Justia Government Contracts Opinion Summaries

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Plaintiff filed suit on behalf of the United States under the False Claims Act (FCA) against AECOM, alleging that AECOM submitted fraudulent claims for payment to the government. Specifically, plaintiff alleges that AECOM overstated its man-hour utilization rate, improperly billed the government for labor not actually performed, and failed to properly track government property, resulting in significant financial costs and government waste.The Second Circuit affirmed the district court's dismissal of most claims, but concluded that the district court's materiality analysis of plaintiff's 31 U.S.C. 3729(a)(1)(A)-(B) claims premised on the labor billing allegations was flawed because the district court improperly relied on materials extraneous to the complaint. The court also concluded that the public disclosure bar does not provide an alternative basis to affirm. Accordingly, the court vacated the judgment, reversed the district court's dismissal of the section 3729(a)(1)(A)-(B) claims premised on the labor billing allegations; affirmed the dismissal of plaintiff's other claims; and remanded for further proceedings. View "United States ex rel. Foreman v. AECOM" on Justia Law

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In 2015, JKB and the Army entered into a three-year indefinite-delivery, indefinite-quantity contract. JKB agreed to provide instructional services up to 14 classes per year. The contract incorporates Federal Acquisition Regulation (FAR) 52.212-4, which includes a termination for convenience clause for the government, and incorporates Defense Federal Acquisition Regulation Supplement (DFARS) 252.216-7006, which requires all supplies and services furnished under the contract to be ordered by issuance of delivery or task orders. The Army issued three year-long task orders, each listing one lot of training-instructor services, the price per class, and a total price corresponding to the price of 14 classes. Each year, the Army used JKB for fewer than 14 classes and paid for each class actually taught, refusing to pay the total price listed in the task orders.JKB sued for breach of contract. The Claims Court ultimately granted the government summary judgment based on FAR 52.212-4 and the doctrine of constructive termination for convenience. The Federal Circuit vacated. FAR 52.212-4 governs the termination of commercial item contracts for the government’s convenience; it does not apply to service contracts, such as the contract at issue. On remand, the Claims Court may consider whether the “Christian doctrine” applies to incorporate a termination for convenience clause and whether the doctrine of constructive termination for convenience applies. View "JKB Solutions and Services, LLC v. United States" on Justia Law

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In 1993, the County and the Orange County Employee Retirement System (OCERS) entered into a Memorandum of Understanding (MOU), allowing the County to access surplus investment earnings controlled by OCERS and depositing a portion of the surplus into an account to pay for county retirees' health insurance. The county adopted the Retiree Medical Plan, funded by those investment earnings and mandatory employee deductions. The Plan explicitly provided that it did not create any vested rights. The labor unions then entered into MOUs, requiring the county to administer the Plan and that retirees receive a Medical Insurance Grant. In 1993-2007, retired employees received a monthly grant benefit to defray the cost of health insurance. In 2004, the county negotiated with its unions to restructure the underfunded program, reducing benefits for retirees.Plaintiffs filed suit. The Ninth Circuit affirmed summary judgment in favor of the county. The 1993 Plan explicitly provided that it did not create any vested right to benefits. The Plan was adopted by resolution and became law with respect to Grant Benefits, part of the MOUs. The MOUs expired on their own terms by a specific date. Absent express language providing that the Grant Benefits vested, the right to the benefits expired when the MOUs expired. The Plan was not unilaterally imposed on the unions and their employees without collective bargaining; the unions executed MOUs adopting the Plan. The court rejected an assertion that the Grant Benefit was deferred compensation and vested upon retirement, similar to pension benefits. View "Harris v. County of Orange" on Justia Law

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Dr. Polansky was an official at the Centers for Medicare and Medicaid Services (CMS) before consulting for EHR, a “physician advisor” company that provides review and billing certification services to hospitals and physicians that bill Medicare. Polansky became concerned that EHR was systematically enabling its client hospitals to over-admit patients by certifying inpatient services that should have been provided on an outpatient basis.In 2012, Polansky filed suit under the False Claims Act (FCA), 31 U.S.C. 3729, alleging EHR was causing hospitals to bill the government for inpatient stays that were not “reasonable and necessary” for diagnosis or treatment as required by the Medicare program, 42 U.S.C. 1395y(a)(1)(A). His complaint remained under seal for two years while the government conducted its own investigation and ultimately determined it would not participate in the case.In 2019, the government notified the parties that it intended to dismiss the entire action under 31 U.S.C. 3730(c): “[t]he Government may dismiss the action notwithstanding the objections of the [relator]” so long as the relator receives notice and an opportunity to be heard on the Government’s motion. The district court eventually granted the motion. The Third Circuit affirmed. The government is required to intervene before moving to dismiss and its motion must meet the standard of FRCP 41(a). The district court acted within its discretion in granting the government’s motion. View "Polansky v. Executive Health Resources Inc" on Justia Law

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Schindler filed suit alleging that WMATA arbitrarily eliminated it from consideration of a bid to replace escalators throughout WMATA's Metrol Rail System stations even though it complied with the Request for Proposal's (RFP) requirements and offered a better value than that proposed by the awardee.The DC Circuit affirmed the district court's dismissal sua sponte of Schindler's complaint based on lack of subject matter jurisdiction on the ground that WMATA, an interstate compact entity, had not waived its sovereign immunity. The court explained that neither the interstate compact creating WMATA, the Authority's procurement documents nor the Administrative Procedure Act waives WMATA's sovereign immunity for challenges to procurement decisions like Schindler's. View "Schindler Elevator Corp. v. Washington Metropolitan Area Transit Authority" on Justia Law

