UNITED STATES v. JOHNSON CONTROLS, INC.

BENNETT, Circuit Judge.

The government appeals from a final decision of the Armed Services Board of Contract Appeals (ASBCA or board), ASBCA No. 25714, 82-1 BCA ¶ 15,779. The ASBCA held that (1) it had jurisdiction under the Contract Disputes Act of 1978 (CDA or Act), 41 U.S.C. §§ 601-613 (Supp. V 1981), to decide a claim brought directly by a subcontractor, Johnson Controls, Inc. (Johnson); (2) Johnson was the proper party to certify the claim under the CDA; and (3) on the merits, Johnson was entitled to an equitable adjustment for the supply of redundant hardware. Since we hold that there was no privity of contract, and thus the ASBCA erred in assuming jurisdiction over Johnson's claim, we do not reach the certification issue and the issue of Johnson's entitlement to an equitable adjustment. We reverse and vacate.

Background

On May 24, 1977, the Department of Health, Education, and Welfare (now the Department of Health and Human Services) entered into a contract with Turner Construction Company (Turner or the prime contractor) for services in connection with the construction of the National Institute of Environmental Health Sciences permanent laboratory facility in Research Triangle Park, North Carolina. This contract, No. 141-77-0006 (the prime contract), was entitled "Construction Manager Agreement, Construction Manager Services with Guaranteed Maximum Price." The guaranteed maximum price was stated as $65,394,000. Turner entered into approximately 74 subcontracts for the construction work on the project. Turner executed each subcontract in its own name. Although none of the subcontracts was executed by the government, each contract was subject to prior government approval.1

One of these subcontracts was executed on September 27, 1977, between Turner and Johnson. This subcontract called for the supply and construction of a Central Control Center (CCC) for the temperature control/central monitoring of the facility. This subcontract incorporated the entire prime contract by reference and, in addition, some provisions of the prime contract were physically included. Some of the contract documents referred to Turner as "construction manager" and Johnson as "contractor," while other documents referred to Turner as "contractor" and Johnson as "subcontractor." In addition, the contract contained the following key provision, hereafter referred to as the "ABC" clause:

In June and July 1978, Johnson made submittals for the CCC. Four computers were shown in the submittals. On October 9, 1978, Turner rejected these submittals because, among other reasons, "redundant hardware is not being supplied as specified." Johnson agreed to modify the proposed system to include redundant hardware, but also gave notice of its intention to file a claim for the additional expense that would be incurred. As installed, the CCC system contained seven computers rather than the four computers contemplated by Johnson.

On May 16, 1980, Johnson certified its claim for $221,150, pursuant to the requirements of the CDA, 41 U.S.C. § 605(c)(1). On May 19, 1980, Turner forwarded Johnson's claim to the contracting officer for a decision. Turner joined in the request for a determination under the CDA. Turner, however, declined to certify the claim on the ground that Johnson was the only party who could logically and realistically certify the claim.

On June 9, 1980, the contracting officer accepted the claim, but also informed Turner that he reserved further processing of the claim until Turner certified it. Turner's refusal to certify the claim was not unique to Johnson. At this time, Turner had taken the same position on claims of four other subcontractors.

On July 2, 1980, Turner submitted a report to the contracting officer on the merits of Johnson's claim, as was required by a provision in the prime contract. The report stated, in part:

On August 13, 1980, however, Turner certified Johnson's claim.2 The contracting officer still consistently refused to issue a final decision on the merits. On January 13, 1981, Johnson appealed directly to the ASBCA, noting the failure of the contracting officer to issue a decision on its claim. See 41 U.S.C. § 605(c)(5). Upon receipt, the board docketed the appeal in Johnson's name.

