Justia Government Contracts Opinion Summaries

Associated Energy Group, LLC (AEG) initiated multiple bid protests concerning contracts managed by the U.S. Department of Defense, Defense Logistics Agency Energy (DLA) to deliver fuel to a U.S. military base and nearby airfield in Djibouti. This appeal concerns whether AEG has standing to bring its second bid protest in the U.S. Court of Federal Claims, challenging a one-year sole-source bridge contract awarded to the incumbent contractor. AEG argued that officials within the Djiboutian Ministry of Energy and Natural Resources were preventing contract performance by threatening AEG’s contracted fuel delivery truck drivers and refusing to issue or renew petroleum activity licenses (PALs) to AEG and its contractors.The U.S. Court of Federal Claims dismissed AEG’s complaint for lack of subject matter jurisdiction, ruling that AEG lacked both Article III constitutional standing and Tucker Act statutory standing to challenge the sole-source bridge contract awarded to United Capital Investments Group, Inc. (UCIG). The Claims Court found that neither AEG nor its contractors possessed the required PAL, making AEG ineligible to bid on the contract.The United States Court of Appeals for the Federal Circuit reviewed the case and affirmed the Claims Court’s dismissal. The court held that AEG lacked Article III standing because it could not bid on or compete for the bridge contract due to the lack of a PAL. Additionally, the court found that AEG lacked statutory standing under the Tucker Act, as it did not have a substantial chance of winning the contract even if the alleged errors by DLA were corrected. The court concluded that an exception to mootness applied to the case, but AEG’s inability to secure the required PAL meant it had no concrete stake in the lawsuit. View "ASSOCIATED ENERGY GROUP, LLC v. US " on Justia Law

CKY, Inc. entered into a fixed-price construction contract with the United States Army Corps of Engineers (Corps) in October 2012. CKY encountered unexpected conditions, including heavy rainfall and undisclosed culverts, which led to additional expenses. CKY sought compensation for these expenses, but the Corps denied the requests. CKY then filed a claim under the Contract Disputes Act, seeking $1,146,226 for the additional costs incurred. The Armed Services Board of Contract Appeals (Board) ruled in favor of CKY regarding the undisclosed culverts but denied compensation for other claims.The Board awarded CKY $185,000 plus interest for the expenses related to the undisclosed culverts. CKY then applied for attorney’s fees and expenses under the Equal Access to Justice Act (EAJA). The Board granted the application, concluding that the government’s position regarding the undisclosed culverts was not substantially justified. The Board limited its substantial-justification inquiry to the government’s litigation position on the specific claim where CKY prevailed.The United States Court of Appeals for the Federal Circuit reviewed the case. The court held that the Board erred by categorically narrowing its substantial-justification inquiry to the government’s litigation position and to the specific claim on which CKY prevailed. The court emphasized that the substantial-justification inquiry should consider both the agency’s pre-litigation conduct and its litigation position, and should treat the case as an inclusive whole rather than focusing on individual claims. The court vacated the Board’s decision and remanded the case for reconsideration without the categorical limitations previously applied. View "In Re SECRETARY OF THE ARMY " on Justia Law

