Justia Government Contracts Opinion Summaries

The City of Biloxi (City), the Secretary of State on behalf of the State of Mississippi (State), and the Board of Trustees of the State Institutes of Higher Learning (IHL) settled an ownership dispute over coastal property leased to a casino, and agreed how to divide the annual casino rent. Seventeen years later, the City asked the chancery court to declare that it could adjust for inflation its base amount of rent received before divvying up its rent with the State and the IHL. But the City’s only support of its new inflation-adjustment claim was the three public entities’ lease with the casino. While the casino lease required the minimum amount of rent owed be adjusted for inflation every five years, the casino lease did not govern how the City, the State, and the IHL were to divide the rent. Instead, the manner in which rent was divided is governed solely by the settlement agreement. And the settlement agreement was silent with respect to an inflation adjustment. The Mississippi Supreme Court found, however, the agreement was clear: the City received a specific sum, and any rent in excess of that exact amount had to be shared with the State and the IHL. View "In the Matter of The Stewardship of the Public Trust Tidelands" on Justia Law

In 2008, severe storms hit Indiana. Columbus Hospital sustained significant damage. President Bush authorized FEMA assistance through disaster grants under the Stafford Act, 42 U.S.C. 5121–5206. The state agreed to be the grantee for all grant assistance, with the exception of assistance to individuals and households. FEMA reserved the right to recover assistance funds if they were spent inappropriately or distributed through error, misrepresentation, or fraud. Columbus apparently submitted its request directly to FEMA, instead of through the state. FEMA approved Columbus projects, totaling approximately $94 million. Funds were transmitted to Columbus through the state. In 2013, the DHS Inspector General issued an audit report finding that Columbus had committed procurement violations and recommended that FEMA recover $10.9 million. FEMA reduced that amount to $9,612,831.19 and denied Columbus’s appeal. Columbus did not seek judicial review. FEMA recovered the disputed costs from Columbus in 2014.In 2018, Columbus filed suit, alleging four counts of contract breach and illegal exaction. The Claims Court dismissed Columbus’s illegal exaction claim, holding that Columbus did not have a property interest in the disputed funds and that FEMA’s appeal process protected Columbus’s rights to due process, and dismissed Columbus’s contract-based claims, finding that Columbus had no rights against FEMA under that contract or otherwise. The Seventh Circuit affirmed the dismissal of the illegal exaction and express and implied contract claims. The court vacated the dismissal of the third-party beneficiary contract claim. View "Columbus Regional Hospital v. United States" on Justia Law

In 2009, Meidinger submitted whistleblower information to the IRS under 26 U.S.C. 7623, concerning “one million taxpayers in the healthcare industry that are involved in a kickback scheme.” The IRS acknowledged receipt of the information, but did not take action against the accused persons. The IRS notified Meidinger of that determination. Meidinger argued that the IRS created a contract when it confirmed receipt of his Form 211 Application, obligating it to investigate and to pay the statutory award. The Tax Court held that it lacked the authority to order the IRS to act and granted the IRS summary judgment. The D.C. Circuit affirmed that Meidinger was not eligible for a whistleblower award because the information did not result in initiation of an administrative or judicial action or collection of tax proceeds.In 2018, Meidinger filed another Form 211, with the same information as his previous submission. The IRS acknowledged receipt, but advised Meidinger that the information was “speculative” and “did not provide specific or credible information regarding tax underpayments or violations of internal revenue laws.” The Tax Court dismissed his suit for failure to state a claim; the D.C. Circuit affirmed, stating that a breach of contract claim against the IRS is properly filed in the Claims Court under the Tucker Act: 28 U.S.C. 1491(a)(1). The Federal Circuit affirmed the Claims Court’s dismissal, agreeing that the submission of information did not create a contract. View "Meidinger v. United States" on Justia Law

