Justia Government Contracts Opinion Summaries

The Judicial Council of California, (JCC) entered into a contract with Jacobs Facilities, a wholly owned subsidiary of Jacobs. Performance of the contract required a license under the Contractors’ State License Law. Facilities was properly licensed when it commenced work. Later, Jacobs, as part of a corporate reorganization, transferred the employees responsible for the JCC contract to another subsidiary and caused the new subsidiary to obtain a contractor’s license, while permitting the Facilities license to expire. Facilities remained the signatory on the JCC contract until a year later, when the parties entered into an assignment to the new, licensed subsidiary. JCC sued under Bus. & Prof. Code 7031(b), which requires an unlicensed contractor to disgorge its compensation. Defendants contended that Facilities had “internally” assigned the contract to the new subsidiary prior to expiration of its license; JCC ratified the internal assignment when it consented to the assignment to the new subsidiary; and Facilities had “substantially complied” with the law. After the jury found for defendants on the other defenses, the substantial compliance issue was not decidedd. The court of appeal reversed, concluding Facilities violated the statute when it continued to act as the contracting party after its license expired, and remanded for a hearing on substantial compliance. View "Judicial Council of Cal. v. Jacobs Facilities, Inc." on Justia Law

Dunnet, a highway construction company, is prequalified to bid and work on Illinois Department of Transportation (IDOT) projects and competes for federally assisted highway construction contracts. Dunnet is owned and controlled by two white males. Between 2007 and 2009, its average annual gross receipts were over $52 million. To receive federal-aid funds for highway contracts, IDOT must have a “disadvantaged business enterprise” (DBE) participation program. A DBE is a for-profit small business concern that is at least 51% owned and controlled by one or more socially and economically disadvantaged individuals. There is a rebuttable presumption that women and members of racial minority groups are socially and economically disadvantaged, but an individual owner of any race or gender may qualify as “socially and economically disadvantaged.” A firm is not an eligible DBE if the firm (including affiliates) has had average annual gross receipts over its previous three fiscal years, greater than $22.41 million. Illinois has not met its DBE participation goals. Dunnet was denied a goal waiver and was not awarded a major expressway project. The Seventh Circuit affirmed summary judgment rejecting Dunnet’s claim that IDOT’s DBE Program discriminates on the basis of race, concluding that Dunnet lacked standing to raise an equal protection challenge based on race and that the Program survived the constitutional and other challenges. View "Dunnet Bay Constr. Co. v. Borggren" on Justia Law

The City of Rochester contracted with Rochester City Lines, Co. (RCL) for more than thirty years to operate the municipal bus service in Rochester. In 2011, the Federal Transit Administration informed the City that, in order to continue to receive federal funding, the City needed to initiate a competitive bidding process for its next contract. During the City's ensuing bidding process, RCL filed a lawsuit against the City, claiming that the City’s actions were an unconstitutional taking of RCL’s property. The City subsequently awarded the contract to First Transit, Inc. RCL subsequently amended its complaint to add claims against members of the City Council and First Transit. The district court granted summary judgment to Defendants on each of RCL’s claims. The court of appeals affirmed. The Supreme Court affirmed in part, reversed in part, and remanded, holding (1) RCL presented sufficient evidence to create a genuine issue of material fact on the question of whether the City awarded the contract to First Transit based on an unfair and biased process; and (2) the district court properly granted summary judgment on the remainder of RCL’s claims. View "Rochester City Lines, Co. v. City of Rochester" on Justia Law

The Defense Contract Management Agency within the Department of Defense (DOD) employed Vassallo as a computer engineer in 2012. That summer, it announced a vacancy for the position of Lead Interdisciplinary Engineer, stating that only certain individuals could apply: “[c]urrent [DCMA]” employees or “[c]urrent [DOD] [e]mployee[s] with the Acquisition, Technology, and Logistics . . . [w]orkforce who are outside of the Military Components.” Vassallo, a veteran, applied, but DCMA rejected his application. The Office of Personnel Management (OPM) determined that DOD was not required to afford him veterans employment preferences under the Veterans Employment Opportunities Act of 1998 (VEOA), 112 Stat. 3182. OPM defines the word “agency” in 5 U.S.C. 3304(f)(1) to mean “Executive agency” as defined in 5 U.S.C. 105 and concluded that DCMA was not required to give Vassallo an opportunity to compete under 5 U.S.C. 3304(f)(1) because the DOD— the agency making the announcement—did not accept applications from outside its own workforce. Vassallo sought corrective action from the Merit Systems Protection Board, which concluded that OPM’s regulation permissibly fills a gap in the governing statute. The Federal Circuit affirmed, rejecting arguments that the OPM regulation contradicts the plain terms of the statute and unreasonably undermines the purpose of the VEOA. View "Vassallo v. Dept. of Defense" on Justia Law

