Justia Government Contracts Opinion Summaries

The Court of Appeal affirmed the trial court's denial of FESB's petition for writ of mandate seeking to invalidate two one-year contracts between the school district and Just Communities. The court concluded that the trial court applied the correct deferential standard of review to the school district's decision to enter a no-bid contract with Just Communities. The court also concluded that there was no error in finding that Just Communities fell within the "professional services" exemption and the "special services" exemption. Consequently, the court need not determine whether the common law exemption applied in this case. View "Fair Education Santa Barbara v. Santa Barbara Unified School District" on Justia Law

Tolliver had a contract with the United States under which Tolliver was obliged to write technical manuals for government-used equipment. The government was obliged to supply Tolliver information relevant to that task. When the government failed to obtain and therefore failed to supply that information, the parties modified the contract. Tolliver ultimately produced the manuals. After the modification, however, a third party sued Tolliver in the name of the government under the False Claims Act, alleging that Tolliver had made a false certification of compliance with the original contract. The government, rather than intervening in the qui tam case and then dismissing it, allowed it to proceed. With evidentiary help from the government, Tolliver prevailed after incurring substantial legal fees.The contracting officer denied Tolliver's claim under the Contract Disputes Act, 41 U.S.C. 7101, for an “equitable adjustment” for reimbursement of “allowable legal fees.” The Claims Court entered judgment for Tolliver, concluding that the United States had breached an implied warranty of performance. The Federal Circuit vacated. Because Tolliver never submitted a claim of breach of that warranty to the contracting officer, the Claims Court lacked jurisdiction to adjudicate such a claim. The claim that Tolliver presented to the contracting officer was, on its face, based on legal fees, not on a breach of the implied warranty of performance. View "Tolliver Group, Inc. v. United States" on Justia Law

Mamalakis, a Wisconsin anesthesiologist, filed a qui tam lawsuit (False Claims Act, 31 U.S.C. 3729), alleging that Anesthetix, his former employer, fraudulently billed Medicare and Medicaid for services performed by its anesthesiologists. His central allegation is that the anesthesiologists regularly billed the government using the code for “medically directed” services when their services qualified for payment only at the lower rate for services that are “medically supervised.” A magistrate judge held that the complaint did not provide enough factual particularity to satisfy the heightened pleading standard for fraud claims, FED. R. CIV. P. 9(b). Mamalakis filed an amended complaint that included 10 specific examples of inflated billing, each identifying a particular procedure and anesthesiologist and providing details about how the services did not qualify for payment at the medical-direction billing rate. Six examples included a specific allegation that the anesthesiologist billed the services using that code; the other four relied on general allegations regarding the group’s uniform policy of billing at the medical-direction rate. The judge dismissed the case with prejudice.The Seventh Circuit reversed. Although Rule 9(b) imposes a high pleading bar to protect defendants from baseless accusations of fraud, Mamalakis cleared it. The examples, read in context with the other allegations in the amended complaint, provide sufficient particularity about the alleged fraudulent billing to survive dismissal. View "Mamalakis v. Anesthetix Management LLC" on Justia Law

U.S. Customs and Border Protection (CBP) controls and monitors traffic at the borders, including the flow of vehicles, cargo, and people. CBP’s Cargo Systems Program Directorate (CSPD) manages a commercial trade processing system, the Automated Commercial Environment (ACE), which provides automated tools and information for making admissibility decisions before shipments reach U.S. borders and supports cargo revenue collection. ACE “is not a single operating system but a collection of applications built on diverse multivendor technological platforms.” In 2018, CBP issued a solicitation requesting quotes for “application development and operation and maintenance support services” as part of CSPD’s effort to develop and support cargo systems applications. Harmonia submitted an unsuccessful pre-award agency-level protest to CBP concerning amendments to the solicitation and CBP’s limitation of bid revisions.The Claims Court rejected Harmonia’s subsequent suit on the Administrative Record. The Federal Circuit reversed in part. The Claims Court erred in determining that Harmonia waived its right to assert before the court the same challenges that it asserted in its pre-award protest. The Federal Circuit vacated a holding that CPD did not act in an arbitrary or capricious manner in evaluating Harmonia’s proposal and in making an award decision. The Claims Court must determine the merits of Harmonia’s pre-award protest and what relief, if any, Harmonia is entitled to based on that protest. View "Harmonia Holdings Group, LLC v. United States" on Justia Law

Tax sharing agreements between the County of San Benito and the City of Hollister require the city to pay the county a fixed fee (the “Additional Amount”) for each residential unit constructed on land that is annexed into the city from the county. Plaintiff entered into development agreements with the city to build residential units on land subject to the city-county tax sharing agreements, and agreed to satisfy certain obligations from the tax sharing agreements, but sued the city and the county seeking a declaration that payment of the Additional Amount is not among plaintiff’s obligations.The court of appeal affirmed a defense judgment. The plaintiff agreed to pay the city the Additional Amount fees as part of the development agreements. Nothing in the tax sharing agreement suggests that obligations created by it would cease to exist merely because a project annexed during its effective period was not constructed until after the agreement expired. The court rejected the plaintiff’s argument that because the Additional Amount is an obligation of the city to the county under the tax sharing agreement, it cannot be a “Developer’s obligation.” The reference to “Developer’s obligations” in the development agreement did not mean only the capital improvement and drainage fees discussed in the tax sharing agreement; the term includes the Additional Amount. View "Award Homes, Inc. v. County of San Benito" on Justia Law