In 2010, the Army granted Authentic a nonexclusive license to manufacture and sell clothing bearing the Army’s trademarks. The agreement required the Army’s advance written approval of any products and marketing materials bearing the Army’s trademarks and included exculpatory clauses that exempted the Army from liability for exercising its discretion to deny approval. In 2011-2014, Authentic submitted nearly 500 requests for approval; the Army disapproved 41 submissions. During that time, Authentic received several formal notices of material breach for claimed failures to timely submit royalty reports and pay royalties. Authentic eventually paid its royalties through 2013. Authentic’s counsel indicated that Authentic would not pay outstanding royalties for 2014.Authentic's ensuing breach of contract suit cited the Army’s denial of the right to exploit the goodwill associated with the Army’s trademarks, refusal to permit Authentic to advertise its contribution to Army recreation programs, delay of approval for a financing agreement, denial of approval for advertising, and breach of the implied duty of good faith and fair dealing by not approving the sale of certain garments. The Federal Circuit affirmed summary judgment in favor of the government. The license agreement stated in no uncertain terms that the Army had “sole and absolute discretion” regarding approval of Authentic’s proposed products and marketing materials; the exercise of that broad approval discretion is not inconsistent with principles of trademark law. View "Authentic Apparel Geoup, LLC v. United States" on Justia Law

In 2017, the Department of Homeland Security issued the Solicitation as a Request for Proposal for a potentially multi-year contract for dorm management services at the Federal Law Enforcement Training Center in Glynco, Georgia. During the evaluation process, the government eliminated Safeguard’s proposal from consideration because Safeguard omitted pricing information for 16 contract line item numbers totaling $6,121,228.The Claims Court and Federal Circuit upheld the award to another bidder. The Solicitation required offerors to submit the pricing information and provided notice that elimination was possible if that pricing information was omitted. Safeguard’s omissions were material and not subject to waiver or clarification. The court upheld the denial of Safeguard’s email request to supplement the administrative record through discovery and the denial of its motion to supplement the administrative record with affidavits. The Claims Court had jurisdiction over a claim that the government breached an implied-in-fact contract to fairly and honestly consider an offeror’s proposal in the procurement context under 28 U.S.C. 1491(b)(1). View "Safeguard Base Operations, LLC v. United States" on Justia Law

In 2009, MC-2 was awarded Government Services Administration (GSA) task order to provide services for the annual GovEnergy Conference. MC-2 performed the Task Order in 2009, 2010, and 2011. GSA canceled the 2012 Conference before it began and requested that MC-2 return the entire Reserve Fund and an accounting for the Reserve Fund over the contract's life. MC-2 purportedly responded days later, arguing that GSA never before claimed that it was entitled to the difference between the Conference revenue and expenses, that MC-2 was entitled to any excess revenue, and that MC-2 had submitted a final accounting at the end of each contracting year. In 2012, MC-2 submitted a termination-for-convenience proposal.In November 2015, GSA sent MC-2 a letter providing the Contracting Officer’s final decision on MC-2’s proposal, which had sought $717,680.10, stating that the Government believed that MC-2 owed the government money. The decision stated that “GSA considers the Reserve Fund balance a contract debt. In January 2018, GSA sent a follow-up letter, demanding payment of $660,013.68. Because MC-2 had not appealed the November 2015 Final Decision, GSA deemed MC-2’s debt “final and conclusive,” 41 U.S.C. 7103(g)).In December 2018, MC-2 filed suit, arguing that the 2015 GSA letter was not a final decision because it failed to state a sum certain. The Federal Circuit affirmed the dismissal of the suit as untimely because it was not brought within 12 months of the 2015 decision, as required by 41 U.S.C. 7104(b)(3). GSA issued a valid claim under the Contract Disputes Act for the return of the Reserve Funds; GSA’s claim was the subject of a written decision by the GSA contracting officer; and MC-2 failed to file suit within 12 months of receiving the contracting officer’s final decision View "Creative Management Services, LLC v. United States" on Justia Law

In 2013, the Naval Facilities Engineering Command installed copyrighted graphics-rendering software created by German company Bitmanagement onto all computers in the Navy-Marine Corps Intranet. No express contract or license agreement authorized the Navy’s actions. In 2016, Bitmanagement filed suit, alleging copyright infringement, 28 U.S.C. 1498(b). The Claims Court found that, while Bitmanagement had established a prima facie case of copyright infringement, the Navy was not liable because it was authorized to make copies by an implied license, arising from the Navy’s purchase of individual licenses to test the software and various agreements between the Navy and the vendor.The Federal Circuit vacated and remanded for the calculation of damages. The Claims Court ended its analysis prematurely by failing to consider whether the Navy complied with the terms of the implied license, which can readily be understood from the parties’ entire course of dealings. The implied license was conditioned on the Navy using a license-tracking software, Flexera, to “FlexWrap” the program and monitor the number of simultaneous users. The Navy failed to effectively FlexWrap the copies it made; Flexera tracking did not occur as contemplated by the implied license. That failure to comply creates liability for infringement. View "Bitmanagement Software GMBH v. United States" on Justia Law

