Justia Government Contracts Opinion Summaries

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The Moodys leased Pine Ridge Indian Reservation parcels for agriculture. The government has a trust responsibility for Indian agricultural lands, 25 U.S.C. 3701(2). The Secretary of the Interior is authorized to participate in the management of such lands, with the participation of the beneficial owners and has delegated some responsibilities to the Bureau of Indian Affairs (BIA). BIA regulations generally allow Indian landowners to enter into agricultural leases with BIA approval. Each Moody lease defined “the Indian or Indians” as the “LESSOR.” The Claims Court concluded that the Oglala Sioux Tribe signed the leases. Other lease provisions distinguished between the lease parties and the Secretary of the Interior/United States. Issues arose in 2012. The BIA sent letters canceling the leases, noting that the Moodys could appeal the decision to the Regional Director. Within the 30-day appeal period, the Moodys returned with a cashier’s check in the proper amount, which the BIA accepted. The BIA informed the Moodys that they need not appeal, could continue farming, and did not require written confirmation. Subsequently, the Moodys received trespass notices and were instructed to vacate, which they did. The Moodys did not appeal within the BIA but sued the government. The Federal Circuit affirmed the Claims Court’s dismissal of the written contract claims for lack of jurisdiction because the government was not a party to the leases, for failure to state a claim upon which relief could be granted because the Moodys did not have implied-in-fact contracts with the government, and for failure to raise a cognizable takings claim because their claim was based on the government’s alleged violation of applicable regulations. View "Moody v. United States" on Justia Law

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Under a 2011 contract with the U.S. Army Corps of Engineers (USACE), HHL was to provide transportation services in Afghanistan. After the contract expired, HHL requested additional compensation based on alleged contract violations: suspension of work, changes to the contract requirements, and termination of the original contract. After various preliminary submissions, HHL submitted a “Request for Equitable Adjustment (REA)” with a sworn statement by HHL’s Deputy Managing Director having “full management [authority].” The submission requested that it be “treated as a[n] REA,” not as a claim, and requested $4,137,964 in compensation. HHL’s request was denied in what the contracting officer characterized as the “Government’s final determination in this matter.” The Armed Services Board of Contract Appeals concluded that it did not have jurisdiction because “[a]t no point, in six years of communication with the [USACE], has HHL requested a contracting officer’s final decision” under 41 U.S.C. 7103(a)(1). The Federal Circuit reversed and remanded, concluding that there was a request for a final decision by a contracting officer and a final decision entered by the contracting officer. A defect in the certification of a claim does not preclude jurisdiction over the claim; HHL can cure any issues with its certification on remand. View "Hejran Hejrat Co. Ltd v. United States Army Corps of Engineers" on Justia Law

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In this case, the issue presented for the Pennsylvania Supreme Court's review was whether the Commonwealth Court disregarded the law when it vacated a grievance arbitration award based on its independent interpretation of the parties’ collective bargaining agreement (“CBA”). Millcreek Township Educational Support Personnel Association (the “Association”) and Millcreek Township School District (the “District”) were parties to a CBA that became effective on July 1, 2011, and was set to expire on June 30, 2016. Negotiations for a successor CBA began January 26, 2016 when the Association offered its initial proposal to the District. Approximately one month later, the District presented a counter proposal in which it sought, among other items, to eliminate a no subcontracting provision. The Association rejected this proposal. On March 29, 2016, with successor CBA negotiations ongoing between the Association and the District, the District issued a request for proposals (“RFP”) seeking quotes from prospective bidders for the provision of custodial labor services. On April 7, 2016, upon learning that the District had issued an RFP to subcontract the bargaining unit’s work, the Association filed a grievance with the District. Pursuant to the Pennsylvania Supreme Court’s decisions under the Public Employee Relations Act (“PERA”), a reviewing court had to apply the highly deferential two-prong “essence test” to grievance arbitration awards: (1) the court had to decide whether the issue was encompassed by the CBA; and (2) the court had to uphold the arbitrator’s award if the arbitrator’s interpretation could rationally be derived from the CBA. Subject to a narrow exception for awards that violate a dominant public policy, proper application of the essence test prohibits a court from vacating an arbitrator’s award unless “the award indisputably and genuinely is without foundation in, or fails to logically flow from, the [CBA].” The Supreme Court had "no trouble" concluding that the award in this case drew its essence from the CBA and because no public policy would be violated by its enforcement, it reversed the decision of the Commonwealth Court. View "Millcreek Twp SD v. Millcreek Twp ESPA" on Justia Law

