Justia Government Contracts Opinion Summaries

The 2013 Department of Defense (DOD) budget was cut by $37 billion halfway through Fiscal Year 2013. The Secretary of Defense directed DOD managers to prepare to furlough most civilian employees for up to 11 workdays, with exceptions for employees deployed to a combat zone, those whose jobs are necessary to protect safety of life and property, Navy Shipyard employees, National Intelligence Program employees, Foreign Military Sales employees, political appointees, non-appropriated fund instrumentality employees, foreign national employees, and various employees not paid directly by DOD Military accounts. Snyder, a civilian engineer at the Naval Surface Warfare Center (Dahlgren) received a Notice of Proposed Furlough. Snyder worked on an Advanced Shipboard Weapons Control project, governed by a Cooperative Research and Development Agreement (CRADA) between Dahlgren and Lockheed. Lockheed was solely responsible for funding and paid $2.6 million in 2012 to the U.S. Treasurer. Unused funds were to be remitted to Lockheed. Lockheed and Snyder requested that Dahlgren employees supporting the CRADA be exempt from furlough. The Navy denied the request. The Federal Circuit affirmed the Merit System Protection Board in upholding Snyder’s furlough. An agency may furlough an employee for lack of work or funds or other non-disciplinary reasons, 5 U.S.C. 7511(a)(5), 7512(5) if the furlough “will promote the efficiency of the service.” The court found the furlough decision to “be a reasonable management solution to the financial restrictions placed on the agency.” View "Snyder v. Department of the Navy" on Justia Law

BBII filed suit against the City for breach of contract, alleging that the City unlawfully assessed liquidated damages against the company for failure to complete a construction project on time. This case involved two public works contracts entered into by the parties, in which BBII agreed to build certain parts of a wastewater treatment system aimed at reducing pollution in the Chesapeake Bay. The court agreed with the district court that BBII is not excused from the normal requirement of administrative exhaustion under Maryland law. The court rejected BBII's remaining claims and affirmed the district court's dismissal for lack of subject matter jurisdiction. View "Balfour Beatty Infrastructure v. Mayor and City Council of Baltimore" on Justia Law

Henderson, Nevada executed an agreement with Developer to construct sports venues on 480 acres of federally-owned public land. The city requested the Bureau of Land Management in the Department of Interior to convey the land to Developer. After completion of the project, Developer was to transfer ownership of the land and the sports complex to the city; the city would lease back the venues to Developer. The Bureau agreed to conduct a modified competitive sealed-bid auction, so that Developer had the right to match the highest bid. After the bidding, Developer paid the balance and requested the land patent for recording. Within hours after the funds transferred to the Bureau, Developer terminated its agreement with Henderson. Henderson requested the Bureau to cancel the sale and sued Developer. The parties settled. Developer agreed to give the city $4.25 million after it recorded the patent and not to pursue any development in Henderson. The city agreed to withdraw its objection. The Department determined that the Bureau should not release a patent for the land. Developer alleged violation of the Federal Land Policy and Management Act by canceling the sale more than 30 days after it paid for the land. The district court held that the Secretary had plenary power to terminate the sale because its consummation would have been contrary to law, given that the Bureau had authorized a modified land auction, only because of the anticipated public benefits. The D.C. Circuit affirmed, rejecting a claim that the Secretary’s action was arbitrary. The auction sale was rendered unlawful when Developer terminated the agreement; it did not suffer a due process violation because it never acquired a property interest in the land. View "Silver State Land, LLC v. Schneider" on Justia Law

