Petrillo: Keepin' it simple

A plain-meaning approach is a risky way to interpret federal contracting laws

The Supreme Court rarely rules on government contract cases. But its rulings in other cases can influence procurement law, sometimes in subtle ways.

Consider the matter of legislative history. When a law's meaning isn't clear, courts sometimes look to committee hearings, conference reports or floor debates to shed light on what Congress intended when it passed a statute.

Justices Antonin Scalia and Clarence Thomas are notoriously scornful of legislative history. Instead, they look only at the words in the statute. This plain-meaning approach puts more stock in dictionary definitions than conference reports. Over time, their view has prevailed. Last year, a study concluded that the Supreme Court relies on legislative history half as often as it once did.

That trend appears to be affecting government contract disputes. Increasingly, the courts look only at the plain meaning of a contract clause or regulation.

For example,  a case involving United Technologies turned on the meaning of the words 'material cost' in a procurement regulation. The U.S. Court of
Appeals for the Federal Circuit went out of its way to slam the testimony of three self-proclaimed experts on what the regulation meant. The court even said such evidence was inadmissible.

The same trend is evident in cases of contract interpretation. One starts with the words of the contract. But when those words aren't clear, courts have looked to external evidence of intent, such as trade practice and other contracts and testimony.

In a recent case involving TEG-Paradigm Environmental, the same court moved closer to the plain-meaning approach. It held that external evidence other than trade practice was useful only to confirm the plain meaning of a contract, not to determine if it was ambiguous.

But why should external evidence be limited to confirming the apparent plain meaning? That smacks of ignoring the evidence that doesn't support your conclusion. And what if language that appears to be clear isn't?
There is another problem with this approach. Jargon distorts common words in uncommon ways. 'Start' doesn't usually mean turning something off, but that's where you go to shut down a Windows computer. And when economists talk about 'rent-seeking behavior,' they don't mean landlords dunning tenants.
Government contract regulations have more than their share of jargon, and that's where expert testimony can help.

The plain-meaning approach also relies too heavily on a judge's knowledge. The higher up the judicial ladder that a judge ascends, the less likely it is that he or she has hands-on experience with government contracts. Therefore, the judge might be ignorant of the context that informs meaning.

The plain-meaning approach works best with simple issues. Unfortunately, the cases that end up in court are there because the contract or regulation isn't clear on  crucial points. Just staring at the words might not be the best way to resolve a complex issue. The plain-meaning approach might work for statutory interpretation, but it isn't robust enough for federal contracts and their complex regulations.

Petrillo is a lawyer at Washington law firm Petrillo and Powell. He can be reached at jp@petrillopowell.com.

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