include what probably are a lot of unnecessary provisions from the point of view of our situation. So that while I patterned the substance of our rules after the Armed Services Board and to some extent the Interior Board rules, I made them much simpler and shorter, as you can see.

Senator MONTOYA. Thank you very much, Mr. Ostroff.

The next witness is Mr. Frank J. Barry, Solicitor, Department of the Interior.

STATEMENT OF FRANK J. BARRY, SOLICITOR, DEPARTMENT OF THE INTERIOR, WASHINGTON, D.C.; ACCOMPANIED BY DEAN F. RATZMAN, CHAIRMAN, INTERIOR BOARD OF CONTRACT APPEALS; AND EDWARD WEINBERG, DEPUTY SOLICITOR

Mr. BARRY. Mr. Chairman, I am glad to present the views of the Department of the Interior in response to the invitation extended in the chairman's letter of February 14, 1966.

As you know, Mr. Chairman, by letters of March 31 and August 12, 1965, the Department provided the committee with detailed information regarding the makeup and activities of the Interior Board of Contract Appeals. We believe that the Interior Board has, generally speaking, operated in a manner that has been effective and fair both to the Government and to contractors.

Subsequent to the decision of the Supreme Court in United States v. Carlo Bianchi and Co., 373 U.S. 790 (1963), holding that on questions of fact that have been considered under a disputes clause, contractors are bound by the administrative record save only for the grounds of fraud, capriciousness, arbitrariness, gross error, or lack of substantial evidence, the Interior Board has endeavored (1) to make a complete and careful record with respect to each contract appeal that comes before it, (2) to follow the rules of evidence utilized in courts of record, (3) to insure that an adequate verbatim transcript of the proceedings is taken for each formally scheduled hearing, and (4) to preserve the complete appeal record for a period of time related to the applicable statute of limitations.

We advised your committee in our letter of August 12, 1965, that the board does not allow ex parte communications. The rules of the Interior Board of Contract Appeals will be amended to include a specific and direct prohibition of receipt of ex parte information.

We have given a good deal of attention recently to the matter of the relationship of the Interior Board of Contract Appeals with the Office of the Solicitor. The Interior Board in its present status as a unit of the Office of the Solicitor is unique in that its authority is derived from a direct delegation of authority from the Secretary. We have followed the practice of not discussing the merits of a contract appeal with the board members, and as a practical matter we have considered the board to be in the Solicitor's office for administrative or "housekeeping" purposes only.

Because of liberalization in recent years of the "constructive change" doctrine, the adoption of the optional standard "suspension of work" clause for construction contracts, and the likelihood that standard clauses will be revised in the near future to give greatly increased authority to contracting officers--for example, settlement of

claims that now are regarded as sounding in breach of contract-we have taken steps to strengthen our staff of attorneys who advise on Government contract matters. Members of our immediate office will work closely with this staff in order to provide maximum assistance to contracting officers who will be assuming increased responsibilities in the contract claims settlement area. In these circumstances, and in order to insure that there cannot be even an appearance of lack of impartiality on the part of the Interior Board of Contract Appeals, we have recommended that the Interior Board of Contract Appeals should be transferred from the Office of the Solicitor to the Office of the Secretary. We anticipate that this recommendation will be implemented shortly and should require only slight revisions in the board's rules and operating procedures.

While recognizing the need for a complete and impartial administrative hearing at the board level, we do wish to raise for consideration the question of whether the "one-way street" situation that now exists with respect to Board decisions should continue. Deputy General Counsel Welch of the General Accounting Office recently urged that a definite and practical procedure should be established by which the Government can secure judicial review of matters which have been decided at the administrative level under the disputes clause. Without doubt a contract appeals board can issue a decision that is seriously in error and is harmful to the interests of the Government. The necessity for separate and impartial boards brings with it a need for a system by which the Government can obtain judicial review. We therefore believe that Mr. Welch's proposal merits serious consideration. I say this, Mr. Chairman, notwithstanding the seemingly incongruous nature of an appeal by the Government from a decision which, technically, is the Government's own act. However, upon examination, it will be seen that somewhat analogous cases are by no means unknown. For example, the Department of Justice on behalf of the Department of the Interior has appeared in Federal court to seek review of decisions made by the Federal Power Commission. In court cases involving laws that regulate business activities, the Department of Justice has taken positions contrary to those of Federal regulatory agencies.

