Justia Government Contracts Opinion Summaries

In 2006, the Federal Bureau of Prisons issued a Request for Proposals for the “design-build” construction of a federal correctional institution. The project involved a “cut-to-fill” site, meaning that the ground had to be leveled by excavating materials from one area of the site and using those materials to fill lower areas. Based on information in the solicitation documents and prior experience, BH believed the New Hampshire Department of Environmental Sciences would approve a permit for a one-step-cut-to-fill construction plan and calculated its bid price, $238,175,000, accordingly. The contract provided liquidated damages of $8,000 for each day completion was overdue. The NHDES rejected the application. BH advised the government of the implications of NHDES restrictions, but did not refuse to proceed or request that the government intervene with the NHDES. According to BH, the restrictions were contrary to generally accepted industry practice. Upon completion of cut-to-fill operations, BH submitted a Request for Equitable Adjustment, seeking $7,724,885 for excess costs. The Contracting Officer and the Claims Court rejected the request, finding that the Permits and Responsibilities clause placed the burden of obtaining and complying with state and local permits on BH “without additional expense to the Government;” that BH had not alleged violation of the implied duty of good faith; and that, because the government did not control the NHDES, there was no basis for imposing liability for constructive change. The Federal Circuit affirmed.View "Bell/Heery v. United States" on Justia Law

The issue before the Supreme Court in this case centered on a contract dispute between the State of Vermont and Corizon Health, Inc., formerly known as Prison Health Services, Inc. (PHS). The State appealed a declaratory judgment ruling that PHS was not contractually obligated to defend the State and its employees against certain claims brought by the estate of an inmate who died while in the custody of the Department of Corrections.  Upon review of the contract in question, the Supreme Court reversed, concluding that PHS had a duty to defend.View "Vermont v. Prison Health Services, Inc." on Justia Law

American General Contractors, Inc. ("AGC"), appealed a judgment assessing liability and awarding damages and interest for the cost of delays in the construction of the Williams County Law Enforcement Center in Williston. C&C Plumbing and Heating, LLP ("C&C"), the successful bidder for the mechanical prime contract, filed suit when construction the center was delayed approximately two years after "substantial completion" was supposed to have happened. The district court concluded it was appropriate for the County and AGC to share responsibility for providing temporary shelter and heat on the project. The court apportioned 47 percent of the liability for the costs of the delay for the three and one-half months of active interference to the County and 53 percent to AGC, for the four months delay inherent to the industry. The court awarded C&C approximately $73,000 on its claim against the County. After offsetting amounts owed between the parties, the court awarded AGC approximately $424,000 on its claim against the County. The court awarded Davis Masonry approximately $96,000 from AGC for masonry work completed under its subcontract with AGC, and rejected AGC's claimed offsets to that amount. Davis had provided heat, cover and shelter for the project during cold weather and sought $649,000 from the County and AGC for that expense including prompt payment interest. Davis had settled with the County for $530,000, and the court ruled AGC was responsible for 53 percent of the remaining $119,000, or $63,070. AGC argues the district court erred in determining AGC was liable for any of the costs incurred from the delay under its contract with the County. Finding no reversible error, the Supreme Court affirmed the district court. View "C&C Plumbing and Heating, LLP v. Williams County" on Justia Law

Bachner Company and Bowers Investment Company were unsuccessful bidders on a public contract proposal. They filed a claim for intentional interference with prospective economic opportunity against four individual procurement committee members. The superior court found that the bidders failed to present a genuine issue of material fact regarding the committee members' alleged bad faith conduct. The superior court then held that the committee members were protected by qualified immunity and that the lawsuit was barred by the exclusive remedy statute. The bidders thereafter appealed. Upon review, the Supreme Court concluded that the bidders indeed failed to present a genuine issue of material fact regarding the committee members' alleged bad faith. Furthermore, the exclusive remedy statute barred the bidders' suit. Accordingly, the Court affirmed the trial court's decision. View "Bachner Company, Inc. v. Weed" on Justia Law

