Justia Government Contracts Opinion Summaries

In 1993, Bowers and the FAA entered into a lease for office and warehouse space. The FAA agreed to monthly payments, $19,509, beginning in January 1994, payable each month “in arrears.” The parties modified the lease eight times until termination on September 30, 2006. In 2008, Bowers filed a claim of $82,203.72 with the contracting officer (41 U.S.C. 7103(a)(1)), for the final month’s rent and property damage. Bowers claimed that because the contract provided for payment “in arrears,” payment made in September, 2006 was for the August rent. The contracting officer held that rent was actually paid in advance, but allowed other, minor, claims. Before the Civilian Board of Contract Appeals, Bowers attempted to establish that the FAA had not paid rent for three months in 1994. CBCA rejected the attempt and Bowers signed a certificate of finality. In 2009 Bowers submitted two more claims: $56,640.78 (plus interest) for assertedly unpaid rent for January, February, and March of 1994 and that the FAA underpaid by $664 every month from October 1, 1998 to October 1, 2006, a total of $64,408.00 (plus interest). The contracting officer denied the claims. The Claims Court held that the CBCA’s final decision precluded the litigation. The Federal Circuit affirmed. View "Bowers Inv. Co, LLC v. United States" on Justia Law

In 2007 the Postal Service awarded Tip Top a contract under which the Postal Service would assign individual projects by issuing work orders. In 2009, the Postal Service issued a work order to replace the air conditioning system at the Main Post Office in Christiansted, Virgin Islands, for the price of $229,736.92. As a result of that work Tip Top submitted a claim and request for an equitable adjustment under the Contract Disputes Act, 41 U.S.C. 7101-7109, in the amount of $34,553.77, consisting of a subcontractor’s price for a change, plus 10% profit, 4% insurance, and 4% gross receipts tax, plus $9,655 for “Preparation Costs & Extended Overhead” and $2,745 for “Legal Fees.” The Postal Service Board of Contract Appeals ruled that Tip Top was entitled to recover $2,565. The Board ruled that Tip Top was not entitled to recover the balance of the amount claimed because it had failed to demonstrate that the costs at issue were incurred as a result of the change order. The Federal Circuit reversed and remanded, with directions to grant the appeal in its entirety. The ruling was based upon an error of law and not supported by substantial evidence. View "Tip Top Constr., Inc.v. Donahoe" on Justia Law

In 2009 the Forest Service awarded Scott contracts to remove timber on federally-owned plots during a designated period. Scott was then pursuing litigation based on delays in other contracts resulting from environmental litigation. The government therefore included provisions in the contracts at issue, authorizing suspension of the contracts to comply with court orders or for environmental reasons. The contracts provided for term adjustment, but prohibited award of lost profits, attorney’s fees, replacement costs, and similar losses. Another environmental suit arose in Oregon, resulting in an injunction that included the contracts at issue. The Forest Service suspended the contracts and began protected species surveys required by that litigation. Surveys were completed in late 2000, but the suspensions continued, due to new litigation, until 2003. In 2004-2008, Scott harvested the total contractual amount of timber. In 2005, Scott sought damages. The Claims Court found breach of an implied duty of good faith and fair dealing and that the government unreasonably delayed the surveys and continued the suspensions. The court found that Scott was entitled to $28,742 in lost profits and $129,599 in additional costs, offset by some actual profit; the government was also liable to a log-processing subcontractor, for $6,771,397 in lost profits; The Federal Circuit reversed. View "Scott Timber Co. v. United States" on Justia Law