We are following with a great deal of interest your committee's review of the adequacy of the administrative remedies available to subcontractors, and study of the question whether there should be uniform procedures for all agency boards. We are interested also in your inquiry into the need for direct and effective Board authority to serve subpenas and administer oaths.

In closing, I would like to supplement the information that this Department provided last year concerning the members of the Interior Board of Contract Appeals. Mr. William F. McGraw was appointed to the Board in October 1965 to replace former Deputy Chairman Herbert J. Slaughter, who died in September 1965. Mr. McGraw is an attorney who has specialized in Government contract work for almost 20 years. For 12 years of this period he represented contractors, and for about 8 years he was a legal adviser to Government contracting officers.

I would like to present two gentlemen who are with me. My Deputy Solicitor, Mr. Edward Weinberg, is here. He was for many years

in a position which was in effect that of Chief Counsel for the Bureau of Reclamation, one of the larger contracting bureaus in our Department; and Mr. Dean F. Ratzman, who is the Chairman of our Contract Appeals Board.

Senator MONTOYA. Thank you, Mr. Barry.

I want to compliment you and the Department of the Interior for trying to better the procedures and promote the independence of the particular Contract Appeals Board. I think it is a very good idea that you are making the Board independent of the Solicitor's Office. Mr. BARRY. May I say something about that?

I agree it is important that we avoid the appearance of evil and that we divorce the Board as much as possible from influence by the Solicitor's Office. I appoint the contract attorneys who represent the Government before the Board, and I also happen to be the superior of the Board. I think that we can sometimes get too close to the trees to see the forest. It might be well to consider retaining the Board in the Office of the Solicitor who is a lawyer, who has the pride that our profession has about judicial niceties and who knows that there should be no outside influence on the Board. Perhaps we should not jump too quickly to the conclusion that by moving it to the Secretary's Office, we would remove any kind of influence that might be imposed upon the Board.

In our office, there is no communication whatsoever with the Board in the consideration of any appeal. We have people who get in touch with the Solicitor for the purpose of attempting to influence the Board, and the Solicitor's Office refuses to talk to the Board about it, because we believe these are matters that should be considered by the Board as a court.

We should be aware that the further we change the Board from an administrative board and the more we make it like a court, the more we are going to invite cumbersome proceedings and interfere with the smooth, expeditious administrative determination of contract matters. Senator MONTOYA. Do you feel that there is something lacking when a board has the final decision as to questions of fact and neither of the parties has the power to resort to further review of the decision? Mr. BARRY. I think that no solution of this problem is ideal. We pay a price if we allow a trial de novo in all cases, and the contractors as well as the Government would pay a price.

The price paid would be that there would not be a final decision for years after a case was presented. If we have very careful administration of contract appeals within the Government, I think we can be fair with the contractors. As the law now exists, leaving the final decision on the facts to the Board seems to me in our Department to work in such a way as to be fair to contractors.

Senator MONTOYA. Do you have an appeal procedure to the Office of the Secretary?

Mr. BARRY. NO. The Board has a direct delegation from the Secretary. I believe that the Secretary could however, reverse a decision by the Board in favor of the Government.

Senator MONTOYA. Has he ever done it?

Mr. BARRY. I don't know of any case in which he has done it. No, I don't think he has. As a matter of fact, he has not done so at all during the time I have been Solicitor, in the last 5 years.

Senator MONTOYA. What does he usually do when somebody complains to him about a decision of the Board?

Mr. BARRY. Somebody in the Secretary's Office refers the complaint to me, and the inquiry stops with me, if the matter is still under consideration.

Senator MONTOYA. When do you anticipate that the actual transfer of the Board to the Office of the Secretary will take place in your Department?

Mr. BARRY. By the end of this fiscal year.

Senator MONTOYA. Do you think that the rules of procedure should be uniform for all the boards in the different agencies?

Mr. BARRY. Well, our rules are very much like the rules of the Armed Services Board of Contract Appeals. I personally would have no objection to their being made the same if required. I think it would probably be of assistance to those who practice before the boards, and it would not change our procedures substantially.

Senator MONTOYA. Do you conduct hearings out in the field to avoid expenses for the particular contractors?

Mr. BARRY. A very large part of our hearings are conducted in the field.

