AUTHORITY: §§ 3.1 to 3.60 issued under sec. 161, 68 Stat. 948, 42 U.S.C. 2201.

SOURCE: §3.1 to 3.60 appear at 24 F.R. 10869, Dec. 29, 1959.

Prior Amendments

1959: 24 F.R. 726, Feb. 3.

§3.1

GENERAL PROVISIONS
Purpose.

(a) Contracts entered into by the AEC usually contain a disputes article providing that disputes arising under the contract which are not disposed of by mutual agreement shall be decided in the first instance by the contracting officer. Many subcontracts under AEC cost-type contracts contain similar articles. The typical disputes clause further provides that the contractor or subcontractor may make an appeal in writing to the designated representative or representatives of the Commission, whose decision shall be final.

(b) The rules of procedure contained in this part are designed to provide an orderly and expeditious means for handling contract appeals. The AEC Hearing Examiner is the designated representative to hear, consider, and initially decide, an appeal from the decision of a contracting officer in a dispute arising, or alleged to arise, under a Commission contract and subcontract. Subject to

the provisions of 41 U.S.C. sections 321 and 322, his decision is final unless one of the parties to the proceeding requests review thereof by petition and the Commission grants the petition and orders the record and decision submitted to the members thereof for further decision. § 3.2 Scope.

The rules contained in this part set forth the procedure which will be followed by the parties and by the Hearing Examiner in arriving at his decision, and by the Commission in the review, if any, of such decision, as to the disposition of an appeal from a decision of a contracting officer in a dispute arising, or alleged to arise, under a contract or subcontract.

§ 3.3 Definitions.

(a) "AEC" means the agency established by the Atomic Energy Act of 1954, as amended, comprising the members of the Commission and all officers, employees, and representatives authorized

to act in the case or matter whether clothed with final authority or not.

(b) "Contracting Officer" shall mean the representative of the Commission who, under the contract or subcontract, has the responsibility for determining the dispute in the first instance and from whose decision appeal may be taken.

(c) "Contractor" shall include a subcontractor, and "contract" shall include a subcontract, as the case may be.

(d) "Commission" means the commission of five members or a quorum thereof sitting as a body, as provided by section 21 of the Atomic Energy Act of 1954, as amended.

(e) "Hearing examiner" shall mean the AEC officer designated by the Commission to conduct assigned hearings in accordance with regulations of the Commission under the Atomic Energy Act of 1954, as amended, including the rules set forth in this part.

(f) "Party" or "parties" shall mean (1) the prime contractor and the contracting officer, if the dispute arises, or is alleged to arise, under a prime contract; or (2) the contractor and subcontractor if the dispute arises, or is alleged to arise, under a subcontract: Provided, however, The AEC Hearing Examiner may, upon good cause shown, permit the AEC to participate as a party to the appeal.

(a) All pleadings shall be simple, concise, and direct. They shall be so construed as to do substantial justice.

(b) All pleadings of the contractor and the notice of appeal provided in §3.12 shall be dated and shall be signed by the contractor if an individual, by an officer thereof if a corporation, by a partner thereof if a partnership, by a joint venturer if a joint venture, or by the duly authorized attorney-at-law thereof.

(c) All pleadings of the contracting officer or AEC shall be dated and signed by the AEC counsel therefor.

§ 3.5 Computation of time.

The provisions of § 2.701 of this chapter (the AEC Rules of Practice) shall be applicable to proceedings under this part.

§ 3.6 Service of papers, methods, proof. The provisions of § 2.703 of this chapter (the AEC Rules of Practice) shall be applicable to proceedings under this part. § 3.7 Representation.

(a) The parties may represent themselves or may be represented in the proceeding by an attorney-at-law in good standing admitted to practice before any court of the United States, the District of Columbia, or the highest court of any state, territory or possession of the United States.

(b) Notice of appearance by an attorney-at-law, including AEC counsel, shall be given by filing with the Hearing Examiner a statement that the representative is an attorney-at-law in good standing admitted to practice before any court of the United States, the District of Columbia, or the highest court of any state, territory, or possession of the United States. Thereafter, any service of notice or papers upon the authorized representative shall constitute service upon the party, but a copy of all notices and papers served upon the party shall also be sent to the duly authorized representative.

All proceedings under this part shall be so conducted as to insure compliance with the security regulations and requirements of the Commission, and the contracting officer, the hearing examiner, and the Commission may take appropriate steps to insure said compliance in accordance with the provisions of the Atomic Energy Act of 1954, as amended, and the regulations issued thereunder, including §§ 2.800 to 2.814 of this chapter (the AEC Rules of Practice).

