Justia Government Contracts Opinion Summaries

A state agency issued a request for proposals for legal services. A law firm delivered its proposal after the submission deadline, but the procurement officer accepted the proposal and forwarded it to the evaluation committee. After the agency issued a notice of intent to award that law firm the contract, a second law firm protested, alleging that the evaluation committee made scoring errors and that consideration of the late-filed proposal was barred by a relevant regulation and the request for proposals. The procurement officer sustained the protest, rescinded the original award, and awarded the second law firm the contract. The first law firm then protested, claiming: (1) the second law firm’s protest should not have been considered because it was filed after the protest deadline; (2) the first law firm’s proposal was properly accepted because the delay in submission was immaterial; and (3) the second law firm’s proposal was nonresponsive because that firm lacked a certificate of authority to transact business in Alaska. The procurement officer rejected that protest and the first law firm filed an administrative appeal. The administrative agency denied the appeal, and the first law firm appealed the agency decision to the superior court, which affirmed the administrative agency ruling. Upon review, the Supreme Court concluded that the administrative agency acted reasonably in accepting the second law firm’s late-filed protest and deeming that firm’s proposal responsive notwithstanding its lack of a certificate of authority. Furthermore, the Court concluded the agency’s interpretation that its regulation barred acceptance of the first firm’s late-filed proposal is reasonable and consistent with statute. Therefore, the Court affirmed the superior court’s decision upholding the final agency decision. View "Davis Wright Tremaine LLP v. Alaska, Dept. of Administration" on Justia Law

Southern Rehabilitation Group and its medical director sued the Secretary of Health and Human Services and past and present Medicare contractors, seeking review of the Secretary’s final decision on 6,200 claims for Medicare reimbursement. The district court remanded so that the Secretary could pay the disputed amount. After payment, the case returned to the district court, which concluded that the claims for payment were moot and dismissed remaining constitutional and statutory claims as barred by jurisdictional provisions of the Medicare Act. The court also held that plaintiffs did not show that they were eligible to collect interest on their claims and that it did not have jurisdiction over 8,900 other claims that plaintiffs alleged were still in the administrative process. The Sixth Circuit affirmed summary judgment to defendants on plaintiffs’ federal and state law claims and on the 8,900 claims still in the administrative process, but reversed summary judgment on plaintiffs’ claims for interest. The Secretary could not rely on her unreasonable interpretation of the “clean-claims” statute as a basis for summary judgment concerning interest.View "S. Rehab. Grp. v. Sec'y of Health & Human Servs." on Justia Law

In 1998 Prazen retired as superintendent of the City of Peru electrical department. He had more than 27 years of service and purchased five years of age-enhancement credit. Prazen had an unincorporated electrical business, which was incorporated just before he retired. Before he retired, the City entered into an agreement with his corporation for operation of the City’s electrical department, including management and supervision. First year compensation under the contract was about $7,000 higher than Prazen’s prior annual salary. The relationship lasted until 2009, when the corporation was dissolved. In 2010, the Illinois Municipal Retirement Fund notified Prazen that, after participating in the early retirement incentive plan, he had violated the statutory prohibitions (40 ILCS 5/7-141.1(g)) against returning to work. The Fund recalculated his years of service as 27 and claimed he should repay $307,100 as a statutory forfeiture. The circuit court agreed. The appellate court reversed and the Illinois Supreme Court agreed. The work done between 1999 and 2009 was done by a separate corporate entity and was not precluded by statute. If the legislature had wanted to specifically prohibit this, it could have said so. The statute does not show intent to prohibit outsourcing to a retired employee’s corporation and the legislature did not grant the Trustees of the Fund authority to find that a corporation was a “guise.” The court noted that, earlier in the period under consideration, the Board had expressed the view that what the arrangement was pView "Prazen v. Shoop" on Justia Law