The City of Rochester’s Department of Public Works owned and operated the Rochester Water System, which provided water to residents of the City. The City operated three water storage tanks, one of which is the Rochester Hill Water Storage Tank (the Tank). Whitman & Howard n/k/a AECOM Technical Services, Inc. (AECOM) designed the Tank and oversaw its construction by Chicago Bridge & Iron n/k/a CB&I, Inc. (CB&I). CB&I completed the Tank in 1985, and it was placed into service that same year. In June 2009, the City contracted defendant Marcel A. Payeur, Inc. (Payeur) to service the Tank by recoating the Tank’s interior and exterior, installing a mixer, and modifying the Tank to accommodate the mixer. Defendant Wright-Pierce performed the engineering and design work for the modification project. Payeur substantially completed the modification, under Wright-Pierce’s supervision, in November 2009. In December 2011, the Tank developed a leak. The City had to evacuate nearby residents, drain the Tank, and remove it from service. The City inspected the Tank and discovered that Payeur had failed to properly construct the modifications in accordance with Wright-Pierce’s design. The City filed suit against Payeur in November 2012, alleging breach of contract, breach of warranty, negligence, and unjust enrichment. In April 2014, the City named CB&I, AECOM, and Wright-Pierce as additional defendants. The City’s amended complaint alleged that Wright-Pierce had failed to properly supervise Payeur’s 2009 modification work; it also alleged that, in 1985, CB&I had failed to properly construct the Tank in accordance with AECOM’s design, and AECOM had failed to adequately monitor CB&I. CB&I and AECOM moved to dismiss the City’s claims against them, arguing that the claims were time-barred. The superior court dismissed the City’s claims against CB&I and AECOM pursuant to a six year statute of limitations in effect when CB&I and AECOM substantially completed their contract with the City. The City appealed, arguing the superior court erred in refusing to apply the doctrine of “nullum tempus occurrit regi (“time does not run against the king”). Finding no reversible error, the New Hampshire Supreme Court affirmed. View "City of Rochester v. Marcel A. Payeur, Inc." on Justia Law

In 1973, two Kalamazoo, Michigan hospitals formed a consortium to manage their health education programs and to train interns and residents. In the 1980s, they joined Michigan State University to form the Michigan State University Kalamazoo Center for Medical Studies (KCMS). KCMS administered graduate medical programs for residency programs for the hospitals. The hospitals agreed to incur “joint and equal responsibility for providing [KCMS] with sufficient financing to carry out its programs as negotiated on a yearly basis.” KCMS also received patient-care revenue, support from Michigan State University, and funds from contracts and grants. The hospitals sought reimbursement on their Medicare cost reports (42 U.S.C. 1395ww(h)) during fiscal years 2000–2004 for costs incurred for residents’ training at KCMS’s nonhospital clinics. The Centers for Medicare and Medicaid Services found that the hospitals failed to show they incurred all or substantially all of the costs of their residency programs and that they failed to comply with a requirement of a written agreement detailing the financing of their offsite programs. The district court and D.C. Circuit affirmed the denials of reimbursement, rejecting an argument that the “written agreement” requirement was satisfied by a collection of documents executed over the years. None of the documents met the regulatory criteria. View "Borgess Medical Center v. Burwell" on Justia Law

The Department of Mental Health (DMH) submitted a proposal to the Auditor of the Commonwealth that would privatize certain of its state-run mental health services. The Auditor issued a written decision approving the proposed privatization contract, concluding that the privatization proposal met the requirements of the Pacheco Law. The Pacheco Law establishes procedures that agencies must follow when beginning the bidding process for an entering into a privatization contract. The Supreme Judicial Court affirmed the Auditor’s decision, holding that the Auditor did not abuse her discretion in determining that DMH’s privatization proposal met the requirements of the Pacheco Law. View "Service Employees International Union, Local 509 v. Auditor of the Commonwealth" on Justia Law