The six-month trial of former Detroit mayor Kilpatrick and Detroit contractor Ferguson, included almost 100 government witnesses and over 700 exhibits. The government’s main theory was that Kilpatrick and Ferguson conspired to extort money from other Detroit-area contractors by pressuring them to include Ferguson’s companies in their city contracts—even when Ferguson’s companies were not the most qualified candidates and even when Ferguson’s companies did no work. Kilpatrick was convicted of 24 counts: RICO conspiracy, 18 U.S.C. 1962(d); four counts of extortion, 18 U.S.C. 1951; attempted extortion, 18 U.S.C. 1951; bribery, 18 U.S.C. 666(a); 11 counts of mail and wire fraud, 18 U.S.C. 1341, 1343; five counts of subscribing a false tax return, 26 U.S.C. 7206(a); and income tax evasion, 26 U.S.C. 7201. Ferguson was convicted of nine counts: RICO conspiracy, six counts of extortion, attempted extortion, and bribery. The Sixth Circuit affirmed the convictions but vacated a restitution order, rejecting arguments that Kilpatrick was denied conflict-free counsel because his lead attorneys had recently become “of counsel” to a firm that was suing Kilpatrick for alleged conduct related to his criminal charges; extensive testimony by two case agents violated the Rules of Evidence; and the court erred in allowing witnesses to report what other people had told them about Kilpatrick and Ferguson as evidence that witnesses feared the defendants. View "United States v. Ferguson" on Justia Law

Bay County Utilities provides water and sewer services. The County Commissioners establish rates. In 1966, the U.S. Air Force contracted with the County for water services at Tyndall Air Force Base. The parties entered into a sewer services contract in 1985. Both required the parties to renegotiate any new rates. In 1994, Federal Acquisition Regulations were amended to require standardized clauses in utility service contracts. When the government is contracting with an unregulated utility or the utility is subject to non-independent oversight, the parties must negotiate new rates. If the utility is overseen by an independent regulatory body, no further negotiations are required. In 2007 and 2009, Bay County increased water rates. The Air Force ignored those increases, but, in 2009 and 2010, unilaterally modified the water contract, with new rates, lower than the rates set by Bay County. In 2009 Bay County increased sewer rates. The Air Force refused to pay those higher rates, and instituted a unilateral contract modification to moderately increase sewer rates. Bay County submitted unsuccessful Contract Disputes Act claims to recover the unpaid balance of approximately $850,000. The Federal Circuit affirmed the Court of Federal Claims, holding that Bay County is an independent regulatory body and may revise rates in utility contracts without resorting to negotiations with the Air Force. View "Bay Cnty., Fla. v. United States" on Justia Law

Relator filed suit under the False Claims Act (FCA), 31 U.S.C. 3730(h), against several defendants for violation of the Davis-Bacon Act, 40 U.S.C. 3141-3144, 3146, 3147. In this case, although the FCA complaint was properly filed under seal, relator's attorney revealed to relator's employer the existence of the complaint well before the end of the sixty day waiting period. The district court found a violation of the seal requirement and dismissed the action with prejudice. However, the court concluded that the dismissal was inappropriate under the FCA because the seal violation did not incurably frustrate the seal’s statutory purpose. The court further concluded that neither of the district court’s alternative reasons for dismissing relator’s claims - the doctrine of primary jurisdiction and failure to comply with Civil Procedure Rule 9(b) - warrant dismissal with prejudice. Finally, the court concluded that the district court erred when it dismissed relator’s retaliation claim. Accordingly, the court reversed and remanded for further proceedings. View "Smith v. Clark/Smoot/Russell" on Justia Law

