## Facts

- The SBA awarded Afro-Lecon, Inc., a small-business subcontract, to supply filing cabinets for GSA.
- After performance disputes, the parties entered a 1982 settlement terminating the contract without termination costs while preserving Afro-Lecon’s right to assert claims for the delivered portion.
- Afro-Lecon submitted a certified claim seeking costs allegedly caused by GSA delays in issuing purchase orders and bills of lading; the contracting officer denied the claim.
- Afro-Lecon appealed to the GSA Board of Contract Appeals, where the government sought detailed discovery on delay periods, costs, and causation.
- The Board granted a motion to compel and issued an “order on accounting” requiring Afro-Lecon to provide a detailed account of its claim.
- Afro-Lecon learned it was the subject of a grand jury investigation related to the civil claim and asserted that key employees refused to provide information to avoid self-incrimination.
- Afro-Lecon moved to stay the Board proceeding pending completion of the criminal matter; the Board denied the stay.
- A grand jury later indicted Afro-Lecon for making false claims tied to the civil claim.
- A criminal investigator attended a civil deposition and heard testimony beyond criminal discovery limits without identifying himself as an investigator.
- Afro-Lecon renewed its stay request; the Board again denied it and dismissed the appeal with prejudice for failure to comply with discovery and the order on accounting.

## Issues

1. Whether the Board abused its discretion by denying a stay of the civil contract-dispute proceedings during a related criminal investigation and indictment.
2. Whether dismissal with prejudice for discovery noncompliance was an improper sanction given the parallel criminal proceedings and asserted Fifth Amendment concerns of corporate personnel.

## Decision

- The Federal Circuit vacated the Board’s dismissal with prejudice and remanded.
- The court held the Board applied an overly rigid approach by treating the corporation’s lack of a Fifth Amendment privilege as effectively dispositive.
- The court required a flexible, case-by-case balancing addressing the risks and burdens created by parallel civil and criminal proceedings.
- The court concluded dismissal with prejudice was unduly harsh because the Board did not meaningfully consider less severe alternatives, including a stay or discovery limits.

## Legal Principles

- Although a corporation cannot invoke the Fifth Amendment privilege, tribunals must consider the privilege of officers and employees when their testimony or cooperation is necessary to litigate the corporation’s civil claim.
- When civil and criminal matters overlap, adjudicators must guard against using civil discovery to obtain information unavailable or less available through criminal discovery.
- Motions to stay in the parallel-proceedings context require a reasoned, flexible balancing of interests, including: the government’s need for civil discovery, potential prejudice to the criminal case, the claimant’s ability to pursue the civil claim, and constitutional concerns affecting individual witnesses.
- Dismissal with prejudice is a severe sanction that generally requires consideration of less drastic measures when noncompliance is tied to parallel criminal exposure.

## Conclusion

The Federal Circuit set aside the Board’s dismissal because the Board failed to apply a balanced framework for managing overlapping civil and criminal proceedings and imposed a disproportionate sanction without adequately considering a stay or other protective measures.


Afro-Lecon, Inc. v. United States, 820 F.2d 1198 (Fed. Cir. 1987)