Plaintiff filed suit on behalf of the United States under the False Claims Act (FCA) against AECOM, alleging that AECOM submitted fraudulent claims for payment to the government. Specifically, plaintiff alleges that AECOM overstated its man-hour utilization rate, improperly billed the government for labor not actually performed, and failed to properly track government property, resulting in significant financial costs and government waste.The Second Circuit affirmed the district court's dismissal of most claims, but concluded that the district court's materiality analysis of plaintiff's 31 U.S.C. 3729(a)(1)(A)-(B) claims premised on the labor billing allegations was flawed because the district court improperly relied on materials extraneous to the complaint. The court also concluded that the public disclosure bar does not provide an alternative basis to affirm. Accordingly, the court vacated the judgment, reversed the district court's dismissal of the section 3729(a)(1)(A)-(B) claims premised on the labor billing allegations; affirmed the dismissal of plaintiff's other claims; and remanded for further proceedings. View "United States ex rel. Foreman v. AECOM" on Justia Law

In 2015, JKB and the Army entered into a three-year indefinite-delivery, indefinite-quantity contract. JKB agreed to provide instructional services up to 14 classes per year. The contract incorporates Federal Acquisition Regulation (FAR) 52.212-4, which includes a termination for convenience clause for the government, and incorporates Defense Federal Acquisition Regulation Supplement (DFARS) 252.216-7006, which requires all supplies and services furnished under the contract to be ordered by issuance of delivery or task orders. The Army issued three year-long task orders, each listing one lot of training-instructor services, the price per class, and a total price corresponding to the price of 14 classes. Each year, the Army used JKB for fewer than 14 classes and paid for each class actually taught, refusing to pay the total price listed in the task orders.JKB sued for breach of contract. The Claims Court ultimately granted the government summary judgment based on FAR 52.212-4 and the doctrine of constructive termination for convenience. The Federal Circuit vacated. FAR 52.212-4 governs the termination of commercial item contracts for the government’s convenience; it does not apply to service contracts, such as the contract at issue. On remand, the Claims Court may consider whether the “Christian doctrine” applies to incorporate a termination for convenience clause and whether the doctrine of constructive termination for convenience applies. View "JKB Solutions and Services, LLC v. United States" on Justia Law

In 1993, the County and the Orange County Employee Retirement System (OCERS) entered into a Memorandum of Understanding (MOU), allowing the County to access surplus investment earnings controlled by OCERS and depositing a portion of the surplus into an account to pay for county retirees' health insurance. The county adopted the Retiree Medical Plan, funded by those investment earnings and mandatory employee deductions. The Plan explicitly provided that it did not create any vested rights. The labor unions then entered into MOUs, requiring the county to administer the Plan and that retirees receive a Medical Insurance Grant. In 1993-2007, retired employees received a monthly grant benefit to defray the cost of health insurance. In 2004, the county negotiated with its unions to restructure the underfunded program, reducing benefits for retirees.Plaintiffs filed suit. The Ninth Circuit affirmed summary judgment in favor of the county. The 1993 Plan explicitly provided that it did not create any vested right to benefits. The Plan was adopted by resolution and became law with respect to Grant Benefits, part of the MOUs. The MOUs expired on their own terms by a specific date. Absent express language providing that the Grant Benefits vested, the right to the benefits expired when the MOUs expired. The Plan was not unilaterally imposed on the unions and their employees without collective bargaining; the unions executed MOUs adopting the Plan. The court rejected an assertion that the Grant Benefit was deferred compensation and vested upon retirement, similar to pension benefits. View "Harris v. County of Orange" on Justia Law

Dr. Polansky was an official at the Centers for Medicare and Medicaid Services (CMS) before consulting for EHR, a “physician advisor” company that provides review and billing certification services to hospitals and physicians that bill Medicare. Polansky became concerned that EHR was systematically enabling its client hospitals to over-admit patients by certifying inpatient services that should have been provided on an outpatient basis.In 2012, Polansky filed suit under the False Claims Act (FCA), 31 U.S.C. 3729, alleging EHR was causing hospitals to bill the government for inpatient stays that were not “reasonable and necessary” for diagnosis or treatment as required by the Medicare program, 42 U.S.C. 1395y(a)(1)(A). His complaint remained under seal for two years while the government conducted its own investigation and ultimately determined it would not participate in the case.In 2019, the government notified the parties that it intended to dismiss the entire action under 31 U.S.C. 3730(c): “[t]he Government may dismiss the action notwithstanding the objections of the [relator]” so long as the relator receives notice and an opportunity to be heard on the Government’s motion. The district court eventually granted the motion. The Third Circuit affirmed. The government is required to intervene before moving to dismiss and its motion must meet the standard of FRCP 41(a). The district court acted within its discretion in granting the government’s motion. View "Polansky v. Executive Health Resources Inc" on Justia Law

Schindler filed suit alleging that WMATA arbitrarily eliminated it from consideration of a bid to replace escalators throughout WMATA's Metrol Rail System stations even though it complied with the Request for Proposal's (RFP) requirements and offered a better value than that proposed by the awardee.The DC Circuit affirmed the district court's dismissal sua sponte of Schindler's complaint based on lack of subject matter jurisdiction on the ground that WMATA, an interstate compact entity, had not waived its sovereign immunity. The court explained that neither the interstate compact creating WMATA, the Authority's procurement documents nor the Administrative Procedure Act waives WMATA's sovereign immunity for challenges to procurement decisions like Schindler's. View "Schindler Elevator Corp. v. Washington Metropolitan Area Transit Authority" on Justia Law