Sharp Electronics Corporation v. Army
707 F.3d 1367
Fed. Cir.2013Background
- Sharp, a federal schedule contractor, sought termination fees after the Army partially exercised an option year on a four-year copier lease under Sharp’s GSA Schedule Contract GS-25F0037M.
- Modifications 11 and 12 shortened Option Year Three; the modifications did not address potential termination claims or PDF payments.
- Sharp filed a CDA claim with the Army CO; Army did not respond or refer the claim to the GSA CO responsible for the schedule contract.
- ASBCA dismissed for lack of jurisdiction, holding FAR 8.406-6 requires the GSA CO to resolve disputes involving interpretation of schedule contract terms.
- The CDA and FAR framework, along with chosen contracting officer authority, led to whether the Army CO or the GSA CO should decide Sharp’s dispute.
- The court ultimately held that FAR 8.406-6 does not authorize an ordering CO to interpret schedule contract provisions; the claim must be referred to the GSA CO for a final decision.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Which CO has jurisdiction for schedule contract interpretation disputes? | Sharp argues Army CO can decide disputes involving order performance and schedule terms. | GSA CO has sole authority to interpret schedule contract terms; ordering CO refers such disputes to GSA CO. | FAR 8.406-6(b) assigns scheduling-contract interpretation to GSA CO; Army CO cannot decide. |
| Does the dispute require interpretation of the schedule contract? | Dispute turns on application of termination provisions to the facts of order and modifications. | Dispute centers on schedule contract terms (PDF) and their applicability, not merely performance. | Yes; interpretation of Sharp’s schedule contract terms governs the dispute, requiring GSA CO decision. |
| Did Army’s failure to refer the claim to GSA CO affect jurisdiction? | There was a deemed denial to appeal to ASBCA; lack of referral should not bar jurisdiction. | Absence of a proper final decision or referral defeats ASBCA jurisdiction. | Referral was required; without it, ASBCA lacked jurisdiction. |
| Can the agency CO still decide if the dispute involves schedule terms only partially? | Agency CO may decide performance-related disputes unless essential schedule-terms interpretation is needed. | Disputes requiring interpretation of schedule terms must go to GSA CO. | Disputes involving interpretation of schedule terms must be referred to GSA CO; agency CO cannot decide. |
| What is the governing default rule for CO jurisdiction in these overlapping contracts? | Majority rule should allow agency CO to decide when the dispute is about order performance. | Bright-line GSA CO/default rule should control interpretation of schedule terms. | The court adopts the bright-line rule that schedule-term interpretations go to GSA CO; agency CO decides predominantly order-performance disputes. |
Key Cases Cited
- Reflectone, Inc. v. Dalton, 60 F.3d 1572 (Fed.Cir. 1995) (final decision prerequisite for Board jurisdiction under the CDA)
- Newport News Shipbuilding & Dry Dock Co. v. Garrett, 6 F.3d 1547 (Fed.Cir. 1993) (uniform, predictable allocation of jurisdiction under CDA/FAR)
- Case, Inc. v. United States, 88 F.3d 1004 (Fed.Cir. 1996) (jurisdictional treatment of disputes under CDA)