The Christian Doctrine - ''Hey, I Didn't Agree to That!''
by Jerome S. Gabig Jr., Paul A. Debolt, and Johana A. Reed, CPCM 

     In both the private and the government con­tracting arena, written contracts usually reflect the entire scope of the contracting parties' agreement. In government contracts, however, the written agreement with the government does not always reflect all of the rights, obliga­tions, and responsibilities of the contracting parties. Since 1963, both the courts and the boards of contract appeals have used the Christian doctrine' to incorporate, "as a matter of law," mandatory procurement clauses into government contracts. Generally speaking, there is no counterpart to the Christian doctrine in commercial contracting.

     A court's or a board's decision to reform a contract to insert a previously omitted manda­tory clause can have far-reaching implications for the unknowing or unwitting offeror. The Christian doctrine has been used to insert clauses unintentionally left out of the contract as well as mandatory clauses that the parties, in good faith, believed they had negotiated out of the contract. For this reason, the insertion of a previously omitted mandatory clause can fundamentally alter the bargain struck between the parties and potentially force a contractor to incur additional costs or obliga­tions that were not anticipated at the time of contract formation. In light of the unantici­pated risks and liabilities arising from the insertion of a previously omitted mandatory clause into a contract, the Christian doctrine remains a unique and important principle in government contracting.

     To avoid the consequences of the Christian doctrine, government contractors should stay abreast of the mandatory clauses that the gov­ernment must include in solicitations. Offerors should pay particular attention to the manda­tory clauses concerning the following areas: the Truth in Negotiations Act (TINA), the Buy American Act (BAA), government-furnished property, the Fair Labor Standards Act (FLSA), the Service Contract Act (SCA), socioeconomic provisions, and general cost principles.

     If an offeror determines that the govern­ment has not included a mandatory clause in a solicitation, the offeror should immediately bring the omitted clause to the contracting officer's (CO) attention to determine if the omission was by oversight or properly author­ized. A clause may be properly omitted if the CO had the authority to exclude the omitted clause or if a deviation has been authorized by higher authority. Thus a detailed review of a solicitation is critical to a government contrac­tor's determination of whether an omitted mandatory clause may present a potential risk to the contractor under the Christian doctrine.

     This article provides a general overview of the Christian doctrine and identifies those general areas where the courts and boards have applied it. This article is not intended to provide the procurement professional with an exhaustive review of every instance in which a court or board has reformed a contract pur­suant to the Christian doctrine. Nonetheless, this information should assist the procurement professional in assessing the doctrine's potential impact on current or future contracts with the government. To facilitate the identification of omitted mandatory clauses that the courts and boards have read into contracts "as a mat­ter of law," refer to Figure 1, which identifies many of the clauses that have been reviewed by the courts and boards under the doctrine.

THE CHRISTIAN DOCTRINE

     Procurement regulations control almost every aspect of the government's acquisition of supplies and services with appropriated funds. If a government contract does not com­ply with a regulation or statute that has the "force and effect of law," the following out­comes may occur: (1) the contract may be void or voidable by the government or (2) the con­tract may be reformed either to incorporate a mandatory clause or to exclude a clause that is inconsistent with a statute or regulation irre­spective of which party the clause benefits.' The Christian doctrine applies where the gov­ernment's failure to comply with a mandatory regulation or statute requires the court or board to reform the contract to either include an omitted clause or remove a clause that is inconsistent with law or regulation.

     In its simplest terms, the Christian doctrine provides that if a statute or a regulation with the "force and effect of law" mandates the inclusion of a clause in a government contract, the courts and boards will interpret the con­tract as if it contains the omitted clause. Conversely, if a contract contains a clause that is inconsistent with a statute or regulation, the courts and boards will interpret the contract as if it does not contain the offending clause.' The courts' and boards' willingness to reform an integrated written agreement based on the Christian doctrine converts a government con­tract from an agreement that represents an arm's-length bargain between the contracting parties to a bargain made, at least in part, by the regulations of the administrative agency.' Consequently, vendors must always keep abreast of the procurement regulations for any agency with which they seek to do business.

