the docket number to the Government counsel, the appellant and his attorney. A copy of the Board rules of procedure will also be sent to appellant and his attorney.

§3.6 Service of papers.

A copy of all statements, pleadings, briefs and any other documents and data of whatever nature, except the appeal file, shall be served on the other party at the time of filing with the Appeals Board.

§3.7 Appellant's statement of claim.

Within thirty (30) days after the mailing or filing of a notice of appeal appellant shall file with the Appeals Board a concise and detailed statement of the nature and amount of each claim, the reasons why the contracting officer's determination in respect thereto is deemed erroneous, and any documentation upon which he relies.

§3.8 Answer.

(a) Within thirty (30) days after receipt of the appellant's statement of claim, Government counsel shall prepare and file with the Appeals Board an answer setting forth the Government's position on each claim and the reasons therefor.

(b) Upon request made within ten (10) days, the Board shall afford the appellant a reasonable opportunity to file a statement in rebuttal of the Government's answer.

§3.9 Prehearing conference.

The Appeals Board may require the parties to appear for a conference to consider agreement and simplification of the issues, possible stipulations as to facts and documents, limitation of the number of expert and other witnesses, and any other matters that may assist in the disposition of the appeal.

§ 3.10 Depositions, interrogatories, production of documents.

The Appeals Board may consider requests for permission to take the testimony of any person by deposition, to serve written interrogatories upon the opposing party, and to produce and permit the inspection of designated documents. Such requests shall be approved only to the extent and upon such conditions as the Board in its discretion considers to be consistent with the objective of securing a fair, expeditious and inexpensive determination of the dispute on appeal.

§3.11 Settlement.

Whenever at any time it appears that appellant and Government counsel are in agreement as to disposition of the dispute, the Appeals Board may suspend further processing of the appeal in order to permit settlement by the contracting officer or other proper authority.

§3.12 Hearings.

(a) The Appeals Board will provide an oral hearing unless waived by both parties, and will give the parties at least thirty (30) days' notice of the time and place of the hearing. Hearings will be held in Washington, D.C., unless there is, in the Board's judgment, a special and substantial justification for holding the hearing elsewhere.

(b) Witnesses at hearings will not be required to testify under oath. However, the presiding officer will call to the attention of each witness that his statements are subject to the provisions of Federal law

imposing penalties for knowingly making false representations in connection with claims against the United States or in any matter within the jurisdiction of any Government department or agency. All witnesses may be examined or cross-examined by the Board members, the parties or their representatives.

(c) Both parties may offer oral and written evidence, subject to exclusion, in the presiding officer's discretion, of irrelevant, immaterial or unnecessarily repetitious evidence. The probative value of all evidence received will be determined by the Board. Testimony at hearings shall be reported verbatim.

(d) Post-hearing briefs may be submitted by either party or required by the Board, and appropriate rebuttal arrangements may also be authorized by the Board.

§3.13 Decisions.

(a) All decisions of the Appeals Board shall be based solely on the record made before it, and the Board may decide all questions of fact and law arising under the provisions of the contract in question. Under the provisions of the so-called Wunderlich Act, 68 Stat. 81 (1954), 41 U.S.C. sections 321 and 322, a departmental decision on a question of fact arising under a contract disputes clause is declared to be final and conclusive and not subject to judicial review "unless the same is fraudulent or capricious or arbitrary or so grossly erroneous as necessarily to imply bad faith or is not supported by substantial evidence." A Board decision on a question of law, on the other hand, is subject to full judicial review.

(b) The decision of a majority of the panel in a particular case constitutes the decision of the Board. Decisions will be made in writing and copies furnished to all parties. All decisions will be available to public inspection.

§3.14 Reconsideration.

Requests for reconsideration may be made by either party within thirty (30) days from the date of receipt of its copy of the Board's decision. Such requests will be considered only upon a showing of significant error or on the basis that new and material evidence has been discovered. The other party will be afforded a reasonable time to oppose such request for reconsideration, and the Board will as soon as practicable thereafter rule on the request. Failure to request reconsideration shall not be deemed to be a failure to exhaust administrative remedies.

§3.15 Optional accelerated procedure.

If the amount involved in an appeal is relatively small or the appeal otherwise specially lends itself to expeditious consideration, the Appeals Board may, with the concurrence of the parties, reach a decision on the basis of the available record as furnished by the parties. Such appeals will be decided as soon as practicable without regard to their normal position on the docket and in such summary form as may be appropriate.

§3.16 Extensions of time.

Upon request, time extensions may be granted by the Appeals Board except with respect to the filing of the notice of appeal.

Effective date. The provisions of section 4 of the Administrative Procedure Act (5 U.S.C. 1003) which require notice of proposed rule

making, opportunity for public participation, and delay in effective date are not applicable because these rules relate to agency management and public contracts. Accordingly, these regulations shall become effective upon publication in the FEDERAL REGISTER, and except as otherwise directed by the Chairman of the Appeals Board they shall not apply to appeals which have been docketed prior to that date.

Dated: December 22, 1964.

NATHAN OSTROFF, Chairman, Appeals Board.