Before the board, the government brought a motion to dismiss on the ground that Turner had not submitted a valid certification, which was a prerequisite to the board's jurisdiction. Apparently the government felt that Turner's certification of Johnson's claim was invalid because of Turner's earlier statement that Johnson's claim should not be paid. The board denied the government's motion. 82-1 BCA at 78,143. On the merits, the board held that Johnson was entitled to an equitable adjustment for its supply of redundant hardware.

The Bristol Decision

The board's holding on jurisdiction in this case is based solely upon its earlier holdings in Bristol and Industrotech.3 The Industrotech decision, in turn, is based upon the reasoning and holding of the board in Bristol.4 A thorough analysis of the ASBCA's holding on jurisdiction in this case, therefore, requires an examination of the board's holding and reasoning in the Bristol case. Fortunately, the contract provisions relied upon by the board in the Bristol case are identical to the provisions relevant to this appeal; the prime contract is of course the same in both cases, and the provisions of the Turner-Bristol contract relied upon are similarly found in the Turner-Johnson contract.

In order to review the board's holding in Bristol that there is privity of contract between the subcontractor and the government, it is necessary to examine the contract provisions in both the prime contract and the subcontract. The following provisions of the prime contract were used to support the board's conclusion that Turner was, in effect, an "agent of the government."

Article 1.1, Purpose and Intent, states:

Article 3.4 provides, in part:

Article 3.6.1 states:

See also Construction Management Special General Provisions (CMSGP), subparagraph e, Provision 11, Solicitation of Bids, 81-1 BCA at 74,528.

Article 3.7.3 provides with respect to subcontracts:

Article 4.6.2 states, inter alia, that it is the government's responsibility to maintain an inspection staff at the job site for the inspection of the work of the construction manager and, with Turner's assistance, the work of the separate contractors (i.e., subcontractors). This provision goes on to state that "[t]he Government shall have the sole authority and duty to reject work which does not conform to the contract requirements." The government is also given the power of interpretation of the meaning and intent of the drawings and specifications. See also CMSGP, Provision 13, id.

In Articles 4.10.1 and 4.10.2 the government is empowered to request changes in the work, or to approve changes proposed by the construction manager. See also CMSGP, Provision 18, id. The prime contract also contained the same "ABC" clause quoted earlier. The contract included Standard Form 23-A (SF-23A), which contains the standard Changes, Disputes, and Suspension of Work clauses. See 41 C.F.R. § 1-16.901-23A (1982). Finally, the prime contract contained Form 36, which includes general provisions of the subcontract form to be used in the bid package subcontracts.

The following provisions of the subcontract between Turner and the subcontractor were relied upon by the ASBCA. Article II provides:

Article V states, inter alia, that in the event the subcontractor is delayed by various factors, an extension of time will be granted, as determined by Turner. This article goes on to state, "In the event of dispute by the Subcontractor, the matter shall be referred to the Architect [i.e., the government] whose decision thereon shall be final and binding upon the parties hereto." Id. at 74,529.

Article VIII provides, in part: "The Work hereunder is to be performed and furnished under the direction and to the satisfaction of both the Architect and Turner. The decision of the Architect as to the true construction, meaning and intent of the Plans and Specifications shall be final and binding upon the parties hereto."

Article IX states, inter alia, that Turner reserves the right to make changes in the work as it may deem necessary, upon written order to the subcontractor. The article further states that should the parties disagree on the value of the work to be changed, then "the determination of the value of the work shall be referred to the Architect whose decision shall be final and binding upon the parties hereto."

The subcontract also included Standard Form 23A, which includes the standard Disputes and Suspension of Work provisions. The Disputes clause provides, inter alia, that a dispute concerning a question of fact shall be decided by the contracting officer (i.e., the government's representative), with a right of appeal to an agency board of contract appeals, whose decision is final unless fraudulent, arbitrary or capricious, so grossly erroneous as necessarily to imply bad faith, or not supported by substantial evidence. The Suspension of Work provision provides, inter alia, that the contracting officer may order a suspension of work "for the convenience of the Government," and provides for an adjustment for any increase in the cost of performance if certain conditions are met. Id. at 74,530. Finally, the subcontract contained the "ABC" clause mentioned earlier.