The Army solicited proposals for aerial target flight operations and maintenance services. Kratos provided these services under a predecessor contract. The solicitation listed three evaluation factors: Technical/Management; Past Performance; and Price/Cost to be rated as “outstanding,” “satisfactory,” “marginal,” or “unsatisfactory.” The contract was subject to the Service Contract Act of 1965, under which the Federal Acquisition Regulation requires that “successor contractors … in the same locality must pay wages and fringe benefits … at least equal to those contained in any bona fide collective bargaining agreement … under the predecessor contract.” The Army received three proposals, including the offers from SA-TECH and Kratos. After review, the Technical Evaluation Committee announced a Final Evaluation Report, noting potential difficulties for SA-TECH under the Labor sub-factor, but rating SA-TECH as “outstanding” for all factors. Kratos also received “outstanding” ratings. The Source Selection Authority concluded that SA-TECH offered the best value for the government. Kratos filed a protest with the Government Accountability Office. SA-TECH subsequently protested the Army’s decision to engage in corrective action instead of allowing SA-TECH’s award to stand. The Claims Court denied the Army’s motion to dismiss and found the Army’s actions unreasonable and contrary to law. The Federal Circuit affirmed. View "Sys. Application & Tech., Inc. v. United States" on Justia Law

Watkins, an African-American, worked for the school district, overseeing security systems. Fultz supervised Watkins and, relying on Watkins’s advice, Fultz awarded Vision a $182,000 annual contract for service of security cameras. Vision’s president, Newsome, testified that Watkins called her and talked about a “finder’s fee.. Newsome went to Cleveland for a customer visit. She e-mailed Watkins and he replied: “Absolutely$.” Newsome believed that Watkins expected her to pay him at their meeting. Newsome notified Fultz. At the meeting, Watkins requested “an envelope.” After Fultz contacted police, the FBI recorded meetings at which Newsome gave Watkins $5,000 and $2,000. A white jury convicted on two counts of attempted extortion “under color of official right” (Hobbs Act, 18 U.S.C. 1951), and one count of bribery in a federally funded program, 18 U.S.C. 666(a)(1)(B). The court determined a total offense level of 22, applying a two-level enhancement for obstruction of justice, another two-level enhancement for bribes exceeding $5,000, and a four-level enhancement for high level of authority, plus an upward variance of 21 months under 18 U.S.C. 3553(a), and sentenced Watkins to six years’ incarceration. The Sixth Circuit affirmed, rejecting challenges to jury instructions, sufficiency of the evidence, the jury’s racial composition, and the reasonableness of the sentence.View "United States v. Watkins" on Justia Law

Plaintiff brought suit under the qui tam provisions of the False Claims Act (FCA) against Lockheed Martin Corporation, alleging that Lockheed defrauded the United States Air Force under a contract for the Range Standardization and Automation IIA program concerning software and hardware used to support space launch operations at Vandenberg Air Force Base and Cape Kennedy. Hooper filed his suit in the Maryland district court, which transferred the suit to the central district of California on forum non conveniens grounds. The district court granted summary judgment in favor of Lockheed on all grounds. The Ninth Circuit Court of Appeals (1) affirmed the district court's evidentiary rulings and conclusion that Hooper failed to establish his claims of fraudulent use of the software and defective testing procedures because there was no genuine issue of material fact as to whether Lockheed "knowingly" submitted a false claim; and (2) reversed the district court's dismissal of (i) Hooper's wrongful discharge claim as barred by California's two-year statute of limitations, holding that Maryland's three-year statute of limitations applied here, and (ii) Hooper's claim that Lockheed violated the FCA by knowingly underbidding the contract. View "Hooper v. Lockheed Martin Corp." on Justia Law

Access to the Ambassador Bridge between Detroit and Windsor, Ontario necessitated traversing city streets. The state contracted with the Company, which owns the Bridge, to construct new approaches from interstate roads. The contract specified separate jobs for the state and the Company. In 2010, the state obtained a state court order, finding the Company in breach of contract and requiring specific performance. The Company sought an order to open ramps constructed by the state, asserting that this was necessary to complete its work. The court denied the motion and held Company officials in contempt. In a 2012 settlement, the court ordered the Company to relinquish its responsibilities to the state and establish a $16 million fund to ensure completion. Plaintiffs, trucking companies that use the bridge, sought an injunction requiring the state to immediately open the ramps. The district court dismissed claims under the dormant Commerce Clause, the motor carriers statute, 49 U.S.C. 14501(c), and the Surface Transportation Assistance Act, 49 U.S.C. 31114(a)(2). The Sixth Circuit affirmed. For purposes of the Commerce Clause and statutory claims, the state is acting in a proprietary capacity and, like the private company, is a market participant when it joins the bridge company in constructing ramps. View "Mason & Dixon Lines Inc. v. Steudle" on Justia Law