     Unlike many decisions involving a govern­ment contract dispute, a court's or board's deci­sion to include an omitted mandatory clause pursuant to the Christian doctrine does not require a detailed factual analysis. Rather, a court's or board's analysis under the Christian doctrine turns on whether the omission of a mandatory clause, or the inclusion of a clause that is inconsistent with law or regulation, will frustrate or circumvent a fundamental-and often deeply ingrained-procurement policy. Consequently, the procurement professional should focus less on the facts surrounding the government's omission of a mandatory clause or inclusion of a clause that is contrary to law or regulation, and more on whether the omis­sion or inclusion of the clause will frustrate or circumvent a fundamental procurement princi­ple.

The Christian Decision

     In Christian the government tenninated a housing project before the project's comple­tion. Although the parties to the construction contract at issue in Christian specifically negotiated out the provision authorizing the government to terminate the contract for con­venience,' the government contended that the court should interpret the contract as if the contract contained the Termination for Convenience clause mandated by section 8.703 of the Armed Services Procurement Regulation (ASPR).6 Ultimately, the court agreed with the government's position and inserted, by operation of law, the omitted Tennination for Convenience clause into the contract, thereby precluding the contractor's recovery of anticipated profits.'

     The court began its analysis by stating that since the ASPR "was issued under statutory authority," the regulation had the "force and effect" of law.' Thus, if the regulation applied to this class of contract, the contract had to contain the standard Termination clause. The court further stated that if the contract had to contain the standard Termination clause, the court would interpret the contract as if it contained the omit­ted Termination for Convenience clause.'

     In its opinion, the court explained that it "should not be slow to find the standard tenni­nation article incorporated as a matter of law into the contract" because the Tennination for Convenience clause's limitation on profits represented a deeply ingrained strand of pub­lic procurement policy. 1° Further, the court stated that an "experienced" government con­tractor should have been aware that the government may terminate the contract for conve­nience without breaching the contract.11 Indeed; the court noted that the contract con­tained at least four separate references to the Termination for Convenience clause.

     Although the facts surrounding the Christian decision appear complex, the court actually based its decision on a fundamental policy concern. The court read the contract as if it contained the, omitted Termination for Convenience clause because the court wanted to ensure "that procurement policies set by higher authority not be avoided or evaded (deliberately or negligently) by lesser offi­cials."" Further, the court stated that congres­sional enactments must govern federal contracts because legislative policies must be protected from the "ad hoc encroachment" of the executive branch. 13 Moreover, the court believed that it needed to prevent subordinates from sapping the significant procurement poli­cies established by their superiors.14

     Thus a proper Christian doctrine analysis does not depend on whether the omission of the mandatory clause was inadvertent or inten­tional." Instead, the linchpin of the analysis is whether the omission of a mandatory clause or the inclusion of a clause that is inconsistent with law or regulation would cause a deeply ingrained procurement policy to be avoided. If it would, the courts and boards will interpret the contract as if it contains the omitted manda­tory clause under the Christian doctrine.

     Moreover, a contractor cannot avoid the impact of the Christian doctrine by arguing that it did not know of the regulation requiring the inclusion of the omitted clause or that it believed that the CO had the authority not to include a mandatory clause. Everyone is charged with knowledge of the U.S. Statutes at Large.16 Similarly, the publication of an agency's rules and regulations in the Federal Register provides everyone constructive legal notice of those regulations. Finally, anyone who enters into a contract with the government runs the risk of having correctly ascertained the bounds of the employee's authority.11

     Although some decisions have suggested that the courts and boards should invoke the Christian doctrine only "under extraordinary circumstances,"18 the the courts and boards have used it on numerous occasions to insert omitted mandatory clauses into written agree­ments. In fact, over the years, the boards and courts have expanded the reach of the doctrine. Today the courts and boards rely on it, not only to incorporate omitted mandatory clauses that reflect deeply ingrained procurement policies but also to incorporate less fundamental or sig­nificant mandatory procurement clauses that were written for the benefit or protection of the party seeking the regulation's protection.19

     To provide the procurement professional with a better understanding of the factors the courts and boards consider under their Christian analysis, each of the factors reviewed by the court in Christian are dis­cussed more fully in the following paragraphs.