In its discussion in the Bristol case, the ASBCA noted that only in rare cases is a subcontractor permitted to sue the government in its own name, but that "privity results when prime contractors act as Government agents to place subcontracts." Id. at 74,532 (citations omitted). The board then went on to state that, in its opinion, "the path to the correct conclusion in this appeal was shown in Continental Illinois Nat. B. & T. Co. v. United States, ... 81 F.Supp. 596 [112 Ct.Cl. 563] (Ct.Cl.1949)." Id. In Continental Illinois, the Court of Claims reviewed the relevant provisions of a prime contract and concluded that:

Regarding a provision in the contract of similar import to the "ABC" provision involved in this case, the court stated:

The Court of Claims, however, held that the contract provisions were not sufficient to cross the "border" of privity of contract between the subcontractor and the government, and therefore dismissed the claims brought on behalf of subcontractors. The court stated:

In contrast to the holding in Continental Illinois, the ASBCA in Bristol held that the provisions of the prime contract and the subcontract were such that privity of contract was created between the government and the subcontractor. The board stated:

The board concluded that "there is privity of contract between the subcontractor and the Government, and that the subcontractor not only may, but must, certify its claim under the Contract Disputes Act." Id. at 74,533. The government's motion to dismiss for lack of jurisdiction was therefore denied.

Direct Subcontractor Appeals Under the CDA

The literal issue before us is whether the subcontractor, Johnson, may directly sue the government under the CDA.5 The government asserts that Johnson is not a "contractor," as that term is used in the statute, and therefore the board lacked jurisdiction under the CDA to entertain Johnson's claim.

41 U.S.C. § 601(4) states that "the term `contractor' means a party to a Government contract other than the Government." From this language, the government concludes that Johnson cannot be a "contractor," as it did not execute a contract with the government, and thus could not be "a party to a Government contract." In support of its contention that subcontractors such as Johnson are not authorized to bring a direct appeal under the CDA, the government cites the following significant passage from Senate Report No. 1118, 95th Cong., 2d Sess. 16-17, reprinted in 1978 U.S.Code Cong. & Ad.News 5235, 5250-51, discussing the definition of a "contractor" contained in the CDA.

The government also points to 41 U.S.C. § 602, which provides, inter alia, that the Act "applies to any express or implied contract ... entered into by an executive agency ...." The government asserts that subcontracts under a prime contract between the government and a contractor are, by definition, not entered into by an executive agency. Finally, the government points out that it is only claims by a "contractor" that must be considered by the contracting officer, 41 U.S.C. § 605(a), and only a "contractor" or the government may appeal a contracting officer's decision. 41 U.S.C. §§ 606, 609(a)(1).

Johnson, of course, disputes the government's assertion that the foregoing language of the CDA was designed to operate as an impenetrable bar to a direct appeal by a subcontractor. Johnson largely relies upon the decision of the Energy Board in A & B Foundry, Inc., EBCA No. 118-4-80, 81-1 BCA ¶ 15,161, for the position that a party who enters into a contract with an agent of the government can be deemed to be "a party to a Government contract" for purposes of a direct appeal under the CDA.

In A & B Foundry, the board noted that the definition of a "contractor" in the CDA was susceptible to more than one reasonable interpretation. Turning to the legislative history, the board noted that a Senate bill penultimate to the final Senate bill contained the following definition of the term "contractor":

This language, however, was subsequently deleted in favor of the definition quoted earlier. The board also noted that the Procurement Commission was aware that several agencies permit direct subcontractor appeals. See 81-1 BCA at 75,003. From the foregoing, the board concluded:

The board held that A & B Foundry, in supplying goods to Union Carbide, a purchasing agent of the government, was a "contractor" under the CDA.6

In Bristol, the ASBCA also held that the CDA did not bar all subcontractor appeals because the portion of the Senate Report quoted by the government (1) has nothing to do with the certification requirements, and (2) is "not concerned with cases where a prime contractor acts for certain purposes as the Government's agent to contract with others." 81-1 BCA at 74,532.

