S.J. Amoroso Const. Co., Inc. v. U.S.

• Decision Date: 17 December 1993
• Docket Number: No. 92-5167,92-5167
• Citation: S.J. Amoroso Const. Co., Inc. v. U.S., 12 F.3d 1072 (Fed. Cir. 1993)
• Parties: 39 Cont.Cas.Fed. (CCH) P 76,603 S.J. AMOROSO CONSTRUCTION CO., INC., Plaintiff-Appellant, v. The UNITED STATES, Defendant-Appellee.
• Court: U.S. Court of Appeals — Federal Circuit

Page 1072

12 F.3d 1072

39 Cont.Cas.Fed. (CCH) P 76,603

S.J. AMOROSO CONSTRUCTION CO., INC., Plaintiff-Appellant, v. The UNITED STATES, Defendant-Appellee.

No. 92-5167.

United States Court of Appeals Federal Circuit.

Dec. 17, 1993.

Peter V. Shackter, McCarthy, Flowers & Roberts, of San Francisco, CA, argued for plaintiff-appellant.

John P. Sholar, Atty., Commercial Litigation Branch, Dept. of Justice, of Washington, DC, argued for defendant-appellee. With him on the brief were Stuart M. Gerson, Asst. Atty. Gen., David M. Cohen, Director and Martha H. DeGraff, Asst. Director.

Before ARCHER, MICHEL, and PLAGER, Circuit Judges.

ARCHER, Circuit Judge.

S.J. Amoroso Construction Co., Inc. (Amoroso) appeals the summary judgment of the United States Claims Court, ¹ S.J. Amoroso Construction Co. v. United States, 26 Cl.Ct. 759 (1992), denying Amoroso's claim for additional compensation under a contract with the Army Corps of Engineers (Corps). We affirm.

I.

The facts underlying this appeal are set forth more completely in the opinion of the Claims Court, 26 Cl.Ct. 759, and a familiarity with that opinion is presumed. On August 17, 1987, the Corps and Amoroso entered into a $10,786,274.20 contract for the construction of a commissary building at the Presidio, San Francisco, California. The contract was subject to the requirements of the Buy American Act (BAA), 41 U.S.C. Secs. 10a-10d (1982), and corresponding Federal Acquisition Regulations (FAR), see 48 C.F.R. Secs. 52.225-1 to -14 (1986). Instead of using the FAR clause for construction contracts, 48 C.F.R. Sec. 52.225-5 (hereafter clause 34), however, the contract included the FAR clause pertaining to nonappropriated fund supply contracts, 48 C.F.R. Sec. 52.225-3 (hereafter clause 79). Amoroso does not dispute that the contract in this case is a construction contract.

Amoroso subcontracted with Bostrom-Bergen Metal Products (Bostrom) on September 25, 1987, for structural steel, miscellaneous steel, structural welding, ultrasonic inspection of welds and steel joists. After Bostrom informed Amoroso that it intended to purchase material from a foreign mill, Amoroso notified Bostrom by letter dated December 28, 1987 that its "products are not preassembled, therefore each item that is delivered to the site must be American made." Amoroso enclosed with the letter a Corps compliance memorandum entitled "Updated Guidance on Buy American Act," dated December 9, 1982, which, inter alia, provided:

4. ... construction materials means articles, materials and supplies brought to the site for incorporation in the building or work. Components means articles, materials and supplies directly incorporated in construction materials.

5. Where the construction material has only one part it becomes synonymous with component. A Japanese beam is made of one component, hence the beam is 100% Japanese. Since the beam must be 50+% 'domestic' (or excluded) components, it is rejected.

In January 1988, Amoroso requested that Bostrom confirm in writing its compliance with the BAA. Bostrom responded in a January 21, 1988 letter in which it set out the total cost for foreign steel purchased as $70,882.60 and the total cost of "domestic product" as $101,767.64. The actual cost figures for "domestic product" apparently were adjusted downward because Amoroso thereafter informed the Corps that foreign steel costs were $70,000.00 and that domestic costs were $88,820, comprising the following:

DOMESTIC--LABOR & MATERIAL
                Cost to detail & cut raw material into specified lengths (beams)        $ 8,000
                Cost to install domestic material (connectors, angles, etc.) to the     $52,470
                  beams.  Labor & material
                Cost to apply domestic material (protective coating) to the beams.      $28,350
                  Labor & Material
                                                                                        -------
                                                                                        $88,820
                

The cost figures furnished to the Corps represented the aggregate costs associated with all steel beams to be delivered to the site by Bostrom.

In a letter dated February 10, 1988, the Corps advised Amoroso that each beam must be considered "separately and singularly" in determining compliance with the BAA requirements and that costs of "[o]perations done on the foreign steel, such as drilling and cutting, do not result in its being combined with domestic materials and are not considered to alter the imported component percentage." Bostrom thereafter performed individual computations for the approximately 1,000 steel pieces required under the contract. Only about two-thirds of them were found to comply with the Corps's interpretation of the BAA requirement.

