Justia Government Contracts Opinion Summaries

Plaintiff worked at Huntington Ingalls Incorporated as a sheet-metal mechanic. After leaving the company, Plaintiff complained of hearing loss. Plaintiff selected and met with an audiologist. An administrative law judge denied Plaintiff’s Longshore and Harbor Workers’ Compensation Act (LHWCA). Plaintiff appealed this decision to the Department of Labor’s Benefits Review Board. The Board reversed its initial decision on whether Plaintiff could choose his own audiologist. The Company timely petitioned for review. The question is whether audiologists are “physicians” under Section 907(b) of LHWCA.   The Fifth Circuit denied the Company’s petition for review. The court reasoned that based on the education they receive and the role that they play in identifying and treating hearing disorders, audiologists can fairly be described as “skilled in the art of healing.” However, audiologists are not themselves medical doctors. Their work complements that of a medical doctor. But, the court wrote, Optometrists, despite lacking a medical degree, are able to administer and interpret vision tests. And based on the results of those tests, optometrists can prescribe the appropriate corrective lenses that someone with impaired vision can use to bolster his or her ability to see. Audiologists are similarly able to administer hearing tests, evaluate the resulting audiograms, and then use that information to fit a patient with hearing aids that are appropriately calibrated to the individual’s level of auditory impairment. Because the plain meaning of the regulation includes audiologists, and because that regulation is entitled to Chevron deference, audiologists are included in Section 907(b) of the LHWCA’s use of the word “physician.” View "Huntington Ingalls v. DOWCP" on Justia Law

The Commission alleged that the Army violated the Randolph-Sheppard Act by failing to give priority to blind vendors in the bidding process for a vending facility services contract at an Army base cafeteria. After the arbitration panel found in favor of the Army, the Commission appealed the panel's decision.The Fifth Circuit affirmed the district court's grant of summary judgment in favor of the Commission. The court held that the statutory language is ambiguous; applied the presumption against ineffectiveness; supported a broader interpretation of "operate" in the context in which it is used within the Act; and held that the district court did not err in holding that the Act may apply to Dining Facility Attendant (DFA) contracts generally. In this case, the DFA contract at issue is subject to the Act and the Army violated the Act by not giving the Commission priority in the bidding process. View "Texas Workforce Commission v. United States Department of Education" on Justia Law

After the U.S. invasion of Iraq, Agility was awarded a contract for support of staging area operations (PCO Contract). Under the Contract, the Coalition Provisional Authority (CPA) could issue individual task orders to Agility. Funds obligated under the contract were sourced from the Development Fund for Iraq (DFI). The CPA controlled the DFI, which consisted of Iraqi money. The Contract provided that “[n]o funds, appropriated or other, of any Coalition country are or will be obligated under this contract” and recognize[d] that a transfer of authority from the CPA to the interim Iraqi Governing Council (IIG) would occur in June 2004. The contracting parties were the CPA and Agility. The Contract expressly preserved the right of the United States to assert claims against Agility. A Contract amendment provided that any claim Agility had after the transfer to IIG could not be brought before the Armed Services Board of Contract Appeals but could only be brought in an Iraqi court. The U.S. Army was designated as the administrator of the PCO contract.In 2010, following an audit of the PCO Contract, the Army contracting officer sent demand letters for overpayments allegedly made under 12 task orders. The Claims Court upheld the offsets, holding that the United States (rather than Iraq) was owed the alleged overpayment and the United States was authorized to offset the alleged overpayment. The Federal Circuit in part and vacated in part. The Claims Court did not evaluate the merits of the offset determination nor the procedures required by law. View "Agility Public Warehousing Co. v. United States" on Justia Law