Duit, an Oklahoma highway contractor, contracted with the Arkansas State Highway and Transportation Department (ASHTD) to reconstruct I-30 between Little Rock and Benton. Duit encountered soil conditions that, it alleges, differed materially from information provided by the ASHTD during bidding. Duit’s claims for compensation were denied by the ASHTD, the Arkansas State Claims Commission, and the General Assembly. Duit sued under 42 U.S.C. 1983, citing the “in re Young” exception to Eleventh Amendment immunity. Duit alleged violations of the Federal Aid Highway Act, 23 U.S.C. 101, and the Due Process and Equal Protection clauses and sought to “enjoin Defendants from accepting federal aid … until . . . they fully comply with the federally mandated differing site clause.” The court dismissed the FAHA claim because that statute is enforced exclusively by an executive agency, dismissed the due process claim because Duit’s interest in future highway contracts is not a protected property interest and because the state appeals process for claim denials satisfies procedural due process requirements. The court declined to dismiss the equal protection claim, concluding Duit sufficiently alleged that the Commission treated out-of-state-contractor Duit differently from similarly situated in-state contractors without a rational reason. The Eighth Circuit held that Duit lacks standing to bring its equal protection claim and that the court erred in not dismissing that claim. View "Duit Constr. Co. Inc. v. Bennett" on Justia Law

DiLuzio, owned Yorkville buildings that burned under suspicious circumstances. Fire Chief Klubert led the firefighting and coordinated with Mayor DiFilippo on a decision to demolish part of a building immediately, without inspection or formal decision. Klubert and DiFilippo ordered Officer Davis to find DiLuzio and bring him to a meeting. At that meeting, DiLuzio insisted the buildings could be repaired. DiFilippo ordered Nemeth to demolish most of the south building, but left part intact, even though it had suffered the worst damage. Days later, Police Chief Morelli (on orders from DiFilippo) approached DiLuzio’s son with a low-ball offer from an anonymous investor, to purchase the property “as is.” DiLuzio declined. Morelli approached DiLuzio with another offer months later. DiLuzio declined again. Morelli, Klubert, and DiFilippo began to issue citations, threatening $600 per day fines. The Village dismissed the first citation, which included false statements about inspections and authorizations. Morelli falsified a State Fire Marshall citation threatening $1,000 per day fines. The Village then passed a criminal ordinance concerning unkempt properties. Morelli charged DiLuzio, falsely notarizing his own signature. DiLuzio filed a 42 U.S.C. 1983 action. The Sixth Circuit affirmed.summary judgment for defendants on some claims, but denied qualified immunity to DiFilippo and Klubert on the due process claim concerning demolition; to Morelli and Davis on substantive due process claims; and to Nemeth because he was not a state actor. View "DiLuzio v. Village of Yorkville" on Justia Law

Bridge Company appeals a district court judgment ordering it to donate a toll bridge to the cities of Fargo, North Dakota, and Moorhead, Minnesota, free and clear of all liens. In May 1986, the cities and the Company entered into an agreement for the purpose of construction and operation of a private toll bridge over the Red River connecting the cities. The bridge was completed and started operations on June 1, 1988. The bridge was originally financed with publicly-sponsored bonds issued by Moorhead and capital from an investment firm. In 2004, the cities agreed to allow the Company to refinance the indebtedness, but the refinancing was required to be completely amortized by June 1, 2013, which was 25 years from the commencement of the operation of the bridge. The bank refinancing the debt required personal guarantees from the Company's two shareholders. As of June 1, 2013, the Company owed approximately $75,000 on the refinanced loan. In early September 2013, the Company's two shareholders satisfied their personal guarantees for the debt, and as of September 6, 2013, none of the original indebtedness for construction of the bridge remained outstanding. During the 25-year time span, the Company's records reflected $108,761 was paid for maintenance and repair of the bridge. All of these bills were paid by the Company before February 6, 2014. However, taxes remained owing to Cass County, North Dakota, and Clay County, Minnesota, and the unpaid taxes constituted a lien on the bridge. The district court found that during the 25-year period between June 1, 1988, and June 1, 2013, the bridge was closed 249 days because of flooding on the Red River. Applying an Acts of God clause in the original agreement, the court ruled the 25-year period was extended 249 days to February 5, 2014, and because there was no qualifying debt in existence as of that date, the Company was required to donate the bridge to the cities free and clear of any liens. Because the district court did not err in interpreting the parties' agreement and the court's findings of fact were not clearly erroneous, the North Dakota Supreme Court affirmed the district court's judgment. View "City of Moorhead v. Bridge Co." on Justia Law