Unilaterial termination of government contract: fettered or convenient?

There is, in this post, a bit of a red herring. I will be comparing failures of a government to perform an admitted contract, and the effect of the contract obligation on the validity of the contracted obligation. Actually, the compared situtations are distinguishable on their facts, but the common notion is one of governance issues one necessarily encounters when contracting with a government. Thus, this is more a case of contrasts, not comparisons at a certain level, but a teachable moment nevertheless (I hope).

Note that I regularly, with no disrespect intended, slice and dice, reorganize, paraphrase, leave out critical facts and citations, and generally make a mess of the original source to fit the available space and the point to be made in a post. So, always, always, go to the source; read the original at the link and don't get misled by my wayward rendition.

The impetus of this post is the Australian appellate case captioned Searle v Commonwealth of Australia [2019] NSWCA 127, decided May 31, 2019. A good nutshell discussion of the case is provided by Dr Nick Seddon, an honorary professor at the Australia National University College of Law, on the Australian Public Law blog. Dr Seddon is an accomplished leading authority, and author, on Australian commercial and government contract law. Critically for this blog writer, he writes in a forthright and narrative style that is easy to read and grasp.

Searle v Commonwealth [2019] NSWCA 127 – government contracting and fettering

What happened in Searle?    Searle joined the Navy as a marine technician. After being signed up, he entered into a training contract under which he would undertake a course of training towards a Certificate IV in Engineering. Under it the Navy undertook to provide a training plan and the various components to achieve the Certificate. The Navy failed to provide these elements of training. After leaving the Navy, Searle sued for damages for breach of contract. He argued that, if he had achieved the Certificate, he could have obtained a more remunerative job in civilian life than he in fact got.

There is a special legal background to this story. Going back to medieval times, English law held that the Crown does not enter into contracts with its servants. This applies in Australia although, for the ordinary public service, it has been superseded by elaborate legislation. Not so for the military, or at least not so as to remove the basic proposition that there is no contract between an service member and the Commonwealth. Such members are engaged at her Majesty’s pleasure.

The fettering rule.   When government enters into a contract, there is always a potential tension. To what extent does the contract bind the government in a way that may thwart the government’s task of governing? The answer to this traditionally has been that freedom to govern trumps freedom of contract. Under various labels (executive necessity, the rule against fettering or, more vaguely, sovereign risk) the government must be free to implement its programs and policies even if this causes the government to be in breach of contract. Traditionally, that is too bad for the contractor with no right to a remedy. This collection of principles has generated much controversy over many years, though it arises rarely. The controversy is fully described by Bell P, the lead New South Wales Court of Appeal judge in Searle v Commonwealth.

This tension is captured in a number of propositions (stated starkly here):
1. The government may simply break a contract with impunity;
2. The government cannot contract out of, or relieve the contractor from, existing statutory obligations;
3. The government cannot through a contract fetter its future exercise of executive power;
4. The government cannot through contract commit to future legislation;
5. The government may instigate legislation to override an existing contract.
Propositions 2 and 4 are less controversial and are well-established. Propositions 1 and 3 are controversial and ill-defined. Proposition 5 is well-established but controversial.

The no-fettering argument in Searle:   The Commonwealth said that the basic employment arrangement was not contract but, instead, an exercise of the Crown’s prerogative (or executive) power. Even if the training contract was a separate arrangement, over and above the underlying employment arrangement, the training contract could not fetter the Navy’s prerogative right to direct, control and manage Searle as a military person (dubbed “Navy Command” in the Court of Appeal). This was therefore a proposition 3 (the training contract could not fetter the exercise of Navy Command), or possibly a proposition 1 (the Commonwealth could simply break the training contract with impunity), case. This argument succeeded before the trial Judge.