The Federal Circuit affirmed the Civilian Board of Contract Appeals' decision denying P.K. Management's claim that it should receive individual payments for inspections of Custodial properties under a contract with the Department of Housing and Urban Development. The court agreed with the Board's determination that the contract terms unambiguously cover routine inspections through a monthly fee rather than individual payments.In this case, the court read the Contract as whole and held that the plain meaning places compensation for routine inspections of Custodial properties under Contract Line Item Numbers (CLIN) 0006 rather than CLIN 0005AA. The court explained that, because the Contract is unambiguous, it follows the plain meaning without considering extrinsic evidence or related arguments. The court considered P.K. Management's remaining arguments and found them unpersuasive. View "P.K. Management Group, Inc. v. Secretary of Housing and Urban Development" on Justia Law

The Army Corps of Engineers issued a request for proposals. NIKA bid but was not awarded a contract. NIKA made a timely request for debriefing. The Corps sent NIKA a written debriefing and alerted NIKA of the right to submit additional questions. NIKA did not submit additional questions. NIKA filed a protest at the Government Accountability Office (GAO) six days after the written debriefing. Under 31 U.S.C. 3553(d), bid protests filed at the GAO invoke an automatic stay of procurement during the pendency of the protest if the federal agency awarding the contract receives notice within five days of debriefing. GAO denied the stay as untimely.NIKA filed suit, citing 10 U.S.C. 2305(b)(5)(B)(vii), which states that “[t]he debriefing shall include . . . an opportunity for a disappointed offeror to submit, within two business days after receiving a post-award debriefing, additional questions related to the debriefing.” The Claims Court instituted the stay. The bid protest concluded and the stay has ended.The Federal Circuit reversed, first holding that the issue was not moot, being capable of repetition but evading review. The text of 31 U.S.C. 3553(d) indicates that when no additional questions are submitted, the “debriefing date” is the date upon which the party receives its debriefing. The five-day period begins on the debriefing date, rather than two days later. Because NIKA did not file at the GAO within the five-day period, it did not timely invoke the stay. View "NIKA Technologies, Inc. v. United States" on Justia Law

Fisk, an LLC formed in 2018, had two members; one is an attorney. Fisk collaborated with the City of DeKalb regarding the redevelopment of a dilapidated property. Under a Development Incentive Agreement, if Fisk met certain contingencies, DeKalb would provide $2,500,000 in Tax Increment Financing. In 2019, Nicklas became the City Manager and opened new inquiries into Fisk’s financial affairs and development plans. Nicklas concluded Fisk did not have the necessary financial capacity or experience, based on specified factors.Fisk's Attorney Member had represented a client in a 2017 state court lawsuit in which Nicklas was a witness. Nicklas considered funding incentives for other development projects with which, Fisk alleged, Nicklas had previous financial and personal ties.The City Council found Fisk’s financial documents “barren of any assurance that the LLC could afford ongoing preliminary planning and engineering fees,” cited “insufficient project details,” and terminated the agreement. Fisk sued Nicklas under 42 U.S.C. 1983, alleging Nicklas sought to retaliate against Fisk and favor other developers. The Seventh Circuit affirmed the dismissal of the claims. Fisk did not exercise its First Amendment petition right in the 2017 lawsuit. That right ran to the client; Fisk did not yet exist. Fisk had no constitutionally protected property right in the agreement or in the city’s resolution, which did not bind or “substantively limit[]” the city “by mandating a particular result when certain clearly stated criteria are met.” Nicklas had a rational basis for blocking the project, so an Equal Protection claim failed. View "145 Fisk, LLC v. Nicklas" on Justia Law