Justia Government Contracts Opinion Summaries

The company has been under contract with the U.S. Army’s Morale, Welfare, and Recreation Fund since 1993 to build and operate a hotel at a military base on Oahu. With 18 years remaining on the agreement, the Armed Services Board of Contract Appeals determined that the Fund breached the core of the contract and the parties entered the damages phase of the dispute. The company filed a separate complaint alleging that the Fund had done nothing to cure its ongoing breach. The ASBCA dismissed the second complaint as duplicative. The Federal Circuit affirmed, finding that the company voluntarily waived its right to appeal to the court under its negotiated contract with the Fund. View "Minesen Co. v. McHugh" on Justia Law

Following published stories about an investigation of their business practices, principals of a waste-management company improved their chances of winning a bid for a contract to refurbish garbage carts for the City of Chicago by slashing their bid. They encouraged other companies to bid in hopes of being hired as a subcontractor if another company won the bid. Each bidder had to certify that it had not entered into any agreement with any other bidder or prospective bidder relating to the price, nor any agreement restraining free competition among bidders. The company won the bid, and after a Justice Department investigation for antitrust violations, the principals were convicted of mail and wire fraud. The Seventh Circuit reversed, reasoning that the purpose of "colluding" with other potential bidders had not been to prevent them from underbidding but to provide insurance against the bid being rejected based on the earlier investigation. There was no harm as a result of the company encouraging additional bidders. View "United States v. Fenzl" on Justia Law

In 2008 the district court calculated damages for the government's partial breach of the Standard Contract for disposal of spent nuclear fuel using the 1991 Annual Capacity Report and the duty of good faith and fair dealing. The Federal Circuit, having set the 1987 ACR as the appropriate acceptance rate for a causation analysis under the Standard Contract, remanded. On remand, the district court set the amount of damages at $89,004,415. The Federal Circuit affirmed, holding that the new judgment accounts for the proper causation times and principle. View "Pacific Gas & Elec. Co. v. United States" on Justia Law

Defendant (principal contractor) sub-contracted with Stevens for work on military personnel housing at the Army base at Fort Polk, Louisiana. Stevens retained plaintiff to perform re-roofing. Plaintiff completed satisfactory work at the instruction of defendant and Stevens, but was not paid in full. Plaintiff originally sued under the Miller Act, 40 U.S.C. 3133, which provides federal question jurisdiction Plaintiff conceded at trial that defendants failed to secure a bond as required under the Miller Act. The federal claim was dismissed. The district court entered judgment in favor of plaintiff on a Louisiana-law breach of contract claims and allowed plaintiff to amend to allege diversity that existed at the time of the original complaint. The court declined to consider defendants' newly submitted evidence concerning diversity. The Fifth Circuit vacated. The district court may not have had proper subject-matter jurisdiction from the instant plaintiff filed; it incorrectly held that it had discretion to exercise supplemental jurisdiction over the state claims, assuming that it had proper subject-matter jurisdiction under the Miller Act. The Miller Act claim was too attenuated to establish proper federal question jurisdiction and could not support supplemental jurisdiction.View "Arena. v. Graybar Electric Co., Inc.," on Justia Law

Plaintiff, certified by the city as a minority-owned business eligible for favored treatment, sells a variety of products. The city is virtually its only customer. Early in 2005 the city began to suspect that plaintiff was a broker rather than a wholesaler, which would make it ineligible to bid for contracts as an MBE. Plaintiff had only six employees, though it claimed to have a warehouse. The city never completed its investigation, so plaintiff retains its certification. The city also believed that the company had shorted it on a shipment of aluminum sign blanks, and ultimately debarred it from dealing with the city. The company sued immediately and obtained a temporary restraining order; debarment was in effect for only eight days. The city abandoned its attempt to debar the company. The district court then ruled in favor of defendants. The Seventh Circuit affirmed. Claims by the principals in the company were frivolous, given that they continued to be employed by the company. The temporary diminution in business did not amount to destruction of the company nor did it constitute retaliation. Plaintiff did not prove breach of contract. View "Chicago United Indus. v. City of Chicago" on Justia Law

In a national emergency, the Department of Defense can augment its own capabilities with aircraft drawn from the "Civil Reserve Air Fleet," composed of aircraft owned by commercial carriers but committed voluntarily for use during emergencies. The Fleet is divided into teams of airlines. The Department awards mobilization value points; the more points a member has, the more non-emergency Department air transportation the member can bid on. Points are transferrable within teams. Members of defendant's team have a contract with a one-year term and a separate three-year agreement concerning distribution of business among members. Plaintiff's suit is based on a 2006 three-year agreement in the form of a letter. A change from what members of the team had been doing ultimately led to plaintiff's withdrawal from the team. Plaintiff subsequently went into bankruptcy. Plaintiff won a jury verdict of almost $66 million. The Seventh Circuit reversed, holding that the "agreement" did not include crucial terms and was so indefinite as to be unenforceable. The court also criticized the regression analysis on which the award was calculated. A promissory estoppel claim, while not preempted, failed on the facts. View "ATA Airlines, Inc. v. FedEx Corp." on Justia Law

