Justia Government Contracts Opinion Summaries

This dispute arose out of 2011 legislation that dissolved California’s redevelopment agencies and created a process for winding down their affairs. The Department of Finance (Department) determined that certain reimbursement agreements between the City of Chula Vista (City) and its former redevelopment agency (Agency) were not “enforceable obligations” under the redevelopment dissolution laws. Thus, despite having approved payment under the agreements on prior “recognized obligation payment schedules” (ROPS), the Department denied payment authorization on the fiscal year 2018-2019 and 2019-2020 ROPS. The City and the Chula Vista Redevelopment Successor Agency (together, plaintiffs) filed this action seeking to compel the Department to recognize the reimbursement agreements as enforceable obligations and approve the use of property tax revenues for such items on all current and future ROPS. The trial court denied the petition and entered judgment in favor of the Department. On appeal, plaintiffs argued the Department erred in rejecting the items as enforceable obligations under Health and Safety Code section 34171(d)(2). Alternatively, plaintiffs contended the Department should have been estopped from denying the items based on its prior approvals. The Court of Appeal concluded some of the disputed items were enforceable obligations, and reversed the trial court's judgment in part. View "City of Chula Vista v. Stephenshaw" on Justia Law

The Army issued a solicitation for a Next Generation Load Device Medium to encrypt and decrypt sensitive information on the battlefield, stating that in order to be eligible for the award Offerors must receive a minimum of acceptable rating in each Technical Subfactor. CACI's initial proposal received a Technical/Risk Rating of unacceptable because it failed to provide for two-factor authentication for all modes of operation as required by the solicitation. Nonetheless, CACI’s proposal was included in the competitive range. CACI was allowed to submit a final proposal. The Army assigned three deficiencies to CACI’s proposal related to its two-factor authentication proposal, making CACI ineligible for the award. The Army awarded the contract to others. CACI filed a bid protest challenging the technical deficiencies.The Claims Court dismissed CACI’s complaint for lack of standing under a new theory not raised before the contracting officer–that CACI had an organizational conflict of interest that could not be waived or mitigated, which made CACI ineligible for the award. Alternatively, the Claims Court found that, even if CACI had standing, the Army acted reasonably in its assessment of CACI’s proposal. The Federal Circuit held that the Claims Court erred in treating the statutory standing issue as jurisdictional but affirmed on the merits. View "CACI, Inc.-Federal v. United States" on Justia Law

In 2014 the Los Angeles City Council passed a resolution directing various City departments and officials to prepare and execute the necessary approvals and agreements to convey the property to Childhelp in exchange for Childhelp’s agreement to continue using the property to provide services for victims of child abuse. Ultimately, however, the City decided not to transfer the property to Childhelp. Childhelp filed this action against the City for, among other things, declaratory relief, writ of mandate, and promissory estoppel, and the City filed an unlawful detainer action against Childhelp. After the trial court consolidated the two actions, the court granted the City’s motion for summary adjudication on Childhelp’s cause of action for promissory estoppel, sustained without leave to amend the City’s demurrer to Childhelp’s causes of action for declaratory relief and writ of mandate, and granted the City’s motion for summary judgment on its unlawful detainer complaint. Childhelp appealed the ensuing judgment.   The Second Appellate District affirmed. The court explained that Childhelp had occupied the property for almost 30 years and had an expectation it would eventually own the property. The 2014 resolution certainly suggested the City was seriously considering selling the property to Childhelp. But it was undisputed the parties never completed the transaction in accordance with the City Charter. While Childhelp cites cases reciting general principles of promissory estoppel, it does not cite any cases where the plaintiff successfully invoked promissory estoppel against a municipality in these circumstances. The trial court did not err in granting the City’s motion for summary adjudication on Childhelp’s promissory estoppel cause of action. View "Childhelp, Inc. v. City of L.A." on Justia Law