In 1983, the Nuclear Waste Policy Act, 42 U.S.C. 10101-10270, authorized the Department of Energy to contract with nuclear facilities for disposal of spent nuclear fuel and high level radioactive waste. The Standard Contract provided that rights and duties may be assignable with transfer of SNF title. Plaintiff entered into the Standard Contract in 1983 and sold its operation and SNF to ENVY in 2002, including assignment of the Standard Contract, except one payment obligation. Plaintiff transferred claims related to DOE defaults. As a result of DOE’s breach, ENVY built on-site dry-storage facilities. The Claims Court consolidated ENVY’s suit with plaintiff’s suit. The government admitted breach; the Claims Court awarded ENVY $34,895,467 (undisputed damages) and certain disputed damages. The Federal Circuit affirmed in part. Plaintiff validly assigned pre-existing claims; while partial assignment of rights and duties under the contract was not valid, the government waived objection. The assignment encompassed claims against the government. Legal and lobbying fees to secure Vermont approval for mitigation were foreseeable, but other expenses were not recoverable. ENVY failed to prove costs of disposing of contaminated material discovered due to the breach and its characterization of spent fuel moved to dry storage. ENVY is not entitled to recover cost of capital for funding mitigation, or Resource Code 19 payroll loader overhead costs, but may recover capital suspense loader overhead costs,.View "VT Yankee Nuclear Power Corp. v. United States" on Justia Law

Andrews was designated as contractor for improvements to the sewage system, in a no-bid process involving kickbacks and bribery, having made numerous false statements in the bond application package. After the contract was terminated, he submitted a claim of $748,304, based on false statements and duplicate charges. Evidence indicated that Andrews was not capable of the project work and that the entire scheme was fraudulent. He was convicted of one count of conspiracy, 18 U.S.C. 371, four counts of wire fraud, 18 U.S.C. 1343, 1346, and 2, one count of program fraud, 18 U.S.C. 666(a)(1)(B) and 2, one count of making a false claim upon the Government of the Virgin Islands, 14 V.I.C. 843(4), and one count of inducing a conflict of interest, 3 V.I.C. 1102, 1103, and 1107. The Third Circuit affirmed the conviction, but remanded for resentencing. Errors in the indictment and jury instructions concerning honest services fraud did not affect substantial rights. Although the 151-month term of imprisonment was within the statutory maximum for Counts Two through Five, it exceeded the statutory maximum for Counts One and Six; it was not possible to determine whether the sentence was legal as to each count View "United States v. Andrew" on Justia Law

In February, 2002, the Navy awarded GM&W a contract for floor coating at a military base. GM&W subcontracted with FloorPro, which completed the work on February 27, 2002 and billed GM&W. On March 8, the Navy informed GM&W that the work was completed satisfactorily. On April 17, FloorPro informed the Navy’s contracting officer that it had not been paid. GM&W had claims pending and was not sure whether funds that the Navy directly deposited would be available to FloorPro. In April 2002, the Navy and GM&W entered into contract modification providing for mailing to FloorPro of a check payable to GM&W and Floor-Pro. The Navy paid GM&W directly by electronic transfer and informed FloorPro that its recourse was to sue GM&W. In December 2002, FloorPro submitted a claim to the Navy’s contracting officer. On March 27, 2003, FloorPro filed at the Armed Services Board of Contract Appeals, which awarded $37,500. The Federal Circuit reversed, holding that under the Contract Disputes Act, 41 U.S.C. 7101, ASBCA has no jurisdiction over a claim by a subcontractor. In 2009, FloorPro filed in the Court of Claims, which ruled in favor of FloorPro. The Federal Circuit vacated, ordering dismissal under the six-year limitations period of 28 U.S.C. 2501. View "FloorPro, Inc. v. United States" on Justia Law