Appeal:   On appeal, the New South Wales Court of Appeal (the functional equivalent to a Supreme Court in many U.S. jurisdictions) took this opportunity to examine the long-standing controversy about propositions 1 and 3, described as “uncertain” and “ill-defined”. The lead judgment by Bell P was supported by short judgments from Bathurst CJ and Basten JA. It was held that the training contract did not amount to a fetter on the Commonwealth’s executive (or prerogative) power of Naval Command and that the Commonwealth was liable to pay damages.

Space does not allow coverage of the very thorough description and analysis by Bell P of the difficulties and criticisms of the fettering doctrine. Making a government contract almost invariably employs the executive power. The fettering rule says that that contract is void if it purports to dictate or control a future exercise of executive power, including making another contract. If this is correct, it is a public law intrusion on contracting.

The Mason solution:   The consequence of invoking the fettering rule -- the contract that offends the rule is void -- has been one of the strands of criticism of the rule. Voidness is usually chaotic. Many years after the contract is made, a court pulls the rug leaving the parties in a very uncertain position. An important solution to this problem was suggested by way of obiter dicta by Mason J in Ansett Transport Industries (Operations) Pty Ltd v Commonwealth (1977) 139 CLR 54 at 76. This was that the contract is not void but it could not be enforced by coercive orders such as an injunction of specific performance. But, on the other hand, it could be the subject of a damages remedy. This solution preserves the underlying rationale of the fettering doctrine and, at the same time, protects the contractor. It is clear that the denial of the equitable remedies of injunction or specific performance is because of the government’s imperative to be unhindered in its task of implementing its policies and programs -- not for one of the reasons that guides a court’s discretion under the ordinary law of contract.

The training contract:    In Searle the contest was between the training contract and the future exercise of the power of Naval Command. Absent a possible fettering argument, there was no basis for challenging the contract. At a factual level, the training contract simply did not fetter the power of Naval Command. Any resort to Naval Command that detracted from the obligations arising from the training contract did not fetter the Commonwealth in any real sense. Even the possibility of having to pay damages in accordance with the Mason solution would not amount to a practical fetter. The Commonwealth conceded that it had the power to enter into such a contract and did not attempt to argue that it lacked that power, absent a fettering argument.

President Bell, during the course of his wide-ranging examination of the academic and judicial criticisms of the fettering doctrine, was clearly motivated by the fundamental principle that contracts should be kept, not just for the sake of the contractor but also from the perspective of government, because otherwise it would not be a credible commercial player. "This approach is more nuanced than others which carry the crude, often overbroad and instinctively unfair consequence of a contract being treated as void. It is an approach which arguably best reconciles the competing policy considerations."

Conclusion:   This case “raises a number of very important questions of principle” about government contracting, albeit in an area of the law that is rarely litigated. The fettering doctrine, at least arising from propositions 1 and 3, has been festering over many years and is in need of a fresh look and restatement. The Mason solution has been applied for the first time in Australia by the New South Wales Court of Appeal. It strikes a sensible balance between the government’s imperative to govern and its need to make contracts.

Watch this space for a possible appeal to the High Court.

In the U.S., the private law of contract has been undermined and supplanted by statutory laws applicable to government acquisition contracts. In the typical "procurement" government contract, the government is acquiring something. "“Acquisition” means the acquiring by contract with appropriated funds of supplies or services (including construction) by and for the use of the Federal Government through purchase or lease.... Acquisition begins at the point when agency needs are established and includes the description of requirements to satisfy agency needs, solicitation and selection of sources, award of contracts, contract financing, contract performance, contract administration, and those technical and management functions directly related to the process of fulfilling agency needs by contract. 2 FAR 2.101(a) In the Searle case, the government was acquiring nothing.