Senator MONTOYA. Is that part of your policy?

Mr. BARRY. That is our policy.

Senator MONTOYA. That is all.

Thank you very much, Mr. Barry.
Mr. BARRY. Thank you.

Senator MONTOYA. Mr. Paul H. Gantt, Chairman, Board of Contract Appeals, Atomic Energy Commission.

You are welcome before the committee Mr. Gantt.

I want to say for the record that the committee is very appreciative of Mr. Gantt's cooperation in developing this kind of study. He has certainly rendered great contributions to our staff, and I also want you, Mr. Gantt, to thank your staff for the cooperation it has rendered also.

STATEMENT OF PAUL H. GANTT, CHAIRMAN, BOARD OF CONTRACT APPEALS, ATOMIC ENERGY COMMISSION, WASHINGTON, D.C.; ACCOMPANIED BY JAMES A. COHEN, LEGAL ASSISTANT

Mr. GANTT. Thank you very much, Senator Montoya.

You have paid me in advance, because of the opportunity I had to spend some time in Albuquerque and Taos. That was at the time I visited with the late General McFarland. I was sorry to hear he had died. However, since we had been strangers up to now, I am submitting herewith my personal data. It may be of interest to note that of the 27 years which I have spent since I came to the United States I have devoted roughtly 24 years to the service of this country. Since about 1950 my work has been entirely in the field of Government contracts and procurement. Specifically from 1958 until 1959 I was Procurement Counsel for the Department of the Interior. From 1959 until 1964, I was Chairman of the Department of Interior Board of Contract Appeals. Since November 1964, I have been Chairman of the Atomic Energy Commission Board of Contract Appeals. I have written and lectured extensively in this field. Of specific contribution in the field of Government contracts, I would like

to refer to my work in getting the "Suspension of Work" clause adopted. A major breakthrough was scored. I have contributed to the solution of the "Buy-American" problems. Together with Mr. Irving R. M. Panzer, I have pioneered in advocating proper procedures to be applied concerning the debarment of bidders. I am happy to say that our proposals were adopted on a Government-wide basis. In the field of contract appeals board procedures, I introduced the pretrial conference concept into appeals procedures.

I should like to discuss briefly (1) appeals boards generally, specifically in the light of the studies of this committee, and (2) the Atomic Energy Commission Board of Contract Appeals (AECBCA). Based on my experience in having followed the work of all contract appeal boards, I should like to make specific suggestions and draw specific conclusions.

I. APPEAL BOARDS GENERALLY

It would be a major mistake to lump together all contract appeals boards.

As the studies of this committee indicate, without any doubt, there exists only one board which is outstanding on account of the volume of its work; the general competence of its members; the quality of leadership and management by its chairman; and because of its impact on industry, the Government and the courts. I speak, of course, of the Armed Services Board of Contract Appeals (ASBCA). Its rules are good, although they can be improved. However, nobody would write rules without starting with a study of the ASBĆA rules. The personnel of the ASBCA is excellent. I conclude, that the everchanging nature of its personnel is a contributing factor to its everrenewing vigor. Let us not forget that a board is only as good as counsel-both Government and private-appearing before it. The ASBCA is fortunate in having appearing before it the best which can be found in Government and in the private practice of law. The ASBCA is well managed. I acknowledge a debt of gratitude to its Chairman, Louis Spector, who has contributed greatly to my education, even if in some respects we go about the solution of problems in different ways. The problem of managing a large board of about 900 appeals a year is an extremely difficult one. To have achieved fairly uniform decisions of practical and educational value is a credit to his leadership.

The annual volume of appeals requires a production of about 30 decisions a year from each member, no mean achievement in itself and not paralleled in any other board. The ASBCA has the distinc tion of full industry acceptance even losing lawyers are full of praise for it. That is the real test. A favorable trend has developed whereby agencies which appeals, numberwise, belong in the peanut category-have their appeals heard and decided by the ASBCA under the rules applicable to the ASBCA. In that category belong the AID, USIA, National Science Foundation, and CIA. I believe that appeal boards which have less than 5 to 10 cases a year can neither muster the competence, nor have the special experience in the field of Government contracts and procurement, which is necessary for a fair disposition of appeals. Hence, my suggestion is for them to farm out their appeals to the ASBCA. The Atomic Energy Commission is not in the market for the assignment of appeals.