The case involves a qui tam action under the False Claims Act (FCA) brought by Relators against Great American Insurance Company (GAIC) and Native American Services Corporation (NASCO). The Relators allege that GAIC and NASCO fraudulently took control of DWG & Associates, Inc. (DWG), a company that had graduated from the Small Business Administration's (SBA) 8(a) program but was still performing on 8(a) contracts. The 8(a) program is designed to help small, disadvantaged businesses compete for federal contracts. DWG, initially owned and controlled by a disadvantaged individual, Gose, lost its eligibility when GAIC and NASCO allegedly took over its ownership and control without notifying the SBA or seeking a waiver, as required by the program's regulations.The United States District Court for the Middle District of Florida dismissed the Relators' claims with prejudice. The court found that DWG, having graduated from the 8(a) program, was no longer a "participant" and thus not subject to the program's ownership and control requirements. Consequently, the court ruled that Relators failed to allege any false claims. Additionally, the court held that fraudulent inducement related to bidding on government contracts was not actionable under the FCA and that Relators failed to meet the particularity requirements of Rule 9(b) for pleading fraud.The United States Court of Appeals for the Eleventh Circuit reversed the District Court's decision. The appellate court held that a business that has graduated from the 8(a) program but is still performing on 8(a) contracts remains a "participant" and is subject to the program's ownership and control requirements. The court further held that submitting bids and claims for payment under these circumstances without notifying the SBA or obtaining a waiver could constitute an actionable claim under the FCA. The court also found that Relators' complaint met the particularity requirements of Rule 9(b) by providing sufficient details about the alleged fraudulent conduct, including the specific contracts, task orders, and the date DWG became ineligible to bid. The case was remanded for further proceedings consistent with the appellate court's opinion. View "Berry v. Native American Services Corporation" on Justia Law

Frederic P. Zotos, an attorney residing in Cohasset, Massachusetts, filed a qui tam complaint against the Town of Hingham and several of its officials. Zotos alleged that the town and its officials posted speed limit signs and advisory speed plaques that did not comply with applicable federal and state laws and regulations. He further claimed that the town applied for and received reimbursements for these signs and plaques from both the federal government and the Commonwealth of Massachusetts. Zotos asserted that the town fraudulently induced the federal government to pay it roughly $3,300,000 and the Commonwealth to pay it approximately $7,300,000.The United States District Court for the District of Massachusetts dismissed Zotos's complaint for failure to state a claim upon which relief could be granted. The court concluded that the qui tam action was not barred by either claim or issue preclusion. However, it found that Zotos's claims fell short of the False Claims Act (FCA) and Massachusetts False Claims Act's (MFCA) requirements. Specifically, it ruled that Zotos failed to sufficiently plead that the alleged misrepresentations were material to the federal government's and the Commonwealth's respective decisions.On appeal, the United States Court of Appeals for the First Circuit affirmed the district court's decision. The appellate court found that Zotos's complaint did not adequately allege that the defendants' purported misrepresentations were material. It noted that the essence of the bargain under the Federal-Aid Highway Program (FAHP) and the Chapter 90 program was that the defendants incurred permissible costs on projects that were duly reimbursed. The court concluded that Zotos's allegations amounted to ancillary violations that, without more, were insufficient to establish materiality. View "United States ex rel. Zotos v. Town of Hingham" on Justia Law

In the case before the United States Court of Appeals for the Federal Circuit, REV, LLC ("REV"), a veteran-owned small business that provides software consulting services, appealed a decision from the United States Court of Federal Claims regarding a bid process by the Department of Veterans Affairs ("VA").REV participated in the VA's bid process for its Transformation Twenty-One Total Technology-Next Generation (“T4NG”) program, aimed at replenishing the pool of Service-Disabled Veteran Owned Small Business (SDVOSB) vendors. REV was successful in the first stage of the bid process, but was eliminated in the second stage and was not among the final awardees.REV filed a lawsuit against the VA in the Court of Federal Claims, arguing that the VA's evaluation process was arbitrary and capricious due to alleged flaws in the process, including the VA's evaluation of rival bidders' submissions. The Court of Federal Claims dismissed REV's claims, ruling that REV lacked standing to challenge the VA’s evaluation of rival bidders' submissions and the VA’s establishment of the competitive range. The court found that REV failed to show that it was prejudiced as it could not establish that it had a greater than an insubstantial chance of securing an award had certain awardees been excluded from the bid process.On appeal, the United States Court of Appeals for the Federal Circuit disagreed with the lower court's decision, holding that REV had standing to challenge the VA's evaluation of rival bidders' submissions and the VA’s establishment of the competitive range. The court reasoned that REV had shown a substantial chance that it would have been added onto the T4NG contract if not for the alleged errors, thereby satisfying the requirements for standing. The court reversed the lower court's decision and remanded the case for further proceedings. View "REV, LLC v. US " on Justia Law