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Plaintiffs, employees of civilian and military contractors who used Combat Arms Version 2 earplugs, filed separate suits against 3M in Minnesota state court, asserting failure-to-warn claims under state law. After removal to federal court, the district court granted plaintiffs' motions to remand the cases to state court for lack of federal jurisdiction, concluding that 28 U.S.C. 1442(a)(1) was not a basis for removal.Reviewing de novo, the Eighth Circuit affirmed the remand orders in the Graves and Hall actions, whose members acquired commercial earplugs. The court concluded that 3M failed to establish it was "acting under" a federal officer or agency in developing and disseminating warnings and instructions for its commercial earplugs. However, the court affirmed in part and reversed in part the remand orders in the Copeland cases and remanded for further proceedings. The court concluded that 3M has a colorable federal contractor defense for claims made by Copeland plaintiffs who acquired earplugs through the military, and has satisfied the other elements required for section 1442(a)(1) removal as to these plaintiffs. Therefore, the district court's remand orders are reversed as to this group, whose members will need to be determined on remand. View "Graves v. 3M Company" on Justia Law

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EC contracted to repair the Navy ships Thunderbolt, Tempest, and Hurricane. The Navy claimed $474,600 in liquidated damages under the Tempest contract because of late delivery. Having already paid for the Tempest work, it withheld $473,600 under the Hurricane contract. EC claimed the Navy caused the delay and, after the contracting officer denied its claim, sued under the Tempest contract, referring specifically to the $473,600 setoff. While the litigation proceeded, EC sought additional compensation under the Hurricane contract for unexpected work on that ship and appealed to the Armed Services Board of Contract Appeals, seeking payment of the $473,600 “withheld from payments due under [the Hurricane] contract.”The parties settled the Tempest suit: EC released the government “from any and all actions, claims, . . . and liabilities of any type, whether known or unknown, suspected or unsuspected, foreseen or unforeseen, or open or hidden, which have existed, presently exist, or may exist in the future, arising out of or in any way relating to the [Tempest] Contract.” The government released EC from “any and all” claims “arising out of or in any way relating to the issues that were raised ... or could have been raised in the pleadings.”In 2019, EC asserted a right to the same $473,600 in a third request to the contracting officer, then filed suit. The Fourth Circuit affirmed summary judgment in favor of the government. The settlement agreement barred EC’s claims. View "East Coast Repair & Fabrication, LLC v. United States" on Justia Law

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Owsley. a nurse for Care Connection, a company providing home healthcare to Medicare patients, alleged that she observed, firsthand, documents showing that her employer had used fraudulent data from Fazzi to submit inflated claims for payment to the federal and Indiana state governments. She sued both companies under the False Claims Act, 31 U.S.C. 3729(a)(1)(A), (B), (C), (G), and an Indiana statute.The Sixth Circuit affirmed the dismissal of the suit. Owsley’s complaint provided few details that would allow the defendants to identify any specific claims—of the hundreds or likely thousands they presumably submitted—that she thinks were fraudulent, and did not meet the requirements of Civil Rule 9(b). While Owsley’s allegations describe, in detail, a fraudulent scheme: Fazzi fraudulently upcoded patient data, which Care then used to submit inflated requests for anticipated Medicare payments, that information does not amount to an allegation of “particular identified claims” submitted pursuant to the fraudulent scheme. View "Owsley v. Fazzi Associates., Inc." on Justia Law

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California AB 32 phases out private detention facilities within the state. Because of fluctuations in immigration, ICE relies exclusively on private detention centers in California. AB 32 carves out exceptions for the state’s private detention centers. The United States and GEO, which operates private immigration detention centers, sued. The district court ruled largely in favor of California.The Ninth Circuit reversed. California is not simply exercising its traditional police powers, but rather impeding federal immigration policy. . Under the Supremacy Clause, state law must fall if it stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress. The presumption against preemption does not apply to areas of exclusive federal regulation, such as the detention of immigrants. California did more than just exercise its traditional state police powers – it impeded the federal government’s immigration policy. Congress granted the Secretary of the Department of Homeland Security broad discretion over immigrant detention, including the right to contract with private companies to operate detention facilities. AB 32 also discriminated against the federal government in violation of the intergovernmental immunity doctrine by requiring the federal government to close all its detention facilities, while not requiring California to close any of its private detention facilities until 2028. View "GEO Group, Inc., v. Newsom" on Justia Law

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Triple Canopy, a private security company, had six fixed-price contracts for security services in Afghanistan, awarded by the Department of Defense. Each contract required that Triple Canopy comply with local law and incorporated Federal Acquisition Regulation 52.229-6, which states: [T]he contract price shall be increased by the amount of any after-imposed tax or of any tax or duty … if the Contractor states in writing that the contract price does not include any contingency for such tax and if liability for such tax, interest, or penalty was not incurred through the Contractor’s fault, negligence, or failure to follow instructions of the Contracting Officer or to ... take all reasonable action to obtain exemption." After repeatedly seeking exemptions, Triple Canopy paid a penalty ($430,994.97) that the Afghan government imposed based on the company having more than 500 employees.Within six years of making payment, Triple Canopy submitted claims. The Armed Services Board of Contract Appeals denied the claims as untimely, 41 U.S.C. 7103(a)(4)(A).The Federal Circuit reversed. Triple Canopy’s claims did not accrue until July 6, 2011, when the Afghan government responded to Triple Canopy’s April 8, 2011 appeal. Triple Canopy’s June 6, 2017 claim submission was within the six-year limitations period Triple Canopy had to comply with the requirement that it “take all reasonable action” to obtain “exemption” from the assessment, which meant appealing the assessment. View "Triple Canopy, Inc. v. Secretary of the Air Force" on Justia Law