G.L. Christian & Associates v. United States

In G.L. Christian & Associates v. United States, 312 F.2d 418, 160 Ct.Cl. 1, reh'g denied, 320 F.2d 345, 160 Ct.Cl. 58, cert. denied, 375 U.S. 954, 84 S.Ct. 444, 11 L.Ed.2d 314 (1963), the Court of Claims established what has become known as the Christian Doctrine. In Christian, a construction contract was terminated for the convenience of the government even though the contract lacked a termination clause. 312 F.2d at 424. The contractor sued the government alleging breach of contract. The court denied the contractor's claim noting that the termination clause was required under federal procurement regulations. Id. at 427. As the court explained: The Armed Services Procurement Regulations were issued under statutory authority, those regulations, including Section 8.703, had the force and effect of law.... If they applied here, there was a legal requirement that the plaintiff's contract contain the standard termination clause and the contract must be read as if it did. Id. at 424. Accordingly, the court incorporated the missing termination clause into the contract. "We believe that it is both fitting and legally sound to read the termination article required by the Procurement Regulations as necessarily applicable to the present contract and therefore as incorporated into it by operation of law." Id. at 427. Thus, 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. However, the Christian Doctrine does not permit the automatic incorporation of every required contract clause. As the Christian court stated: "The termination clause limits profit to work actually done, and prohibits the recovery of anticipated but unearned profits. That limitation is a deeply ingrained strand of public procurement policy. Regularly since World War I, it has been a major government principle, in times of stress or increased military procurement, to provide for the cancellation of defense contracts when they are no longer needed, as well as for the reimbursement of costs actually incurred before cancellation, plus a reasonable profit on that work--but not to allow anticipated profits." Id. at 426. In denying the contractor's motion for rehearing and reargument, the Court of Claims added: To accept plaintiff's plea that a regulation is powerless to incorporate a provision into a new contract would be to hobble the very policies which the appointed rule makers consider significant enough to call for mandatory regulation. Obligatory Congressional enactments are held to govern federal contracts because there is a need to guard the dominant legislative policy against ad hoc encroachment or dispensation by the executive. There is a comparable need to protect the significant policies of superior administrators from sapping by subordinates. Christian, 320 F.2d at 350-51.