United States v. Carlo Bianchi & Co.

Background

A contractor challenged a contracting agency’s adverse decision in litigation before the United States Court of Claims. The dispute grew out of a question under the contract’s “disputes” clause, which governs how disagreements over contract performance are resolved. The Court of Claims had allowed the contractor to present new evidence and hear the matter anew instead of resting only on what the agency had compiled in its administrative record, and the Supreme Court agreed to review that approach.

Reasoning

The core question was whether the Court of Claims may receive evidence beyond the record made before the contracting agency. The Supreme Court reversed the Court of Claims and held that, except where fraud is alleged, the Court of Claims may not consider evidence outside the agency’s administrative record. The Court said that both the language of the Wunderlich Act — a federal law governing the finality of contracting-agency decisions — and the Act’s legislative history require reliance on the administrative record. The Supreme Court vacated the prior judgment and sent the case back to the Court of Claims to decide, based only on the agency record, whether the agency’s adverse decision is vulnerable under the Wunderlich Act.

Real world impact

The ruling narrows the ways contractors can prove their claims in Court of Claims cases: judges will generally examine the agency’s existing record instead of taking new evidence. Only allegations of fraud will justify looking beyond that record. Because the case was returned to the lower court, the contractor’s ultimate outcome will depend on what the administrative record shows.