Claimant appealed from a judgment of the district court ordering the forfeiture to plaintiff United States, pursuant to 22 U.S.C. 401(a), of certain communication-jamming devices, to wit, the defendant-in-rem Jammers, owned by claimant and a company of which he was the majority shareholder and CEO. On appeal, claimant contended that the district court erred in dismissing his claim, arguing principally that the stipulation he signed was void on the grounds that it was signed under duress and without consideration. The court held that, as a matter of New York law, no consideration for claimant's agreement to the release was needed; and thus, if consideration was absent, its absence did not make the stipulation invalid. The court also held that claimant's assertions did not meet any part of the test of duress. The court further held that the district court correctly granted the government's motion to strike or for summary judgment on the ground of claimant's lack of Article III standing. Accordingly, the judgment was affirmed. View "United States v. Twenty MilJam-350 IED Jammers" on Justia Law

In 1999 plaintiff pled guilty to making false statements while working on a project funded by the Federal Highway Administration (18 U.S.C. 2, 1014, and 1020). The agreement prohibited plaintiff from participating in any FHWA-funded project for a year. Plaintiff challenged Puerto Rico agencies' subsequent actions. The parties negotiated settlements; plaintiff entered into an agreement allowing it to bid on FHWA projects. Puerto Rico then enacted Law 458, which prohibits award of government contracts to any party convicted of a crime constituting fraud, embezzlement, or misappropriation of public funds and requires rescission of any contract with a party convicted of a specified offense. The statute states that it does not apply retroactively. One agency cancelled plaintiff's successful bids, another withdrew its consent to the settlement. The district court rejected claims of violation of the federal Contracts Clause and breaches of contract under Puerto Rico law. The First Circuit affirmed with respect to the constitutional claim. Any breach of the settlement agreements did not violate the Contracts Clause, even if committed in an attempt to unlawfully enforce Law 458 retroactively; defendants have not impaired plaintiff's ability to obtain a remedy for a demonstrated breach. Given the stage of the litigation, the district court should have retained the breach of contract claims. View "Redondo Constr. Corp. v. Izquierdo" on Justia Law

Plaintiff, which owned a nuclear power plant, entered into the standard U.S. Department of Energy contract, under which DOE agreed to collect spent nuclear fuel (SNF) no later than 1998. DOE never began collecting SNF and has breached contracts nationwide. Massachusetts restructured the electric utility industry and, in 1999, the plant sold for $80 million; buyer agreed to accept decommissioning responsibilities for $428 million. The district court awarded $40 million for the portion of the decommissioning fund corresponding to projected post-decommissioning SNF-related costs attributable to DOE’s continuing breach. The court awarded the buyer $4 million in mitigation damages, including direct and overhead costs for new spent fuel racks and fees paid to the NRC. The Federal Circuit reversed in part and remanded. Plaintiff cannot recover damages under a diminution-of-value theory in a partial breach setting. The sale of assets does not alter the principle that when the breaching party has not repudiated and is still expected to perform, anticipated damages are not recoverable until incurred. A non-breaching party may recover from the government indirect overhead costs associated with mitigation and the costs of financing those activities. View "Boston Edison Co. v. United States" on Justia Law

This consolidated appeal arose from a contract dispute between Douglas Asphalt Company (Douglas) and the Georgia Department of Transportation (GDOT) where GDOT had awarded Douglas two paving contracts to mill and resurface certain stretches of interstate highway. GDOT subsequently retained QORE, Inc., an engineering and materials testing company, to remove asphalt samples from the first project site and conduct tests to determine the samples' lime content. QORE retained, at GDOT's direction, Applied Technical Services, Inc. (ATS), to perform a test that GDOT developed, called an atomic absorption test. QORE and ATS sent the data that those tests produced to GDOT for its analysis and consideration and GDOT concluded from those data that the asphalt that Douglas had laid did not contain enough hydrated lime; GDOT then relied, in part, on those test results to justify its decision to place Douglas in default on both highway contracts. Douglas responded by filing this action against QORE, ATS, and several individual GDOT officials. On appeal, Douglas contended that the district court erred by dismissing its Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. 1961-1968, claims and by granting summary judgment for QORE on its claims for defamation and negligence. ATS maintained that the district court erroneously failed to grant its motions for judgment as a matter of law on both the defamation and negligence claims. The court held that the district court did not err in dismissing Douglas's RICO claim and that QORE and ATS were entitled to judgment as a matter of law on both the defamation and negligence claims. Therefore, the court affirmed in part, reversed in part, vacated the judgment against ATS, and remanded for entry of judgment in favor of ATS. View "Douglas Asphalt Co., et al. v. QORE, Inc., et al." on Justia Law