1. There is created the Armed Services Board of Contract Appeals which is hereby designated as the authorized representative of the Secretary of Defense, the Secretary of the Army, the Secretary of the Navy and the Secretary of the Air Force, in hearing, considering and determining as fully and finally as might each of the Secretaries appeals by contractors from decisions of contracting officers or their authorized representatives or other authorities on disputed questions. These appeals may be taken (a) pursuant to the provisions of contracts requiring the decision of appeals by the Secretary of Defense or by a Secretary of a Military Department or their duly authorized representative or board, or (b) pursuant to the provisions of any directive whereby the Secretary of Defense or the Secretary of a Military Department has granted a right of appeal not contained in the contract. The Board shall operate under general policies established or approved by the Assistant Defense Secretary of (Installations and Logistics).

2. Membership of the Board shall consist of qualified attorneys who have been admitted to practice before the highest court of any State or the District of Columbia. There shall be appointed from members of the Board a chairman and two vice-chairmen. Appointment of the chairman and vice-chairman and other members of the Board shall be made jointly by the Assistant Secretary of Defense (I&L) and the Assistant Secretaries of the Military Departments responsible for procurement. The chairman and vice-chairman shall serve in that capacity for a two-year term unless sooner removed or reappointed for an additional term or terms. The Assistant Secretaries will also designate the order in which the two vice-chairmen will act for the chair

man in his absence. In the absence of a vice-chairman, the chairman or acting chairman will designate a member of the Board to serve as a temporary vicechairman.

3. It shall be the duty and obligation of the members of the Armed Services Board of Contract Appeals to decide appeals on the record of the appeal to the best of their knowledge and ability in accordance with applicable contract provisions and in accordance with law and regulation pertinent thereto.

4. The chairman of the Board shall be responsible for establishing appropriate divisions of the Board in such manner as to provide for the most effective and expeditious handling of appeals. He shall be responsible for assigning appeals to the divisions for decision without regard to the Military Department or other procuring agency which entered into the contract involved. A division may consist of one or more members of the Board. A majority of the members of a division shall constitute a quorum for the transaction of the business of the division and the decision of a majority of the division shall constitute the decision of the Board provided that the chairman and two vice-chairmen jointly signify their approval of the decision. If a majority of the members of a division are unable to agree on a decision, or if the chairman or one or more of the vice-chairmen do not signify approval of the decision, determination of the appeal shall be made by the chairman and vice-chairmen. A decision by a majority of those individuals will constitute the decision of the Board. On request of the appellant, an appeal involving $5,000 or less shall be decided under accelerated procedures as provided by the Rules of the Board.

5. When an appeal is taken pursuant to a disputes clause in a contract which limits appeals to disputes concerning questions of fact, the Board may nevertheless in its discretion hear, consider, and decide all questions of law necessary for the complete adjudication of the issue. When in the consideration of an appeal it appears that a claim is involved which is not cognizable under the terms of the contract, the Board may, insofar as the evidence permits, make findings of fact with respect to such a claim without expressing an opinion on the ques tion of liability.

6. When a contract requires the Secretary of Defense or the Secretary of a Militar Department, personally, to render a decisio on the matter in dispute, the Armed Service Board of Contract Appeals, in accordanc with the procedure set forth in paragraph shall make findings and recommendations t the appropriate Secretary with respect thereto.

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7. The Board shall have all powers neces sary and incident to the proper performance of its duties. Subject to the approval of the Assistant Secretary of Defense (I&L) and the

Assistant Secretaries of the Military Departments responsible for procurement, the Board shall adopt its own methods of procedure, and rules and regulations for its conduct and for the preparation and presentation of appeals and issuance of opinions. The Military Departments and other procuring agencies of the Department of Defense shall provide legal personnel to prepare and present the contentions of the departments or agencies in relation to appeals filed with the Board. It shall not be necessary for the Board, unless it otherwise desires, to communicate with more than one trial attorney in each of the departments or agencies concerning the preparation and presentation of appeals and the obtaining of all records deemed by the Board to be pertinent thereto.

8. Any member of the Board or any examiner, designated by the chairman of the Board, shall be authorized to hold hearings, examine witnesses, receive evidence and argument, and report the evidence and argument, to the designated division for consideration and determination of the appeal.

