Gregory Timber Resources, Inc. v. The United States

855 F.2d 841, 35 Cont. Cas. Fed. 75,545, 1988 U.S. App. LEXIS 11736, 1988 WL 88493
CourtCourt of Appeals for the Federal Circuit
DecidedAugust 29, 1988
DocketAppeal 87-1598
StatusPublished
Cited by4 cases

This text of 855 F.2d 841 (Gregory Timber Resources, Inc. v. The United States) is published on Counsel Stack Legal Research, covering Court of Appeals for the Federal Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Gregory Timber Resources, Inc. v. The United States, 855 F.2d 841, 35 Cont. Cas. Fed. 75,545, 1988 U.S. App. LEXIS 11736, 1988 WL 88493 (Fed. Cir. 1988).

Opinions

[842]*842FRIEDMAN, Circuit Judge.

This is an appeal from a decision of the Department of Agriculture Board of Contract Appeals (Board), Nos. 84-319-1 and 84-320-1, upholding an award of damages against the appellant Gregory Timber Resources, Inc. (Gregory Timber) for default on two timber contracts. Gregory Timber Resources, Inc., 87-3 B.C.A. (CCH) ¶ 20,086, at 101,681 (AGBCA, August 26, 1987). The appellant challenges the award on various grounds. It also challenges the constitutionality of the provision of the Federal Courts Improvement Act of 1982 (Courts Improvement Act), 28 U.S.C. § 1491(a)(2) (1982), that substituted the United States Claims Court, an Article I court, for the United States Court of Claims, an Article III court, as the forum in which a contractor may obtain a trial de novo of a contracting officer’s decision.

We hold that the appellant cannot maintain its constitutional attack because it elected to challenge the contracting officer’s decision before the Board rather than before the Claims Court. We affirm the Board on the merits of the contract claims.

I

Pursuant to the National Forest Management Act of 1976, 16 U.S.C. § 472a (1982), the Forest Service sells timber contracts to private parties to harvest timber from government lands. At auctions in February and March 1982, Gregory Timber, as the high bidder, was awarded two contracts — Bonk # 2 and East Flat Creek III.

These timber sale contracts were resales of previous contracts, purchased but not performed, by the Robert Dollar Company. Gregory Timber purchased the physical assets of the Dollar company and agreed to indemnify the company for any losses it might incur when the government resold the contracts. Gregory Timber’s bids on the contracts were high enough to eliminate any potential liability to the Robert Dollar Company, and were significantly higher than the other bidders and the Forest Service’s stated minimum bids.

The contracts, which required Gregory Timber to cut, remove and pay for the timber by November 30, 1983, were awarded on April 21, 1982. Since the normal operating season for harvesting timber in that area was from June 1 through October 31, this schedule allowed Gregory Timber two operating seasons to perform the contracts. Gregory Timber submitted a plan stating that logging on the two contracts would begin September 1, 1983, during the second operating season.

Gregory Timber also had several other timber contracts with the Forest Service. In October 1981, the Forest Service awarded to it the North Area Salvage contract, which required completion by November 30, 1983. In March 1983, the appellant received the Locket # 2 contract, with completion set for December 1985.

In October 1983, approximately two months before the scheduled completion date for the Bonk # 2 and East Flat Creek III contracts, Gregory Timber, which had not begun performance, requested that the contracts be extended or adjusted. The contracting officer denied the request. When the contracts expired on November 30, 1983, Gregory Timber had cut no timber under them.

The Forest Service resold the contracts for less than Gregory Timber’s contract prices. The Forest Service then assessed damages for default against Gregory Timber, measured by the difference between the contract price and the resale price.

Gregory Timber appealed the contracting officer’s decision to the Board which, except for a relatively minor modification, upheld the contracting officer.

The Board rejected Gregory Timber’s constitutional challenge to the Board proceedings. Gregory Timber contended that the provision in the Courts Improvement Act that substituted the Claims Court, an Article I court, for the former Court of Claims, an Article III tribunal, as the forum in which a contractor could obtain de novo review of a contracting officer’s decision, unconstitutionally denied it the right to an adjudication of its claim by an Article III court. The Board held that because disputes between government contractors [843]*843and the government involve public rights, the resolution of such disputes may be assigned to non-Article III tribunals.

On the merits, the Board rejected Gregory Timber’s contentions that it should have been given an extension of time for performance of the contracts because (1) the alleged labor dispute that Gregory Timber asserted was responsible for its failure to perform was not an event beyond its control which, under the contract, was a condition for granting an extension; and (2) its performance of other contracts prevented it from performing the Bonk # 2 and East Flat Creek III contracts. The Board also held that Gregory Timber had not met the conditions of other provisions in the contracts that would have warranted an extension. These rulings are discussed in detail in part III below.

II

Prior to the Courts Improvement Act, a government contractor who wished to challenge a decision of a contracting officer had two options under the Contract Disputes Act of 1978, for obtaining a de novo determination of his claim. (1) He could appeal to a Board of Contract Appeals and then obtain judicial review of the Board’s decision in the Court of Claims, or (2) he could file suit directly in the Court of Claims, which (through its Trial Division) would try the case. The Courts Improvement Act combined the Court of Customs and Patent Appeals and the appellate functions of the Court of Claims in the new Court of Appeals for the Federal Circuit. It also created a new Article I court, the United States Claims Court, to exercise the trial jurisdiction the Court of Claims previously had.

The effect of this structural change was to eliminate a contractor’s earlier right to a trial de novo before an Article III court, the Court of Claims. Even under the prior procedure, however, a contractor who elected to appeal to a Board of Contract Appeals waived the right to a trial de novo before a trial judge of the Article III court.

Gregory Timber contends that, at least where the government is seeking recovery from the contractor, the contractor is entitled to a de novo determination of that claim by an Article III court, and that the present statutory system, under which a contractor cannot obtain such Article III review, is unconstitutional. We do not reach that question, however, because we conclude that Gregory Timber cannot raise it in the posture of this case.

When the contracting officer assessed damages against Gregory Timber for its breach of the two contracts, Gregory Timber had the option of challenging that ruling before either the Board or the Claims Court. It elected to proceed before the Board. The effect of this election was to waive, and thus eliminate its right to, a trial de novo before the Claims Court. It now argues that the procedure it elected to follow is unconstitutional because, if it had followed the alternative procedure, that procedure would not have provided it with the trial by an Article III court to which it asserts it would have been entitled.

If Gregory Timber wanted to challenge the constitutionality of the adjudication of government contract cases by the Article I Claims Court, the proper procedure for it to have followed was to file suit in that court.

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Gregory Timber Resources, Inc. v. The United States
855 F.2d 841 (Federal Circuit, 1988)

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855 F.2d 841, 35 Cont. Cas. Fed. 75,545, 1988 U.S. App. LEXIS 11736, 1988 WL 88493, Counsel Stack Legal Research, https://law.counselstack.com/opinion/gregory-timber-resources-inc-v-the-united-states-cafc-1988.