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From 1943-1990, the government produced plutonium for nuclear weapons at Washington’s Hanford Site, leaving behind 56 million gallons of nuclear waste in underground tanks. In 2000, Bechtel was awarded a cost-plus-incentive-fee contract by the Department of Energy (DOE) for the design, construction, and operation of a Hanford nuclear waste treatment plant, incorporating provisions of the Federal Acquisition Regulation (FAR). During the contract’s performance, two former Bechtel Hanford employees sued Bechtel under 42 U.S.C. 1981, alleging sexual and racial discrimination and retaliation. Bechtel settled these lawsuits and sought $500,000 in reimbursement from DOE for its defense costs. The settlement payments were covered by insurance. DOE provisionally approved Bechtel’s request and reimbursed Bechtel as requested. A contracting officer later disallowed the costs, citing Federal Circuit precedent, “Tecom” and stating that the government would offset the provisional reimbursement from future amounts owed to Bechtel. The Claims Court granted the government summary judgment, concluding that Tecom provided the proper standard. The Federal Circuit affirmed. The Bechtel contract incorporated FAR 31.201-2 and 52.222-26, the same provisions that barred reimbursement in Tecom. Under the Tecom standard, Bechtel’s defense costs related to the discrimination suits are only allowable if Bechtel can show that the former employees “had very little likelihood of success.” Bechtel did not challenge the contracting officer’s determination that the former employees’ claims had more than a very little likelihood of success. View "Bechtel National, Inc. v. United States" on Justia Law

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Four Illinois Villages passed ordinances that require commercial buildings to send fire-alarm signals directly to the local 911 dispatch center through one alarm-system provider, Tyco, which services the area pursuant to an exclusive agreement with the dispatch center. An alarm-system competitor, ADS, sued, citing the Illinois Fire Protection District Act, the Sherman Act, and the Fourteenth Amendment. The district court granted the defendants summary judgment. The Seventh Circuit affirmed. The Sherman Act claims fail because they are premised on the unilateral actions of the Villages, which ADS did not sue. The court noted that ADS can compete for the contract now held by Tyco. ADS’s substantive due process claim asserted that the district acted arbitrarily and irrationally by going with an exclusive provider rather than entertaining ADS’s efforts at alternative, methods. The ordinances effectively require the district to work with an exclusive provider and there was thus a rational basis to choose an exclusive provider. View "Alarm Detection Systems, Inc. v. Orland Fire Protection District" on Justia Law

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Relator filed suit under the False Claims Act (FCA), alleging that a handful of large chemical manufacturers violated the Toxic Substances Control Act (TSCA) by repeatedly failing to inform the EPA of information regarding the dangers of isocyanate chemicals. The DC Circuit affirmed the district court's dismissal of the action, declining relator's invitation to be the first court to recognize FCA liability based on defendants' failure to meet a TSCA reporting requirement and on their failure to pay an unassessed TSCA penalty. View "United States ex rel. Kasowitz Benson v. BASF Corp." on Justia Law

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In this case concerning the award of a concessions contract for concessions at a public park in the City of Providence the Supreme Court affirmed the judgment of the superior court in favor of Defendants - the City, the Rhode Island Zoological Society (the Zoo), P.G.S., Inc., and various municipal officials - holding that the trial justice did not abuse his discretion or commit a clear error of law. Plaintiff brought this complaint after the City awarded the concessions contract to the Zoo rather than to Plaintiff, La Gondola, Inc. The trial justice entered judgment for Defendants. The Supreme Court affirmed, holding that the trial justice properly (1) concluded that the bidding process was free of corruption, bad faith, and/or an abuse of discretion; (2) held that a certain amendment to the contract was not enforceable; and (3) denied Plaintiff's claim of intentional interference with prospective contractual relations. View "La Gondola, Inc. v. City of Providence" on Justia Law