9. The chairman shall be responsible for the internal organization of the Board and for its administration. He shall provide within approved ceilings for the staffing of the Board with nonmember personnel, including hearing examiners, as may be required for the performance of the functions of the Board. The chairman shall appoint a recorder of the Board. Such personnel shall be responsible to and shall function under the direction, supervision and control of the chairman.

10. Financing of the operations of the Board as authorized herein will be provided through the use of the Navy Management Fund in accordance with Department of Defense Regulations Covering the Operation of Management Funds.

11. The chairman of the Board will furnish to the Secretary of Defense and to the Secretaries of the Military Departments by July 31 of each year a report containing an account of the Board's transactions and proceedings for the preceding fiscal year. Within 30 days following the close of a calendar quarter, the chairman shall forward a report of the Board's proceedings for the quarter to the Assistant Secretary of Defense (I&L), the Assistant Secretaries of the Military Departments responsible for procurement, and to the Director of the Defense Supply Agency. Such reports shall disclose the number of appeals received, cases heard, opinions rendered, current reserve of pending matters, and such other information as may be required.

12. The Board shall have a seal bearing the following inscription: "Armed Services Board of Contract Appeals". This seal shall be affixed to all authentications of copies of records and to such other instruments as the Board may determine.

13. All appeals pending before the Board under the "Charter for the Armed Services Board of Contract Appeals", which became

effective on February 1, 1959, shall continue to be subject to the jurisdiction of the Board as established hereunder.

14. This charter will become effective May 1, 1962.

PART II-RULES

PREFACE TO RULES OF THE ARMED SERVICES BOARD OF CONTRACT APPEALS

I. Summary of pertinent charter provisions. The Armed Services Board of Contract Appeals is the authorized representative of the Secretary of Defense, the Secretary of the Army, the Secretary of the Navy, and the Secretary of the Air Force in hearing, considering, and determining as fully and finally as might each of the Secretaries:

(a) Appeals by contractors from decisions of contracting officers or their authorized representatives or other authorities on disputed questions, taken pursuant to the provision of contracts requiring the determination of such appeals by the Secretary of Defense or by a Secretary of a Military Department or their duly authorized representative or board; or

(b) Appeals by contractors taken pursuant to the provisions of any directive whereby the Secretary of Defense or the Secretary of a Military Department has granted a right of appeal not contained in the contract.

When an appeal is taken pursuant to a Disputes clause in a contract which limits appeals to disputes concerning questions of fact, the Board may in its discretion hear, consider, and decide all questions of law necessary for the complete adjudication of the issue. In the consideration of an appeal, should it appear that a claim is involved which is not cognizable under the terms of the contract, the Board may make findings of fact with respect to such a claim without expressing an opinion on the question of liability.

When a contract requires the Secretary of Defense or the Secretary of a Military Department, personally to render a decision on the matter in dispute, the Armed Services Board of Contract Appeals makes and submits findings and recommendations to the appropriate Secretary with respect thereto.

There are a number of divisions of the Armed Services Board of Contract Appeals established by the Chairman of the Board in such manner as to provide for the most effective and expeditious handling of appeals. Appeals are assigned to the divisions for decision without regard to the military department or other procuring agency which entered into the contract involved. Hearing may be held by a designated member, or by a duly authorized examiner. The decision of a majority of a division constitutes the decision of the Board provided that the Chairman and two Vice Chairmen jointly signify their approval of the decision. If a majority of the members of a division is unable to agree on a decision, or if the Chairman or one or more of the Vice Chairmen does not

signify approval of the decision, determination of the appeal is by the Chairman and Vice Chairmen. A decision by a majority of those individuals then constitutes the decision of the Board.

On request of the appellant, an appeal involving $5,000 or less is decided as provided in the Optional Accelerated Procedure set forth in Rule 12 of the Board.

II. Statement of purpose. Emphasis is placed upon the sound administration of these rules in specific cases, because it is impracticable to articulate a rule to fit every possible circumstance which may be encountered. These rules will be interpreted so as to secure just and inexpensive determination of appeals without unnecessary delay.

Preliminary procedures are available to encourage full disclosure of relevant and material facts and to discourage unwarranted surprise.

