Playing Cards With a Government That Stacks the Deck - D.C. District Court Radically Expands The 'Christian Doctrine' To Subcontracts

On March 30, 2013, the U.S. District Court for the District of Columbia issued a decision imposing certain socio-economic contract requirements on subcontractors operating hospitals associated with the University of Pittsburgh Medical Centers. See UPMC Braddock, et al. v. Harris, Civ. 09-1210 (PLF) (D.D.C. Mar. 30, 2013) ("UPMC Braddock"). Even though the hospitals' subcontracts did not include these socio-economic clauses, the court applied the age-old "Christian Doctrine," which assumes that certain contract requirements reflecting a "significant or deeply ingrained strand of public procurement policy" will apply to a Government contract even if those requirements have been omitted from the text of the actual contract. See G.L. Christian & Associates v. United States, 312 F.2d 418, 426 (Ct. Cl. 1963). Even though no court has ever before held in the 50-year history of the Christian Doctrine that this legal rule applies to subcontractors (Christian and its progeny apply only to prime contractors doing business directly with the U.S. Government), the court has now radically expanded the doctrine.

Background

The plaintiffs in UPMC Braddock were three hospitals affiliated with the University of Pittsburgh Medical Center (the "Hospitals"). In 1995, the Hospitals entered into subcontracts with a health maintenance organization (the "HMO") to provide medical services and supplies to individuals enrolled in its coverage program. On January 1, 2000, the HMO contracted with the U.S. Government through the Office of Personnel Management ("OPM") to provide insurance coverage for federal employees. The HMO's agreement with OPM required the HMO to comply with several socio-economic requirements promulgated by the U.S. Department of Labor ("DOL"); but these requirements were not included in the HMO's subcontracts with the Hospitals, even when the subcontracts were renegotiated after 2000. The DOL requirements implement various statutory and regulatory socio-economic requirements relating to "equal opportunity" for employees, disabled individuals, and veterans of the Vietnam era:

Executive Order 11246 (30 Fed. Reg. 12319 (Sept. 24, 1965), as amended by Executive Order 11375 (32 Fed. Reg. 14303) (Oct. 13, 1967) (the "Executive Order") - directing the use in Government contracts of clauses that prohibit discrimination on the basis of race, color, religion, sex, or national origin, requiring prime contractors to include the clauses in "every subcontract or purchase order unless exempted by rule, regulations, or orders of the Secretary of Labor," and mandating that subcontractors furnish DOL with audit rights to ensure compliance with the clauses. Section 503 of the Rehabilitation Act of 1973, as amended, 29 U.S.C. § 793 (the "Rehabilitation Act") - which requires that any Government contract or any...