The Force and Effect of Law

     The court in Christian held that "[r]egula­tions reasonably adapted to the administration of a Congressional act, and not inconsistent with any statute, have 'the force and effect of law. "'20 Thus if an agency issues a regulation to implement an act of Congress, the regula­tion has the force and effect of law so long as the regulation does not contravene any statute. This characterization can be misleading, how­ever, since all regulations legitimately enacted by federal agencies have a binding effect on the agency's personnel. Consequently, any regulation could arguably have the force and effect of.Jaw.21

     Fortunately, the Christian doctrine does not require the courts and boards to react· every procurement regulation into a government contract. Instead, for the purpose of the Christian doctrine, a regulation has the force and effect of law only if the regulation is issued pursuant to a statute that reasomrbly contemplates the regulation. 22 Additionally, the government must have published the regu­lation in accordance with the requirements imposed by Congress· and the Administrative Procedure Act, 5 U.S.C. 553." Regulations that meet these criteria have the force and effect of law because they result from Congress's delegation of its legislative powers to an executive agency.24 Consequently, their legal status make the regulations binding on persons, including government contractors, regardless of the contractual agreement.".

     Simply because a regulation has the force and effect of law, however, does not mean that the regulation will be incorporated into a con­tract under the Christian doctrine. Rather, each regulation must be considered on a case-by-­case basis, with the controlling element in each case being the purpose, scope, and underlying intent of the regulation itself." Ultimately a court or board may have to decide whether the omitted clause relates to a deeply ingrained procurement policy. Over the years, however, a substantial body of law has developed con­cerning the types of procurement policies that the courts and boards have deemed deeply ingrained federal procurement policies. This body of law should assist procurement profes­sionals in their review of omitted mandatory clauses.

Deeply Ingrained Procurement Policies

     The courts and boards have incorporated omitted mandatory clauses relating to the fol­lowing areas into government contracts pur­suant to the Christian doctrine: the covenant against contingent fees, the Anti-discrimination clause, and the prohibition against cost plus a percentage of cost contracts." Additionally, the boards and courts have found that provisions relating to TINA," the BAA in construction contracts," and the Government-Furnished Property clause also constitute deeply ingrained procurement policies.'° In fact, at least one court has indicated that the Christian doctrine may require the incorporation of pro­visions that facilitate the sharing of cost and pricing data between departments within the Department of Defense (DOD)." The courts and boards also have incorporated clauses relating to the FLSA and the SCA."

     Thus, when reviewing a potential contract with the government, procurement profession­als should pay particular attention to the mandatory clauses relating to these general areas. They also must be aware, however, of some nuances within these broad categories. Generally these nuances arise in the context of statutory requirements that are not always self­-implementing, such as the Davis-Bacon Act (DBA).

     The requirements of the DBA are incorpo­rated into government construction contracts pursuant to Federal Acquisition Regulation (FAR) 22.407 required clauses. FAR 22.407 requires the insertion of certain clauses in solicitations and contracts for construction that exceed $2,000. Thus: if the government issues a contract that is clearly for construc­tion, the DBA and its related required clauses are part of the contract irrespective of whether the clause has been included in the contract. 33

     If the contract is for other than construction, but it includes construction aspects, ·or con­struction is incidental to the contract, the con­tract may or may not be subject to the DBA. In these situations, unlike a construction con­tract, the DBA is not a self-implementing statute. 34 Instead, the CO must determine "that a particular contract is covered by the Act before the contract is subject to the Act."" Consequently, the boards and courts will not insert, as a matter of law, a DBA wage deter­mination that is later found to be applicable. Indeed, the courts and boards will distinguish those contracts where the CO determined that the DBA did not apply from those contracts "where the Act clearly applied at the time of award where the omission was an administra­tive oversight."36

     The implication of these decisions is that in cases where the contract is clearly for con­struction, the DBA is part of the contract as a matter of law regardless of whether the clause has been included in the contract." If the con­tract includes construction aspects or if con­struction is incidental to the contract, but the contract does not include the DBA clauses, a prudent contractor should inquire whether the CO has made a DBA determination.