There was nothing more than an arrangement between the government and an employee that the government would provide a service for an employee. It was something in the nature of, what the U.S. Supreme Court has styled, a "gratuity": "Pensions, compensation allowances and privileges are gratuities. They involve no agreement of parties; and the grant of them creates no vested right. The benefits conferred by gratuities may be redistributed or withdrawn at any time in the discretion of Congress. ... On the other hand War Risk policies, being contracts, are property and create vested rights. The terms of these contracts are to be found in part in the policy, in part in the statutes under which they are issued and the regulations promulgated thereunder." Lynch v. United States, 292 US 571,577, U.S. Supreme Court (1934)

I'm not sure if that is a difference with a distinction between the fettering rules for government contract as practiced in Australia and contract clauses available in U.S. government, and Guam, contracting regulations, but by definition, Searle did not deal with a government contract as we know in procurement. "“Contract” means a mutually binding legal relationship obligating the seller to furnish the supplies or services (including construction) and the buyer to pay for them. It includes all types of commitments that obligate the Government to an expenditure of appropriated funds and that, except as otherwise authorized, are in writing. In addition to bilateral instruments, contracts include (but are not limited to) awards and notices of awards; job orders or task letters issued under basic ordering agreements; letter contracts; orders, such as purchase orders, under which the contract becomes effective by written acceptance or performance; and bilateral contract modifications. Contracts do not include grants and cooperative agreements ...." 2 FAR 2.101(a)

Guam's procurement law would not provide jurisdiction for a court to hear the contract claim brought by Searle, because the Guam procurement law does not waive sovereign immunity involving government contracts that are not acquisitions. In Guam, the government has waived sovereignty to be sued under government contracts more generally, but under the Claims Act, and, similar to Searle, the Claims Act only has jurisdiction to render judgement for monetary awards related to expenses incurred "upon a contract", not other monetary damages and it is an open question whether it even applies to to oral or un-written contracts, or to any theories of recovery based in equity, contracts implied in law, quasi-contract, or quantum meruit. The Guam Supreme Court has left to "another day our answer to whether the Guam Legislature has extended the waiver of sovereign immunity to oral or unwritten contracts, or to any theories of recovery based in equity." Guam Police Department v. Superior Court (Lujan) 2011 Guam 8, ftnt 8.

But, to the extent that the authority of the executive branch of the government in the U.S. is impinged upon by the procurement contracting process, the U.S. government and most if not all other jurisdictions in the USA have obtained a bit of flexibility unavailable in private contract law to cope with matters of good public governance, resulting in similar outcomes as in Searle yeilding a sensible balance between the government’s imperative to govern and its need to make contracts, in reliance on the immunity of the 'crown', particular laws and regulations, and the contract between the parties, all in concert, when a void contract is to be avoided.

An example of this is the accepted "Termination for Convenience" clause, which in private law of contracts would normally render the entire contract void as an illusory "bargain". It allows the government to unilaterally terminate a contract for practically any reason short of bad faith or fraud. However, it also requires that the government to compensate the contractor for work done and profits earned to the date of termination. It thus reached a similar outcome as in the Searle case. The termination for convenience clause arose out of the experiences of war, in particular the armistice following hostilities (in the "good old" days of wars between established states), when peace suddenly broke out but war material contracts persisted, without the government's need for more war materiel -- indeed as an impediment to redirecting funds to meet the needs of rebuilding the country.

Another example is the standard contract disputes clause. In simple terms, this clause and implementing regulations provides that contract disputes between the government and a contractor will be decided by the government if the parties are unable to "mutually agree" on a settlement and resolution of the dispute. In the face of this somewhat illusory and certainly conflicted decision making process, the clause contemplates a review of the government's decision, administratively, judicially or both.

This discussion illustrates a point I make when people tell me that government contracting should be done in the same manner as private contracting: government contracting must be conducted with an eye to good public governance as the overriding principle on which the contracting is allowed. It is true that "when the United States enters into contract relations, its rights and duties therein are governed generally by the law applicable to contracts between private individuals". Lynch v. United States, supra, 579, U.S. Supreme Court (1934) Nevertheless, only Congress can determine to allow a cause of action against the government arising under that contract. "The character of the cause of action — the fact that it is in contract as distinguished from tort — may be important in determining (as under the Tucker Act) whether consent to sue was given." Id., at 582 "Specifically, the Tucker Act permits three kinds of claims against the government: (1) contractual claims, (2) noncontractual claims where the plaintiff seeks the return of money paid to the government and (3) noncontractual claims where the plaintiff asserts that he is entitled to payment by the government."

