Justia Government Contracts Opinion Summaries

After an order was issued setting the execution of Virgil Delano Presnell, Jr., the Federal Defender Program, Inc. filed a breach of contract action against the State of Georgia and Christopher Carr in his official capacity as Attorney General (collectively, the “State”) alleging that the State breached a contract governing the resumption of the execution of death sentences in Georgia after the COVID-19 pandemic. The State contended the trial court erred in denying its motion to dismiss based on sovereign immunity and in granting the Appellees’ emergency motion for a temporary restraining order and an interlocutory injunction. The Georgia Supreme Court concluded that an e-mail exchange between a deputy attorney general and certain capital defense attorneys, including an attorney employed by the Federal Defender, constituted a written contract sufficient to waive sovereign immunity in this matter, and the Supreme Court in turn conclude that the trial court did not abuse its discretion in weighing the equities in granting the Appellees’ motion for injunctive relief. Accordingly, judgment was affirmed. View "Georgia, et al. v. Federal Defender Program, Inc., et al." on Justia Law

The Department of Energy (DOE) issued a solicitation for Technical Security, Communications Security, Cyber, Analysis, and Security Administration, designated as a small business set-aside. The size limit for interested businesses was a maximum of $20.5 million in average annual receipts. Obsidian submitted a bid proposal and self-certified as a small business based on its five-year average of annual receipts ($17.5 million). DOE notified Obsidian that it was the apparent successful offeror but submitted a request to the Small Business Administration (SBA) to confirm Obsidian’s size status before making the award. The SBA determined Obsidian did not qualify as a small business. Rather than use the five-year average of receipts, the SBA used Obsidian’s three-year average (roughly $21.8 million)The Office of Hearings and Appeals affirmed. Obsidian filed a bid protest under the Tucker Act, 28 U.S.C. 1491(b), arguing that the BA was required to start using five years of annual receipts. Obsidian cited the Runway Extension Act (REA), an amendment to the Small Business Act (15 U.S.C. 632(a)(2)), including a requirement to use a five-year average of receipts for purposes of size determinations. The Federal Circuit affirmed judgment on the administrative record in favor of the government. The REA unambiguously did not apply to the SBA. There are two subsections discussing size factors. The SBA has its own, broader limitations on establishing size standards than other agencies. View "Obsidian Solutions Group, LLC v. United States" on Justia Law

In 2005, the Defense Logistics Agency (DLA) awarded Supreme a contract to provide food to U.S. forces in Afghanistan. During negotiations concerning deliveries to forward operating bases, Supreme submitted inflated cost proposals. Supreme threatened to withhold payments to subcontractors (potentially cutting off supplies to troops), The parties executed a Modification, including Supreme’s proposed rates, subject to verification. The Defense Contract Audit Agency concluded that Supreme’s documentation was not adequate and questioned more than $375 million of claimed costs. The contracting officer, in 2011, determined that DLA had overpaid Supreme by $567,267,940. DLA withheld $540 million from Supreme’s monthly payments. Supreme submitted unsuccessful “reverse image” claims. In 2014, Supreme pled guilty to fraud and entered into a civil settlement in a False Claims Act suit. During the investigations, with Supreme’s contract expiring, the parties entered into two extensions. In 2015, based on Supreme’s guilty plea, DLA demanded the return of all money paid under the contract. In 2020, the Armed Services Board of Contract Appeals concluded that Supreme’s contract claims against the government were barred by Supreme’s prior material breach.The Federal Circuit affirmed. The government did not waive its prior material breach defense. While DLA had some notice of Supreme’s fraudulent behavior in 2009, it had no “known right” until Supreme’s guilty plea, after which DLA never extended Supreme’s contract. Supreme cannot treat the bridge contracts as separate only to evade the government’s affirmative defenses. The parties treated the original contract and the extensions as inextricably intertwined; DLA’s prior material breach defense applies to those contracts. View "Supreme Foodservice GmbH v. Director of the Defense Logistics Agency" on Justia Law