MMS Construction & Paving, L.L.C. entered into a subcontract with Head, Inc. to pave asphalt runway shoulders at Altus Air Force Base in Oklahoma. The project was delayed and MMS, expressing concern that Head had not been making agreed payments, quit the job. MMS also complained that completing the job would be more expensive than it originally believed because certain requirements were being imposed that Head said would be waived. After MMS quit, Head finished the job, relying on other subcontractors. MMS sued Head on state-law claims of breach of contract, tortious breach of contract, quantum meruit, and misrepresentation, and brought a claim under the federal Miller Act on Head’s surety bond for the project. Head filed a counterclaim, alleging that MMS breached the contract. After a jury trial, MMS was awarded damages and attorney fees. Head filed a motion for judgment as a matter of law or for a new trial, both of which the district court denied. Head appealed, arguing: (1) the evidence at trial was insufficient to show that Head breached the contract; (2) if there was a breach, it was not material; (3) an Oklahoma statute limited MMS’s breach-of-contract damages to the amount unpaid plus interest; (4) the evidence was not sufficient to establish MMS’s alleged lost-profits damages for breach of contract; (5) MMS did not present sufficient evidence to prove misrepresentation or any damages from misrepresentation, MMS waived the misrepresentation claim, and the award of misrepresentation damages duplicated the award of damages for breach of contract; and (6) MMS was not entitled to attorney fees from Head because the Miller Act does not allow recovery of those fees. Upon careful consideration of the district court record, the Tenth Circuit reversed damages award based on the misrepresentation claim because the jury’s award was not supported by any evidence at trial. On all other issues, the Court affirmed. View "MMS Construction & Paving v. Head, Inc., et al" on Justia Law

Under the Workforce Investment Act, 29 U.S.C. 2887(a)(2)(A), the Department of Labor administers the Job Corps program, providing education, training, and support services to help at-risk youth obtain employment. There are 125 Job Corps Centers, including Blue Ridge in Marion, Virginia, which Res-Care has operated since 1998. In 2011, DOL published a Request for Information from potential bidders on an upcoming procurement for the operation of Blue Ridge. Res-Care’s contract was to expire in 2013. The Request encouraged firms that qualify as small businesses to respond with a “capabilities statement.” One large and four small businesses submitted statements. Res-Care, a large business, did not submit. The contracting officer found that, based on the responses, DOL would likely receive bids from at least two responsible small businesses at fair market prices, as required by the Federal Acquisition Regulation, 38 C.F.R. 19.502-2(b), and recommended conducting the selection as a small business set-aside. DOL issued a presolicitation notice indicating that the next Blue Ridge contract, with a value of $25 million, would be solicited as a “100% Set-Aside for Small Business.” Res-Care filed a bid protest alleging that DOL violated WIA by setting aside the Blue Ridge contract for small businesses, based on the “competitive basis” provision in section 2887. The Claims Court and Federal Circuit upheld the DOL determination.View "Res-Care, Inc. v. United States" on Justia Law

Kingdomware is a VA-certified service-disabled veteran-owned small business. The Small Business Act, 15 U.S.C. ch. 14A, states that small businesses generally will receive “a fair proportion of the total purchases and contracts for property and services for the Government.” Veteran-Owned Small Businesses (VOSBs) and Service-Disabled Veteran-Owned Small Businesses (SDVOSBs) are expressly recognized in the Small Business Act and the Federal Acquisition Regulation (FAR), 48 C.F.R. ch. 1, which implements the Office of Federal Procurement Policy Act, 41 U.S.C. ch. 7. Agency-specific contract regulations are stated in the Veterans Affairs Acquisition Regulation (VAAR), 48 C.F.R. ch. 8. In 2012, the VA decided to implement an Emergency Notification Service in medical centers. The VA contracting officer chose to use the General Services Administration (GSA) Federal Supply Schedule (FSS) to procure the needed services, and awarded the contract to a FSS vendor which was not a VOSB. Kingdomware filed a bid protest with the Government Accountability Office (GAO), which rejected the VA’s argument, and issued a recommendation that the VA cancel the award. The VA did not acquiesce. The Claims Court upheld the VA determination, interpreting 38 U.S.C. 8127(c), concerning use of restricted competition, as not creating a mandatory set-aside. The overarching policy of the FAR generally demands ‘full and open competition,” which is deemed satisfied by FSS contracts. The FAR specifies that an agency is encouraged to obtain goods and services from FSS contractors before purchasing from commercial sources, which include privately owned VOSBs and SDVOSBs. The Federal Circuit affirmed. View "Kingdomware Techs, Inc. v. United States" on Justia Law