Edelweiss brought a qui tam action against financial institutions (California False Claims Act (Gov. Code 12650) (CFCA)), alleging that the defendants contracted to serve as remarketing agents (RMAs) to manage California variable rate demand obligations (VRDOs): tax-exempt municipal bonds with interest rates periodically reset by RMAs. Edelweiss claims that the defendants submitted false claims for payment for these remarketing services, knowing they had failed their obligation to reset the interest rate at the lowest possible rate that would enable them to sell the series at par (face value), and “engaged in a coordinated ‘Robo-Resetting’ scheme where they mechanically set the rates en masse without any consideration of the individual characteristics of the bonds or the associated market conditions or investor demand” and “impose[d] artificially high interest rates on California VRDOs.” Edelweiss alleged that it performed a forensic analysis of rate resetting during a four-year period and that former employees of the defendants “stated and corroborated” this robo-resetting scheme.The trial court dismissed the complaint, concluding that the allegations lacked particularized allegations about how the defendants set their VRDO rates and did not support a reasonable inference that the observed conditions were caused by fraud, rather than other factors.The court of appeal reversed. While allegations of a CFCA claim must be pleaded with particularity, the court required too much to satisfy this standard. The court rejected an alternative argument that Edelweiss’s claims are foreclosed by CFCA’s public disclosure bar. View "Edelweiss Fund LLC v. JPMorgan Chase & Co." on Justia Law

For pressing projects, the government can issue “Undefinitized Contract Actions” (UCAs) to allow contractors to begin work before the parties have reached a final agreement on contract terms, like price. The Air Force entered into two UCAs with Lockheed for upgrades to F-16 aircraft. Both UCAs include “definitization” clauses that provide that if the parties are unable to reach agreements on price by a certain time, the Contracting Officer (CO) may determine a reasonable price. After years of negotiations, the Air Force and Lockheed were unable to agree on the price terms. The CO assigned to each UCA unilaterally definitized a price of about $1 billion.The Armed Services Board of Contract Appeals (ASBCA), acting under the Contract Disputes Act (CDA), dismissed appeals for lack of jurisdiction because Lockheed failed to submit a certified contractor claim to the COs requesting a final decision on its claims as required under the CDA. The Federal Circuit affirmed, rejecting Lockheed’s argument that the COs’ unilateral definitizations qualified as government claims under the CDA, which a contractor can directly appeal to the ASBCA without having to submit its own claim to the COs. The COs’ definitizations of the contract prices were not demands or assertions by the government seeking relief against Lockheed. View "Lockheed Martin Aeronautics Co. v. Secretary of the Air Force" on Justia Law

The Department of Transportation (DOT) provides funds for state transportation projects. States that receive federal transportation funds must set participation goals for disadvantaged business enterprises (DBEs)--for-profit small businesses “at least 51 percent owned by one or more individuals who are both socially and economically disadvantaged” and “[w]hose management and daily business operations are controlled by one or more of the socially and economically disadvantaged individuals who own it.” States certify businesses as DBEs.The defendants were convicted of conspiracy to commit wire fraud, 18 U.S.C. 1349, and wire fraud, section 1343, arising out of DOT-financed contracts for work in Philadelphia that included DBE requirements. The Defendants' bids committed to working on the projects with Markias, a company that had prequalified as a DBE. During the performance of their contracts, the Defendants submitted false documentation regarding Markias’ role; PennDOT awarded the Defendants DBE credits and paid them based on their asserted compliance with the DBE requirements. Markias did not do any work on the projects or supply any of the materials. The Defendants arranged for the actual suppliers to send their invoices to Markias, which then issued its own invoices, adding a 2.25% fee.The Third Circuit affirmed the convictions but vacated the forfeiture order and loss calculation. The court acknowledged the complex nature of this fraud in this and commended the attempt to determine the amount of loss for sentencing purposes, and the amount to be forfeited. View "United States v. Kousisis" on Justia Law

A False Claims Act qui tam action was filed under seal against SHH and its nursing facilities, alleging that SHH provided unreasonable and unnecessary services to claim the highest possible Medicare reimbursement. Three co-relators also alleged that SHH retaliated against them for internally reporting fraudulent billing practices. SHH received a Department of Justice notification that it was the subject of a fraudulent claims investigation, requesting information about recent terminations of SHH employees, including the relators. It did not explicitly refer to the retaliation allegations.Two years later, SHH obtained liability coverage. Allied's claims-made policy applies only to claims first made during the policy period. SHH's application checked "none" when asked to “provide full details of all inquiries, investigations, administrative charges, claims, and lawsuits filed” within the last three years. SHH checked “no” to whether “[SHH], any Subsidiary, any Executive or other entity proposed for coverage kn[ew] of any act, error or omission which could give rise to a claim, suit or action.” An application exclusion, incorporated into the policy, stated that if such information existed, any inquiry, investigation, administrative charge, claim, or lawsuit arising therefrom or arising from such violation, knowledge, information, or involvement is excluded from coverage.The qui tam action was unsealed. SHH notified Allied and sought coverage for defense costs. Allied denied coverage. SHH sued. SHH later settled the relators' retaliation claim ($2.2 million) and finalized a $10 million settlement for the claims-submissions violations. The district court granted SHH partial summary judgment, awarding $2,336,786.35. The Sixth Circuit reversed. The plain language of SHH’s policy excluded coverage. View "SHH Holdings, LLC v. Allied World Specialty Ins. Co." on Justia Law