While we do not find it necessary to decide the correctness of the government's assertion that the language of the CDA was designed to bar all direct appeals by a subcontractor, we think that the preceding discussion illuminates many of the considerations bearing on the issue of privity of contract between the government and a subcontractor. Assuming, for discussion purposes only, that the CDA left intact the pre-existing exceptions to a direct appeal by a subcontractor, an examination of these exceptions leads us to conclude that this case does not present the factors necessary to fall within any recognized exception to the well-entrenched rule that a subcontractor cannot bring a direct appeal against the government.

Privity of Contract

A brief examination of the judicial history of the privity doctrine in regard to subcontractor claims provides some guidance as to the parameters of this doctrine. In Merritt v. United States, 267 U.S. 338, 45 S.Ct. 278, 69 L.Ed. 643 (1925), the plaintiff, a subcontractor, sued the United States to recover amounts the government had received from the prime contractor. The Supreme Court denied recovery, stating:

See also United States v. Blair, 321 U.S. 730, 737, 64 S.Ct. 820, 823, 88 L.Ed. 1039 (1944); Severin v. United States, 99 Ct.Cl. 435, 442 (1943), cert. denied, 322 U.S. 733, 64 S.Ct. 1045, 88 L.Ed. 1567 (1944); Nickel v. Pollia, 179 F.2d 160, 163-64 (10th Cir.1950). In Putnam Mills Corp. v. United States, 479 F.2d 1334, 1337, 202 Ct.Cl. 1, 4 (1973), the Court of Claims stated:

Thus, the no-privity rule is synonymous with a finding that there is no express or implied contract between the government and a subcontractor. This concept of privity is mirrored in the CDA, 41 U.S.C. § 602 ("this chapter applies to any express or implied contract ... entered into by an executive agency ..."), and the Tucker Act, 28 U.S.C. § 1491, amended by the Federal Courts Improvement Act of 1982, Pub.L. No. 97-164, § 133(a), 96 Stat. 25, 39-40 ("The United States Claims Court shall have jurisdiction to render judgment upon any claim against the United States founded ... upon any express or implied contract with the United States ....").

Over the years a number of exceptions have been recognized to the general rule that a subcontractor cannot bring a direct appeal against the government.7 We will focus only on that exception which the ASBCA, in Bristol, found controlling — where the prime contractor was acting as an agent of the government. The board stated:

The articles cited by the board as authority in turn rely on two cases to establish the proposition that there can be privity of contract between the government and subcontractors where the prime contractor is a mere government agent. Kern-Limerick, Inc. v. Scurlock, 347 U.S. 110, 74 S.Ct. 403, 98 L.Ed. 546 (1954), and Western Union Telegraph Co. v. United States, 66 Ct.Cl. 38 (1928). But, a recognition of the factual differences between those cases and the one before the court now demonstrates why the facts in the earlier cases may not be relied upon to support a finding of privity based upon an agency theory in this case. In Kern-Limerick and Western Union the prime contractor was (1) acting as a purchasing agent for the government, (2) the agency relationship between the government and the prime contractor was established by clear contractual consent, and (3) the contract stated that the government would be directly liable to the vendors for the purchase price. See 347 U.S. at 112 n. 2, 74 S.Ct. at 405 n. 2; 66 Ct.Cl. at 50. In the recent Supreme Court case of United States v. New Mexico, 455 U.S. 720, 102 S.Ct. 1373, 71 L.Ed.2d 580 (1982), the Court noted that these same factors, as well as others (e.g., title passed directly to the government), were crucial to their decision in Kern-Limerick. Id. at 742, 102 S.Ct. at 1386. See also Deltec Corp. v. United States, 326 F.2d 1004, 164 Ct.Cl. 432 (1964), where it was implied that the government could be directly liable to a subcontractor on an agency theory. Again, the three factors enumerated above were present. Id. at 1005-06 n. 1, 164 Ct.Cl. at 433 n. 1.

