Justia Government Contracts Opinion Summaries

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Dunbar, a Service Disabled Veteran Owned Small Business (SDVOSB), was awarded an Army Corps of Engineers ditch and tributary project in Arkansas. Dunbar then hired a subcontractor, Harding Enterprises, to work on the project. After Harding Enterprises defaulted, Dunbar made a demand on the bond guaranteed by Hanover, which Hanover denied. Hanover then filed suit seeking a declaration that it had no obligations under the bond and seeking to have the bond rescinded based on illegality of the subcontract. The Eighth Circuit reversed the district court's grant of summary judgment in favor of Hanover, holding that the district court erroneously concluded that the subcontract was undisputedly in violation of 13 C.F.R. 125.6(b)(2) because the percentage that Dunbar spent on contract performance relative to the prime contract price could not be conclusively ascertained until conclusion of performance of the prime contract. The court also held that the potential that Hanover may have liability under the False Claims Act if it were to perform under the bond does not justify discharging Hanover from its obligations and rescinding the contract. View "Hanover Insurance Co. v. Dunbar Mechanical Contractors, LLC" on Justia Law

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The Council handles contracts for over 200 New Jersey municipalities, police departments, and school districts. Mid-American sells bulk road salt. The Council's members estimated their salt needs for the 2016-17 winter. The Council issued a comprehensive bid package, anticipating the need for 115,000 tons of rock salt. MidAmerican won the contract, which stated: There is no obligation to purchase [the estimated] quantity. As required by the contract, Mid-American obtained a performance bond costing $93,016; imported $4,800,000 worth of salt from Morocco; and paid $31,250 per month to store the salt and another $58,962.26 to cover it. Mid-American incurred at least another $220,000 in finance costs and additional transportation costs. Council members purchased less than five percent of the estimated tonnage. Mid-American claims “several” Council members purchased salt from MidAmerican’s competitors, who lowered their prices after MidAmerican won the contract. Mid-American sued the Council and 49 of its members, alleging breach of contract, breach of the covenant of good faith and fair dealing, and bad faith under UCC Article 2. The Third Circuit affirmed the denial of relief. No valid requirements contract existed here because the contract was illusory. These sophisticated parties were capable of entering into precisely the contract they desired. Neither the Council nor its members ever promised to purchase from Mid-American all the salt they required View "Mid-American Salt LLC v. Morris County Cooperative Pricing Council" on Justia Law

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Relator filed a qui tam action under the False Claims Act (FCA) and the Florida False Claims Act (Florida FCA), against two skilled nursing home facilities, two related entities that provided management services at those and 51 other facilities in the state, and an affiliated company that provided rehabilitation services. The Eleventh Circuit denied the motion to dismiss, holding that relator has sufficiently demonstrated she has constitutional standing and thus the case or controversy requirement is satisfied. Furthermore, relator's entry into the litigation funding agreement does not violate the FCA. Drawing all inferences in favor of relator, the court held that the evidence at trial permitted a reasonable jury to find that defendants committed Medicare-related fraud. In this case, relator alleged that defendants defrauded Medicare through the use of two improper practices: upcoding and ramping. Furthermore, relator introduced sufficient evidence to permit a jury to reasonably conclude that La Vie Management caused the submission of false claims. Therefore, the court reversed the district court's grant of summary judgment as a matter of law to defendants as to the Medicare-related fraud claims. However, the court held that the district court correctly granted defendants' motion for judgment as a matter of law as to the alleged false Medicaid claims where, based on the evidence presented at trial, no jury could have reasonably concluded that defendants defrauded Medicaid. The court remanded with instructions for the district court to reinstate the jury's verdict in favor of relator, the United States, and the State of Florida and against defendants on the Medicare claims in the amount of $85,137,095, and to enter judgment on those claims after applying trebling and statutory penalties. The court also reversed and vacated the district court's grant of a conditional new trial. View "Ruckh v. Salus Rehabilitation, LLC" on Justia Law