PRELIMINARY PROCEEDINGS

§ 3.10 Initial determination.

Where a dispute arising, or alleged to arise, under a contract cannot be disposed of by mutual agreement, the contracting officer shall, in all cases and as expeditiously as possible, prepare and serve in writing upon the contractor his specific findings of fact with respect to such dispute, his decision thereon, and a copy of the rules contained in this part and Part 2 of this chapter (the AEC Rules of Practice).

An appeal from the decision of the contracting officer shall be taken by the contractor by serving upon the contracting officer, from whose decision the appeal is taken, a notice of appeal, together with three copies thereof, within sixty days after service upon the contractor of such decision or within such other period as may be provided by the contract under which the dispute has arisen or is alleged to arise. The complaint provided for in § 3.13 may be filed with the notice of appeal.

§3.12 Notice of appeal.

The notice of appeal shall be in writing; shall indicate that an appeal is thereby intended; shall identify (a) the contract, by number, under which the dispute has arisen, or is alleged to arise, and (b) the decision of the contracting officer from which the appeal is taken and the date thereof; and may request that a hearing be held. A suggested form of notice of appeal is set forth in Appendix A, but the notice of appeal may be in such other form as shall conform to the requirements of this section. §3.13

Complaint.

an

(a) The contractor shall serve original and three copies of a complaint with respect to the dispute which is the subject of the decision of the contracting officer (1) upon the contracting officer, if the complaint is filed with the notice of appeal; or (2) upon the hearing examiner, if the complaint has not been filed with the notice of appeal, within twenty days after the service of the notice of appeal upon the contracting officer or within such other period of time as may be ordered by the hearing examiner, upon application therefor with due notice to the other party or parties to the dispute.

(b) The complaint shall (1) identify the contract, by number, with respect to which the dispute has arisen, or is alleged to arise; (2) set forth the article or articles of the contract pertaining to disputes thereunder; (3) identify other articles of the contract relevant to the dispute; (4) identify the decision of the contracting officer from which the appeal is taken; (5) describe the portion or portions of such decision which the contractor claims to be erroneous, with a brief statement therefor; and (6), if the contractor desires an oral hearing be

fore the hearing examiner, contain a request that such hearing be held. A suggested form of complaint is set forth in Appendix B, but the complaint may be in such other form as shall conform to the requirements of this section.

(c) Documentary evidence in support of the allegations of the complaint may be filed as exhibits thereto, subject to a motion to strike by an adverse party at the hearing or, if no hearing is requested or ordered, at the time the answer is filed.

§3.14 Transmittal of notice of appeal.

When the contracting officer has been served with a notice of appeal, or with a notice of appeal and complaint, as the case may be, he shall forthwith endorse the date of such receipt on the original and copies thereof and within ten days thereafter forward to the hearing examiner (a) the original and two copies of such notice of appeal or of such notice of appeal and complaint, as the case may be, and (b) three copies of the contract, the findings of fact and decision of the contracting officer, and supporting data, correspondence, or other documents relative to the dispute, together with a list thereof. The contracting officer shall simultaneously serve one copy of each document (except the contract), together with a copy of the list of all such documents, upon the appellant. §3.15 Notification of parties by hearing examiner.

Upon receipt thereby of the material referred to in § 3.14, the hearing examiner shall forthwith docket the appeal and so notify the parties. §3.16 Answer.

(a) Within twenty days after service of the complaint, or within such other period of time as may be ordered by the hearing examiner upon application therefor with due notice to the other party or parties, the contracting officer or other adverse party, as the case may be, shall prepare and serve an original and two copies of an answer to such complaint upon the hearing examiner.

(b) The answer shall state in short and plain terms the defense to each claim asserted and shall admit or deny averments upon which the appellant relies. If the answering party is without knowledge or information sufficient to form a belief as to the truth of an

averment, the answer shall so state, and this has the effect of a denial. Affirmative defenses shall be stated separately in the answer.

(c) Lack of jurisdiction of the hearing examiner to hear the appeal and failure to state a claim upon which relief can be granted may be asserted in the answer or may be raised by appropriate motion, as provided in § 3.19.

(d) Documentary evidence in support of defenses contained in the answer may be filed as exhibits thereto, subject to a motion to strike at the hearing or, if no hearing is requested or ordered, within ten days after service of the answer. § 3.17

Admissions.

The provisions of § 2.739 of this chapter (the AEC Rules of Practice) shall be applicable to proceedings under this part.