None of these crucial factors is present in this case. Even if we assume, for discussion purposes only, that an agency relationship can be implied under the provisions of the prime contract, there is still no contractual provision providing that the government is directly liable to a subcontractor for the goods or services supplied to Turner. As a consequence, we find that the cases cited as support for the agency exception to the no-privity rule are of no relevance to the case before us. Turner was not, therefore, acting as an agent of the government for the purpose of establishing privity between the government and Johnson.

The only court case cited by the board and Johnson to support their position that privity between the government and a subcontractor can exist in a factually similar setting is the 34-year-old case of Continental Illinois, which we mentioned earlier. The dicta of the Court of Claims in that case certainly implied that privity between the government and a subcontractor could be found if the contract provisions circumvent the independent authority of the prime contractor. But the court did not actually find privity. We know of no case, other than the board's own holding in Bristol, where privity has been found based upon this theory.

The Continental Illinois case also involved an important factor not present in this case — the application of the Severin doctrine.8 In Continental Illinois, the subcontractor's claim was being "sponsored" by the prime contractor. The court held that, because of an exculpatory clause identical to that in the Severin case, it had no jurisdiction to hear the part of the claim brought by the prime contractor on behalf of the subcontractor. 81 F.Supp. at 597, 112 Ct.Cl. at 565. It is not clear to what extent the court's opinion reflected the fact that the Severin doctrine barred the prime contractor's sponsorship of the subcontractor's claim, but it is reasonable to assume that this fact influenced the court's opinion.9

We reject the board's conclusion that the contract provisions so circumvented the independent authority of the prime contractor that Turner was acting as an agent of the government. It is true that the government here has retained a great deal of control over the actions of Turner in its dealings with the subcontractors on the project. But it is also apparent that the government meant to use Turner as a buffer between it and the claims of the subcontractors. After all, it was Turner that was contractually bound to supervise and complete the construction project for a fixed price. See Article 1.1, Purpose and Intent, supra. Also, it was Turner, not the government, who rejected Johnson's submittals as being nonresponsive, and required Johnson to provide redundant hardware. The court in Continental Illinois held that the contract provisions in that case were not sufficient to create privity between the government and the subcontractor, and we likewise cannot conclude that the contract provisions here are so extraordinary as to mandate a finding of privity.

Intent of the Parties

A careful analysis of the contract documents leads us to the conclusion that no provision was made for a direct appeal by a subcontractor. There is some merit to Johnson's allegation that the "contract documents are, at best, confusing, and at worst, in conflict, concerning the intention of the parties with respect to the relationship created thereby." The following factors, however, lead us to the conclusion that the contracts do not authorize a direct appeal by a subcontractor: (1) the government and Johnson never entered into a direct contractual relationship; (2) the "ABC" clause, contained in both the prime contract and the subcontract, specifically disclaimed a contractual relationship between the government and Johnson; (3) Turner was required to obtain a Miller Act payment bond, which provided a recourse by the subcontractor other than a direct appeal; and (4) there is no provision in any of the contract documents that clearly authorizes a direct appeal by a subcontractor.

The first factor, although obvious, is significant in that it clearly identifies Johnson as a "subcontractor."10 It is also significant to note that it has not been asserted that the subcontract was assigned to the government, see Brock & Blevins Co. v. United States, 343 F.2d 951, 170 Ct.Cl. 52 (1965), or that direct dealings between the government and Johnson created privity of contract, see Seger v. United States, 469 F.2d 292, 199 Ct.Cl. 766 (1972).11 Rather, the basis for the board's holding that there was privity between the government and Johnson was that the contract provisions in the prime contract and the subcontract so circumvented the independent authority of the prime contractor that Turner was acting as an agent of the government. This holding, by implication, recognizes that there was no direct contractual relationship between the government and Johnson; if there were, it would not have been necessary to designate Turner as an agent of the government in order to find privity.