American jurisdictions tend to mitigate the "fettering tensions" discussed above by Dr Seddon with a combination of regulations and contract clauses, coupled with particular waivers of sovereign immunity. And they each, in their separate ways, look for that nuance which strikes a sensible balance between the government’s imperative to govern and its need to make contracts.

Outsourcing defense procurement: an experiment

The UK is going to conduct an experiment, of sorts, with full and serious consideration being had, if not preferred, to privatize (or outsource, take your pick) the conduct of the country's defense spend.

It is a proposition, of course, that is controversial.

This article from supplymanagement.com (which provides views inside the world of government contracting as well as private sector contracting) describes the experiment.

Defence procurement outsourcing needs more examination

The Ministry of Defence (MoD) is to carry out a year-long assessment phase before eventually deciding whether to outsource defence procurement to the private sector.

In a statement to Parliament yesterday defence secretary Philip Hammond revealed the government will invite proposals from the private sector that will detail the provider’s capability and how they would operate a ‘government-owned, contractor-operated’ (GoCo) entity. In his statement, Hammond made clear he believes the GoCo option will prove preferable. “We have made no secret of our expectation that the GoCo option is likely to prove better value for money, but we need to test this assumption with the market, to see what can be delivered and at what cost.”

In parallel, it will assess a public sector comparator, described as ‘Defence Equipment & Support plus’ to decide which option provides greater value for money. Once the assessment phase has been completed, the government will decide whether to contract one of the bidding parties or to keep the purchase of military supplies - from helmets to helicopters - within the public sector.

Some consider this the Holy Grail, as in this next opinion piece by Andrew Pringle from The Telegraph.  Andrew Pringle is president of KBR’s UK defence business.  KBR provides defence work for the UK. One is reminded of Candy Rice-Davies.

It might be noted, as does the last mentioned article below, that this is a £14bn annual procurement programme. It is big bikkies, and big business, in anyone's currency.

The Ministry of Defence can get better value from the private sector

Good equipment saves lives, while failures in supply or specification can endanger or even cost them. Those on the front line do not care how it is procured, as long as they get the right equipment, in the right place, at the right time.

Yesterday’s announcement by Philip Hammond, the Defence Secretary, that private firms will be brought into the heart of the MoD’s procurement process – with the Defence Equipment and Supply organisation (DE&S) becoming, in the jargon, a government-owned, contractor-operated entity – has attracted criticism. But having been on both sides of the divide – as a commander at every level from platoon to division, and now the president of a global leader in the delivery of defence projects – I have no doubt that commercial-sector expertise could greatly enhance the way our Forces are equipped, and provide far better value for money for the taxpayer.

Lord Browne, the Government’s lead non-executive director, argued that by adopting best practice from the private sector, the country could save between 10 and 30 per cent of that total. This must start with the ethos. From the beginning to the end of the process, everyone must focus on that fundamental business concept: time is money.

Making defence procurement faster and more cost-efficient is not “privatising” or “taking over” the Civil Service. This is a model of equal partnership. It is about loosening the bureaucratic straitjacket to create the freedom for the thousands of excellent civil servants who work in the DE&S to do their job better.

How will this work? First, new skills. The existing staff are drawn from the Armed Forces, mostly with a background in operations, or the Civil Service, often with a background in policy. Their ability to run increasingly challenging acquisition programmes, on a £14 billion budget, can be enhanced by introducing individuals whose sole focus in their working life has been to extract the best deals from the supply chain and force it to deliver on time and to budget. This new partnership will level that playing field, and allow the ministry to cultivate, retain and recruit the best in the market.

