Justia Government Contracts Opinion Summaries

The pro se plaintiff sued her former employer, a private recipient of federal funding, alleging violation of the Rehabilitation Act of 1973, 29 U.S.C. 794, by requiring her to complete certain duties as a dental assistant that she was incapable of performing due to an unspecified disability that limits her strength and mobility, and then firing her because of her disability. The district judge dismissed for failure to exhaust administrative remedies. The Seventh Circuit reversed. A plaintiff under the Rehabilitation Act against a recipient of federal money is not required to exhaust the administrative remedies that the Act provides; an employee or former employee of a private company, such as the plaintiff, is not required Act to even file an administrative charge or complaint.View "Williams v. Milwaukee Health Servs., Inc." on Justia Law

Following the 1941 attack on Pearl Harbor, each of the Oil Companies entered into contracts with the government to provide high-octane aviation gas (avgas) to fuel military aircraft. The production of avgas resulted in waste products such as spent alkylation acid and “acid sludge.” The Oil Companies contracted to have McColl, a former Shell engineer, dump the waste at property in Fullerton, California. More than 50 years later, California and the federal government obtained compensation from the Oil Companies under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), 42 U.S.C. 9601, for the cost of cleaning up the McColl site. The Oil Companies sued, arguing the avgas contracts require the government to indemnify them for the CERCLA costs. The Court of Federal Claims granted summary judgment in favor of the government. The Federal Circuit reversed with respect to breach of contract liability and remanded. As a concession to the Oil Companies, the avgas contracts required the government to reimburse the Oil Companies for their “charges.” The court particularly noted the immense regulatory power the government had over natural resources during the war and the low profit margin on the avgas contracts. View "Shell Oil Co. v. United States" on Justia Law

Cunningham worked for the U.S. Office of Personnel Management in 2004-2005. He appealed his termination to the Merit Systems Protection Board, alleging discrimination based on marital status. Cunningham agreed to withdraw his appeal; OPM agreed to pay him $50,000. The agreement designated the OPM’s director of human resources as the contact for reference inquiries and permitted disclosure of dates of service only. The termination letter was to be removed from the personnel file and both parties were prohibited from disclosing the agreement or the grievance. In 2006, Cunningham accepted a position with USIS, a private company that contracts with federal agencies to perform background investigations. A week after Cunningham began training USIS suspended him without pay at the direction of OPM's security office. OPM employees (not the Director of Human Resources) had discussed Cunningham’s termination. An administrative judge found that OPM had breached the agreement, but that MSPB could not award damages. Cunningham was only entitled to rescind the agreement, reinstate his appeal, and return the $50,000 payment. MSPB adopted the findings. Cunningham did not want his appeal reinstated and sought breach-of-contract damages. The Claims Court found that it had subject matter jurisdiction under the Tucker Act, but dismissed based on res judicata. The Federal Circuit vacated, agreeing that the court had jurisdiction, but holding that res judicata did not apply because jurisdictional limits on the MSPB did not permit him to seek damages in the prior matter.View "Cunningham v. United States" on Justia Law

Fisher-Cal filed suit alleging that the Air Force violated the Administrative Procedure Act (APA), 5 U.S.C. 500 et seq., when the Air Force opted not to renew a contract for multimedia services with Fisher-Cal and decided to in-source the services. On appeal, Fisher-Cal challenged the district court's appeal of its suit for lack of subject matter jurisdiction. The court accepted the reasoning of the Federal Circuit in Distributed Solutions, Inc. v. United States, which held that lawsuits involving decisions whether to in-source or contract fell within the jurisdiction of the Tucker Act, 28 U.S.C. 1491. Accordingly, Fisher-Cal's challenge to the Air Force's decision to in-source was governed by the Tucker Act and therefore the U.S. Court of Federal Claims had jurisdiction over the challenge. Accordingly, the court affirmed the judgment of the district court. View "Fisher-Cal Indus., Inc. v. United States, et al." on Justia Law

In the early 2000s, Raytheon underwent a major reorganization, including the sale of several business segments, including AIS, Optical, and Aerospace (segments at issue). As part of each sale, Raytheon retained the assets and liabilities of defined-benefit pension plans associated with the segments. Raytheon also calculated segment closing adjustments as required by CFR Cost Accounting Standards (CAS). Raytheon determined that some of its segments had pension surpluses, but the segments at issue had deficits. Although Raytheon paid the government its share of the surpluses, the government refused to pay its share of the deficits. Raytheon submitted certified claims for recovery of the deficits under the Contract Disputes Act, 41 U.S.C. 7103 (2011). The contracting officer issued final decisions denying these claims, reasoning that the adjustments were subject to the Federal Acquisition Regulation’s timely funding requirement, 48 CFR 31.205-6(j)(2)(i), and the deficits were therefore unallowable because Raytheon failed to fund the full amount of the pension deficits in the same year as the closings and that Raytheon’s segment closing calculations “do[] not comply with CAS 413[.]” The Claims Court awarded Raytheon $59.209,967 and rejected a claim for recovery with respect to one segment, finding that Raytheon applied the wrong asset allocation method in its adjustment calculation. The Federal Circuit affirmed.View "Raytheon Co. v. United States" on Justia Law

