Crown Coat Front Co. v. United States

Background

On May 14, 1956, a private contractor agreed to supply canteen covers lined with mildew‑resistant felt. The Government tested and rejected some felt, the contractor accepted a price reduction, and completed delivery on December 14, 1956. The contractor later discovered the nature of the Government’s tests, filed an administrative claim in October 1961 for a refund and delay costs, was denied by the contracting officer, and lost on appeal to the Armed Services Board of Contract Appeals in February 1963. The contractor sued in July 1963, more than six years after finishing the contract, and the lower courts held the suit time‑barred under the six‑year statute.

Reasoning

The central question was when the contractor’s six‑year right to sue against the United States begins: at contract completion or after the final administrative decision required by the contract’s disputes clause. The Court explained that where the contract requires administrative resolution first, the contractor only gains a judicial remedy after that administrative process is complete. Courts then review the administrative record for arbitrariness or lack of substantial evidence rather than retrying the claim. Measuring the limitations period from contract completion could let mandatory administrative proceedings consume the entire six years and unfairly bar suits. For claims properly subject to the disputes clause, the Court held the right to sue accrues when the final administrative decision is rendered. The Court did not decide whether this specific claim was within the disputes clause and remanded that question to the lower court.

Real world impact

Contractors required to exhaust agency appeals will have six years from the final administrative ruling to file suit in court. This prevents long administrative delays from automatically barring judicial review, while leaving unresolved the accrual rule for pure breach claims.