In April 2008, the Department of the Navy awarded a contract to Strategic Technology Institute, Inc. (STI) to provide various aircraft engineering and support services. The contract incorporated Federal Acquisition Regulation (FAR) 52.216-7, Allowable Cost and Payment, and FAR 52.242-4, Certification of Final Indirect Costs. STI was required to submit its cost rate proposals for fiscal years 2008 and 2009 by certain deadlines. STI did not submit these proposals until 2014, upon request by the government. After receiving these proposals, the government conducted audits and found that STI's proposals included approximately $1 million in unallowable costs. The government issued a final decision, demanding payment of unallowable costs, penalties, and interests.STI appealed to the Armed Services Board of Contract Appeals, arguing that the government's claim was barred under the six-year statute of limitations under the Contract Disputes Act. The Board rejected STI’s argument and held that the statute of limitations on any government claim for disallowed costs does not begin until the contractor submits the incurred cost proposal and provides sufficient audit records.STI then appealed to the United States Court of Appeals for the Federal Circuit. The court held that the event that started the clock for the statute of limitations is the submission of STI’s cost rate proposals in September 2014, not STI’s failure to timely submit the proposals. The court held that STI's liability for receiving overpayment was not fixed until STI submitted unallowable costs in the cost proposal. Therefore, the government’s claim could not have accrued until STI submitted its cost rate proposals. The court affirmed the decision of the Board. View "STRATEGIC TECHNOLOGY INSTITUTE, INC. v. SECRETARY OF DEFENSE " on Justia Law

In this case, Nova Group/Tutor-Saliba (“NTS”) was awarded a construction contract by the United States Department of the Navy to build a new aircraft carrier maintenance pier at a naval base. The contract required NTS to demolish an old pier, design and build a replacement pier, and construct a new structure known as the Mole Quaywall, which would be designed by the government. During construction, NTS encountered unexpected subsurface soil conditions that complicated and increased the cost of the project. NTS sought additional compensation from the government alleging differing site conditions.The United States Court of Appeals for the Federal Circuit affirmed the decision of the United States Court of Federal Claims which had denied NTS's claim for additional compensation. The Court of Federal Claims found that NTS had not established a Type I differing site condition because the contract documents disclosed that NTS would encounter unpredictable subsurface conditions and possible obstructions. It also found that NTS had failed to prove a Type II differing site condition, as it had not demonstrated that any of the potential causes for hard driving were unknown or unusual in the region or materially different from comparable work. The Court of Appeals agreed with these findings and also ruled that the parol evidence rule had not been violated as NTS claimed. The Court of Appeals found that the parol evidence rule does not prevent a party from presenting evidence that a recital of fact in an integrated agreement may be untrue, and the challenged evidence was not introduced to modify any term of the contract. Therefore, the appeal by NTS was denied and the decision of the Court of Federal Claims was affirmed. View "NOVA GROUP/TUTOR-SALIBA v. US " on Justia Law

Stronghold and the city entered into a 2015 contract to renovate the Monterey Conference Center. Before filing a lawsuit asserting a claim for money or damages against a public entity, the Government Claims Act (Gov. Code 810) requires that a claim be presented to the entity. Without first presenting a claim to the city, Stronghold filed suit seeking declaratory relief regarding the interpretation of the contract, and asserting that the Act was inapplicable.Stronghold presented three claims to the city in 2017-2019, based on its refusal to approve change orders necessitated by purportedly excusable delays. Stronghold filed a fourth amended complaint, alleging breach of contract. The court granted the city summary judgment, reasoning that the declaratory relief cause of action in the initial complaint was, in essence, a claim for money or damages and that all claims in the operative complaint “lack merit” because Stronghold failed to timely present a claim to the city before filing suit.The court of appeal reversed. The notice requirement does not apply to an action seeking purely declaratory relief. A declaratory relief action seeking interpretation of a contract is not a claim for money or damages, even if the judicial interpretation sought may later be the basis for a separate claim for money or damages which would trigger the claim presentation requirement. View "Stronghold Engineering, Inc. v. City of Monterey" on Justia Law

