Justia Government Contracts Opinion Summaries

Articles Posted in US Court of Appeals for the Federal Circuit
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The Army sought to procure the services of certified registered nurse anesthetists for the Fort Bragg Army Medical Center. Eskridge bid but the solicitation was canceled. A new solicitation received 18 timely, complete proposals. Eskridge filed a pre-award protest with the Government Accountability Office (GAO), alleging that the Army “acted in bad faith” by failing to include language allegedly agreed-upon following the cancellation. Eskridge withdrew its protest after the Army responded. Eskridge’s bid was not ranked among the five lowest proposals. The Army awarded the contract to Ansible as the lowest-priced, technically acceptable proposal. Eskridge filed another protest. The Army indicated it would “better document the selection” and reviewed the 10 lowest-priced bidders on technical and past performance bases. Of the five technically acceptable bidders, Eskridge bid the highest total price. The Army awarded the Contract to Ansible. Eskridge filed a post-award protest. The GAO and the Claims Court dismissed Eskridge’s claims, finding Eskridge had no substantial chance of winning the Contract and that the claimed errors would affect each of the five lowest-priced, technically acceptable proposals equally. The Federal Circuit affirmed. Eskridge does not possess a direct economic interest. The relevant inquiry is whether the bidder “establish[ed] not only some significant error in the procurement process but also that there was a substantial chance it would have received the contract award but for that error.” The court found no error in the Army’s compensation realism analysis. View "Eskridge & Associates v. United States" on Justia Law

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The VA issued a contract to OPSS for developing and managing the VA’s program to provide veterans access to community-based healthcare in Region 3 of the WellPoint, an unsuccessful bidder, brought a bid protest action. The Claims Court found that the VA conducted a reasonable best value determination, denied WellPoint’s request for injunctive relief, and dismissed WellPoint’s bid protest challenge. The Federal Circuit affirmed. The VA’s methodology for evaluating price in connection with this procurement was both reasonable and in accordance with the terms of the Solicitation. The court noted the three levels at which the proposals were evaluated and found no showing that alleged errors in first-tier revies carried over to the final decision. Even if an error had been carried over, WellPoint has not demonstrated that “but for the error, it would have had a substantial chance of securing the contract.” View "WellPoint Military Care Corp. v. United States" on Justia Law

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The 1961 National Housing Act provided financial incentives to private developers to build low-income housing, including below-market mortgages insured by HUD. Participating developers had limited ability to increase rents while HUD insured the mortgage. The mortgage term was 40 years but developers could prepay their mortgages after 20 years and convert to market-rate housing. The 1988-1990 Preservation Statutes eliminated the prepayment option, 12 U.S.C. 4101. The 1996 Housing Opportunity Program Extension Act restored prepayment rights to developers still in the program. Four “first wave plaintiffs” (FWPs) owned their properties before the Preservation Statutes and sold after their enactment, consistent with the 1990 Low-Income Housing Preservation and Resident Homeownership Act (LIHPRHA) to organizations that preserved the rent restrictions. One FWP owned its property before the Preservation Statutes and remained in the program, obtaining HUD financial incentives in exchange for abiding by the restrictions for the property's "remaining useful life.” The final FWP (Casa) purchased its property in 1991 and sold pursuant to LIHPRHA. The FWPs alleged regulatory taking. The Claims Court applied the “Penn Central” three-factor test and rejected the claims on summary judgment. The Federal Circuit affirmed with respect to Casa, a sophisticated investor that voluntarily purchased its property with knowledge that it had no prepayment option and had no reasonable investment-backed expectation. The court otherwise vacated. The character of the governmental action and the investment-backed expectations weighed against summary judgment and the Claims Court did not consider certain genuine issues of fact regarding the calculations of economic impact. View "Anaheim Gardens, L.P. v. United States" on Justia Law

