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Performance and Payment Bonds

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I have been advised that an emergency construction contract for forest debris removal was awarded (>$150K) and the contractor began performance without providing bonds IAW the Miller Act. The contract did not contain a requirement to provide bonding and the work is currently in progress.

The Miller Act requires that payment and performance be submitted before receiving a notice to proceed with the work or being allowed to start work.

I believe this could be corrected by modifying the contract bi-laterally to require bonding IAW the Miller Act and allow the contractor to submit a payment request for the actual cost of the bonds.

Question: Can the government require the contractor to provide bonding after the fact?

Question: Is the Miller Act subject to the "Christian Doctrine"?

Comments are appreciated.

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...an emergency construction contract for forest debris removal...

Do you really have a construction contract? Forest debris removal doesn't sound like a construction contract. I tend to remember, when I was with the Forest Service, treating landslide removal, for example, as a service using the Service Contract Act, not construction using the Davis-Bacon Act.

But if it is a construction contract...

I don't think the Christian Doctrine is relevant to you. The doctrine is used by courts, where a contract purposefully or accidentally doesn't have a clause where there is a "significant or deeply ingrained public procurement policy supporting incorporation of the clause" by the court. If you are the contracting officer, and if you recognize that your contract doesn't have a required clause, you can fix it by contract modification without reference to the Christian Doctrine. Do it bilaterally if you can, or unilaterally if you must. Or, terminate the contract. Now.

You might even suspend performance of the work under the contract's Suspension of Work clause (does the contract have that clause?) pending resolution of this matter. As long as the period of suspension is reasonable, there will be no adjustment in contract price. Equitable adjustments are only made for suspensions of an unreasonable period of time.

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I have been advised that an emergency construction contract for forest debris removal was awarded (>$150K) and the contractor began performance without providing bonds IAW the Miller Act. The contract did not contain a requirement to provide bonding and the work is currently in progress.

The Miller Act requires that payment and performance be submitted before receiving a notice to proceed with the work or being allowed to start work.

I believe this could be corrected by modifying the contract bi-laterally to require bonding IAW the Miller Act and allow the contractor to submit a payment request for the actual cost of the bonds.

Question: Can the government require the contractor to provide bonding after the fact?

Question: Is the Miller Act subject to the "Christian Doctrine"?

Comments are appreciated.

The requirements of the Miller Act have not been read into a contract pursuant to the Christian Doctrine. The name of the case is the longest I've ever seen:

Faerber Electric Co., Inc. an Illinois corporation, and Great Lakes Construction Co., an Illinois corporation v. Atlanta Tri-Com, Inc., a Georgia corporation, Contractors Surety & Fidelity Co., Ltd, a Nevada corporation, and Raytheon Service Company, a Delaware corporation; United States of America for the Use and Benefit of Faerber Electric Company, Inc., an Illinois corporation, and Great Lakes Construction Co., an Illinois corporation v. Raytheon Service Company, a Delaware corporation, U.S. District Court, N.D. Illinois, 38 CCF ¶76,428, (May 1, 1992)

Here's a summary of the court's holding:

A construction contract that did not expressly require the prime contractor to obtain Miller Act bonds could not be construed to contain such an obligation by operation of the Miller Act requirement for bonds, because the Miller Act is not self-implementing. Like the Davis-Bacon Act, the Miller Act’s provisions concerning which contracts are covered contain undefined terms. In the absence of an express contractual term or, at least, an express bidding requirement, there was no promise to provide a bond. Consequently, a second-tier subcontractor had no rights against the prime contractor as third-party beneficiary.

That answers your second question. As to your first question, I don't see how the Government can unilaterally enforce the requirement. I think your proposed approach is good.

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Guest Vern Edwards

First, I agree with ji20874 that the removal of forest debris does not sound like construction.

Assuming, however, that it is construction, I don't think Don's citation of Faerber Electric Co., an unreported decision of a U.S. district court, is reliable with respect to the applicability of the Christian Doctrine to the Miller Act clause. All the same, I do not think that the Christian Doctrine applies to that clause.

The question is not "Is the Miller Act subject to the Christian Doctrine." The Miller Act is a statute, and the Christian Doctrine does not provide for the incorporation of statutes into contracts. The question is whether the clause at FAR 52.228-15, "Performance and Payment Bonds--Construction (OCT 2010)", which implements the Miller Act, can be incorporated into the contract pursuant to the Christian Doctrine. I think that the answer is no.

According to General Engineering and Machine Works v. O'Keefe, 992 F.2d 775 (Fed. Cir. 1993): "[T]he Christian Doctrine applies to mandatory contract clauses which express a significant or deeply ingrained strand of public procurement policy."

See: "The Christian Doctrine: What Is The Rule?", The Nash & Cibinic Report (Sept. 1996).

According to FAR 28.102-1(a) and 28.102-3(a), FAR 52.228-15 is not a mandatory clause, because a CO can revise paragraphs ( b )(1) and ( b )(2) and can waive its inclusion in some circumstances. See K.L. Conwell Corp., EBCA No. 399-10-87, 88-2 BCA ¶ 20712:

Under Christian, a clause whose inclusion in a contract is mandatorily required by a statute or regulation is considered to be included by operation of law, even if it has been physically omitted therefrom. The doctrine does not operate quite as mechanically or as comprehensively as Appellant contends… It does not apply to the incorporation of a clause whose applicability is based on the exercise of judgment or discretion. See Muncie Gear Works, Inc. ASBCA No. 16153, 72-1 BCA ¶ 9429.

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This sounds like a commercial service contract to me. Does your contract contain FAR Part 36 clauses? Or does it contain FAR 52.212-4?

If this is a commercial contract, bonding is generally not something that you should be asking for or requiring.

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