The second great benefit will be private expertise in large-scale programme management. Lord Browne’s recommendations are again a good starting point. Projects must be held to a high level of scrutiny before the button is pushed, and no money should be committed without an experienced project manager and team in place.

The skills needed to run such projects translate directly into what’s required at DE&S to deliver the best possible kit to our soldiers at the best possible price. That is why this new approach may well prove a model for the world.

Others are far less sanguine, as reported in the Financial Times (you will likely need to register for a free, but limited, right to view this article, but you should always check the source, especially on this blog since I often extract, cut and rearrange and paraphrase to make a teachable moment of the item).

MoD procurement reform plan gets cool industry response

Howard Wheeldon, a veteran industry analyst, said on Thursday: “I have not heard of anybody who is in favour . . . I have not heard of one [defence] company that has put its hat in the ring.

“It still must be proven beyond all reasonable doubt that this is going to provide value for money for the taxpayer and to the armed forces and some benefit for those companies the MoD procures equipment from,” he added.

Sir Brian Burridge, vice-president of ADS, the industry trade group, said: “There needs to be a proper dialogue, a proper recognition of the legitimacy of the industry’s concerns and a proper resolution of those concerns.”

These include commercial confidentiality and intellectual property issues, especially if the job of running the Goco is given to a competitor.

However, the Royal United Services Institute, one of the UK’s most influential military think-tanks, expressed stronger doubts. “We cannot easily see how the . . . Goco would even work in practice, let alone why it would be a less expensive and better alternative to what is in place today,” it said, adding that history was littered with failed outsourcing deals.

I am supportive of this kind of experimentation.  Assuming the race is a fair one (and I question whether the defects in outsourcing this complex task will show up in only the first year), we need practical studies of the effects of the choices available to get the right balance of transparency and accountability against bang for buck and efficiency appropriate for the job.

But we cannot, in my mind, abdicate due process and public interest, especially when it comes to critical government functions and services, such as the defense of the country. We could, for instance, sell advertising space on uniforms, replacing the flag of the country for, say, a golden arches patch, and that would give us bang for buck. Sports teams do that, and it is a common private sector practice. But is that commercial model one we want for our military, our public works department, our school teachers?  

I get queasy with the thought of off-loading our governmental responsibilities to and conferring our sovereign immunity on the highest bidder, even the best value bidder. 

Courting government business and sovereign immunity

One of the risks of doing business with the government is that you cannot sue them for fault, even if clearly wrong, unless you get its permission to sue. At least with the common law, a sovereign cannot be sued unless it consents to be sued. This is the law of "sovereign immunity". Fortunately, most US jurisdictions do consent, at least in a very restricted manner, to being sued in procurement matters. But you may have to hop on one foot and plea, "may it please the court", if that is one of the conditions the sovereign demands of you.

When the government allows suit, it is said to waive sovereign immunity. And it is a very strict application of legislative, or constitutionally, granted waiver. The right to sue may only be in a very particularly described case (or cause of action), in a particular court, at a particular time, and in a particular manner. Get any of those conditions wrong, and your "right" to sue he sovereign is a mirage.

I must here disclaim much knowledge of such matters. Sovereign immunity is generally in the knowledge of courts and litigators, and I do not litigate. I am a simple minded in house general commercial lawyer. So, this is more in the nature of a "heads up" than any kind of elucidation of the law of this topic. Still, I thought you might want to be aware.

Here I link to two cases, the first from Pennsylvania, and the second from Guam, each dismissing a procurement claim on the basis of sovereign immunity.  In the Pennsylvania case, the issue was which tribunal was required; in the Guam case, the issue was what form of action was required.

The following case is from the Commonwealth (State for those outside the USA) of Pennsylvania, USA. Again, I have no knowledge of Pennsylvanian law. I am guessing, but it appears to me that Pennsylvania had a long standing law relating to government contracting, particularly construction contracting, and that it more recently adopted a more comprehensive law dealing more broadly with government contracting, including for supplies, services and construction. At first blush, it looks somewhat like the ABA Model Procurement Law on which Guam's law is based.