     Arguably, if the government has determined that the DBA applies to the contract but it fails to include the appropriate Davis-Bacon clauses, the contractor may not be entitled to an equitable adjustment when the clauses are added. 38 Conversely, if the government has made a good-faith determination that Davis­Bacon does not apply and later decides to include the clauses, the contractor probably is entitled to an equitable adjustment."

     In addition to inserting omitted clauses, the boards and courts also will use the Christian doctrine to replace an incorrect version of a contract clause with the correct version of the clause. In one case, DWS, Inc., the Armed Services Board of Contract Appeals (ASBCA) found that the government had incorrectly placed the short-form Termination for Convenience clause in a contract for supplies and services.40 The board could not find any reasonable basis for the CO's decision that "the contract would not provide a basis for a termi­nation claim 'other than for services rendered"' as required in the applicable procurement reg­ulation. 41 Thus by including the incorrect Termination for Convenience provision in the contract, the CO exceeded her authority. The board deleted the short-form Termination for Convenience clause and replaced it with the Jong-form Termination for Convenience provi­sion pursuant to the Christian doctrine."

     With regard to omitted mandatory clauses that do not concern a deeply ingrained pro­curement policy, the probability of a court's or board's incorporating an omitted clause will depend on which party is to benefit from the clause. If the government promulgated a regu­lation with the force and effect of law for the benefit of government contractors, the courts and boards will protect the contractor's rights and interpret the contract as if it includes the omitted clause. One example of these types of clauses is the Bid Mistakes clause."

     If the government waives a nonlegislative regulation that benefits the government only, however, neither the contractor nor the gov­ernment can avoid the waiver.44 Moreover, if Congress did not pass a law or if the agency did not promulgate a regulation for the benefit of the party seeking the statute's or regula­tion's protection and the law or regulation does not concern a deeply ingrained procure­ment policy, the courts and boards will not incorporate the statute or regulation as a mat­ter of Jaw.45

Actual or Constructive Knowledge of the Regulation or Statute

     In addition to determining that a regulation concerns a deeply ingrained procurement pol­icy and has the force and effect of Jaw, the courts and boards also must find that the con­tractor had either actual or constructive knowl­edge of a regulation. Since such clauses are published in the Federal Register, however, neither the courts nor the boards have had any trouble finding that contractors had either actual or constructive knowledge of the clauses that relate to deeply ingrained procurement policies. Moreover, the courts and boards will review the contract to determine whether any other contractual provision men­tions the omitted clause. If other provisions of the contract reference the omitted mandatory clause, the courts and boards may construe this fact as evidence of the contractor's knowl­edge of the omitted mandatory provision."

Limits on the Christian Doctrine

     The Christian doctrine is limited to the incorporation of mandatory contract clauses into an otherwise properly awarded govern­ment contract.47 Although the doctrine's reach has expanded over the years to include other mandatory clauses that do not necessarily con­cern a deeply ingrained procurement policy, the courts and boards do not apply the doctrine to every case in which a mandatory clause has been omitted. For example, the courts and boards will not invoke the doctrine to incorpo­rate an internal regulatory guideline into a contract that was promulgated for the benefit of the government.