The Navy began a program to design and build littoral combat ships (LCS) and issued a request for proposals. During the initial phase of the LCS procurement, FastShip met with and discussed a potential hull design with government contractors subject to non-disclosure and confidentiality agreements. FastShip was not awarded a contract. FastShip filed an unsuccessful administrative claim, alleging patent infringement. The Claims Court found that the FastShip patents were valid and directly infringed by the government. The Federal Circuit affirmed.The Claims Court awarded FastShip attorney’s fees and expenses ($6,178,288.29); 28 U.S.C. 1498(a), which provides for a fee award to smaller entities that have prevailed on infringement claims, unless the government can show that its position was “substantially justified.” The court concluded that the government’s pre-litigation conduct and litigation positions were not “as a whole” substantially justified. It unreasonable for a government contractor to gather information from FastShip but not to include it as part of the team that was awarded the contract and the Navy took an exceedingly long time to act on FastShip’s administrative claim and did not provide sufficient analysis in denying the claim. The court found the government’s litigation positions unreasonable, including its arguments with respect to one document and its reliance on the testimony of its expert to prove obviousness despite his “extraordinary skill.” The Federal Circuit vacated. Reliance on this pre-litigation conduct in the fee analysis was an error. View "FastShip, LLC v. United States" on Justia Law

The Guard Recruiting Assistance Program (G-RAP), designed to increase recruiting to the Air National Guard during the “War on Terror” was run by Docupak, a private corporation. Docupak selected and trained Recruiting Assistants (RAs) to find and direct potential airmen to full-time recruiters. The program paid a $1,000 pre-loaded gift card upon actual enlistment of a potential airman and another $1,000 upon the airman’s completion of training. The RAs were to identify individuals that were not already working with a full-time recruiter and were prohibited from splitting the payment with full-time recruiters. Osborne, a full-time recruiter, was accused of referring names of pre-existing recruits to RA Andolsek so that they could claim the incentive, with kickbacks to Osborne. Osborne was charged with aiding Andolsek in embezzling from the Department of Defense, 18 U.S.C. 641; 18 U.S.C. 2, which “caused” the Department to reimburse Docupak for $9,000. Andolsek pleaded guilty and testified against Osborne. Osborne argued that the funds were stolen from a private contractor, so they only violated Docupak’s internal policy, not a federal regulation. The Sixth Circuit reversed Osborne’s conviction. No reasonable jury could have found that the funds were something of value to the government beyond a reasonable doubt, given the evidence of control. The government did not retain a reversionary interest in the funds and imposed few restrictions. Docupak gave the government access to information, but the government did not retain the right to conduct audits. View "United States v. Osborne" on Justia Law

In a contract dispute between BAE and Korea, BAE sought a declaratory judgment that it had not breached any contractual obligation to Korea and a permanent injunction barring Korea from prosecuting its suit against BAE in Korean courts. The Fourth Circuit affirmed the district court's grant of BAE's requested declaration, but refused to issue a permanent injunction. The court held that the BAE-Korea agreement's permissive forum selection clause provided no basis for dismissing this action; Korea was not immune from suit under the Foreign Sovereign Immunities Act; the Foreign Military Sales (FMS) structure shields a U.S. contractor, such as BAE, from liability; enforcement of the BAE-Korea agreement would undermine the control the United States retained in all FMS transactions over price; because the U.S. government retained control over price in an FMS transaction, a foreign state generally has no cause of action — against anyone — if the price demanded by the U.S. government increases over time; and the district court did not abuse its discretion in denying BAE's petition for a permanent anti-suit injunction. Accordingly, the court affirmed the judgment. View "BAE Systems Technology v. Republic of Korea's Defense Acquisition Program Admin." on Justia Law

In a contract dispute between BAE and Korea, BAE sought a declaratory judgment that it had not breached any contractual obligation to Korea and a permanent injunction barring Korea from prosecuting its suit against BAE in Korean courts. The Fourth Circuit affirmed the district court's grant of BAE's requested declaration, but refused to issue a permanent injunction. The court held that the BAE-Korea agreement's permissive forum selection clause provided no basis for dismissing this action; Korea was not immune from suit under the Foreign Sovereign Immunities Act; the Foreign Military Sales (FMS) structure shields a U.S. contractor, such as BAE, from liability; enforcement of the BAE-Korea agreement would undermine the control the United States retained in all FMS transactions over price; because the U.S. government retained control over price in an FMS transaction, a foreign state generally has no cause of action — against anyone — if the price demanded by the U.S. government increases over time; and the district court did not abuse its discretion in denying BAE's petition for a permanent anti-suit injunction. Accordingly, the court affirmed the judgment. View "BAE Systems Technology v. Republic of Korea's Defense Acquisition Program Admin." on Justia Law