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New York requires cable operators to set aside channels for public access. Those channels are operated by the cable operator unless the local government chooses to operate the channels or designates a private entity as the operator. New York City designated a private nonprofit corporation, MNN, to operate public access channels on Time Warner’s Manhattan cable system. Respondents produced a film critical of MNN. MNN televised the film. MNN later suspended Respondents from all MNN services and facilities. They sued, claiming that MNN violated their First Amendment free-speech rights. The Second Circuit partially reversed the dismissal of the suit, concluding that MNN was subject to First Amendment constraints. The Supreme Court reversed in part and remanded. MNN is not a state actor subject to the First Amendment. A private entity may qualify as a state actor when the entity exercises “powers traditionally exclusively reserved to the State” but “very few” functions fall into that category. Operation of public access channels on a cable system has not traditionally and exclusively been performed by government. Providing some kind of forum for speech is not an activity that only governmental entities have traditionally performed and does not automatically transform a private entity into a state actor. The City’s designation of MNN as the operator is analogous to a government license, a government contract, or a government-granted monopoly, none of which converts a private entity into a state actor unless the private entity is performing a traditional, exclusive public function. Extensive regulation does not automatically convert a private entity's action into that of the state. The City does not own, lease, or possess any property interest in the public access channels. View "Manhattan Community Access Corp. v. Halleck" on Justia Law

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The Supreme Court affirmed the order of the circuit court granting a motion to dismiss filed by the Arkansas State Highway Commission and the Arkansas Department of Transportation and its director in this challenge to a contract entered into between the Department and the United States Fish and Wildlife Service (USFWS), holding that the circuit court correctly found that the complaint failed to state facts upon which relief could be granted. Under the contract in this case the Department would cede certain property to USFWS in exchange for a fifty-acre easement over land in the Cache River and White River Wildlife Refuges in order to build a new bridge on Highway 79. The agreement further required the Department to convey additional land to USFWS and to demolish three bridges. Appellants filed a motion for preliminary injunction and complaint for declaratory and injunctive relief, arguing that the contract was unconscionable, entered into under duress, and constituted a windfall to USFWS. The circuit court dismissed the complaint. The Supreme Court affirmed, holding that the complaint lacked sufficient facts to state a claim for an illegal exaction. View "Prince v. Arkansas State Highway Commission" on Justia Law

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The Medicare program offers additional payments to institutions that serve a “disproportionate number” of low-income patients, 42 U.S.C. 1395ww(d)(5)(F)(i)(I), calculated using the hospital’s “Medicare fraction.” The fraction’s denominator is the time the hospital spent caring for patients entitled to Medicare Part A benefits; the numerator is the time the hospital spent caring for Part-A-entitled patients who were also entitled to income support payments under the Social Security Act. Medicare Part C (Medicare Advantage) was created in 1997. Part C, beneficiaries may choose to have the government pay their private insurance premiums rather than pay for their hospital care directly. Part C enrollees tend to be wealthier than Part A enrollees, so counting them makes the fraction smaller and reduces hospitals’ payments. In 2014, the Medicare website indicated that fractions for fiscal year 2012 included Part C patients. Hospitals sued, claiming violation the Medicare Act’s requirement to provide public notice and a 60-day comment period for any “rule, requirement, or other statement of policy . . . that establishes or changes a substantive legal standard governing . . . the payment for services.” The Supreme Court affirmed the D.C. Circuit in agreeing with the hospitals. The government has not identified a lawful excuse for neglecting its statutory notice-and-comment obligations. The 2014 announcement established or changed a “substantive legal standard” not an interpretive legal standard. The Medicare Act and the Administrative Procedures Act do not use the word “substantive” in the same way. The Medicare Act contemplates that “statements of policy” can establish or change a “substantive legal standard." Had Congress wanted to follow the APA in the Medicare Act and exempt interpretive rules and policy statements from notice and comment, it could have cross-referenced the APA exemption, 5 U.S.C. 553(b)(A). View "Azar v. Allina Health Services" on Justia Law