Justia Government Contracts Opinion Summaries

In this case, Nova Group/Tutor-Saliba (“NTS”) was awarded a construction contract by the United States Department of the Navy to build a new aircraft carrier maintenance pier at a naval base. The contract required NTS to demolish an old pier, design and build a replacement pier, and construct a new structure known as the Mole Quaywall, which would be designed by the government. During construction, NTS encountered unexpected subsurface soil conditions that complicated and increased the cost of the project. NTS sought additional compensation from the government alleging differing site conditions.The United States Court of Appeals for the Federal Circuit affirmed the decision of the United States Court of Federal Claims which had denied NTS's claim for additional compensation. The Court of Federal Claims found that NTS had not established a Type I differing site condition because the contract documents disclosed that NTS would encounter unpredictable subsurface conditions and possible obstructions. It also found that NTS had failed to prove a Type II differing site condition, as it had not demonstrated that any of the potential causes for hard driving were unknown or unusual in the region or materially different from comparable work. The Court of Appeals agreed with these findings and also ruled that the parol evidence rule had not been violated as NTS claimed. The Court of Appeals found that the parol evidence rule does not prevent a party from presenting evidence that a recital of fact in an integrated agreement may be untrue, and the challenged evidence was not introduced to modify any term of the contract. Therefore, the appeal by NTS was denied and the decision of the Court of Federal Claims was affirmed. View "NOVA GROUP/TUTOR-SALIBA v. US " on Justia Law

The Township solicited bids for the demolition of former hospital buildings. ICC, a Detroit-based minority-owned company, submitted the lowest bid. AAI, a white-owned business submitted the second-lowest bid, with a difference between the bids of almost $1 million. The Township hired a consulting company (F&V) to vet the bidders and manage the project. F&V conducted interviews with both companies and provided a checklist with comments about both companies to the Township. ICC alleges that F&V made several factual errors about both companies, including that AAI had no contracting violations and that ICC had such violations; that ICC had no relevant experience, that AAI had relevant experience, and that AAI was not on a federal contracting exclusion list. F&V recommended that AAI receive the contract. The Township awarded AAI the contract. ICC filed a complaint, alleging violations of the U.S. Constitution, federal statutes, and Michigan law.The district court dismissed the case, finding that ICC failed to state a claim under either 42 U.S.C. 1981 or 42 U.S.C. 1983 by failing to allege the racial composition of its ownership and lacked standing to assert its constitutional claims and that F&V was not a state actor. The Sixth Circuit reversed in part. ICC had standing to bring its claims, and sufficiently pleaded a section 1981 claim against F&V. The other federal claims were properly dismissed. View "Inner City Contracting LLC v. Charter Township of Northville" on Justia Law

The Supreme Judicial Court affirmed the decision of the superior court judge dismissing the underlying declaratory judgment complaint in this declaratory judgment action regarding the scope of the Department of Housing and Community Development's (DHCD) authority under Mass. Gen. Laws ch. 121B, 7A, holding that dismissal was warranted.Plaintiffs - location housing authorities (LHAs) of various cities and towns, current and former executive directors of LHAs and others - sought a judgment declaring that DHCD exceeded its authority under Mass. Gen. Laws ch. 121B, 7A by promulgating guidelines that govern contracts between an LHA and its executive director and making compliance with the guidelines a requirement to obtain contractual approval from DHCD. A superior court judge allowed DHCD's motion to dismiss. The Supreme Judicial Court affirmed, holding that LHAs have authority to hire executive directors and "determine their qualifications, duties, and compensation, under Mass. Gen. Laws ch. 121B, 7. View "Fairhaven Housing Authority v. Commonwealth" on Justia Law

Stronghold and the city entered into a 2015 contract to renovate the Monterey Conference Center. Before filing a lawsuit asserting a claim for money or damages against a public entity, the Government Claims Act (Gov. Code 810) requires that a claim be presented to the entity. Without first presenting a claim to the city, Stronghold filed suit seeking declaratory relief regarding the interpretation of the contract, and asserting that the Act was inapplicable.Stronghold presented three claims to the city in 2017-2019, based on its refusal to approve change orders necessitated by purportedly excusable delays. Stronghold filed a fourth amended complaint, alleging breach of contract. The court granted the city summary judgment, reasoning that the declaratory relief cause of action in the initial complaint was, in essence, a claim for money or damages and that all claims in the operative complaint “lack merit” because Stronghold failed to timely present a claim to the city before filing suit.The court of appeal reversed. The notice requirement does not apply to an action seeking purely declaratory relief. A declaratory relief action seeking interpretation of a contract is not a claim for money or damages, even if the judicial interpretation sought may later be the basis for a separate claim for money or damages which would trigger the claim presentation requirement. View "Stronghold Engineering, Inc. v. City of Monterey" on Justia Law