In September 2003, Bachner Company Inc. entered into a contract with the Alaska Department of Administration, to lease portions of the Denali Building in Fairbanks. After a ten-year lease term and a one-year renewal, Bachner alleged that the State was in default on its rent payments, and it filed suit in superior court to recover. The State moved to dismiss the complaint, arguing that the claim was governed by the Alaska State Procurement Code and that Bachner had failed to exhaust its remedies under the code before filing suit. The superior court agreed and granted the State’s motion to dismiss. Bachner appealed. After review, the Supreme Court concluded the procurement code covered a rent dispute over an ongoing lease, that the Bachner's claim fell under the procurement code, and Bachner had to exhaust its administrative remedies before filing suit in superior court. View "Bachner Company Incorporated v. State, Dept. of Administration" on Justia Law

In 2012, the FTC announced the “Robocall Challenge,” under 15 U.S.C. 3719(b). The public was invited to create “innovative solutions to block illegal robocalls.” for a $50,000 prize. Contestants granted the FTC non-exclusive, irrevocable, royalty free and worldwide license and agreed to release the FTC from all liability. The FTC received about 800 submissions. The judges, with little guidance from the contest rules, decided that the frontrunners would be those entries that proposed using filtering as a service (FaaS) to block robocalls. Frankel’s submission proposed a “traceback” solution rather than FaaS. When his submission was not chosen, Frankel sued under the bid protest provisions of 28 U.S.C. 1491(b) and alleging breach of contract. The Federal Circuit affirmed the Claims Court’s rejection of both theories. His contract with the FTC was not a procurement contract, so Frankel did not have standing to register an objection to the award under section 1491(b). Frankel is unable to show “fraud, irregularity, intentional misconduct, gross mistake, or lack of good faith.” Any other breach of contract claim based on the judging process is barred by the limitation of liability clause. View "Frankel v. United States" on Justia Law

Inclusion, Inc., Inclusion North, Inc., and Inclusion South, Inc., (collectively Inclusion) provided residential rehabilitation support services to Idahoans eligible for Medicaid. In September 2012, Inclusion filed a complaint against the Idaho Department of Health and Welfare (IDHW), alleging IDHW breached binding Medicaid Provider Agreements by failing to adequately reimburse Inclusion for its services. In June 2013, Inclusion amended its complaint with unjust enrichment and quasi-estoppel claims. The district court granted summary judgment for IDHW, concluding no triable issue of fact supported Inclusion’s claims. IDHW then moved for attorney fees under Idaho Code section 12-120(3) and requested $74,925.00 in fees. The district court found that IDHW’s requested award was based on a reasonable amount of hours and a reasonable hourly rate, as determined by the Boise market. As the district court acknowledged, “the hourly rate requested is reasonable and certainly well within the rate in the marketplace in the Fourth District in Ada County, in particular.” Even so, the district court took issue with how IDHW’s requested award was not based on the actual hourly rate billed during litigation. As the district court explained, “[e]xcept where the award of attorney fees is paid to the lawyer, fees awarded to a party should not exceed the amount the client actually paid for the lawyer.” To that end, the district court multiplied 599.4 hours of work by $54.00 per hour1 to award a total of $30,857.11. IDHW moved to reconsider, but the district court upheld the award for $30,857.11. IDHW timely appealed, arguing the district court abused its discretion by basing the award on the amount billed by the Attorney General. The Supreme Court agreed, vacated the judgment and granted IDHW its requested award. View "Inclusion, Inc v. Id. Dept. of Health & Welfare" on Justia Law

In 2013, the Orange County Department of General Services issued a request for proposals (RFP) from companies to provide transportation of children receiving preschool special education services in three transportation zones in the County. ACME Bus Corp. (ACME), which held the contract at the time, submitted two alternative proposals. Orange County awarded transportation contracts for the first two zones to Quality Bus Service, LLC and for the third zone to VW Trans, LLC. ACME subsequently commenced this proceeding against the County, Quality, and VW, seeking to vacate the award of the contracts. Supreme Court dismissed the proceeding. The Court of Appeals reversed, holding that the County’s scoring mechanism in the cost category deviated from the formula stated in the RFP, and therefore, its award was arbitrary and capricious. View "ACME Bus Corp. v. Orange County" on Justia Law