Northern, operated by VanDuinen, was a general contractor on public construction projects, legally required to obtain surety bonds. Hanover was Northern’s bonding agent and required Northern to enter into an Indemnity Agreement, which VanDuinen signed in his individual capacity and as Northern’s President. The Midway Airport Project was financed by the FAA and managed by Parsons. In 2008 Northern won the bid and began subcontracting. in 2009 subcontractors complained that Northern failed to pay them in accordance with the bonds and contracts. Work was halted, resulting in a separate complaint, by Parsons, for failure to complete the Project as required. The FAA opted to retain possession of remaining contract funds, $127,086.00, pending resolution of the disputes and completion of the work. Hanover received claims from subcontractors McDaniel ($127,452.78) and Rex Electric ($78,495.00) and a claim for performance from Parsons. Hanover demanded collateral under the Agreement. Northern refused to post collateral or to indemnify Hanover. In 2009 McDaniel filed for bankruptcy; the bankruptcy trustee sued Hanover seeking payment for work performed. In 2012, Hanover paid the trustee $127,452.78 to resolve both McDaniels’s and Rex Electric’s claims. Hanover resolved Parson’s claim by stepping in as general contractor and arranging for completion of the Project. Parsons paid Hanover the $127,086.00 of contract funds the FAA had withheld. Hanover sued Northern and VanDuinen. The district court granted summary judgment in Hanover’s favor. The Seventh Circuit affirmed. The Agreement is unambiguous. Northern breached it, and Hanover is entitled to contractual damages. View "Hanover Ins. Co. v. Northern Bldg. Co." on Justia Law

These appeals concerned a suit filed under the False Claims Act (FCA), 31 U.S.C. 3729 et seq., and two bankruptcy proceedings. The district court concluded that the bankruptcy trustee had exclusive standing to assert the FCA claims at issue because those claims belonged to the bankruptcy estate. The court agreed with the district court that only the trustee had standing to prosecute the FCA lawsuit; affirmed the district court's dismissal under Rule 12(b)(6); and concluded that the district court did not abuse its discretion in denying the motion for reconsideration. View "Westbrook Navigator L.L.C., et al v. Navistar, Inc., et al." on Justia Law

Plaintiff alleged that Bayer defrauded the United States government through its marketing and sale of the cholesterol-lowering drug Baycol. On appeal, plaintiff challenged the dismissal of the qui tam action she brought against Bayer Healthcare under the False Claims Act (FCA), 31 U.S.C. 3729-3733. Based upon the court's review of plaintiff's allegations regarding the Department of Defense (DoD) contracts, the court concluded that her complaint satisfied Rule 9(b)'s requirements and survived a motion to dismiss under Rule 12(b)(6). Accordingly, the court reversed the district court's judgment with regard to her allegations regarding the DoD contracts and remanded for further proceedings. However, the court affirmed the district court's judgment with respect to the allegations involving federal health insurance reimbursement claims under United States v. ex rel. Roop v. Hypoguard USA, Inc.View "Simpson v. Bayer Healthcare, et al." on Justia Law

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

The Department of Human Services revoked a contractor's eligibility to provide home delivered meals to Medicaid clients because the contractor breached its contract with the department by failing to comply with certain food preparation and delivery standards. The contractor, Homestyle Direct, objected to the revocation, arguing that the standards in the contract were not enforceable because they should have been promulgated as administrative rules. The department rejected those arguments, concluding that whether the standards could have been promulgated as administrative rules was irrelevant to their enforceability as terms of a contract. The Court of Appeals reversed on the ground that the department could not enforce unpromulgated rules as terms of a contract. The Supreme Court disagreed with the appellate court and reversed its decision. The Court affirmed the final order of the department.View "Homestyle Direct, LLC v. DHS" on Justia Law

Relator filed a qui tam complaint against Verizon under the False Claims Act, 31 U.S.C. 3730(b)(5). On appeal, relator challenged the district court's dismissal of his qui tam complaint for lack of subject matter jurisdiction under Rule 12(b)(1). The court held that the complaint sufficiently related to relator's earlier action, that the first-to-file bar applied to relator even though he brought the first action, and that the bar remained in effect even after the first action was no longer pending. Accordingly, the court affirmed the judgment of the district court. View "United States v. Cellco Partnership, et al." on Justia Law