George Stewart, III | Husch Blackwell | September 16, 2019
Under the Christian Doctrine, prime contractors face the risk of having a court or a board of contract appeals read a clause into their contracts, even if it was omitted from the contract that they signed. In this entry we discuss whether the Christian Doctrine applies to subcontractors.
The Christian Doctrine is almost certainly inapplicable to subcontractors. For the reasons why, consider the decision in Energy Labs, Inc. v. Edwards Engineering, Inc., (N.D. Ill. June 2, 2015). A subcontractor contracted to manufacture and deliver HVAC systems for the Chicago Transit Authority. In its own contract, the prime contractor certified that the HVAC system would comply with the Buy America Act. But the prime contractor failed to flow the requirement down to the HVAC manufacturer, which planned to manufacture the units in Mexico. After learning that the plan to manufacture the units in Mexico would not meet the Buy America requirement, the prime contractor canceled the order and purchased the units from another manufacturer.
The original manufacturer sued for breach of contract. In its motion to dismiss, the prime contractor made two arguments. The subcontract was “illegal” because it omitted the Buy America requirement. Or it was legal only because the Christian Doctrine meant that the Buy America requirement was read into the subcontract by operation of law. The court rejected both arguments. There was nothing “illegal” about the prime’s failure to include a Buy America requirement in the subcontract. And there was no basis to read the requirement into the subcontract through the Christian Doctrine. “The Christian doctrine . . . was intended to apply to contracts between the federal government and government contractors, not to subcontracts.”
This result is consistent with our experience.
Another court addressed this topic tangentially, but did not offer any firm conclusions as to whether the Christian Doctrine applies to subcontractors. In UPMC Braddock v. Harris, 934 F. Supp. 2d 238, 258 (D.D.C. 2013), the District Court for the District of Columbia considered whether Department of Labor regulations applicable to both “contractors” and “subcontractors” extend to hospitals that provide medical services and supplies to federal employees. In seeking to avoid the requirement, the hospitals argued that they were not subcontractors at all. Even if they were, they asserted that the Christian Doctrine would not allow DOL to enforce regulatory requirements that had been omitted from their contracts because the Christian Doctrine did not extend to subcontracts. In the court’s view, this argument missed the point. The hospitals provided services that would make them subcontractors governed by regulatory provisions that extend to subcontractors.
The decision in UPMC Braddock is not reliable authority for the argument that the Christian Doctrine extends to subcontractors. First, the district court’s decision was vacated while the appeal was pending. Congress passed legislation conclusively rejecting DOL’s argument that hospitals would be considered subcontractors. [Read more about this litigation here.] Second, the decision does not hold that the Christian Doctrine offers a basis to incorporate a contract clause into a subcontract by operation of law. Rather, the decision holds that a party found to be a subcontractor is governed by regulations that are themselves explicitly applicable to subcontractors.
Prime contractors and subcontractors at every tier pay careful attention to flowdown requirements incorporating applicable federal policies. They know that their respective rights and duties must be set forth in a contract that won’t be supplemented or revised during litigation. For good reason. The Christian Doctrine is not intended to protect the prime contractor or the subcontractor. It is intended to protect the government. G.L. Christian & Assocs. v. United States, 320 F.2d 345, 351 (Ct. Cl. 1963).