All time limitations specified for various procedural actions are computed as maximums, and are not to be fully exhausted if the action described can be accomplished in a lesser period. These time limitations are similarly eligible for extension in appropriate circumstances, on good cause shown.

Whenever reference is made to contractor, appellant, contracting officer, respondent and parties, this shall include respective counsel for the parties, as soon as appropriate Notices of Appearance have been filled with the Board.

Preliminary Procedures

1. Appeals, how taken. Notice of an appeal must be in writing, and the original, together with two copies, may be filled with the contracting officer from whose decision the appeal is taken. The notice of appeal must be mailed or otherwise filled within the time specified therefor in the contract or allowed by applicable provision of directive or law.

2. Notice of appeal, contents of. A notice of appeal should indicate that an appeal is thereby intended and should identify the contract (by number), the department and agency or bureau cognizant of the dispute, and the decision from which the appeal is taken. The notice of appeal should be signed personally by the appellant (the contractor making the appeal), or by an offcer of the appellant corporation or member of the appellant firm, or by the contractor's duly authorized representative or attorney. The complaint referred to in Rule 6 may be filled with the notice of appeal, or the appellant may designate the notice of appeal as a complaint, if it otherwise fulfills the requirements of a complaint.

3. Forwarding of appeals. When a notice of appeal in any form has been received by the contracting officer, he shall endorse thereon the date of mailing (or date of receipt, if otherwise conveyed) and within 10 days shall forward said notice of appeal to the Board. Following receipt by the Board of the original notice of an appeal (whether through the contracting officer or otherwise),

the contractor and contracting officer will be promptly advised of its receipt, and the contractor will be furnished a copy of these rules.

4. Duties of the contracting officer. Following receipt of a notice of appeal, or advice that an appeal has been filled, the contracting officer shall promptly, and in any event within 30 days, compile and transmit to the Board and to the Government Trial Attorney copies of all documents pertinent to the appeal, including the following:

(1) The findings of fact and the decision from which the appeal is taken, and the letter or letters or other documents of claim in response to which the decision was issued; (2) The contract, and pertinent plans, specifications, amendments, and change orders;

(3) Correspondence between the parties and other data pertinent to the appeal;

(4) Transcripts of any testimony taken during the course of proceedings, and affdavits or statements of any witnesses on the matter in dispute made prior to the filing of the notice of appeal with the Board;

(5) Such additional information as may be considered material.

Upon completion of the foregoing compilation, the contracting officer shall notify the appellant, provide him with a listing of its contents, and afford him an opportunity to examine the complete compilation at the office of the contracting officer, or at the office of the Board, for the purpose of satisfying himself as to the contents, and furnishing or suggesting any additional documentation deemed pertinent to the appeal. Following receipt of the foregoing compilation, as it may be augmented at the time of receipt, the Board will promptly advise the parties.

5. Dismissal for lack of jurisdiction. Any motion addressed to the jurisdiction of the Board shall be promptly filed. Hearing on the motion shall be afforded on application of that its decision on the motion will be deferred pending hearing on both the merits and the motion. The Board shall have the right at any time and on its own motion to raise the issue of its jurisdiction to proceed with a particular case, and shall do so by an appropriate order, affording the parties an opportunity to be heard thereon.

6. Pleadings. (a) Within 30 days after receipt of notice of docketing of the appeal, the appellant shall file with the Board an original and two copies of a complaint setting forth simple, concise, and direct statements of each of his claims, alleging the basis, with ap propriate reference to contract provisions, for each claim, and the dollar amount claimed. This pleading shall fulfill the gen erally recognized requirements of a com plaint, although no particular form or for mality is required. Upon receipt thereof, the Recorder of the Board shall serve a copy upon the respondent. Should the complaint not be received within 30 days, appellant's claim and appeal may, if in the opinion of the Board the issues before the Board are suff. ciently defined, be deemed to set forth his

complaint and the respondent shall be so notified.

(b) Within 30 days from receipt of said complaint, or the aforesaid notice from the Recorder of the Board, respondent shall prepare and file with the Board an original and two copies of an answer thereto, setting forth simple, concise, and direct statements of respondent's defenses to each claim asserted by appellant. This pleading shall fulfill the generally recognized requirements of an answer, and shall set forth any affirmative defenses of counterclaims, as appropriate. Upon receipt thereof, the Recorder shall serve a copy upon the appellant. Should the answer not be received within 30 days, the Board may, in its discretion, enter a general denial on behalf of the Government, and the appellant shall so be notified.

