[Timeliness of Former Licensees of the American Revolution Bicentennial Administration Claims]

The Department of the Interior asked whether breach of contract claims by six former licensees of the American Revolution Bicentennial Administration (ARBA) should be barred because of the statute of limitations on breach of contract actions against the United States. GAO noted that ARBA entered into a number of licensing agreements under which participating companies agreed to produce and market specific types and amounts of commemorative items using its logo. The claimants argued that: (1) ARBA officials induced their participation by orally agreeing to take a number of actions to promote the logo; (2) the oral representations constituted a part of the overall agreements, and failure to meet those commitments constituted a breach of contract; (3) ARBA actions caused significant damages through the overproduction of commemorative items; and (4) they were informed that a similar claim was settled on equity or policy grounds and that the rest of the claims would be similarly settled regardless of any limitations on legal liability. GAO found that: (1) since the claimants failed to take judicial action within 6 years of the termination date of their license agreements, their claims were barred from recovery; (2) agencies may not pay claims subject to the 6-year time limitation; (3) Interior's actions in the test case did not constitute a settlement and was not subject to the same limitations that would otherwise apply to an agency's authority to settle and pay claims based upon legal liability; and (4) there was no legal obstacle to Interior's execution of its agreement to resolve the remainder of ARBA claims in the same manner as the test case. GAO also found that administrative adjudication of breach of contract claims may not be time-barred, even when filed 7 years after contract termination, if cognizable under the Contract Disputes Act. Accordingly, the claims may still be considered for formal legal adjudication and settlement if cognizable under the Contract Disputes Act.