Ascolese, a compliance officer, brought a False Claims Act (FCA) retaliation claim against his former employer, MBP, in connection with a qui tam action involving a federally-funded public housing construction project for the Philadelphia Housing Authority (PHA). In 2009–2010, Congress amended the FCA, 31 U.S.C. 3729(a)(1)(A), to expand the scope of protected conduct shielded from retaliation and the type of notice an employer must have of the protected conduct. The new standard is whether Ascolese showed he engaged in protected conduct in furtherance of an FCA action or other efforts to stop or more violations of the FCA and that he was discriminated against because of his protected conduct. The court believed that the pre-amendment standard was required by the Third Circuit, and concluded that Ascolese failed to show MBP was on notice that he was attempting to stop MBP from violating the FCA and not merely doing his job.The Third Circuit vacated and remanded. The right question is whether Ascolese pled facts that plausibly showed MBP was on notice he tried to stop MBP’s alleged FCA violation. Ascolese sufficiently pled that he engaged in protected conduct when he went outside of his chain of command to report his concerns of fraudulent work to the PHA. View "Ascolese v. Shoemaker Construction Co" on Justia Law

The Supreme Judicial Court vacated the judgment of the business and consumer docket entered in favor of Plaintiffs vacating the Bureau of Parks and Lands' lease of public reserved land to NECEC Transmission LLC and Central Maine Power Co. (CMP) for construction of a high-capacity transmission line, holding that the Bureau acted within its constitutional and statutory authority in granting the lease.CMP appealed and Plaintiffs cross-appealed the trial court's decision not to address the substantive question of whether the Bureau had the constitutional authority to lease to the public reserved land. Plaintiffs later moved to dismiss the appeals on the ground that a citizen's initiative rendered the appeals moot. The Supreme Judicial Court denied the motion to dismiss and vacated the judgment below, holding (1) retroactive application of section 1 of the Initiative did not violate the Contract Clause of the United States Constitution, and therefore, the lease was not voided by the initiative; and (2) the record established that the Bureau acted within its constitutional and statutory authority in granting the lease. View "Black v. Bureau of Parks & Lands" on Justia Law

Jernigan Copeland Attorneys, PLLC (JCA), a law firm practicing out of Ridgeland, Mississippi, filed suit against Shad White, in his official capacity as auditor for the state of Mississippi, seeking to recover damages for services rendered and for the reimbursement of costs and expenses owed to a public relations firm. A circuit court found that, because discovery had not been completed in the case, genuine issues of material fact remained. Thus, it denied the office of the state auditor’s (OSA) motion to dismiss or, alternatively, for summary judgment. Because JCA failed to submit evidence creating a genuine issue of material fact that the employment contract complied with statutory requirements, and because JCA’s alternative claims were barred by the applicable statute of limitations, the Mississippi Supreme Court reversed the trial court’s denial of summary judgment. View "White v. Jernigan Copeland Attorneys, PLLC" on Justia Law

Broadband Voice, LLC, d/b/a Fuse.Cloud, LLC (Fuse), appealed a Mississippi circuit court's dismissal of its complaint with prejudice. Fuse entered into four contracts with Jefferson County for telephone and internet installation and services. In January 2020, an entirely new board of supervisors took office. The County notified Fuse on November 3, 2020, that it would be terminating the contracts entered into by the 2019 board of supervisors. The termination was to take effect on November 16, 2020. Fuse notified the new board of supervisors that an early-termination fee of $116,984.02 would be imposed if the County terminated the contracts. Fuse disconnected the County’s service before the November 16, 2020 termination date, and sued when the County refused to pay the fee. On August 23, 2021, the circuit court dismissed Fuse’s complaint with prejudice, finding that there were no triable issues. Fuse argued on appeal to the Mississippi Supreme Court that it was entitled to $116,984.02 in early-termination fees from the four contracts. Finding that the early-termination-fee provision was negotiated by the prior board, and that prior board could not limit the ability of a subsequent board to terminate that provision or any other provision of the four contracts, the Supreme Court held the early-termination fee was not enforceable. The circuit court's dismissal was affirmed. View "Broadband Voice, LLC d/b/a Fuse.Cloud, LLC v. Jefferson County, Mississippi" on Justia Law