In 1996, the Air Force entered into a contract under which SUFI would install and operate telephone systems in guest lodgings on bases in Europe at no cost to the government; the Air Force agreed that SUFI network was to be the exclusive method available to a guest placing telephone calls at the lodging. The contract permitted SUFI to block other networks and required the Air Force to remove or disable preexisting Defense Switched Network (DSN) telephone lines in hallways and lobbies, but DSN phones remained in place. Call records showed that, with Air Force assistance, guests often placed multiple or lengthy individual calls. After the Air Force declined to implement controls to curb DSN and patched-call abuse, SUFI blocked guest-room access to the DSN operator numbers but permitted morale calls from lobby phones, monitored by sign-in logs. Air Force personnel failed to require guests to sign the logs and gave guests new DSN access numbers, to circumvent SUFI’s charges. After failed attempts to resolve the situation, including through the Armed Services Board of Contract Appeals, SUFI sold the telephone system to the Air Force for $2.275 million and submitted claims, totaling $130.3 million, to the contracting officer. The officer denied the claims, except for $132,922 on a claim involving use of calling-cards. The Board later awarded $7.4 million in damages, plus interest. In an action under the Tucker Act, 28 U.S.C. 1491, the Court of Federal Claims awarded $118.76 million in damages, plus interest. The Federal Circuit vacated in part and remanded for additional findings. View "SUFI Network Servs, Inc. v. United States" on Justia Law

DynCorp contracted with the U.S. Department of State to assist in the development of a civilian police force in Iraq and subcontracted with PMC for operations and maintenance support. PMC filed suit against DynCorp alleging that DynCorp breached its contract with PMC by making payments to one account instead of another. The court affirmed the district court's dismissal of PMC's case against DynCorp as a sanction for its discovery malfeasance. The court rejected PMC's arguments on appeal because they did not support reversal of the district court's orders.View "Projects Mgmt. Co. v. DynCorp Int'l LLC" on Justia Law

Northern, operated by VanDuinen, was a general contractor on public construction projects, legally required to obtain surety bonds. Hanover was Northern’s bonding agent and required Northern to enter into an Indemnity Agreement, which VanDuinen signed in his individual capacity and as Northern’s President. The Midway Airport Project was financed by the FAA and managed by Parsons. In 2008 Northern won the bid and began subcontracting. in 2009 subcontractors complained that Northern failed to pay them in accordance with the bonds and contracts. Work was halted, resulting in a separate complaint, by Parsons, for failure to complete the Project as required. The FAA opted to retain possession of remaining contract funds, $127,086.00, pending resolution of the disputes and completion of the work. Hanover received claims from subcontractors McDaniel ($127,452.78) and Rex Electric ($78,495.00) and a claim for performance from Parsons. Hanover demanded collateral under the Agreement. Northern refused to post collateral or to indemnify Hanover. In 2009 McDaniel filed for bankruptcy; the bankruptcy trustee sued Hanover seeking payment for work performed. In 2012, Hanover paid the trustee $127,452.78 to resolve both McDaniels’s and Rex Electric’s claims. Hanover resolved Parson’s claim by stepping in as general contractor and arranging for completion of the Project. Parsons paid Hanover the $127,086.00 of contract funds the FAA had withheld. Hanover sued Northern and VanDuinen. The district court granted summary judgment in Hanover’s favor. The Seventh Circuit affirmed. The Agreement is unambiguous. Northern breached it, and Hanover is entitled to contractual damages. View "Hanover Ins. Co. v. Northern Bldg. Co." on Justia Law