On December 27, 1988, Amoroso submitted a certified claim on behalf of Bostrom to the Contracting Officer (CO), asserting that it was proper to consider the entire group of steel pieces for determining compliance with the BAA, and that the Corps incorrectly required each piece of steel delivered to the construction site to comply with the BAA. Amoroso sought $363,250.00 for the costs incurred in testing the steel pieces and replacing the ones that under the Corps's interpretation did not satisfy the BAA requirements. The CO denied Amoroso's claim in a final decision issued November 21, 1990. The Claims Court affirmed the CO's final decision by granting the government's motion for summary judgment and denying the cross-motion of Amoroso. This appeal followed.

II.

A. Amoroso argues that the Claims Court erred in construing the contract to include by operation of law clause 34 (the BAA clause required by FAR Sec. 52.225-5 to be used in construction contracts) in lieu of clause 79. It contends that there is no strong federal procurement policy that requires clause 34 to be used. Amoroso also argues that even if clause 34, rather than clause 79, is held applicable, it should nonetheless be entitled to aggregate the costs of the steel beams delivered to the construction site in determining compliance with the BAA. Finally, Amoroso contends that the Claims Court erred in holding that cost of labor and transportation to the site cannot be included in the domestic costs of the steel beams in measuring compliance with the BAA. ²

B. The Claims Court construed the contract to include clause 34 for construction contracts under the authority of G.L. Christian & Associates v. United States, 312 F.2d 418, aff'd on reh'g, 320 F.2d 345, 160 Ct.Cl. 58 (1963). Under the so-called Christian doctrine, a mandatory contract clause that expresses a significant or deeply ingrained strand of public procurement policy is considered to be included in a contract by operation of law. General Eng'g & Mach. Works v. O'Keefe, 991 F.2d 775, 779 (Fed.Cir.1993); G.L. Christian, 312 F.2d at 424, 427; see also SCM Corp. v. United States, 645 F.2d 893, 903-04, 227 Ct.Cl. 12 (1981); Chris Berg, Inc. v. United States, 426 F.2d 314, 317, 192 Ct.Cl. 176 (1970).

As an initial matter, Amoroso contends that the Christian case is inapplicable because in that case a clause was inadvertently omitted whereas in this case clause 79 was intentionally substituted for clause 34. ³ This distinction, as the Claims Court held, is irrelevant. Application of the Christian doctrine turns not on whether the clause was intentionally or inadvertently omitted, but on whether procurement policies are being "avoided or evaded (deliberately or negligently) by lesser officials." G.L. Christian & Assoc., 320 F.2d at 351. The Christian doctrine "guard[s] the dominant legislative policy against ad hoc encroachment or dispensation by the executive" and prevents "hobbl[ing] the very policies which the appointed rule-makers consider significant enough to call for ... mandatory regulation." Id.; see also General Eng'g, 991 F.2d at 779. Moreover, the Christian doctrine echoes Supreme Court law that the United States is neither bound nor estopped by its agents who act beyond their authority or contrary to statute and regulations. See Federal Crop Ins. Corp. v. Merrill, 332 U.S. 380, 384, 68 S.Ct. 1, 3, 92 L.Ed. 10 (1947); see also Yosemite Park & Curry Co. v. United States, 582 F.2d 552, 558, 217 Ct.Cl. 360 (1978); Porter v. United States, 496 F.2d 583, 590, 204 Ct.Cl. 355 (1974).

Amoroso's principal argument is that there is no significant or deeply ingrained strand of public procurement policy requiring the inclusion of the correct BAA clause--clause 34 rather than clause 79--in this contract. We disagree. ⁴ The BAA, first enacted in 1933, has long required in express terms that every construction contract for public buildings and works "shall contain a provision that in the performance of the work" only American materials will be used. 41 U.S.C. Sec. 10b. Section 10b reads in pertinent part:

(a) Every contract for the construction, alteration, or repair of any public building or public work in the United States growing out of an appropriation heretofore made or hereafter to be made shall contain a provision that in the performance of the work the contractor, subcontractors, material men, or suppliers, shall use only such unmanufactured articles, materials, and supplies as have been mined or produced in the United States, and only such manufactured articles, materials, and supplies as have been manufactured in the United States substantially all from articles, materials, or supplies mined, produced, or manufactured, as the case may be, in the United States except as provided in section 10a of this title: Provided, however, That if the head of the department or independent establishment making the contract shall find that in respect to some particular articles, materials, or supplies it is impracticable to make such requirement or that it would unreasonably increase the cost, an exception shall be noted in the specifications as to that particular article, material, or supply, and a public record made of the findings which justified the exception....