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Relator filed a qui tam action against Trinity, alleging that Trinity violated the False Claims Act (FCA) by knowingly presenting a false or fraudulent claim to the government, making a false statement material to a false or fraudulent claim, and retaliating against him. The Eighth Circuit affirmed the district court's grant of Trinity's motion to dismiss for failure to state a claim, holding that the complaint failed to allege with particularity that defendant presented a false or fraudulent claim to the government or that it had made, used or caused to be used a false record or statement. In this case, relator's general allegations that Trinity's compensation scheme most likely resulted in the presentment of claims for payment or approval are insufficient; while there is no "presentment" requirement for a 31 U.S.C. 3729(a)(1)(B) claim, the plaintiff must plead a connection between the alleged fraud and the actual claim made payable to the government; because relator failed to allege with particularity that Trinity submitted a claim for payment to the government, he cannot establish that Trinity's allegedly false statements were "material" to any claim that was actually submitted; and relator's allegations are insufficient to establish that Trinity knew he was engaged in a protected activity. View "United States ex rel. Benaissa v. Trinity Health" on Justia Law

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Citynet filed a qui tam action against West Virginia officials, alleging that defendants defrauded the United States when obtaining federal funding for a program to improve broadband connectivity for West Virginia residents, in violation of the False Claims Act (FCA). Specifically, Citynet alleged that Defendants Gianato and Given, respectively the Director of the West Virginia Division of Homeland Security and Emergency Management and the State Technology Officer, along with other defendants, knowingly submitted false statements and records to the United States as part of their application for funding under the federal Broadband Technology Opportunities Program and, once the funding was obtained, made false claims in drawing down funds under the Program. The Fourth Circuit vacated the district court's immunity ruling and remanded with instructions to deny Gianato and Given's claim of qualified immunity. Because the district court's ruling was contingent on the answer to the threshold legal question of whether qualified immunity may be invoked as a defense to FCA claims, the court exercised appellate jurisdiction and held that qualified immunity does not apply to protect government officials from claims against them for fraud under the Act. View "United States ex rel. Citynet, LLC v. Gianato" on Justia Law

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ACC, the subcontractor on a Corps flood protection project, filed suit against the prime contractor, Hirani, for breach of contract and the providers of Hirani's payment bond, Colonial, under the Miller Act for unpaid labor and materials. The district court entered judgment in favor of ACC and awarded damages against both defendants. The DC Circuit remanded the case to the district court to make findings of fact as to when the Prime Contract was terminated and whether ACC performed labor or supplied material on April 29 and/or April 30. In the event that Colonial and Hirani cannot meet their burden to show that ACC's Miller Act claim was untimely, then this court can resolve the parties' other Miller Act contentions. If Hirani and Colonial show that termination occurred before April 29 or that ACC performed no labor or supplied no material on April 29 or 30, the court can then address the Miller Act statute of limitations issue. The court affirmed the restitution damages award against Hirani on ACC's contract claim where ACC has not provided the court with any basis to deviate from the principle of D.C. law that restitution, not quantum meruit, is the proper remedy where there is an express contract between the parties. The court deferred addressing other issues raised by the parties. View "United States v. Hirani Engineering & Land Surveying, PC" on Justia Law

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The U.S. Defense Information Systems Agency (DISA) awarded contracts for the opportunity to sell information technology services to various federal government agencies. Inserso did not receive an award; its total evaluated price was the 23rd lowest in a competition for 20 slots. DISA attached a debriefing document to its notice, including the total evaluated price for the awardees and some previously undisclosed information on how DISA evaluated the cost element of the proposals. Inserso sent follow-up communications, noting that several awardees in the small-business competition had also competed in the full-and-open competition as part of joint ventures or partnerships. Inserso asked whether those entities had received similarly detailed debriefings and expressed concern that, if so, the earlier debriefing would have provided unequal information giving a competitive advantage to some bidders. DISA stated that all unsuccessful bidders in both competitions were given similarly detailed information. The Federal Circuit ruled in favor of the government. Because Inserso did not object to the solicitation before the awards, when it was unreasonable to disregard the high likelihood of the disclosure at issue, Inserso forfeited its ability to challenge the solicitation. The court did not reach the issue of whether DISA’s disclosure prejudiced Inserso. View "Inserso Corp v. United States" on Justia Law