The second factor is the inclusion of the "ABC" clause in both the prime contract and the subcontract. Both Johnson and the ASBCA rely on the statement in Continental Illinois that "[a] mere statement that a contractual relationship did not exist would be ineffective if all the elements of such a relation were otherwise present." 81 F.Supp. at 598, 112 Ct.Cl. at 566. Although we certainly agree with this statement, it does not detract from our conclusion that the "ABC" clause is an important, if not determinative, factor in our analysis of the intent of the parties as seen through the contract documents. The "ABC" clause unequivocally states that no contractual relationship shall exist between the government and the subcontractors. Furthermore, the government asserts, and Johnson does not refute, that this clause was specially negotiated for inclusion in the prime contract and the subcontracts, as opposed to being merely "boilerplate" language. See Ball State University v. United States, 488 F.2d 1014, 1016, 203 Ct.Cl. 291, 294 (1973). At the very least, this clause should have put Johnson on notice that the government would resist any direct appeal by a subcontractor.

The third factor favoring lack of privity is the requirement in the prime contract that Turner obtain a Miller Act payment bond. The Miller Act, 40 U.S.C. §§ 270a-270f (1976), requires, inter alia, that a prime contractor undertaking construction of a public building furnish a performance bond "for the protection of the United States" and a payment bond "for the protection of all persons supplying labor and materials." 40 U.S.C. § 270a. Under 40 U.S.C. § 270b, a subcontractor is given the right to bring an action in district court against the prime contractor for amounts justly due. Under the prime contract, Turner was required to obtain a payment bond in the amount of $33,153,450 (approximately 50 percent of the total contract price).

As the government points out, the general purpose of the Miller Act is to protect subcontractors against nonpayment, as it is generally recognized that a subcontractor cannot directly sue the government and cannot obtain a lien against property supplied to the government. See United States v. Munsey Trust Co., 332 U.S. 234, 241, 67 S.Ct. 1599, 1602, 91 L.Ed. 2022 (1947). It would seem anomalous for the government to require that Turner supply the payment bond, with the great expense involved (a portion of which is undoubtedly passed on to the government) if it were contemplated that Johnson and the other bid package subcontractors were "contractors" with a right of direct appeal against the government. Whatever else may be gleaned from the existence of the Miller Act bond, one thing is clear: Johnson was provided with a means of recourse other than a direct action against the government.12

The final factor in our analysis of the intent of the parties is the absence of any clear contractual consent for direct subcontractor appeals. We emphasize "clear" consent, as certain provisions of the contracts make it difficult to define what the parties envisioned. Johnson points to two provisions, one in the subcontract and the other in the prime contract, that it asserts provide for direct subcontractor appeals.

First, Johnson points out that the standard Disputes clause of SF-23A was physically incorporated in the subcontract. Prior to the enactment of the CDA, the Disputes clause constituted the contractual basis upon which a contractor could bring a claim against the government to a board of contract appeals. If, as Johnson asserts, the purpose of the inclusion of the Disputes clause in the subcontract was to permit the presentation of subcontractor claims to the contracting officer with a right of appeal to a board of contract appeals, then a strong argument could be made that the parties intended to permit a direct appeal by Johnson rather than recourse to Turner, the prime contractor. Although the subcontract was executed by Turner and Johnson, it should be remembered that all subcontracts were subject to prior government approval. Also, it appears that not only was the government aware of the inclusion of the Disputes clause in the subcontract, but it also consented to its use.