TRICARE provides current and former members of the military and their dependents' medical and dental care. Hospitals that provide TRICARE services are reimbursed under Department of Defense (DoD) guidelines. TRICARE previously did not require, DoD to use Medicare reimbursement rules. A 2001 amendment, 10 U.S.C. 1079(j)(2), required TRICARE to use those rules to the extent practicable. DoD regulations noted the complexities of the transition process and the lack of comparable cost report data and stated “it is not practicable” to “adopt Medicare OPPS for hospital outpatient services at this time.” A study, conducted after hospitals complained, determined that DoD underpaid for outpatient radiology but correctly reimbursed other outpatient services. TRICARE created a process for review of radiology payments. Each plaintiff-hospital requested a discretionary payment, which required them to release “all claims . . . known or unknown” related to TRICARE payments. Several refused to sign the release and did not receive any payments. Although it discovered calculation errors with respect to hospitals represented by counsel, TRICARE did not recalculate payments for any hospitals that did not contest their discretionary payment offer. The Claims Court dismissed the hospitals’ suit. The Federal Circuit reversed in part, finding that they may bring a claim for breach of contract but may not bring money-mandating claims under 10 U.S.C. 1079(j)(2) and 32 C.F.R. 199.7(h)(2) because the government’s interpretation of the statute was reasonable. View "Ingham Regional Medical Center v. United States" on Justia Law

KPCC filed suit against KBR, a general contractor supporting the Government's military operations in Iraq, alleging claims for breach of contract, fraud, and promissory estoppel. At issue was a 2010 contract for, inter alia, KBR's leasing, with an option to purchase, a dining facility constructed by KPCC in Iraq. The district court dismissed the complaint, concluding that the political-question doctrine rendered nonjusticiable the contract dispute at issue. Applying de novo review, under the discriminating inquiry required by Baker v. Carr, the court concluded that the claims presented required resolution of contractual disputes for which there existed judicially manageable standards. Therefore, there was no justiciable political question. The court disposed of KBR's remaining claims regarding the act-of-state doctrine and regarding a contractor's defense from its strict execution of a constitutionally authorized government order. Accordingly, the court vacated the district court's judgment and remanded. View "Kuwait Pearls Catering Co. WLL v. Kellogg Brown & Root Services, Inc." on Justia Law

Within the Department of Defense, DRMS disposes of surplus military property at Defense Reutilization and Marketing Offices (DRMOs). Property that cannot be reutilized is demilitarized and/or reduced to scrap that can be sold. A 2007 DRMS Request for Proposals sought performance of DRMO activities for up to five years. A referenced website showed DRMS’s historical workload and scrap weight; an amendment indicated that “the contractor may experience significant workload increases or decreases” and outlined a process to “renegotiate the price” if workload increased. DRMS awarded its first contract to Agility to operate six DRMOs for one base year with four option years at a fixed price of $45,233,914.92 per year. Upon commencing work in Arifjan, the largest of the DRMOs, Agility immediately fell behind. It inherited a backlog of approximately 30 weeks. From the start, the volume received at Arifjan was greater than Agility anticipated. The parties terminated their contract for convenience in 2010. Agility thereafter requested funding for its additional costs, claiming DRMS provided inaccurate workload estimates during solicitation. The contracting officer awarded Agility only $236,363.93 for its first claim and nothing for the second, noting that Agility received an offset from its scrap sales. The Federal Circuit reversed, as “clearly erroneous,” the Claims Court’s findings that DRMS did not inadequately or negligently prepare its estimates and that Agility did not rely on those estimates. Agility’s receipt of scrap sales and the parties’ agreement did not preclude recovery. View "Agility Defense & Government Services, Inc. v. United States" on Justia Law