One of the issues presented is "Does the Board of Claims have exclusive jurisdiction to determine claims arising under a contract with the Commonwealth, including the claim that a contract exists?" Please have a read of the whole case at the link and don't rely on my exposition of it; I have selectively cut and pasted and rearranged and paraphrased the opinion, so there is plenty of opportunity here for me to misstate the case. Further there are other issues of importance that I do not touch on.

The background here is that SGI (the appellant) won an RFP under the competitive sealed proposal method of source selection, and the other offeror, GTECH protested, following which the government agency (DGS) cancelled the bid.   Pennsylvania law evidently does not allow a protest of a bid which is cancelled before award. 

SGI brought this action, seeking declaratory and injunctive relief, in the Commonwealth Court's original jurisdiction, and petitioned for a preliminary injunction claiming it had received the contract, or was entitled to receive it, and sought to affirm it. The issue was whether SGI brought a cognizable claim to the Commonwealth Court, or whether it should have been brought before the administrative Board of Claims. The lower court had allowed the non-monetary claim to be brought to the Commonwealth Court rather than the Board of Claims.

The interplay of the older Board of Claims Act terms and the newer Procurement Act terms has to be considered, also, so you must read the opinion to understand that nuance. Such is the tangled web of sovereign immunity.

SCIENTIFIC GAMES INTERNATIONAL, INC. v. COMMONWEALTH OF PENNSYLVANIA, Supreme Court of Pennsylvania, Middle District, Decided March 25, 2013.

The Procurement Code establishes administrative processes to address disputes arising in the procurement setting. On account of the doctrine of sovereign immunity, however, contractors, bidders, and offerors have limited recourse and remedies.

We consider the contours of the Board of Claims' exclusive jurisdiction pertaining to procurement litigation against Commonwealth agencies. More specifically, we are asked to determine whether such jurisdiction forecloses original-jurisdiction proceedings in the Commonwealth Court.

The Procurement Code contains a scheme for resolution of disputes arising in connection with the solicitation or award of a contract, commencing with a pre-litigation process encompassing a protest procedure administered by the purchasing agency and a right of appeal to the Commonwealth Court. For post-award contract disputes, the Procurement Code establishes a claim procedure before the contracting officer, subject to review in the independent administrative board known as the Board of Claims. The Board of Claims is given "exclusive jurisdiction" to arbitrate claims arising from contracts entered into by Commonwealth agencies, except: "(d) Nonmonetary relief. — Nothing in this section shall preclude a party from seeking nonmonetary relief in another forum as provided by law."

Significantly, as well, the Procurement Code "reaffirms sovereign immunity," prescribing, with limited exceptions, that "no provision of this part shall constitute a waiver of sovereign immunity[.]" The only exceptions to this sovereign immunity waiver in the Procurement Code pertain to the protest and claim procedures described above, and to proceedings in the Board of Claims "to the extent set forth in" the chapter pertaining to legal and contractual remedies.

GTECH claims that sovereign immunity has been waived only relative to the protest, claims, and Board-of-Claims procedures specified in the Procurement Code. Thus, for jurisdiction of claims against the Commonwealth to be cognizable in judicial venues, a legislative waiver of sovereign immunity must be found elsewhere to pertain. Appellants observe, however, that neither the Commonwealth Court panel nor SGI has identified any such waiver provision.

SGI adopts the Commonwealth Court panel's position that jurisdiction was proper under Section 1724(d):"On its face, Section 1724(d) preserves parties' ability to invoke any grants of jurisdiction to any other tribunal that would extend to contract actions against Commonwealth agencies for nonmonetary relief."

We begin with the doctrine of sovereign immunity, because we agree with GTECH that it plays an important role under the Procurement Code, which is designedly structured to accord immunity, subject only to specific and limited exceptions.

