Justia Government Contracts Opinion Summaries

The City of Torrington ("city") filed suit against Strong Construction, Inc. ("Strong") alleging breach of contract claims based on Strong's failure to supply and install water pump motors that conformed to contract specifications. At issue was whether the district court's judgment in favor of the city was supported by the record. The court affirmed and held that the district court's determination was not clearly erroneous where there was ample evidence to support the district court's decision that the Centripro Guidelines were provided to Baker & Associates, the city's engineer, prior to approval of the project submittals; where Strong breached the agreement with the city by failing to provide motors that conformed to the specifications in the parties' agreement; where section 13.07 of the General Conditions did not preclude the city's breach of contract claim and the repair obligation, by its terms, was not limited to one year; and where the court found no basis in common law to extend apportionment of damages to breach of contract claims and the comparative fault statute was not applicable to the breach of contract action.

After petitioners fell behind schedule in developing a stealth aircraft (A-12) for the Navy, the contracting officer terminated their $4.8 billion fixed-price contract for default and ordered petitioners to repay approximately $1.35 billion in progress payments for work the Government never accepted. Petitioners filed suit in the Court of Federal Claims ("CFC"), challenging the termination decision under the Contract Disputes Act of 1978, 41 U.S.C. 609(a)(1). The CFC held that, since invocation of the state-secrets privilege obscured too many of the facts relevant to the superior-knowledge defense, the issue of that defense was nonjusticiable, even though petitioners had brought forward enough unprivileged evidence for a prima facie showing. Accordingly, at issue was what remedy was proper when, to protect state secrets, a court dismissed a Government contractor's prima facie valid affirmative defense to the Government's allegations of contractual breach. The Court concluded that it must exercise its common-law authority in this situation to fashion contractual remedies in Government-contracting disputes and held that the proper remedy was to leave the parties where they were on the day they filed suit.

The State, through its Division of Administration, Office of Facility Planning & Control, (State), issued a project manual to solicit bids for the removal and replacement of cabins at Bayou Segnette State Park. The manual included a bid form that set the procedure and conditions for submitting bids for the project. A joint venture of several companies submitted the lowest bid. Respondent Infinity Surety Agency (Infinity) wrote the bid-bond to the joint venture's winning bid. The State would later discover that Infinity was not qualified to write surety bonds on public works projects. The State notified the joint venture and Infinity that its bid was forfeited, and it rebid the entire project at a higher price. The State subsequently sued the joint venture and Infinity for the difference between its bid and the total of the rebid. The joint venture and Infinity filed peremptory exceptions of "no cause of action," alleging that the State's petition failed to state a claim upon which relief could be granted. Respondents argued that the State should have rejected their bid, rather than incur damages when it found the surety bond was deficient. The trial court found that the bid was "non-responsive" and should not have been accepted by the State. The appellate court agreed, holding that the State should have been more careful when reviewing bids. The Supreme Court found that Respondents' exceptions should have been overruled. "Rather than focusing on the allegations in the petition, both courts below apparently made a factual determination that [the joint venture's] bid was non-responsive... and then based their rulings sustaining the exceptions on that determination." The Court concluded that using the exceptions to dismiss the State's claims was improper. Accordingly it reversed the holdings of the lower courts and remanded the case for further proceedings.

Pursuant to the Indian Self-determination and Education Assistance Act (ISDA), the United States enters into contracts with Indian tribes and tribal organizations for âthe planning, conduct and administration of programs or services which are otherwise provided to Indian tribes and their members pursuant to Federal law.â These agreements (Contract Support Cost contracts, or CSCs) include costs which are used for the running of essential tribal services, such as law enforcement, economic development and natural resource management. Congress mandated all CSCs be provided with full funding, but then failed to appropriate funds sufficient to pay all CSCs. Instead Congress capped appropriations at a level well below the sum total of CSCs. Several tribes sued seeking to collect the promised-but-unappropriated CSC money. The government argued that the phrase âsubject to the availability of appropriationsâ relieves it of the obligation to pay if the Congress doesnât appropriate the funds. The tribes argued that only Congressional funding decisionsânot the discretionary allocation decisions made by the Department of the Interiorâcan render an appropriation âunavailable.â The Tenth Circuit concluded that Plaintiffsâ interpretation is âreasonable,â and it reversed the district courtâs grant of summary judgment in favor of the government. The Court remanded the case for further proceedings.