§3.18 Amendments of pleadings.

(a) At any time before hearing or before submission of a case by the parties without hearing, the hearing examiner in his discretion may permit a party, upon appropriate application and with notice to the other party or parties, to amend his complaint or answer. The hearing examiner may, upon his own initiative or upon application by a party, order another party to make a more definite statement of its complaint or answer, or to reply to an answer.

Such

(b) When issues within the proper scope of the appeal but not raised by the complaint and answer are tried by express or implied consent of the parties, such issues shall be treated in all respects as if they had been raised in such complaint and answer. amendment of the complaint and answer as may be necessary to cause them to conform to the evidence may be made upon motion at any time, even after decision, but failure so to amend will not affect the result of the trial of such issues. If evidence is objected to at the hearing on the ground that it is not within the issues raised by the complaint and answer, the hearing examiner may allow the pleadings to be so amended within the proper scope of the appeal when the presentation of the merits of the action will be served thereby and the objecting party shall not be materially prejudiced in the presentation of his case: Provided, however, That the

(a) Unless raised by the answer, lack of jurisdiction and failure to state a claim upon which relief can be granted must be raised by motion before the hearing on the merits. Such motions shall be heard and determined before hearing on the merits unless the hearing examiner orders that determination of the motion be deferred pending hearing on both the merits and the motion. The hearing examiner has the right at any time to recognize his lack of jurisdiction to proceed in a particular case.

(b) With respect to a motion to dismiss for failure to state a claim upon which relief can be granted, the hearing examiner, in his discretion, may permit a party to amend his complaint, within the proper scope of the appeal. If the hearing examiner thereafter finds that the complaint, with such amendments as may be offered and permitted, fails to state a claim upon which relief can be granted, the appeal shall be dismissed.

(c) The hearing examiner may, in his discretion, hear and grant any other proper motion filed by any party. § 3.20

Pre-hearing conferences.

The provisions of § 2.740 of this chapter (the AEC Rules of Practice) shall be applicable to proceedings under this part. § 3.21 Request for hearing by answering party.

If a hearing has not been requested by a party in the notice of appeal or complaint, another party may, not later than the filing date of the answer or in the answer, request that a hearing be held by the hearing examiner.

§ 3.22 Decision by hearing examiner without hearing.

If a hearing has not been requested by any party and the hearing examiner does not order a hearing on his own motion, briefs may be filed with the hearing examiner by each party within such period of time as may be allowed by the hearing examiner. Upon the filing of such briefs and of such reply briefs as he may by order permit, the hearing examiner shall proceed to a decision of the appeal

Hearings ordinarily shall be held at the location of the AEC office administering the contract, but may be held at the AEC Headquarters Building at Germantown, Maryland, or such other place as shall be determined by the hearing examiner, on his own motion or upon appropriate application therefor by a party. § 3.32

Absence of parties or counsel. The unexcused absence of a party or his authorized representative at the time and place set for the hearing shall not be the occasion for delay. In such event, the hearing shall proceed, and the appeal shall be deemed as having been submitted without oral testimony or argument on behalf of such absent party.

§ 3.33 Official reporter; transcript.

The provisions of § 2.743 of this chapter (the AEC Rules of Practice) shall be applicable to proceedings under this part.

§ 3.34 Conduct of hearings.

(a) The hearing shall be conducted as a trial de novo of (1) the issues of fact raised before the contracting officer with respect to the dispute which is the subject of the appeal, and (2) any relevant issue of law, and the appeal shall be considered by the hearing examiner as though such issues were first tried before him.

(b) The provisions of § 2.733, "Powers of Presiding Officers," and § 2.747, "Evidence," of this chapter (the AEC Rules of Practice) shall be applicable to proceedings under this part.

The provisions of § 2.745 of this chapter (the AEC Rules of Practice) shall be applicable to proceedings under this part. § 3.38

Discovery and production of documents and things for inspection, copying, or photographing.

(a) Upon motion of any party showing good cause therefor and upon notice to all other parties, the hearing examiner may (1) order any party to produce and permit the inspection and copying or photographing, by or on behalf of the moving party, of any designated documents, papers, books, accounts, letters, photographs, objects, or tangible things, not privileged in the opinion of the hearing examiner, which are in such party's possession, custody, or control and which constitute or contain evidence (including the existence, description, nature, custody, condition, and location of any books, documents, or other tangible things and the identity and location of persons having knowledge of relevant facts) regarding any matter that is relevant to the subject matter involved in the pending appeal, whether it relates to the claim or defense of a party; or (2) order any party to permit entry upon

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