Hercules Incorporated vs. United States Improper on the Part

Question: 1. A. Would it have been improper for the contractor in this instance to purchase liability insurance and include the cost of such insurance as part of the fixed price contract for Agent Orange? B. Why would a contractor choose to do so?2. A. What is the impact of Congress refusal to grant the Court of Federal Claims (formerly the Claims Court) jurisdiction over implied-in-law contracts? B. What is the policy basis for not doing so? 3. The Court discusses the Spearin Decision, reaffirming it and distinguishing it in interesting ways. When the government awards a contract, it wants the contractor to fulfill the contracts specifications. This decision holds, to oversimplify the matter that the government stands behind those specifications for contract law purposes but not for tort law purposes. A. Why? B. Why would the statutory and administrative authorizations that suffice for the government to have to pay when its specifications result in contractual burdens on the contractor, not s uffice to say that the government should pay tort liability burdens? Answer: 1. Part A No, it would not have been improper on the part of the contractor in this instance to purchase a general liability insurance and add the cost of the same to the Agent Oranges fixed price of the contract. As stated in the Hercules case an agreement which is for indemnification and that which is not open ended such as a liability insurance but has been capped to a certain amount which might have been provided by a private insurer is not improper. Part B The federal employees are barred under the Anti-Deficiency Act (Anti-Deficiency Act, 1987) to enter into contracts that require payments in future of amount in advance of, or more than, an appropriation that is existing 31 U.S.C. 1341. This is an important evidence to the fact that a government officer who was contracting would not be able to provide, in fact, the indemnification that is contractual as has been claimed by Thomson. Thus the contractor may choose to opt for the liability insurance to ensure that he is protected from any kind of liabilities risk that may be imposed on him by any lawsuit or any such similar claims. Thus any claim under the insurance policy the insured would be protected from the same. As mentioned in the Hercules case an agreement which has been capped and one which reflects in the price of contract shall make the Government a type of self-insurer, is within the appropriation in effect since the risk of liabilitys expenditure which would be assumed shall be equal roughly to the premium cost which would be saved by the government by way of self-insuring. Thus a contractor who is aware of risks that can arise potentially as much as the government is aware of such risk would be able to sense the trouble that may arise and obtained likely from the government a payment of the premium that is sufficient. 2. Part A The Claims Court was created by the Congress to permit limited and special cases class for proceeding against the United States (Tennessee v. Sneed,, 1878) and the cognizance for only those claims can be taken by the court why by terms of Congress some act have been committed to it. It is the requirement of the Tucker Act (Tucker Act Shuffle Relief Act of 1997, 1998) that needs to be complied with for a suit to be founded on which states that it is only in implied contract that a suit can be brought against the government. The consequence of this is that there is no action that can be brought in cases that are similar to the Hercules case since the recovery in the contract is implied in law and not in fact. Part B The policy basis for this is that for the Court of Claims to have jurisdiction the demand which has been sued on needs to be founded between the parties on a convention meaning thereby there should have been a meeting of the mind (Hercules, Inc. v. United States, 1996). It is only in contracts that are either implied or express in the fact that this jurisdiction shall extend to and not the contract claims which are implied in law (Sutton v. United States,, 1921); (Merritt v. United States, 1925) (United States v. Mitchell, 1983). It is vide the Tucker Act that the jurisdiction has been conferred upon the court for determining and hearing, the claim that made against the United States and are founded by contract that is implied or express with the United States ( 28 U.S.C. 1491(a)). 3. Part A Neither the Spearin decision (United States v. Spearin, 1918) nor the warranty extends as far as tort law. When specifications have been provided by the government directing the manner in which the performance of the contract is to be carried out, then it is warranted by the government that the performance by the contractor of the contract would be satisfactory if the specifications are followed by it. The performance will not be frustrated or made impossible due to the specifications. However, this circumstance is not sufficient to infer further that it is beyond performance that this warranty exceeds to the claims by the third party against the contractor. Therefore in the Hercules case, it would seem strange to arrive at the conclusion that even after understanding the military use of the herbicide there was contemplation by the United States for the warranty to be extended to third party claims or tort claims against the contractor. The avoidance of such is more likely since the contractor would be provided through reimbursement of the contract what through tort law has been denied to him. Part B It would not suffice to say that the government has to pay other than the burden on the contractor due to the specifications tort liabilities as well in light of the Doctrine of Feres. This doctrine provides immunity to the government from tort suits of armed services personnel. The government contractor who had been sued by the armed personnel could not, in turn, sue the government for the injury that has been caused as it would circumvent the indemnity that the Feres doctrine provides the government. References Anti-Deficiency Act. (1987). Washington, D.C. Hercules, Inc. v. United States, 516 U.S. at 424 (1996). Merritt v. United States, 267 U.S. 338, 341, 45 S.Ct. 278, 279, 69 L.Ed. 643 (1925). Sutton v. United States, 256 U.S. 575, 581, 41 S.Ct. 563, 565-566, 65 L.Ed. 1099 (1921). Tennessee v. Sneed, 96 U.S. 69, 75, 24 L.Ed. 610 (1878). Tucker Act Shuffle Relief Act of 1997. (1998). [Washington, D.C.]. United States v. Mitchell, 463 U.S. 206, 218, 103 S.Ct. 2961, 2968-2969, 77 L.Ed.2d 580 (1983). United States v. Spearin, 248 U.S. 132, 39 S.Ct. 59, 63 L.Ed. 166 (1918).