Justia Government Contracts Opinion Summaries

In 2008, Lee began an appointment under the Federal Career Intern Program (FCIP) with U.S. Citizenship and Immigration Services, Department of Homeland Security. Before that appointment. Lee had completed almost six years of federal service under a series of term appointments. In 2010, the agency notified Lee that her FCIP appointment would expire on March 15, 2010, and that upon completion of the appointment, the agency would not convert it into a competitive service appointment. She completed her FCIP term and was terminated from federal service. A Merit Systems Protection Board Administrative Judge dismissed her appeal for lack of jurisdiction. The Board and Federal Circuit affirmed. Lee was not subject to an adverse action appealable to the Board; successful completion of her internship and satisfaction of other Office of Personnel Management requirements did not guarantee her the right to further federal employment when her internship expired. View "Lee v. Merit Systems Protection Board" on Justia Law

Shareholders lacked standing to challenge, as an illegal exaction, U.S. government’s acquisition of AIG stock as loan collateral. In 2008, during one of the worst financial crises of the last century, American International Group (AIG) was on the brink of bankruptcy and sought emergency financing. The Federal Reserve Bank of New York granted AIG an $85 billion loan, the largest such loan to date. The U.S. Government received a majority stake in AIG’s equity under the loan, which the Government eventually converted into common stock and sold. One of AIG’s largest shareholders, Starr, filed suit alleging that the Government’s acquisition of AIG equity and subsequent actions relating to a reverse stock split were unlawful. The Claims Court held that the Government’s acquisition of AIG equity constituted an illegal exaction in violation of the Federal Reserve Act, 12 U.S.C. 343, but declined to grant relief for either that or for Starr’s reverse-stock-split claims. The Federal Circuit vacated in part, holding that Starr and the shareholders it represented lack standing to pursue the equity acquisition claims directly, as those claims belong exclusively to AIG, rendering the merits of those claims moot. The court affirmed as to Starr’s reverse-stock-split claims. View "Starr International Co. v. United States" on Justia Law

Tightened security at base, preventing access by contractor's ex-felon employees, did not justify contract adjustment. Malmstrom Air Force Base in Great Falls, Montana, houses intercontinental ballistic missiles. Garco's contract to construct base housing incorporated Federal Acquisition Regulation 52.222-3, providing that contractors may employ ex-felons and requiring contractors to adhere to the base access policy. Malstrom’s access policy indicated that it would run the employees’ names through the National Criminal Information Center. “Unfavorable results will be scrutinized and eligibility will be determined on a case-by-case basis.” Garco’s subcontractor, JTC, experienced difficulty bringing its crew onto the base. JTC used workers from a local prison’s pre-release facility. JTC had not encountered access problems in its performance of other Malmstrom contracts over the preceding 20 years. Security had been tightened after an incident where a prerelease facility worker beat his manager. JTC requested an equitable adjustment of the contract, stating that its inability to use convict labor greatly reduced the size of the experienced labor pool so that it incurred $454,266.44 of additional expenses; JTC did not request a time extension. The Federal Circuit affirmed the Armed Services Board of Contract Appeals’ denial of the claim, rejecting a claim of constructive acceleration of the contract. The court concluded that there was no change to the base access policy. View "Garco Construction, Inc. v. Secretary of the Army" on Justia Law

Comments that the Court of Federal Claims made during a hearing, before the government’s corrective action materially altered the relationship between the parties, were not sufficient to qualify the contractor as a “prevailing party” under the Equal Access to Justice Act, 28 U.S.C. 2412(a), (d)(1)(A). The Federal Circuit remanded the case, which involved Dellew’s post-award bid protest, alleging that the Army improperly awarded TSI a contract because TSI did not accept a material term of the request for proposals when it refused to cap its proposed general and administrative rate, and the contract awarded varied materially from TSI’s proposal. During oral argument, the Claims Court provided “hint[s]” about its views favorable to Dellew on the merits, and repeatedly expressed its belief that corrective action would be appropriate. The Army subsequently terminated the TSI contract. The Claims Court dismissed Dellew’s action, determined that it retained jurisdiction despited mootness, and awarded Dellew $79,456.76 in fees and costs, stating that it made “numerous substantive comments during oral argument regarding the merits,” that “carried a sufficient judicial imprimatur to materially alter the relationship between [Dellew] and [the Government] such that [Dellew] qualifies as a prevailing party under the EAJA.” View "Dellew Corp. v. United States" on Justia Law

The Federal Circuit affirmed summary judgment in favor of the United States in Northwest Title Agency’s (NWTA) suit based on contracts, under which NWTA provided closing services for homes owned by the Department of Housing and Urban Development (HUD). The courts concluded that the contracts unambiguously preclude NWTA from charging additional closing fees and declined to consider the affidavit of industry practice submitted by NWTA. The fee prohibition does not conflict with the buyers’ rights, as stated in the contracts, to retain a title company of their own choosing. View "Northwest Title Agency, Inc. v. United States" on Justia Law

