United States v. Anthony Grace & Sons, Inc.

PETITIONER: United States
RESPONDENT: Anthony Grace & Sons, Inc.
LOCATION: General Petroleum Corporation

DECIDED BY: Warren Court (1965-1967)

CITATION: 384 US 424 (1966)
ARGUED: Mar 23, 1966
DECIDED: Jun 06, 1966

Facts of the case


Media for United States v. Anthony Grace & Sons, Inc.

Audio Transcription for Oral Argument - March 23, 1966 in United States v. Anthony Grace & Sons, Inc.

Earl Warren:

Number 439, United States, Petitioner versus Anthony Grace & Sons, Incorporated.

Mr. Claiborne.

Louis F. Claiborne:

Mr. Chief Justice, and may it please the Court.

This and case that follows come here from the Court of Claims.

They both involve an application of this Court's decision three terms ago in Bianchi versus United States.

In that case, the basic thrust of that decision was that the determination of disputes arising out of government contract is primarily for the administrative boards from the various procuring agencies subject only to the same limited judicial review as is appropriate in other cases.

The Court of Claims, it seems to us, has been knowing a way at that rule ever since it was enacted and it is for that reason that we ask the Court to take these cases.

The precise issue in my case is a very narrow one.

It is whether factual issues arising under a government procurement contract or a construction contract in this case which concededly should have been resolved administratively, maybe decided in the first instance by the Court of Claims merely because the administrative board believing that the appeal to it was untimely, did not reach those issues.

The case arises under the following facts.

Back in August of 1958, the Air Force issued invitation for bids to construct military housing in air force base in the Maine.

The successful bidder was the respondent, Anthony Grace & Sons.

Under the -- they were issued a letter of acceptability which is the formal way in which the agreement between the parties was made.

Under the agreement then entered into, it was provided that wage determinations would be made by the Secretary of Labor and this construction was to be governed by the Davis-Becon Act because the wage determination though they're included in the documents might not be up to date, it was provided that new determinations would be sought by the contractor from the Secretary of Labor and that if there was a substantial variance in the new wage determination, an appropriate adjustment in the contract price would be made.

It's also provided that the contractor make a deposit of $25,000 together with the [Inaudible] which respondent did and that, he should be ready to set a closing date that is to enter into the formal construction contract at a time specified.

It was further provided pursuant to what we label a disputes clause that in the event, the contractor defaulted in his obligations and failed to close, the government would be entitled to retain the $25,000 deposit and likewise recover actual damages over and above that amount he paid, and that this matter should be determined in the first instance by the contracting officer and then by the administrative board of the agency involved, in this case the Air Force which jointly with the other services has what is known as the Armed Services Board of Contract Appeals.

After the new wage determinations were made by the Secretary of Labor which did include an increase in wage rates for some of the construction --


Louis F. Claiborne:

Labor involved in a construction.

It was raised to the position that there was not only a change in rates, but also a change in the area to which these higher rates were applicable.

That disagreement was aired between the parties in correspondence to some time.

Ultimately, the Air Force contracting officer took the position that there had not been such a variance in the area to which the new higher rates were applicable and that accordingly the contractor was not entitled to an increase in the contract price on that account.

He therefore demanded Grace that it comply with the closing date and enter into the contract.

Grace did not do so whereupon the contracting officer notified Grace that the agreement was canceled.

20 days later, the contracting officer in response to a letter from Grace asking for a return of its deposit, informed Grace that the deposit was forfeit since the failure -- since the default was to be laid at the door of Grace.

At this point, Grace appealed to the Board of Contract Appeals, seeking a return of its deposit.

The Board, however, viewed the appeal as untimely.

We needn't discuss the reasons for that decision because it is no longer here.

Upon the ruling of the Board of Contract Appeals, Grace then sued out its claim in the Court of Claims.

The Court of Claims held that the appeal was timely, that the Board should have had the case on merits, that the government's motion for summary judgment predicated on the theory that in no event was the default justified even if the adjustment in the bid price might have been erroneously denied, was at least tentatively denied and the Court of Claims remanded the case to its trial commissioner, for trail.