7. Amendments of pleadings or record. The Board upon its own initiative or upon application by a party may, in its discretion, order a party to make a more definite statement of the complaint or answer, or to reply to an answer. The Board may, in its discretion, and within the proper scope of the appeal, permit either party to amend his pleading upon conditions just to both parties. When issues within the proper scope of the appeal, but not raised by the pleadings or the documentation described in Rule 4, are tried by express or implied consent of the parties, or by permission of the Board, they shall be treated in all respect as if they had been raised therein. In such instances, motions to amend the pleadings to conform to the proof may be entered, but are not required. If evidence is objected to at a hearing on the ground that it is not within the issues raised by the pleadings or the Rule 4 documentation (which shall be deemed part of the pleadings for this purpose) it may be admitted within the proper scope of the appeal, Provided, however, That the objecting party may be granted a continuance if necessary to enable him to meet such evidence.

8. Upon receipt of respondent's answer or the notice referred in the last sentence of Rule 6(b), above, appellant shall advise whether he desires a hearing, as prescribed in Rules 17 through 25, or whether in the alternative he elects to submit his case on the record without a hearing, as prescribed in Rule 11. In appropriate cases, the appellant shall also elect whether he desires the optional accelerated procedure prescribed in Rule 12.

9. Pre-hearing briefs. Based on an examination of the documentation described in Rule 4, the pleadings, and a determination of whether the arguments and authorities addressed to the issues are adequately set forth therein, the Board may in its discretion require the parties to submit pre-hearing briefs in any case in which a hearing has been elected pursuant to Rule 8. In the absence of a Board requirement therefor, either party may in its discretion, and upon appropriate and sufficient notice to the other party, fur

nish a pre-hearing brief to the Board. In any case where a pre-hearing brief is submitted, it shall be furnished so as to be received by the Board at least 15 days prior to the date set for hearing, and a copy shall simultaneously be furnished to the other party as previously arranged.

10. Pre-hearing or pre-submission conference. Whether the case is to be submitted pursuant to Rule 11, or heard pursuant to Rules 17 through 25, the Board may upon its own initiative or upon the application of either party, call upon the parties to appear before a member or examiner of the Board for a conference to consider:

(a) The simplification or clarification of the issues;

(b) The possibility of obtaining stipulations, admissions, agreements on documents, understandings on matters already of record, or similar agreements which will avoid unnecessary proof;

(c) The limitation of the number of expert witnesses, or avoidance of similar cumulative evidence, if the case is to be heard;

(d) The possibility of agreement disposing of all or any of the issues in dispute;

(e) Such other matters as may aid in the disposition of the appeal.

The results of the conference shall be reduced to writing by the Board member or examiner in the presence of the parties, and this writing shall thereafter constitute part of the record.

11. Submission without a hearing. Either party may elect to waive a hearing and to submit his case upon the Board record, as settled pursuant to Rule 13. In the event of such election to submit, the submission may be supplemented by oral argument (transcribed if requested), and/or by briefs, arranged in accordance with Rules 18 and 23.

12. Optional accelerated procedure. Should an appeal involve $5,000 in amount or less, it may at the option of appellant be processed under this rule. In the event of such election, the Board will undertake to issue a decision on the appeal on an expedited basis, without regard to its normal position on the docket. Under this accelerated procedure, the case will be further expedited if the parties elect to waive pleadings and/or elect to waive the hearing and submit on the record. In all other respects, these rules will apply.

13. Setting of the record. A case submitted on the record pursuant to Rule 11 shall be ready for decision when the parties are so notified by the Board. A case which is heard shall be ready for decision upon receipt of transcript, or upon receipt of briefs when briefs are to be submitted. At any time prior to the date that a case is ready for decision, either party upon notice to the other, may supplement the record with documents and exhibits deemed relevant and material by the Board. The Board upon its own initiative may call upon either party, with appropriate notice to the other, for

evidence deemed by it to be relevant and material. The weight to be attached to any evidence of record will rest within the sound discretion of the Board. Either party may at any stage of the proceeding, on notice to the other party, raise objection to material in the record or offered into the record, on the grounds of relevancy and materiality.