The Missoula City Counsel, the City of Missoula, and the Mayor, (collectively "City") and Muth-Hilberry, LLC ("developer") appealed a district court determination that found that the City was arbitrary and capricious in approving a zoning and preliminary plat for a subdivision known as Sonata Park located in Rattlesnake Valley, Montana. At issue was whether neighbors, several parties opposed to the subdivision, and the North Duncan Drive Neighborhood Association, Inc. ("Association") had standing. Also at issue was whether the district court erred in striking affidavits filed by the developer and the City in connection with their motions for summary judgment. Further at issue was whether the 1989 Sunshine Agreement between the City and the developer's predecessor in interest superseded the City's growth policy. Finally at issue was whether the City's decision in Sonata Park was arbitrary, capricious, or unlawful. The court held that the neighbors had standing to sue in their own right and that the Association had associational standing to proceed on behalf of its members. The court also held that any error made by the district court in granting the neighbor's motion to strike the developer's affidavit was harmless. The court further held that the Sunlight Agreement did not supersede the City's growth policy where the Sunlight Agreement could be void ab initio and did not appear to guarantee certain density. The court finally held that substantial compliance was still valid and that a government body must substantially comply with its growth policy in making zoning decisions and that the City's decision to approve Sonata Park was arbitrary, capricious, and unlawful.

The Alcoa Power Generating Company ("Alcoa") petitioned for review of two orders of the Federal Energy Regulatory Commission ("Commission") with respect to the relicensing of its Yadkin Project facilities in North Carolina. At issue was whether the petition for review was ripe in light of on-going state administrative review and stay of certification and whether the certifying agency waived its authority by not issuing a certification that was effective and complete within one year under section 401 of the Clean Water Act ("Act"), 33 U.S.C. 1341(a)(1). The court held that the petition was ripe for review where the waiver issue was fit for review and the legally cognizable hardship that Alcoa would suffer from delay sufficed to outweigh the slight judicial interest in the unlikely possibility that the court may never need to decide the waiver issue. The court also held that there was no waiver issue where the "effective" clause would not operate to delay or block the federal licensing proceeding beyond section 401's one-year period.

The Pacific Regional Director of the Interior Department's Minerals Management Service ("Director") caused four oil and gas leases off the coast of California, for which appellants had originally paid the United States over $140 million, to expire. The Director later testified that he based his decision solely on political considerations and that absent such considerations, he would have extended the leases instead. At issue was whether the Interior Board of Land Appeals ("IBLA") should have adopted the decision the Director said he would have made absent political influence in order to cure the Director's original decision of political taint. The court affirmed the district court's decision and held that the IBLA fulfilled its role and appellants received all they were entitled to, i.e., an agency decision on the merits without regard to extrastatutory, political factors.

Beka Industries, Inc. ("BEKA") sued the Board of Education of Worcester County ("County Board") alleging claims that arose from a written contract dispute between BEKA and the County Board when BEKA was dissatisfied with the methods and amounts of the County Board's payment for its work. The court considered several issues on appeal and held that a new trial was warranted where the County Board was precluded from presenting evidence on its recoupment claim and BEKA may have been awarded impermissible "delay damages" under the contract. The court also reversed the intermediate appellate court's holding that the County Board's governmental immunity was not waived unless and until BEKA proved that there was a funding mechanism to satisfy a judgment for money damages rendered against the County Board. Accordingly, court affirmed in part, reversed in part, and remanded the case to the intermediate appellate court with direction to remand to the circuit court for a new trial.

Dunn, McCormack & MacPherson (Dunn), a Virginia law firm, served as legal counsel to the Fairfax County Redevelopment and Housing Authority for thirty years. Dunn worked for the Authority on an at-will contract for legal representation, which was terminated in September, 2005. Dunn filed a complaint against the County Board of Supervisors, alleging that the Chairman of the Board tortiously interfered with Dunn's contract with the Authority. The circuit court sustained the Board's demurrer, holding that Dunn's complaint failed to state sufficient facts to support a cause of action for intentional interference with a contract. Dunn amended its complaint, but ultimately failed to convince the court to rule in its favor. On appeal, the Supreme Court found the record clearly demonstrated that the circuit court sustained the County's demurrer for failing to "adequately state a prima facie cause of action" and affirmed the lower court's decision.

Plaintiff appealed the district court's refusal to enforce a settlement agreement between plaintiff and his former employer, a government contractor, after plaintiff brought an action against his employer under the False Claims Act. At issue was whether the district court erred by not enforcing the settlement agreement, whether the district court made various errors during trial entitling plaintiff to a new trial, and whether the district court erred by awarding attorneys' fees to the employer. The court held that the district court properly denied plaintiff's motion to enforce the settlement agreement where the agreement died when the government rejected it and was not revived by a subsequent agreement between plaintiff and the government. The court also held that plaintiff was not entitled to a new trial where the district court committed no reversible error during trial The court further held that the district court erred in awarding attorneys' fees to the employer where plaintiff's claims were not clearly frivolous.