Project labor agreements (PLAs) are used in the construction industry to set common conditions of employment for large projects involving multiple subcontractors and unions. On a public construction project, a PLA can be entered into by the governmental unit paying for the project or by its general contractor; the other party is a labor organization. If the governmental unit enters into a PLA, all contractors bidding on the project must agree to abide by it. Opponents argue that PLAs discourage nonunion contractors from bidding on government contracts and increase construction costs. Proponents, such as the trades councils, claim that PLAs enhance job-site cooperation and reduce labor disputes. The federal government has gone back and forth on allowing PLAs. Michigan passed the first version of the Fair and Open Competition in Governmental Construction Act in 2011, restricting the use of PLAs on publicly funded projects. Following entry of an injunction, that version was superseded by an amended act, passed in 2012. The district court enjoined the current version as preempted by the National Labor Relations Act. The Sixth Circuit reversed, finding that the act furthers Michigan’s proprietary goal of improving efficiency in public construction projects, and is no broader than necessary to meet those goals. View "MI Bldg. & Constr. Trades Council v. Snyder" on Justia Law

Before the invasion of Iraq, KBR entered into contracts with the U.S. Army for the provision of dining facility (DFAC) services in Iraq. The contract at issue was for DFAC services at Camp Anaconda, one of the largest U.S. bases in Iraq. KBR subcontracted with Tamimi to provide services in Anaconda. As troop levels increased, the Defense Contract Auditing Agency (DCAA) engaged in audits of DFAC subcontracts. With respect to Anaconda, the DCAA concluded that KBR had charged $41.1 million in unreasonable costs for services provided from July 2004 to December 2004 and declined to pay KBR that amount. KBR sued and the government brought counterclaims, including a claim under the Anti-Kickback Act. The Court of Federal Claims held that KBR was entitled to $11,460,940.31 in reasonable costs and dismissed the majority of the government’s counterclaims, but awarded $38,000.00 on the AKA claim. The Federal Circuit affirmed the determination of cost reasonableness and dismissal of the government’s Fraud and False Claims Act claims and common-law fraud claim. The court remanded in part, holding that the Claims Court improperly calculated KBR’s base fee and erred in determining that the actions of KBR’s employees should not be imputed to KBR for purposes of the AKA. . View "Kellogg Brown & Root Servs, Inc. v. United States" on Justia Law

The Federal Grant and Cooperative Agreement Act, 31 U.S.C. 6301, states that an executive agency must use: “a procurement contract . . . when . . . the principal purpose … is to acquire … property or services for the direct benefit or use” of the government and must adhere to the Competition in Contracting Act and the Federal Acquisition Regulation However, an “agency shall use a cooperative agreement . . . when . . . the principal purpose … is to transfer a thing of value … to carry out a public purpose of support or stimulation … instead of acquiring . . . property or service” and can avoid procurement laws. Under Section 8 of the Housing Act, HUD provides rental assistance, including entering Housing Assistance Program (HAP) contracts and paying subsidies directly to private landlords. A 1974 amendment gave HUD the option of entering an Annual Contributions Contract (ACC) with a Public Housing Agency (PHA), which would enter into HAP contracts with owners and pay subsidies with HUD funds. In 1983, HUD’s authority was amended. HUD could administer existing HAP contracts, and enter into new HAP contracts for existing Section 8 dwellings by engaging a PHA if possible, 42 U.S.C. 1437f(b)(1). Later, HUD began outsourcing services and initiated a competition to award a performance-based ACC to a PHA in each state, with the PHA to assume “all contractual rights and responsibilities of HUD.” After making an award, HUD chose to re-compete, seeking greater savings, expressly referring to “cooperative agreements,” outside the scope of procurement law. The Government Accountability Office agreed with protestors that the awards were procurement contracts. HUD disregarded that recommendation. The Claims Court denied a request to set aside the award. The Federal Circuit reversed, finding that the awards are procurement contracts, not cooperative agreements.View "CMS Contract Mgmt. Servs. v. United States" on Justia Law

Biggers had been employed by the Navy for 29 years and in 2007 was Security Manager for the Naval Facilities Engineering Service Center. The position required him to maintain a top secret security clearance. In 2008, a duty officer found that an outer vault door of the Secret Internet Protocol Router Network room was left open. Biggers notified the Commanding Officer of the potential violation. After an investigation, the Command Evaluator recommended that all security personnel (including Biggers) have their access to classified material suspended because “the investigation revealed numerous systemic problems, violations and deficiencies.” Biggers’ security clearance was suspended pending a final determination by the Department of Navy Central Adjudication Facility (DONCAF) pursuant to 5 U.S.C. 7513. Ultimately, DONCAF concluded that the information provided by Biggers and the Center “sufficiently explained, mitigated, or provided extenuating circumstances,” and Biggers was found eligible for a Top Secret clearance and assignment to a sensitive position and returned to duty status.. His suspension had lasted nine months. The Navy did not provide back pay or treat him as employed for calculation of retirement benefits. Biggers alleged that the suspension was motivated by retaliatory animus arising from his participation in an EEOC proceeding. An AJ determined that the Merit Systems Protection Board may not review the merits of a security clearance revocation or suspension. The Federal Circuit affirmed, holding that Biggers was not entitled to back pay. View "Biggers v. Dep't of the Navy" on Justia Law

Plaintiffs are or were air-traffic-control specialists or traffic-management coordinators with the Federal Aviation Administration and alleged that the FAA’s policies governing how to compensate them when they worked overtime did not comply with the time-and-a-half- payment requirement of the Fair Labor Standards Act 29 U.S.C. 207. They sought damages under 29 U.S.C. 216(b) and invoked jurisdiction under the Tucker Act, 28 U.S.C.1491. The Claims Court ruled in their favor, holding that the agency’s personnel policies are contrary to the FLSA and are not authorized by any other provision of law. The Federal Circuit vacated, holding that the FAA has such authority under the federal personnel laws, 5 U.S.C. 5543 and 6120-6133. The court remanded for determination of whether the challenged FAA policies are fully, or only partly, within the authority of those title 5 exemptions from the FLSA. View "Abbey v. United States" on Justia Law