This appeal related to "electronic-bingo" operations conducted by the Department of Alabama Veterans of Foreign Wars of the United States ("the VFW") at some of its Alabama posts. Travis Whaley and Randall Lovvorn contracted with the VFW to superintend and promote its electronic-bingo operations. Between 1997 and 2013, Whaley served the VFW as adjutant, commander, and quartermaster at different times. For his part, Lovvorn served as the VFW's accountant. The VFW contracted with G2 Operations, Inc. ("G2"), to conduct its electronic-bingo operations. Under contract, G2 agreed to conduct electronic-bingo operations at VFW posts throughout Alabama, and the VFW would receive 10% of the gross revenue. All the proceeds from electronic bingo were deposited into a VFW bank account. The VFW also entered into contracts with Whaley and Lovvorn, assigning them specific roles in its electronic-bingo operations. Several years later, after being notified of a tax penalty from the IRS, the VFW discovered a shortfall of $1,782,368.88 from what it should have received under its contracts with G2. The VFW filed a complaint asserting claims against G2 as well as additional claims against other parties, which were eventually whittled down throughout litigation until only claims against Whaley and Lovvorn remained. A jury reached a verdict against Whaley and Lovvorn on VFW's claims of breach of contract, fraudulent suppression, and conversion, awarding $1,782,368.88 in compensatory damages and $2,000,000 in punitive damages. Because the VFW's claims rely upon its own involvement in illegal transactions, the Alabama Supreme Court reversed the trial court's judgment and rendered judgment in favor of Whaley and Lovvorn. View "Whaley, et al. v. Dept. of Alabama Veterans of Foreign Wars of the United States" on Justia Law

Baldwin County Bridge Company, LLC ("BCBC"), filed suit against John Cooper in his official capacity as Director of the Alabama Department of Transportation ("ALDOT"), seeking to halt construction of a bridge that ALDOT had hired Scott Bridge Company, Inc. ("Scott Bridge"), to build over the Intracoastal Waterway in Baldwin County. That lawsuit spawned three matters before the Alabama Supreme Court. In the first, Cooper sought mandamus relief because the trial court entered an order compelling him to respond to certain discovery requests made by BCBC; he argued the information sought was protected from disclosure by the executive-privilege doctrine. On Cooper's motion, the Supreme Court stayed enforcement of the trial court's discovery order to allow the Court to consider Cooper's privilege argument. Meanwhile, the trial-court proceedings continued and, before the Supreme Court was able to rule on Cooper's mandamus petition, the trial court granted BCBC's motion for a preliminary injunction to halt construction of the bridge. Cooper appealed that injunction, arguing that it was unwarranted and that the $100,000 preliminary-injunction bond put up by BCBC was insufficient. Scott Bridge filed its own appeal challenging the preliminary injunction, while also arguing that the trial court erred by dismissing it from the case and by stating that it was not entitled to the protection of an injunction bond. After reviewing the briefs submitted by the parties in all three of these matters, the Supreme Court concluded BCBC's claim on which the preliminary injunction was based was barred by State immunity. Accordingly, the trial court had no subject-matter jurisdiction over that claim and the preliminary injunction had to be reversed. Although the Court ruled in favor of Cooper on this point, it nevertheless rejected his companion argument that the trial court should have been directed to increase the $100,000 preliminary-injunction bond on remand. The Court also rejected Scott Bridge's argument that that it was entitled to recover on the preliminary-injunction bond. Finally, because the discovery that Cooper sought to withhold based on executive privilege was being sought in conjunction with the claim that is barred by State immunity, the trial court's order compelling Cooper to produce that information was moot, as was Cooper's petition challenging that order. View "Ex parte Alabama Department of Transportation" on Justia Law

Construction firm Brasfield & Gorrie, LLC, received the prime contract to expand the University of Mississippi Medical Center Children’s Hospital in 2017. Electrical contractor McInnis Electric Company secured the winning bid to install the electrical and low voltage systems package for the project and subsequently signed a subcontract with Brasfield & Gorrie. Terms of the subcontract incorporated the prime contract, which were related to the same project by reference. The contract provided that work was set to begin on the project on February 15, 2018. However, McInnis, was directed not to report on site until June 4, 2018, and, due to delays, was unable to begin until July 23, 2018. As work progressed, the schedule allegedly became delayed as a result of Brasfield & Gorrie’s failure to coordinate the work of the various subcontractors. McInnis averred that Brasfield & Gorrie’s failure to coordinate and facilitate the work of the various subcontractors worsened as the project progressed, and Brasfield & Gorrie experienced turnover in management. This failure allegedly delayed McInnis’s work, which was not on the path toward completion, supposedly through no fault of its own. Construction issues were amplified when on March 11, 2020, Mississippi experienced its first reported case of COVID-19. On April 1, 2020, the Mississippi Governor instituted a shelter in place order in response to the ongoing pandemic, requiring certain nonessential businesses to close and recommending social distancing to reduce the spread of the coronavirus in Mississippi. The children’s hospital was not classified as an existing infrastructure as it was a nonoperational work in progress and thus was not subject to the executive order’s exception to the governmental shutdowns. By May 8, 2020, McInnis had suffered an approximately 40 percent loss in its workforce due to employees testing positive for COVID-19. Despite the decrease in the available workforce, Brasfield & Gorrie demanded McInnis perform under its contractual obligation. McInnis took measures to continue the work. Brasfield & Gorrie further declined requests for accommodation and instead terminated McInnis on May 13, 2020. The case before the Mississippi Supreme Court here stemmed from disagreements and a broken contract between the parties, contesting whether arbitration was appropriate to settle their disputes. The trial court compelled arbitration, and the Supreme Court affirmed. View "McInnis Electric Company v. Brasfield & Gorrie, LLC et al." on Justia Law

