Report of the Commission on Government ... - Bayhdolecentral

22
Small Claims Boards
Recommendation 4. Establish a regional
small claims boards system to resolve disputes
involving $25,000 or less.
Because our recommendations concerning <strong>the</strong>
agency boards <strong>of</strong> contract appeals would not
alleviate <strong>the</strong> problem <strong>of</strong> processing small
claims, we recommend establishment <strong>of</strong> a system
<strong>of</strong> small claims boards <strong>of</strong> contract appeals
(SCBCA) as a mechanism to provide a
fast, relatively informal forum for <strong>the</strong> adjudication
<strong>of</strong> claims <strong>of</strong> $25,000 or less."
The SCBCA system would be under central
administrative control and located in geographically
dispersed cities according to caseload
demands. A contractor would have <strong>the</strong>
option <strong>of</strong> taking a dispute involving $25,000 or
less to an SCBCA. There would be no judicial
review <strong>of</strong> an SCBCA decision, but a contractor
could receive a new (de novo) trial in court
after an adverse SCBCA decision if it desired.
A decision adverse to <strong>the</strong> Government would
be final, except in cases <strong>of</strong> fraud.
The SCBCA system would operate under informal,
accelerated procedures, and <strong>the</strong> agency
boards <strong>of</strong> contract appeals would no longer
have an optional accelerated procedure. The
natural tendency for any quasi-judicial administrative
board is to become increasingly formal
and cumbersome, as have <strong>the</strong> agency
boards in recent years. In <strong>the</strong> case <strong>of</strong> <strong>the</strong>
SCBCA system, <strong>the</strong> lack <strong>of</strong> pressure to build a
record due to <strong>the</strong> de novo judicial review will
subdue <strong>the</strong> tendency to become more formal.
However, <strong>the</strong> system should have appropriate
supervision and control to ensure that it remains
expeditious and informal.
We consider $25,000 an appropriate ceiling
for <strong>the</strong> SCBCA's jurisdictional limit. Based on
data developed in our study, 63 percent <strong>of</strong> <strong>the</strong>
present appeals handled by agency boards
would be eligible for <strong>the</strong> SCBCA procedure."
The SCBCA system could be independent, or
could operate as an arm <strong>of</strong> an agency board, or
3l Bills to establish regional small claims divisions <strong>of</strong> exiattng
boards were introduced in Congress by Senator McIntyre (8. 3616)
and Rep. Conte (H.R. 15045) in May 1972.. Apart rrom <strong>the</strong> faet that
<strong>the</strong>ir small claims boards would be divisions <strong>of</strong> existing boards, <strong>the</strong>se
bills differ from our recommendations in that '<strong>the</strong>y make no provisions
for an option <strong>of</strong> a due process hearing or de novo judicial
review, and propose a higher jul'isdictional limit.
•, See table 2, 8upra.
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Part G
even <strong>the</strong> Court <strong>of</strong> Claims. However, <strong>the</strong> operation
<strong>of</strong> <strong>the</strong> SCBCA system should be as autonomous
as possible from any parent board or
court, since it is important that <strong>the</strong> SCBCAs
establish <strong>the</strong>ir own tradition, organization,
and procedures that are distinct and highly
visible. If <strong>the</strong> SCBCAs were closely tied to
<strong>the</strong> agency boards or courts, <strong>the</strong>y would appear
to be merely a second-class version <strong>of</strong> <strong>the</strong> parent
forum, and like <strong>the</strong> present accelerated procedures,
<strong>the</strong>y might not be used. More important,
<strong>the</strong> members <strong>of</strong> <strong>the</strong> SCBCAs must develop a
particular expertise in handling small claims
rapidly and fairly, with a minimum <strong>of</strong> "due
process" procedures. This will require a firm
approach with litigants who want to overjudicialize
<strong>the</strong>ir appeals.
Finally, <strong>the</strong> SCBCA system should be staffed
with board members <strong>of</strong> a grade and caliber
equal to <strong>the</strong> members <strong>of</strong> <strong>the</strong> agency boards.
All Disputes Power
Recommendation 5. Empower contracting
agencies to settle and pay, and administrative
forums to decide, all claims or disputes
arising under or growing out <strong>of</strong> or in connection
with <strong>the</strong> administration or performance
<strong>of</strong> contracts entered into by <strong>the</strong>
United States.
We can find no valid reason for <strong>the</strong> distinction
between disputes "under <strong>the</strong> contract,"
that procuring agencies may settle and pay,
and disputes in "breach <strong>of</strong> contract," that <strong>the</strong>y
may not.
The irony in <strong>the</strong> present situation is that,
while <strong>the</strong> procuring agencies are not supposed
to have <strong>the</strong> power to decide or settle breach <strong>of</strong>
contract disputes, that is, disputes not based
on a contract clause conveying board jurisdiction,
<strong>the</strong>y may in effect gain this power merely
by placing a clause in <strong>the</strong> contract providing
an administrative remedy for <strong>the</strong> particular
dispute." This transforms <strong>the</strong> dispute into one
administratively cognizable under <strong>the</strong> contract.
The distinction between disputes arising under
<strong>the</strong> contract and breach <strong>of</strong> contract disputes
is not logical or useful, since it is based on <strong>the</strong>
.,..Shedd, Administrative Authority to Settle Cla/lm3 for Breach <strong>of</strong>
Government ContractB, 27 Geo. Wash. L. Rev. 481, 517 (1959) .