The Board record shall consist of documentation described in Rule 4, and any additional material, pleadings, pre-hearing briefs, record of pre-hearing or pre-submission conferences, depositions, interrogatories, admissions, transcripts of hearing, hearing exhibits, and post-hearing briefs, as may thereafter be developed pursuant to these rules.

This record will at all times be available for inspection by the parties at the office of the Board. In the interest of convenience, prior arrangements for inspection of the file should be made with the Recorder of the Board. Copies of material in the record may, if practicable, be furnished to appellant at the cost of reproduction.

14. Depositions (a) When depositions may be taken. After an appeal has been docketed, the Board may, upon application of either party or upon agreement by the parties, permit the taking of the testimony of any person, by deposition upon oral examination or written interrogatories, for use as evidence in the appeal proceedings. Leave to take a deposition will not ordinarily be granted unless it appears that it is impracticable to present the deponent's testimony at the hearing of the appeal, or unless a hearing has been waived and the case submitted pursuant to Rule 11.

(b) Before whom taken. Depositions to be offered in evidence before the Board may be taken before and authenticated by any person authorized by the laws of the United States, or by the laws of the place where the deposition is taken, to administer oaths.

(c) By oral examinations. When either party desires to take the testimony of any person by deposition upon oral examination, the moving party shall give the opposite party at least 15 days written notice of the time and place where such deposition is proposed to be taken; the name, address, and title of the person before whom it is proposed to be taken; and the name and address of the witness. This notice is unnecessary In any case where the deposition has been scheduled by mutual agreement. If the party so served finds it impracticable to appear at the taking of the deposition, in person or by counsel, he shall promptly so notify the moving party who shall make available to him a copy of the evidence given at the deposition. Within 15 days after receipt of such copy, the party so served may serve cross-interrogatories upon the moving party, and proceedings shall be had thereon as provided in the next succeeding subparagraph (d) herein.

(d) By written interrogatories. When either party desires to take the testimony

of any person by deposition upon written Interrogatories, the moving party shall serve them upon the opposite party with a notice stating the name and address of the person who is to answer them and the name, address, and title of the person before whom the deposition is to be taken. Within 15 days thereafter, the party so served may serve cross-interrogatories upon the moving party. A copy of the notice and copies of all interrogatories served shall be delivered by the moving party to the person before whom the deposition is to be taken, and the latter shall proceed promptly to take the testimony of the witness in response to the interrogatories.

(e) Form and return of deposition. Each deposition should show the docket number and the caption of the proceedings, the place and date of taking, the name of the witness, and the names of all persons present. The person taking the deposition shall certify thereon that the witness was duly sworn by him and that the deposition is a true record of the testimony given by the witness, and he shall enclose the original deposition and exhibits in a sealed pre-paid package and forward same to the Recorder, Armed Services Board of Contract Appeals.

(f) Introduction in evidence. No testimony taken by deposition shall be considered as part of the evidence in the hearing of an appeal unless and until such testimony is offered and received in evidence at the hearing. It will not ordinarily be received in evidence if the deponent is present and can testify personally at the hearing. In such case it can, however, be utilized to contradict or impeach the testimony of the deponent as a witness. If the opportunity to be heard has been waived and the case submitted pursuant to Rule 11, the deposition shall be deemed to be part of the record before the Board.

15. Interrogatories to parties; inspection of documents; admission of facts. Under appropriate circumstances, but not as a matter of course, the Board will entertain applications for permission to serve written interrogatories upon the opposing party, applications for an order to produce and permit the inspection of designated documents, and applications for permission to serve upon the opposing party a request for the admission of specified facts. Such applications shall be reviewed and approved only to the extent and upon such terms as the Board in its discretion considers to be consistent with the objective of securing just and inexpensive determination of appeals without unnecessary delay, and essential to the proper pursuit of that objective in the particular case.

16. Service of papers. Service of papers in all proceedings pending before the Board may be made personally, or by mailing the same In a sealed envelope registered, or certified. postage pre-paid, addressed to the party upon whom service shall be made and the date of delivery as shown by return receipt shall be