The reason for the inclusion of the Disputes clause in the subcontract is the subject of conflicting affidavits proffered by the parties. The government relies on an affidavit of Robert W. Schmidt, a principal government representative during the negotiation of the prime contract.13 Mr. Schmidt states that Turner wanted SF-23A (which includes the Disputes clause) included in the subcontracts for "informational" purposes only, and asserted that no privity of contract or any other relationship would thus be created between the government and the subcontractors. Mr. Schmidt further asserts that Turner and the government then agreed to include the "ABC" clause in both the prime contract and the subcontracts to make this clear.

Johnson, however, asserts that the Schmidt affidavit is contradicted by an affidavit of James E. Yarbrough, the contracting officer for the prime contract. Mr. Yarbrough states that SF-23A was included in the prime contract "to provide a comprehensive statement of the parties['] rights under the contract and to provide comprehensive remedies to be determined in accordance with the administrative disputes procedure." This statement, however, clearly refers only to the government and Turner; no mention is made of the rights of subcontractors. Mr. Yarbrough also states:

This statement is directed to Articles V, IX, and X of Turner's standard subcontract forms, which deal with claims for extensions of time, additional compensation for changes, and disputes regarding inspection, not the inclusion of SF-23A. Furthermore, the government points to yet another affidavit of Mr. Yarbrough in which he states that SF-23A "pertains to disputes solely between Turner and the Government. The clause may be used by Turner's subcontractors but only to the extent that the subcontractor's claim is processed in the name and through Turner." The contracting officer described himself as authorized by the prime contract to be an arbitrator between Turner and the subcontractors and that, therefore, his decision would not be appealable to the board of contract appeals.

Finally, Johnson relies upon an affidavit of Victor C. Smith, Jr., a representative of Turner's during the negotiation of the prime contract. Mr. Smith states that it was his (and Turner's) understanding that the "ABC" clause was included merely to clarify that all normal communication in the project would be through Turner, and that the disputes procedures contained in SF-23A would be the route followed by the subcontractors (called the "separate contractors" in the affidavit) in presenting a claim.14

After reviewing these various affidavits, we conclude that the Disputes clause was not included in the subcontract in order to provide a claims procedure for subcontractors. Also, the existence of such a procedure for direct appeals by subcontractors would be in direct conflict with the inclusion of the "ABC" provision, a provision specially drafted for the prime and subcontracts. See Ball State University, 488 F.2d at 1016, 203 Ct.Cl. at 294. Furthermore, an interpretation that gives a reasonable meaning to all parts of the contract will be preferred to one that leaves portions of the contract meaningless; nor should any provision be construed as being in conflict with another unless no other reasonable interpretation is possible. See Hol-Gar Manufacturing Corp. v. United States, 351 F.2d 972, 979, 169 Ct.Cl. 384, 391 (1965), and cases cited. The government's interpretation regarding the inclusion of the Disputes clause in the subcontracts is the only one that reconciles the use of this clause and the "ABC" clause.15

Johnson also relies upon the following provision in the "Construction Management Special General Provisions" of the prime contract.

20. CLAIMS.

Johnson asserts that the above provision clearly contemplates that the subcontractors have the right to proceed directly against the government. We hold that it does not provide for such authorization because, by its terms, it does not expressly authorize a direct subcontractor appeal. Admittedly, the implications of this provision would have produced a strange result if the board chose to process Johnson's claim as one sponsored by Turner.16 In such a situation, Turner would have to prosecute the claim (at least nominally) and at the same time provide assistance to the government in defending the claim. However bizarre the operation of this provision seems, we do not find that it authorizes a direct subcontractor appeal on the basis of mere implication.

In summary, we conclude that direct subcontractor appeals are not authorized by the terms of the contract documents. Although this theory of jurisdiction was apparently presented to the board, the ASBCA did not rely upon contractual consent as a basis for its finding of privity. However confusing the various contract provisions are (in both the prime and subcontracts), we do not think it likely or reasonable that the parties contemplated direct subcontractor appeals in the absence of an explicit statement authorizing such a procedure.17 This is particularly true in light of the fact that direct subcontractor appeals have only been permitted in rare, exceptional cases; it is therefore unlikely that the parties would agree to such an unusual procedure by using such ambiguous language. As a consequence of this conclusion, we offer no opinion on whether the board could have properly asserted jurisdiction over a direct subcontractor appeal where the contract documents clearly authorize such a procedure.