President Biden invoked his authority under the Federal Property and Administrative Services Act of 1949 (“Procurement Act”) to direct federal agencies to include in certain contracts a clause requiring covered contractor employees to follow COVID-19 safety protocols, including vaccination requirements, in order for employees to be eligible to work on federal government projects. Plaintiffs sued to enjoin the vaccination mandate. This lawsuit revolved around four documents that comprise the Contractor Mandate: the Executive Order, the Task Force Guidance, the Office of Management and Budget Determination, and the Federal Acquisition Regulatory Council Guidance. The district court granted a permanent injunction against the Contractor Mandate, effective in any contract that either involved a party domiciled or headquartered in Arizona and/or was performed “principally” in Arizona.   The Ninth Circuit reversed the district court’s order granting a permanent injunction and dissolved the injunction. First, the panel held the Major Questions Doctrine—which requires that Congress speak clearly if it wishes to assign to an agency decisions of vast economic and political significance—did not apply. Second, the panel held that even if the Major Questions Doctrine applied, it would not bar the Contractor Mandate because the Mandate is not a transformative expansion of the President’s authority under the Procurement Act. Third, the panel held that the Contractor Mandate fell within the President’s authority under the Procurement Act. Fourth, the panel held that the nondelegation doctrine and state sovereignty concerns did not invalidate the Contractor Mandate. Finally, the panel held that the Contractor Mandate satisfied the Office of Federal Procurement Policy Act’s procedural requirements. View "KRISTIN MAYES, ET AL V. JOSEPH BIDEN, ET AL" on Justia Law

The Lemasters run a Lawrence County, Kentucky towing business, which was on the county’s “rotation list” of companies to call when it needed to order a tow. Both as fire chief and in his towing business, Lemaster sparred with Carter, Lawrence County’s “judge-executive,” the elected head of its executive branch. Lemaster criticized Carter on Facebook. Five days later, the 911 Center sent an email to dispatchers; its subject identified Lemaster Towing and the Cherryville Fire Department. Its body stated in all caps: “Per Judge Carter do not tone them out on any fire calls[;] use nearest department[;] . . . Lemaster Towing is no longer on the rotation list[.]”The Lemasters sued Carter and Lawrence County under 42 U.S.C. 1983 and state law, alleging that Carter violated the First Amendment by removing Lemaster Towing from the rotation list in retaliation for Lemaster’s criticisms. The district court granted the defendants summary judgment. The Sixth Circuit affirmed as to the Monell claims against the county; Lemaster did not tie the actions to any county policy. The court reversed as to Carter. Carter conceded that his communications with dispatch employees could constitute an adverse action. The record would allow a rational jury to find that Lemaster’s Facebook post motivated Carter’s decision to remove Lemaster Towing from the rotation list. View "Lemaster v. Lawrence County, Kentucky" on Justia Law

The California Department of Industrial Relations, Division of Labor Standards Enforcement (Division) debarred the following from acting as public works contractors: (1) GRFCO, Inc. (GRFCO), a contractor; (2) George Rogers Frost, the principal in GRFCO; (3) Garcia Juarez Construction (GJC), a contractor and apparent alter ego of GRFCO; and (4) James Craig Jackson, the principal in GJC and an employee of GRFCO. The Division found that, in six instances, the contractors violated apprenticeship requirements, and in two instances, Frost and Jackson had made false certifications under penalty of perjury. The trial court denied the contractors’ petition for administrative mandate. On appeal, the contractors contended: (1) there was insufficient evidence that the apprenticeship violations were knowing; (2) there was insufficient evidence to support the false certification findings; (3) the contractors were debarred because they refused to join a union, in violation of the First Amendment; (5) the Division, hearing officer, and/or the investigator were biased; and (5) the hearing officer erred by denying the contractors' request to reopen, which was based on new evidence of bias. Finding no error, the Court of Appeal affirmed. View "GRFCO, Inc. v. Super. Ct." on Justia Law