In 2018, Kousisis and Alpha Painting were convicted of conspiracy to commit wire fraud, 18 U.S.C. 1349, and three counts of wire fraud, 18 U.S.C. 1343. The charges arose from false documents filed concerning “disadvantaged business enterprise” status in transportation construction projects for which the U.S. Department of Transportation provided funds through the Federal Highway Administration to the Pennsylvania Department of Transportation. The district court imposed a 20-point sentencing enhancement under U.S.S.G. 2B1.1(b)(1), which corresponds to a loss of $9.50 million-$25 million, noting that the actual loss to the government was not measurable at the time of sentencing and concluding that Alpha’s “ill-gotten profits” represented an appropriate measure of loss.The Third Circuit affirmed the convictions. The defendants secured PennDOT’s money using false pretenses and the value PennDOT received from the partial performance of those painting and repair services is no defense to criminal prosecution for fraud. The court vacated the calculation of the amount of loss for sentencing purposes, noting the extreme complexity of the case. The victim’s loss must have been an objective of the fraudulent scheme; it is insufficient if that loss is merely an incidental byproduct of the scheme. The court separately vacated a forfeiture order of the entire profit amount on the contracts. View "United States v. Alpha Painting & Construction Co., Inc." on Justia Law

Westlands Water District (Westlands) appeals from a judgment of dismissal entered in a validation action filed pursuant to, inter alia, Code of Civil Procedure section 860 et seq. The subject matter was an anticipated contract between Westlands and the United States concerning the ongoing delivery of federal reclamation project water and repayment of certain financial obligations. The superior court declined to grant relief and ultimately dismissed Westlands’ validation action for multiple reasons. Most pertinently, the draft was found to be materially deficient in its failure to specify Westlands’ financial obligations under the anticipated contract.   The Fifth Appellate District affirmed the judgment. The court explained that the “Repayment Obligation” cannot be determined without knowing the “Existing Capital Obligation” and/or the contents of exhibit D. The “Existing Capital Obligation” cannot be determined without knowing the contents of exhibit D. In the absence of exhibit D, both terms are useless for purposes of determining Westlands’ financial obligations, i.e., “the scope of the duty and the limits of performance.” Moreover, as Westlands admitted during the motion proceedings, exhibit D was not merely omitted from the draft attached to the complaint. Despite being expressly incorporated into the contract by reference, exhibit D did not exist when the complaint and the December 2019 motion were filed. Even when the motion was heard, there was only meager parol evidence of estimates ranging from $200 million to $362 million. Given the circumstances, the court agreed the contract presented for validation was missing an essential term and, therefore uncertain, i.e., not sufficiently definite to be binding and enforceable. View "Westlands Water Dist. v. All Persons Interested" on Justia Law

The City and County of San Francisco (the City) owns and operates San Francisco International Airport (SFO or the Airport). Airlines for America (A4A) represents airlines that contract with the City to use SFO. In 2020, in response to the COVID-19 pandemic, the City enacted the Healthy Airport Ordinance (HAO), requiring the airlines that use SFO to provide employees with certain health insurance benefits. A4A filed this action in the Northern District of California, alleging that the City, in enacting the HAO, acted as a government regulator and not a market participant, and therefore the HAO is preempted by multiple federal statutes. The district court agreed to the parties’ suggestion to bifurcate the case to first address the City’s market participation defense. The district court held that the City was a market participant and granted its motion for summary judgment. A4A appealed.   The Ninth Circuit reversed the district court’s grant of summary judgment. The court concluded that two civil penalty provisions of the HAO carry the force of law and thus render the City a regulator rather than a market participant. The court wrote that because these civil penalty provisions result in the City acting as a regulator, it need not determine whether the City otherwise would be a regulator under the Cardinal Towing two-part test set forth in LAX, 873 F.3d at 1080 View "AIRLINES FOR AMERICA V. CITY AND COUNTY OF SAN FRANCISCO" on Justia Law