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The VA issued Requests for Proposals (RFP) for the provision of healthcare furniture and related services for VA facilities for five geographic regions. The RFP described a best-value tradeoff selection process that considered three primary evaluation factors: Technical Capability, Past Performance, and Price. Technical Capability was more important than Past Performance and Past Performance more important than Price. Technical Capability subfactor 3 specified that an offeror’s technical proposal must include specific elements. The RFP noted that an “unacceptable” rating for any technical subfactor would result in an overall “unacceptable” technical proposal. An offeror with an unacceptable Technical Capability subfactor was ineligible for a contract award. The VA assigned ODG's bid an unacceptable rating for its technical proposal, noting that it was only able to locate responses to six of the 33 questions in Attachment 15, resulting in a failing score of 12 points. The VA explained that ODG’s technical proposal “lacked detail” and failed to address seven service requirements. Each of the awardees earned at least 40 points for its technical proposal. ODG filed a bid protest. The Claims Court and Federal Circuit upheld the VA’s actions, rejecting arguments that the VA unreasonably and disparately evaluated ODG's technical proposal in comparison to the awardees’ technical proposals and improperly relied on Attachment 15 to evaluate its technical proposal. View "Office Design Group v. United States" on Justia Law

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Acetris obtains its pharmaceutical products from Aurolife, which makes them in a New Jersey facility, using an active pharmaceutical ingredient made in India. Acetris had contracts to supply the VA with several pharmaceutical products, including Entecavir (used to treat hepatitis B). The VA requested that Acetris recertify its compliance with the Trade Agreements Act of 1979 (TAA), which bars the VA from purchasing “products of” certain foreign countries, such as India. Ultimately, the VA requested that Acetris obtain a country-of-origin determination. Customs concluded that the Acetris products were products of India. Acetris agreed to cancel its Entecavir contract. The VA issued a new solicitation seeking proposals for Entecavir, indicating that it would continue to rely on the Customs determination. Acetris filed suit, challenging the VA’s interpretation of the TAA. The VA awarded the Entecavir contract to Golden, consistent with its policy to award contracts to the lowest-price technically acceptable bid. The government moved to dismiss the suit, arguing that Acetris lacked standing because Acetris would not have won the contract regardless of the interpretation of the TAA and that Acetris’ earlier-filed Court of International Trade suits divested the Claims Court of jurisdiction under 28 U.S.C. 1500. The Claims Court denied the government’s motions and rejected the government’s interpretation of the TAA. The Federal Circuit affirmed in part, holding that the suit is justiciable and agreeing with the Claims Court. The court remanded for the entry of a declaratory judgment and injunction. View "Acetris Health, LLC v. United States" on Justia Law

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In 2006-2010, the U.S. Agency for International Development (USAID) awarded DAI developmental services contracts for Afghanistan. DAI subcontracted with EI, which employed over 1,000 individuals to provide security services. Afghanistan imposed a $2 million fine on EI based on the size and composition of EI’s private security workforce. EI paid the fine, allocating the expense among DAI’s contracts. In May 2017, DAI submitted EI’s claims to USAID. DAI’s cover letter characterized itself as a certification. DAI also included EI’s certifications stating that each claim was in good faith; 70 days after DAI submitted its claims, the contracting officer notified DAI that the submission did not contain a contractor certification. DAI filed appeals. The Board dismissed DAI’s claims for lack of jurisdiction based on DAI’s failure to certify the claims (41 U.S.C. 7103(a)(1)), stating that DAI’s May 2017 certification bore no resemblance to the required statutory language, that DAI made its certification with reckless disregard for the requirements, and that nontechnical mistakes in the certification and DAI’s recklessness rendered DAI’s purported certification unsalvageable. The Federal Circuit reversed. The statute provides that “[a] defect in the certification of a claim does not deprive a court or an agency board of jurisdiction over the claim.” EI’s certifications, which mirror the certification language of 48 C.F.R. 33.207(c), evidence an intent to certify the claims. Because the contracting officer failed to issue a decision within the statutory period, DAI’s claim was deemed denied and became appealable, 41 U.S.C. 7103(f)(5). View "DAI Global, LLC v. Administrator of United States Agency for International Development" on Justia Law

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In 1980, Langkamp, then a toddler, suffered severe burn injuries on U.S. Army property. In a suit under the Federal Tort Claims Act, the parties entered into a Settlement Agreement. The government agreed to pay $239,425.45 upfront to cover attorney fees and costs, plus a structured settlement: $350.00 per month, 1985-1996; $3,100.00 per month, guaranteed for 15 years, beginning in 1996, and Lump Sum Payments of $15,000.00 in 1996, $50,000.00 in 2000, $100,000.00 in 2008, 250,000.00 in 2018, and $1,000,000.00 in 2028. The government issued a check for $239,425.45 to the parents and a check for $160,574.55 payable to JMW Settlements, an annuity broker. JMW purchased two single-premium annuity policies from ELNY to fund the monthly and periodic lump-sum payments. Until 2013, ELNY sent Langkamp the specified monthly and periodic lump-sum payments. Following ELNY’s insolvency and court-approved restructuring, Langkamp’s structured settlement payments were reduced to 40 percent of the original amount. The Claims Court rejected Langkamp’s argument that the government had continuing liability for the Settlement Agreement payments. The Federal Circuit reversed. The Settlement Agreement contains no reference to the purchase of an annuity from a third party but unambiguously obligates the government to ensure that all future monthly and periodic lump-sum payments are properly disbursed. The court noted that in 1984 it cost the government approximately $160,000 to obtain a promise from an insurance company to fund the future payments specified in the Settlement Agreement. View "Langkamp v. United States" on Justia Law