The Certification Issue

Johnson and the amici curiae (representing Turner, the prime contractor; Industrotech Constructors, Inc., Watson Electrical Construction Company and Crawford Sprinkler Company, bid package subcontractors with claims before the ASBCA) assert that the board correctly assumed jurisdiction under the CDA because Johnson was the proper party to provide certification of the claim, as required by 41 U.S.C. § 605(c)(1). The certification requirement has been held to be a jurisdictional prerequisite to the board's consideration of a claim under the CDA. W.M. Schlosser Co. v. United States, 705 F.2d 1336, 1338 (Fed.Cir.1983); see also Skelly & Loy v. United States, 685 F.2d 414, 418 (Ct.Cl.1982). Apparently the government urged that the ASBCA dismiss Johnson's claim because Turner's certification, not Johnson's, was a necessary prerequisite to the board's jurisdiction.

The certification issue would only present itself if we concluded that Johnson was a "contractor" under the CDA. The ASBCA in Bristol concluded that there was privity of contract between the subcontractor and the government, and that "the subcontractor not only may, but must, certify its claim under the Contract Disputes Act." 81-1 BCA at 74,533. Since we hold that there was no privity between Johnson and the government, we do not reach the certification issue. 41 U.S.C. § 605(c)(1) states that "the contractor shall certify ... the claim" (emphasis added). It logically follows that a determination of the proper party for certification must be preceded by a finding that the claimant is a "contractor" under the CDA.

Alternatively, Johnson argues that the board properly assumed jurisdiction because Turner submitted its own certification of the claim. The ASBCA did not rely on Turner's certification, however, as it treated Johnson's claim as a direct subcontractor appeal, rather than as a claim sponsored by Turner. Since the board did not rely on Turner's certification and did not consider Johnson's claim as being sponsored by Turner, we cannot rule on the adequacy of Turner's certification on the basis of a hypothetical situation.

Conclusion

In conclusion, we hold that the ASBCA erred in assuming jurisdiction over a direct appeal by the subcontractor, as Johnson was not a "contractor" as that term is defined in the CDA. Our conclusion is based upon our holding that not only was there no privity of contract between the government and Johnson arising either from the contract language or from the doctrine of agency, but that no direct appeal by Johnson was authorized under either the prime contract or subcontract.

A general consideration also influencing our opinion is the doctrine that waivers of sovereign immunity are to be strictly construed. United States v. Mitchell, 445 U.S. 535, 538, 100 S.Ct. 1349, 1351, 63 L.Ed.2d 607 (1980); United States v. King, 395 U.S. 1, 4, 89 S.Ct. 1501, 1502, 23 L.Ed.2d 52 (1969). Prior to the enactment of the CDA, there were recommendations before Congress urging statutory authorization for direct subcontractor appeals. Congress chose not to adopt these recommendations.18 While we do not accept the government's argument that the CDA was designed to eliminate all the previously recognized exceptions to the general rule that direct subcontractor appeals must fail for want of privity, there is no indication that Congress intended to broaden the scope of these exceptions. In order for us to find privity in this case, we would have to go further than any court has gone before. Congress has indicated its desire to retain the present sponsorship approach to subcontractor appeals, and Johnson does not state a claim under any of the recognized exceptions for direct subcontract appeals.

Accordingly, after consideration of the parties' and the amici curiae's submissions, and oral argument, we sustain the appeal of the government and reverse the decision of the ASBCA which held that it had jurisdiction of a direct appeal by this subcontractor.

REVERSED and VACATED.