The Federal Circuit affirmed dismissal of a claim against the U.S. government, finding that the government had no contractual obligation to reimburse plaintiff’s pension withdrawal liability costs, incurred under the Multi-Employer Pension Plan Amendment Act (MPPAA), 29 U.S.C. 1381. Plaintiff had a contract with NASA to provide services, which was subject to the McNamara-O’Hara Service Contract Act (SCA), 41 U.S.C. 6701, under which service contracts specify a “wage determination,” setting wage rates and fringe benefits. The SCA insures that service employees who were protected by a collective bargaining agreement (CBA) with one contractor are not deprived of that CBA’s wages and benefits when the contract they work on is competitively awarded to a new contractor. Otherwise, if an incumbent contractor agreed to a CBA that provided for wages and benefits greater than the prevailing rate, a challenger could underbid the incumbent for the follow-on contract by providing its employees with less. The government is willing to increase contract prices when contractors incur increased costs as a result of an increase in the wage determination. The courts concluded that this plaintiff independently chose to negotiate a CBA with the Teamsters and join the Teamsters’ pension plan and independently assumed the risk of MPPAA withdrawal liability. NASA did not require plaintiff to do so and had no contractual recourse if plaintiff failed to satisfy its MPPAA obligations, so the SCA does not allocate the risk of MPPAA liability to the government. View "Call Henry, Inc. v. United States" on Justia Law

The 2013 Department of Defense (DOD) budget was cut by $37 billion halfway through Fiscal Year 2013. The Secretary of Defense directed DOD managers to prepare to furlough most civilian employees for up to 11 workdays, with exceptions for employees deployed to a combat zone, those whose jobs are necessary to protect safety of life and property, Navy Shipyard employees, National Intelligence Program employees, Foreign Military Sales employees, political appointees, non-appropriated fund instrumentality employees, foreign national employees, and various employees not paid directly by DOD Military accounts. Snyder, a civilian engineer at the Naval Surface Warfare Center (Dahlgren) received a Notice of Proposed Furlough. Snyder worked on an Advanced Shipboard Weapons Control project, governed by a Cooperative Research and Development Agreement (CRADA) between Dahlgren and Lockheed. Lockheed was solely responsible for funding and paid $2.6 million in 2012 to the U.S. Treasurer. Unused funds were to be remitted to Lockheed. Lockheed and Snyder requested that Dahlgren employees supporting the CRADA be exempt from furlough. The Navy denied the request. The Federal Circuit affirmed the Merit System Protection Board in upholding Snyder’s furlough. An agency may furlough an employee for lack of work or funds or other non-disciplinary reasons, 5 U.S.C. 7511(a)(5), 7512(5) if the furlough “will promote the efficiency of the service.” The court found the furlough decision to “be a reasonable management solution to the financial restrictions placed on the agency.” View "Snyder v. Department of the Navy" on Justia Law

Diaz submitted an unsolicited proposal to the U.S. Department of the Navy’s Indian Head Explosive Ordnance Disposal Technology Division (IHEODTD) pursuant to Federal Acquisition Regulation (FAR) Subpart 15.6. An IHEODTD contracting officer conducted an initial review of Diaz’s proposal and determined that it did not satisfy two requirements of FAR 15.606-1: that it be innovative and unique and include sufficient detail to permit a determination that government support could be worthwhile and the proposed work could benefit the agency’s research and development or other mission responsibilities. The Court of Federal Claims dismissed Diaz’s complaint for lack of subject matter because he lacked standing under 28 U.S.C. 1491(b)(1). The Federal Circuit affirmed. Diaz did not possess the requisite direct economic interest to satisfy his “burden of establishing the elements of standing.” Diaz cannot demonstrate that he “had a substantial chance of winning the contract” because, at the very least, his proposal did not conform to the requirements of FAR Subpart 15.6, which governs unsolicited proposals. View "Diaz v. United States" on Justia Law

During Mayberry’s tenure as a civilian employee with the FBI, he elected Becker to receive survivor benefits under the Federal Employees Retirement System upon his death. They were married for less than nine months and had no children together when Mayberry died. Becker applied for survivor benefits with the Office of Personnel Management, which denied her application, citing 5 U.S.C. 8441(1), which identifies a widow as a “surviving wife” who: “was married to [the covered decedent] for at least [nine] months immediately before his death” or “is the mother of issue by that marriage.” An administrative judge for the Merit Systems Protection denied her request to seek information regarding whether OPM had ever waived the nine-month requirement for prior applicants, and whether OPM had ever sufficiently explained the nine-month requirement to Mayberry. The denial became the final decision of the Board. The Federal Circuit affirmed, rejecting arguments that 5 U.S.C. 8441(1) is unconstitutional and that the Board improperly denied her discovery requests. The court applied the rational basis test and cited Supreme Court precedent. View "Becker v. Office of Personnel Management" on Justia Law

The Defense Supply Center Philadelphia (DSCP), a sub-agency of the Defense Logistics Agency, issued a solicitation for an Indefinite-Delivery/Indefinite-Quantity commercial item contract to provide food and non-food products to customers, including the military, in three overseas zones. In May 2003, DSCP awarded a contract to Agility to supply “Full Line Food and Non-Food Distribution” to authorized personnel in Kuwait and Qatar. After many modifications, in December 2005, Agility submitted a Request for Equitable Adjustment for $13.1 million related to trucks being held in Iraq by the government for longer than 29 days. In April 2007, the government’s contracting officer denied Agility’s claim. The Armed Services Board of Contract Appeals denied Agility’s appeal in August 2015, finding that Agility had accepted all risks associated with delays beyond 29 days. The Board stated that it “need not decide whether the government constructively changed contract performance or whether it breached its implied duty of cooperation” because “whether the government breached the contract comes down to contract interpretation.” The Federal Circuit affirmed-in-part, agreeing that the government did not breach the express terms of the contract or a later agreement to consider exceptions, but finding that the Board erred when it concluded that it “need not decide” Agility’s implied duty and constructive change claims. View "Agility Public Warehousing Co. KSCP v. Mattis" on Justia Law