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The Federal Acquisition Regulation permits contractors such as Northrop to seek reimbursement from the federal government for “allowable” post-retirement benefit (PRB) costs. The Armed Services Board of Contract Appeals found that the government improperly disallowed certain retirement benefits costs that Northrop asserted. Certain retirement benefit costs were unallowable under the applicable regulations because they were calculated using an improper accounting method but Northrop never claimed and will never claim any of the disputed benefits. The Federal Circuit affirmed. Substantial evidence supported the Board’s factual findings that the unallowable costs were not charged to the government by virtue of being excluded from Northrop’s transition obligation by Northrop’s negative amendment to its PRB plans. The factual findings are, therefore “final and conclusive,” 41 U.S.C. 7107 (2012). The government’s disallowance of the disputed $253,361,512 of Northrop’s PRB costs was improper. View "Secretary of Defense v. Northrop Grumman Corp." on Justia Law

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The Northern California Power Agency and three California cities, Redding, Roseville, and Santa Clara (plaintiffs) purchase hydroelectric power that is generated by power plants under the jurisdiction of the U.S. Bureau of Reclamation. The plaintiffs sought to recover payments that they claim were unlawfully assessed and collected by the Bureau in violation of the Central Valley Project (CVP) Improvement Act, 106 Stat. 4706, 4706–31. Section 3407(d) of the CVPIA requires that “Mitigation and Restoration” (M&R) payments made by recipients of power and water from the project be assessed in the same proportion, to the greatest degree practicable, as other charges assessed against recipients of water and power from the project. Although the power customers’ allocated share of the CVP repayment costs has been only about 25 percent of the total repayment costs, the Bureau in recent years has charged the customers nearly half of the total M&R payments. The Claims Court concluded that the Bureau’s interpretation of the statute was correct and dismissed the complaint. The Federal Circuit reversed. The proportionality requirement is a true “limitation” and takes priority over the $50 million collection target. The Bureau failed to take measures necessary to achieve the goal of proportionality “to the greatest degree practicable.” View "Northern California Power Agency, City of Redding v. United States" on Justia Law

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The Army Corps of Engineers awarded Ikhana a contract to build a Pentagon facility by October 12, 2015. Ikhana procured required performance and payments bonds from GCNA, which required Ikhana to execute a general indemnity agreement, including a provision that assigned GCNA all rights under the contract if Ikhana defaulted or if GCNA made a payment on any bond. Each time Ikhana discovered a new worksite problem, it had to halt work until the Corps issued a unilateral contract change, causing significant delays and cost overruns. One modification required a power outage at the Pentagon, but the Corps never scheduled the outage. By mid-October 2015, construction stopped; Ikhana submitted claims seeking additional compensation and an extension of the deadline. Ikhana’s sub-contractors filed claims against GCNA’s bond. The Corps terminated Ikhana and made a claim on the bond. Ikhana appealed the termination and its claims to the Armed Services Board of Contract Appeals. GCNA and the Corps negotiated for GCNA to tender a completion contractor. GCNA invoked the indemnity agreement and entered into a settlement with the Corps then sought a declaratory judgment that the agreement authorized it to settle Ikhana’s dispute with the Corps and dismiss the Board appeal. The district court stayed GCNA’s action pending resolution of Ikhana’s Board appeal. The Federal Circuit affirmed the denial of GCNA’s motion to intervene and withdraw Ikhana’s Board appeal. GCNA lacked standing. A party seeking to supplant the plaintiff must be able to show that it could have initiated the complaint on its own. GCNA’s settlement agreement with the Corps, even if it constitutes a takeover agreement, does not entitle GCNA to assert claims that arose before the settlement. View "Guarantee Co. of North America USA v. Ikhana, LLC" on Justia Law