The constitutionally-grounded, statutory doctrine of sovereign immunity obviously serves to protect government policymaking prerogatives and the public fisc. To a degree, it has been tempered to recognize the rights and interests of those who may have been harmed by government actors, and/or, in the contract arena, to remove a substantial disincentive for private individuals to pursue government contracts.

Understandably, some immunity applications may be distasteful to those who may discern government wrongdoing, or at least unremediated collateral injury to private concerns resulting from governmental policy changes. In light of the constitutional basis for the General Assembly's allocation of immunity, however, the area implicates the separation of powers among the branches of government also crafted by the framers.

Thus, in absence of constitutional infirmity, courts are not free to circumvent the Legislature's statutory immunity directives pertaining to the sovereign.

We recognize that some decisions of this Court may suggest that immunity is not squarely a jurisdictional matter. Notably, at the federal level at least, however, sovereign immunity is considered a core jurisdictional concern. The language of the Pennsylvania Constitution itself seems consistent with such perspective, as it relegates to the General Assembly the power to specify the manner and designate the courts in which suits against the Commonwealth may be brought.
While more general clarification of the relationship between sovereign immunity and jurisdiction may be appropriate in the arena at large, for present purposes, we regard sovereign immunity as a jurisdictional concern vis-à-vis the Procurement Code.

In this respect, we agree with GTECH that — as a matter of jurisdiction — if the General Assembly has not specifically provided by statute for such nonmonetary relief in a claim arising from a contract entered into by a Commonwealth agency under the Procurement Code, then either the claim is within the exclusive jurisdiction of the Board of Claims or it is barred by sovereign immunity.

Based on the above, we conclude that the Commonwealth Court erred in interpreting Section 1724(d) so broadly as to sanction original-jurisdiction actions in a judicial tribunal over nonmonetary claims against the Commonwealth. To the contrary, nonmonetary claims against the Commonwealth are cognizable only to the extent they fall within some "specific[]" waiver or exception to immunity. As explained, no such waiver or exception is found in Section 1724(d) of the Procurement Code, and neither the Commonwealth Court nor SGI has identified any other salient and specific waiver provision within which to bring SGI's claims.

This next case is from Guam, and one in which I had involvement at the administrative review level. An appeal of the administrative review tribunal, the Office of Public Accountability, was taken to the Superior Court, which dismissed the action on sovereign immunity grounds. The Guam Supreme Court upheld the result. (Again, there are other issues for which you need to refer to the linked case report.)

As background, for most of the history of the Guam Procurement Act, many if not most appeals to the court were by way of a writ or either mandamus or review, but also by way of an ordinary civil action. Writs are entitled to an expedited review as a "special proceeding". Civil actions take their turn and grind slowly through the system. Nothing frustrates the public, let alone the government and bidders, more than a long, drawn-out review process, especially when needed services or supplies are at stake. And, of course, big money is usually involved when a case is so important to be taken to court.

In the years leading up to this case, there were Superior Court cases, seemingly inconsistent, dismissing a civil action on the basis that a writ must be sought, or dismissing a writ on the basis that a civil action was required. One decision said, of appeals from the administrative tribunal, that not all such appeals were created equally, and if the appeal involved the merits it should be by civil action, but if procedural rules, then by writ. The appeal in this case was framed as a civil appeal, lodged as a special proceeding, and argued it should be treated as a writ of review.

The Supreme Court ruled the statutory waiver of sovereign immunity required a civil action rather than a writ. It reasoned that Guam law distinguishes between writs and civil actions, and that the waiver of sovereign immunity in 5 GCA § 5480(a) expressly referred to an "action", thus it held a "civil action" was required. It found that, since no parties were named (or necessarily required under a writ of review), the Superior Court appeal failed as a civil action. It held, that, to invoke the waiver of sovereign immunity, the appeal must be brought against the Territory of Guam or other named agency in a civil action.

The case is :

 Town House Dep't. Stores, Inc. v Dep't. of Educ., 2012 Guam 25.

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