What is the "Christian Doctrine"?

What is the "Christian Doctrine"? We discussed the basis of the Christian Doctrine back in 2010. You can find that post here.

Briefly stated, under the Christian doctrine, a court may insert a clause into a Government contract by operation of law if that clause is required under applicable federal administrative regulations. In "Christian", the Court of Claims concluded that the standard termination clause required by ASPR (Armed Services Procurement Regulations, since replaced by FAR) must be read into the contract, even though the contract lacked a termination clause. For a court to incorporate a clause into a contract under the Christian doctrine, it generally must find (i) the clause is mandatory and (ii) that it expresses a significant or deeply ingrained strand of public procurement policy.

A recent Appeals Court decision illustrates how the Christian Doctrine is applied to the absense of the Bonding clause in a construction contract.

The Army awarded a contract to K-Con, Inc. that lacked the standard bonding clause for construction contracts. FAR 52.228-15 requires offerors in construction contracts valued at $150 thousand or greater to furnish performance and payment bonds. Through probably an oversight, the Army failed to include that clause in the solicitation or the resulting contract.

The Appeals Court ruled that the clause was "read into" the contract under the Christian Doctrine because it is required by statute. The statute, 40 USC 3131-34 (formerly known as the Miller Act) requires that before any contract of more than $100 thousand is awarded for the construction, alteration, or repair of any public building or public work of the Federal Government, a person must furnish to the Government performance and payment bonds which become binding when the contract is awarded.

Under the second prong of the Christian doctrine, the Appeals Court ruled that performance and payment bonds express a significant or deeply ingrained strand of public procurement policy. Payment bonds are intended to provide security for those who furnish labor and materials in th e performance of Government contracts. For private contracts, subcontractors and suppliers can obtain a mechanic's lien against the improved property to ensure that they are paid. Government property however, cannot be subject to subcontractors' and suppliers' liens. Thus the payment bond requirements was created to provide, in Government contracts, an alternative remedy to protect those who supply labor or materials to a contractor on a Federal project.

Contractors Unwittingly Subject to TINA

Suppose that a prospective contractor submits a proposal that falls under the threshold requiring certified cost or pricing data (currently $750,000) but subsequent to submitting the proposal, the Government decides to add additional quantities that causes the resultant contract to exceed that threshold. Is that contractor required to certify its cost or pricing data?

The short answer is 'yes'. FAR 15.403 (and 10 USC 2306a, the Truth in Negotiations Act or TINA) applies to the dollar value of a contract (or subcontract). The eventual value of the contract action, not the original proposed value, is determinative.

Contractors need to be aware of this. Even if the Government does not require them to sign a certificate of current cost or pricing data, the requirement still applies (see Christian Doctrine and Is Your Contract Subject to a TINA Audit), Some contractors have unwittingly signed up for something they didn't plan for.

There may be ways around this requirement. If the Government negotiates a contract based on the original proposal and subsequently negotiates a modification to add the additional quantities, and neither the proposal nor the modification rise to the threshold level, neither the basic contract nor the modification(s) would be subject to TINA. Each pricing action stands on its own when it comes to the requirement for certified cost or pricing data.

Another situation that may surprise contractors is modifications of contracts that did not require certified cost or pricing data because it was exempt (perhaps because it was based on adequate price competition). Certified cost or pricing data would still be required for any modification should the value of that modification exceed the $750,000 TINA threshold.