     Similarly, the Christian doctrine may not apply to all lease provisions. In Lombardo 's Lakeview Resort, Inc., the court rejected the government's argument that a Termination for Convenience clause should be incorporated into a lease as a matter of law." The court rejected the government's argument because no specific Jaw required the inclusion of the FAR Termination for Convenience clause in leases. In another case, Clem Perrin Marine Towing, however, the Court of Appeals for the Federal Circuit invoked the Christian doc­trine to make the Standard Form 32 part of a lease contract." The court found that a valid regulation required the use of the form and therefore, the form was part of the contract as a matter of law because it was required by a valid regulation.'°

     The courts and boards also will not permit either party to use the Christian doctrine to replace a valid deviation from a mandatory procurement clause with a preferred FAR clause.'1 Likewise the General Accounting Office (GAO) has held that the Christian doc­trine does not require the preaward incorpora­tion of mandatory provisions when such clauses concern the contract formation process." Moreover the doctrine cannot makean unresponsive bid responsive."

     Similarly, the courts and boards will not use the Christian doctrine to replace an applicable FAR clause with a more narrowly drawn agency clause in those situations where the agency clause addressed a policy that was not significant enough to be addressed by the pri­mary body of procurement policies concern­ing government property. 54 Finally, where the CO is given the discretion whether to incorpo­rate a given clause, the clause will not be read into the contract." This result assumes that the CO did not abuse his or her discretion in deciding not to include the clause.

     In addition to the aforementioned limits on the Christian doctrine, there is authority that suggests that the courts and boards will not rely on the doctrine in cases involving a non­appropriated fund instrumentality (NAFI). In F2M, Inc., the ASBCA found that the Christian doctrine did not requite the incorpo­ration of the Protest After Award clause into a N AFI contract because that clause did not meet any of the Christian doctrine criteria."

     First, the board stated that no specific statu­tory authority required the insertion of the clause into a NAFI contract. Second, the board found that the clause did not constitute a deeply ingrained procurement policy in the context of a NAFI procurement. More impor­tant, however, the board noted that the court in Christian had held that contracts of conven­tional NAFis which "do not bind appropriated funds, do not create a debt of the United States, and may not be vindicated in this court." Such NAFis were not included in, or subject to, procurement regulations.

     An unresolved issue is whether the Christian doctrine applies to subcontracts where the statute or procurement regulations mandates that a clause be flowed down to sub­contractors." In light of the fact that there are several FAR clauses that must be flowed down to subcontracts, it is surprising that this matter has not been addressed by the courts or boards." In one decision, the government argued that because the DOD clause on rights in technical data was required to be flowed down to the subcontractor, that clause was binding on the subcontractor under the Christian doctrine." The court observed that "the government asks us to render a decision of first impression."'° Regrettably, the court held that the appeal could be resolved without hav­ing to decide the issue involving the Christian doctrine.

     There are numerous clauses that are not mandated by either law or procurement regu­lation to be flowed down to a subcontractor; however, it would be prudent for a prime con­tractor to flow many of the clauses into their subcontracts. For example, the failure to flow down a Termination for Convenience clause could make the prime contractor liable for anticipatory profits if the government termi­nates the contract for convenience.61 If no statutory or regulatory mandate exists for the prime contractor to flow down a clause, it is highly unlikely that a court or a board would use the Christian doctrine to insert the clause into the subcontract."

Reverse Christian

     In addition to incorporating a clause into a contract as a matter of law pursuant to the Christian doctrine, the courts and boards also will remove from a contract a clause that is inconsistent with law or regulation. 63 In Charles Beseler Company, the board denied the appeal of a CO's decision rejecting two value engineering change proposals. The board found theASPR's prohibition against the inclu­sion of the Value Engineering clause in a pro­curement for commercial items rendered the clause void and unenforceable. 64 Thus the gov­ernment was not bound by the clauses. The courts and boards, however, infrequently use the Christian doctrine in this manner. In fact, one board, the Post Office Board of Contract Appeals, has stated that the Christian doctrine should not be used to delete a special clause agreed to by the parties from a contract.

FINAL CONSIDERATIONS

     As shown by the preceding discussion, any analysis concerning the Christian doctrine requires the procurement professional to con­sider myriad factors. Some of the questions a procurement professional should consider when confronted with an omitted mandatory clause or a clause that appears to be inconsis­tent with a law or regulation are:

•    Does the statute or procurement regulation have the force and effect of law?­
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