The City of Los Angeles (City) entered into a contract with defendant and respondent PricewaterhouseCoopers, LLC (PWC) to modernize the billing system for the Los Angeles Department of Water and Power (LADWP). PWC filed a motion for sanctions under Code of Civil Procedure sections 2023.010 and 2023.030 of the Civil Discovery Act nine months after the case was dismissed with prejudice, seeking monetary sanctions for egregious misuse of the discovery process while the litigation was pending. The trial court awarded $2.5 million in sanctions. On appeal from the postjudgment order, in response to a letter from this court inviting additional briefing pursuant to Government Code section 68081, the sanctioned party contends the Discovery Act does not authorize the trial court to award monetary sanctions under section 2023.030 alone or together with section 2023.010.   The Second Appellate District reversed the postjudgment order and remanded the matter for the trial court to enter a new and different order on the issue of monetary sanctions based on discovery provisions authorizing the imposition of sanctions in this case. The court explained that although the trial court had jurisdiction to entertain PWC’s motion for sanctions and discretion to find it was timely filed, the order awarding sanctions must be reversed and remanded to allow the trial court to award PWC’s reasonable expenses incurred as a result of sanctionable conduct under provisions of the Discovery Act other than sections 2023.010 and 2023.030. View "City of L.A. v. PricewaterhouseCoopers, LLC" on Justia Law

This case concerned whether Washington Substitute Senate Bill (SSB) 5493, constituted an unconstitutional delegation of legislative authority. SSB 5493 amended RCW 39.12.015 to modify how the Department of Labor and Industries (L&I) industrial statistician calculated prevailing wage rates for public works projects. Associated General Contractors of Washington, Associated Builders and Contractors of Western Washington Inc., Inland Pacific Chapter of Associate Builders and Contractors Inc., and Inland Northwest AGC Inc. (collectively AGC), filed suit against the State of Washington and various government officials in their official capacities (collectively State), for declaratory and injunctive relief, arguing that requiring the industrial statistician to use the wages from CBAs constituted an unconstitutional delegation of legislative authority. Both parties moved for summary judgment. The superior court granted the State’s cross motion for summary judgment, holding that SSB 5493 was constitutional, and dismissed the case. The Court of Appeals reversed and held that SSB 5493 was an unconstitutional delegation of legislative authority, holding that the amendments have neither the standards nor adequate procedural safeguards as required by the two-part test set forth in Barry & Barry, Inc. v. Department of Motor Vehicles, 81 Wn.2d 155, 163-64, 500 P.2d 540 (1972). The Washington Supreme Court reversed the Court of Appeals: SSB 5493 was not an unconstitutional delegation of legislative authority because it provided standards and procedural safeguards under the test in Barry & Barry. "The legislature made a policy decision to adopt the highest CBA wage rate and has directed the L&I industrial statistician to identify the highest CBA wage rate and adopt it as the prevailing wage. In addition there are procedural safeguards in related statutes and inherent in the collective bargaining process that protect against arbitrary administrative action or abuse of discretionary power." The case was remanded back to the Court of Appeals for consideration of the remaining issue not addressed because of its disposition in this case. View "Associated Gen. Contractors of Wash. v. State" on Justia Law

Guaranteed was a “reverse distributor,” paid by healthcare providers to return unused or expired pharmaceutical drugs to the drug manufacturers, for refunds for the healthcare-provider clients. Refunds were wired directly to Guaranteed’s general operating account; the company then issued refund checks to the relevant clients, less a service fee. In 2001, the Department of Defense contracted with Guaranteed. The government began investigating Guaranteed after the District of Columbia noticed that it did not receive the full refund on a return of some of its pharmaceuticals. The investigation uncovered a series of schemes that Guaranteed used to defraud its clients.Guaranteed, its CEO, and its CFO, were convicted of multiple counts of wire fraud, mail fraud, conspiracy to launder money, and theft of government property. In addition to prison sentences, the court imposed more than $100 million in restitution and forfeitures. The Third Circuit reversed the money laundering convictions and remanded for resentencing. Viewing the evidence in the light most favorable to the government, there is not sufficient evidence to prove beyond a reasonable doubt that the alleged complex financial transactions—after the initial receipt of “commingled” fraudulent and lawfully obtained funds—were designed for "concealment money laundering." The court otherwise affirmed, rejecting challenges to a search warrant, the sufficiency of the evidence, the jury instructions, and the court’s refusal to permit proposed expert testimony. View "United States v. Fallon" on Justia Law