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Oliva worked for the VA, 2000-2016. In 2015, Oliva challenged the VA’s issuance of a letter of reprimand for Oliva accusing a supervisor of improperly pre-selecting an applicant for a position; Oliva claimed that his email constituted protected whistleblowing. Under a Settlement Agreement, the VA agreed to provide a written reference and the assurance of a positive verbal reference, if requested; Oliva’s Waco supervisor would not mention the retracted reprimand. Oliva was terminated from his employment in April 2016, for performance reasons. Oliva claims that the VA twice breached the Settlement: in March 2015, when Oliva applied for a position in the VA’s El Paso medical center the reprimand letter was disclosed and in February 2016, when Oliva applied for a position in the VA’s Greenville healthcare center a Waco employee disclosed that Oliva was on a Temporary Duty Assignment. The Claims Court held that Oliva’s complaint plausibly alleged breaches of the Agreement that resulted in the loss of future employment opportunities. Oliva sought $289,564 in lost salary and lost relocation pay of either $86,304 or $87,312. The Claims Court then held that Oliva had not stated plausible claims to recover lost salary or relocation pay. The Federal Circuit reversed. Oliva plausibly claimed that the alleged breaches were the cause of his lost salary. Oliva’s termination from his Waco job does not undercut that plausibility. View "Oliva v. United States" on Justia Law

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Ginnie Mae (GM), established by 12 U.S.C. 1717(a)(2)(A) to provide stability in the secondary residential mortgage market and promote access to mortgage credit, guarantees mortgage-backed securities (MBS). FMC, a private corporation, was an originator and servicer of government-guaranteed home mortgages and an issuer of MBS in GM’s program. GM learned of FMC actions that constituted the immediate default of the Guaranty Agreements. FMC undertook an investigation and provided the results to GM, while also complying with SEC requests. GM later terminated FMC from its program. The SEC initiated a civil enforcement action, which terminated in a consent agreement, without FMC admitting or denying the allegations but paying disgorgement and penalties. The Consent Agreement provided that it did not affect FMC’s right to take positions in proceedings in which the SEC is not a party but FMC agreed to not take any action or permit any public statement denying any allegation in the SEC complaint FMC later sued, alleging that GM had breached Guaranty Agreements when it terminated FMC from its program and denied violating those Agreements. The Federal Circuit affirmed the Claims Court’s dismissal. FMC’s breach of contract claims are precluded under the doctrine of res judicata. FMC’s action is essentially a collateral attack on the judgment entered in the SEC action. The SEC and GM are in privity for the purposes of precluding FMC’s claims and “successful prosecution of the second action would nullify the initial judgment or would impair rights established in the initial action.” View "First Mortgage Corp. v. United States" on Justia Law

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The Supreme Court held that the Expedited Declaratory Judgment Act (EDJA), Tex. Gov't Code ch. 1205, gave the trial court jurisdiction to declare whether contracts executed by the San Jacinto River Authority were legal and valid but not whether the Authority complied with the contracts in setting specific water rates. The Authority, which has contracts to sell water to cities and other customers and uses the revenue to pay off its bonds, filed suit seeking declarations under the EDJA regarding the contracts and the water rates set under those contracts. Several participants, including three cities (Cities) opted in as interested parties. The Cities filed pleas to the jurisdiction, arguing that the trial court lacked subject matter jurisdiction to adjudicate the Authority's claims. The trial court denied the pleas to the jurisdiction. The court of appeals held primarily for the Authority. The Supreme Court held (2) the EDJA permits the trial court to exercise jurisdiction over the Authority's claims as to the valid execution of the contracts, but it does not confer jurisdiction over whether the Authority complied with the contracts in setting specific water rates; and (2) the Cities' governmental immunity does not bar an EDJA claim, which is brought in rem to adjudicate interests in property. View "City of Conroe, Texas v. San Jacinto River Authority" on Justia Law