Effective Date of the Contract Disputes Act of 1978 ( 1979 )

May 21, 1979
79-33 MEMORANDUM OPINION FOR THE
CHAIRMAN, BOARD OF CONTRACT
APPEALS, GENERAL SERVICES
ADMINISTRATION
Contract Disputes Act (41 U.S.C. § 601)—
Effective Date of Act
This responds to your request for our opinion regarding the effective
date o f the C ontract Disputes Act o f 1978, Pub. L. No. 95-563, 41 U.S.C.
§ 601 et seq. Based on the language o f the Act, its structure and legislative
history, we conclude that the effective date is March 1, 1979.
Section 16 o f the Act, 41 U .S.C . § 601 note, provides:
This Act shall apply to contracts entered into one hundred
twenty days after the date o f enactm ent. Notwithstanding any
provision in a contract made before the effective date o f this Act,
the contractor may elect to proceed under this Act with respect to
any claim pending then before the contracting officer or initiated
thereafter.
Since the section is entitled “ Effective Date o f the A ct” and states that it
applies to contracts entered into “ one hundred twenty days after the date
o f enactm ent,” it is clear that the effective date is distinct from the date of
enactm ent—November 1, 1978.
This is supported by the structure and legislative history o f the statute.'
The Contract Disputes Act was enacted to bring order and uniformity to
the disparate dispute resolution procedures that had developed in Govern­
ment agencies. See S. Rept. 1118, 95th Cong., 2d sess. 2-4 (1978). An ef­
fective date 4 m onths after the date o f enactm ent provides time to alter ex­
isting procedures and to issue the regulations required by the Act. As
stated in the Senate report: “ Section 16 provides that the effective date of
1 The Supreme C ourt has m ade clear that analysis o f legislative history is proper for
clarification o f congressional intent even where the language o f the statute appears unam ­
biguous. Train v. Colorado Pub. Int. Research Croup, 426 U.S. 1, 9-10 (1976).
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the act will be 120 days after the date o f enactm ent. It is expected that the
120 days will be sufficient to manage the changeover from the current
board system to the system o f consolidation as proposed in this act.” S.
Rept., supra, at 35 (emphasis added).
The importance and purpose o f the 120-day period is made clear in § 8
o f the Act, providing for the continued existence or establishment o f an
agency board. As introduced, the bill provided that a contract appeals
board could be established in an executive agency if the head o f the agency
and the Adm inistrator for Federal Procurem ent Policy agreed that the
volume o f contract claims justified a five-member board. The Senate
Governmental Affairs and Judiciary Committees added the requirement
that a workload study be performed to justify establishment o f a board.
The committees also added a subsection 8(i), which required consolidation
of smaller existing boards and the preparation o f workload studies by
larger boards within 120 days from the date o f enactm ent. The Senate
Report explained that this subsection was added
to insure that specific actions will be taken prior to the effective
date o f the act by the agency heads for consolidation o f boards
that do not meet the requirements as identified in section 8(a).
Also, workload studies justifying the existence o f boards pur­
suant to the provisions in section 8(a) will need to be carried out
during this same period. [S. Rept., supra, at 10 (emphasis
added).]
Subsection 8(i) was amended on the floor o f the Senate. 124 C o n g . R e c .
S. 18640-41 (daily ed., Oct. 12, 1978). As enacted, it provides:
Within one hundred and twenty days from [the date o f enact­
ment o f this ActJ, all agency boards, except that o f the Tennessee
Valley Authority, o f three or more full time members shall
develop workload studies for approval by the agency head as
specified in section 8(a)(1). [41 U .S.C . § 607(i).]
The clear purpose o f the 120-day period, which was retained from the
Senate committees’ draft, is to provide sufficient time to carry out
workload studies justifying the establishment or continued existence o f ap­
peals boards. That 120-day provision appears to have been carefully
chosen to coincide with the 120 days provided in § 16 establishing the ef­
fective date o f the Act.
In sum, it is plain that the effective date o f the Contract Disputes Act o f
1978 is March 1, 1979. This general conclusion permits us to answer the
specific questions you have subsequently posed regarding (1) appointm ent
o f members o f agency boards (§ 8(b)(1)), (2) use o f subpoena power (§ 11),
and (3) applicability o f the Act to cases filed before and after March 1,
1979.
Section 8(b)(1) provides: “ Full-time members o f agency boards serving
as such on the effective date o f this Act shall be considered qualified [to be
appointed to agency boards.]” Thus, any person who was a full-time
agency board member on March 1, 1979 is qualified for appointm ent to
boards established under the Act.
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A lthough the effective date o f the Act is March 1, 1979, that date does
not automatically determ ine the legality o f the exercise o f authorities
under the Act for two reasons. First, the effective date o f the Act is keyed
to the date o f the contract: the section establishing the effective date
provides that the Act “ shall apply to contracts entered into one hundred
twenty days after the date o f enactm ent” (emphasis added). This language
is distinct from typical effective-date language such as, “ this Act shall take
effect 120 days from enactm ent.” Second, a contractor may elect to pro­
ceed under the Act on a claim arising out o f a contract entered into before
the effective date o f the Act if the claim was pending before a contracting
officer on or after the effective d ate.2 We thus can foresee four perm uta­
tions regarding the effective date and the applicability o f the Act.
(A) Contract date, pendency o f claim before contracting officer and fil­
ing o f case before appeal board all before March 1, 1979. The Act does not
apply because the contract was entered into prior to the effective date; the
contractor may not elect to proceed under the Act because the claim was
not pending before the contracting officer on or after the effective date.
(B) Contract date and pendency o f claim before contracting officer
before March 1, 1979; case filed with appeal board on March 1, 1979.
Same answer as (A).
(C) Contract date before March 1, 1979; pendency o f claim before con­
tracting officer on or after March 1, 1979 and case filed with appeal board
after March 1, 1979. The Act does not apply unless the contractor elects to
proceed under it.
(D) Contract date after March 1, 1979. The Act applies.
Thus, the Act would not apply to any case filed with an appeal board
before or on M arch 1, 1979, and would also not apply to some cases filed
with an appeal board after March 1, 1979. Accordingly, the powers
established under § 11 o f the Act could not be exercised by an appeal
board prior to M arch 1, 1979. They may be exercised after March 1, 1979
(1) in cases based on contracts entered into after March 1, 1979, or (2) in
cases pending before a contracting officer on or after March 1, 1979,
where the contractor so elects. The contractor may not elect the Act if his
claim was before an appeal board before or on the effective d ate.3
L arry A . H am m ond
D eputy Assistant A ttorney General
Office o f Legal Counsel
1 See; § 16, quoted supra.
’ Cf. S. R ept., supra, at 35: “ It is not intended that upon the effective date o f this act, a
claim currently before an agency board can be switched to a court under this act’s
provisions.”
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