This appeal related to "electronic-bingo" operations conducted by the Department of Alabama Veterans of Foreign Wars of the United States ("the VFW") at some of its Alabama posts. Travis Whaley and Randall Lovvorn contracted with the VFW to superintend and promote its electronic-bingo operations. Between 1997 and 2013, Whaley served the VFW as adjutant, commander, and quartermaster at different times. For his part, Lovvorn served as the VFW's accountant. The VFW contracted with G2 Operations, Inc. ("G2"), to conduct its electronic-bingo operations. Under contract, G2 agreed to conduct electronic-bingo operations at VFW posts throughout Alabama, and the VFW would receive 10% of the gross revenue. All the proceeds from electronic bingo were deposited into a VFW bank account. The VFW also entered into contracts with Whaley and Lovvorn, assigning them specific roles in its electronic-bingo operations. Several years later, after being notified of a tax penalty from the IRS, the VFW discovered a shortfall of $1,782,368.88 from what it should have received under its contracts with G2. The VFW filed a complaint asserting claims against G2 as well as additional claims against other parties, which were eventually whittled down throughout litigation until only claims against Whaley and Lovvorn remained. A jury reached a verdict against Whaley and Lovvorn on VFW's claims of breach of contract, fraudulent suppression, and conversion, awarding $1,782,368.88 in compensatory damages and $2,000,000 in punitive damages. Because the VFW's claims rely upon its own involvement in illegal transactions, the Alabama Supreme Court reversed the trial court's judgment and rendered judgment in favor of Whaley and Lovvorn. View "Whaley, et al. v. Dept. of Alabama Veterans of Foreign Wars of the United States" on Justia Law

Baldwin County Bridge Company, LLC ("BCBC"), filed suit against John Cooper in his official capacity as Director of the Alabama Department of Transportation ("ALDOT"), seeking to halt construction of a bridge that ALDOT had hired Scott Bridge Company, Inc. ("Scott Bridge"), to build over the Intracoastal Waterway in Baldwin County. That lawsuit spawned three matters before the Alabama Supreme Court. In the first, Cooper sought mandamus relief because the trial court entered an order compelling him to respond to certain discovery requests made by BCBC; he argued the information sought was protected from disclosure by the executive-privilege doctrine. On Cooper's motion, the Supreme Court stayed enforcement of the trial court's discovery order to allow the Court to consider Cooper's privilege argument. Meanwhile, the trial-court proceedings continued and, before the Supreme Court was able to rule on Cooper's mandamus petition, the trial court granted BCBC's motion for a preliminary injunction to halt construction of the bridge. Cooper appealed that injunction, arguing that it was unwarranted and that the $100,000 preliminary-injunction bond put up by BCBC was insufficient. Scott Bridge filed its own appeal challenging the preliminary injunction, while also arguing that the trial court erred by dismissing it from the case and by stating that it was not entitled to the protection of an injunction bond. After reviewing the briefs submitted by the parties in all three of these matters, the Supreme Court concluded BCBC's claim on which the preliminary injunction was based was barred by State immunity. Accordingly, the trial court had no subject-matter jurisdiction over that claim and the preliminary injunction had to be reversed. Although the Court ruled in favor of Cooper on this point, it nevertheless rejected his companion argument that the trial court should have been directed to increase the $100,000 preliminary-injunction bond on remand. The Court also rejected Scott Bridge's argument that that it was entitled to recover on the preliminary-injunction bond. Finally, because the discovery that Cooper sought to withhold based on executive privilege was being sought in conjunction with the claim that is barred by State immunity, the trial court's order compelling Cooper to produce that information was moot, as was Cooper's petition challenging that order. View "Ex parte Alabama Department of Transportation" on Justia Law