Justia Government Contracts Opinion Summaries

The Nuclear Waste Policy Act of 1982 authorized the Department of Energy (DOE) to contract with power utilities for a planned national nuclear waste disposal system, 42 U.S.C. 10222. Utilities were to pay into a Nuclear Waste Fund; the government was to dispose of their spent nuclear fuel beginning by January 31, 1998.. Under the Standard Contract, utilities must provide “preparation, packaging, required inspections, and loading activities necessary for the transportation … to the DOE facility.” DOE is responsible for “arrang[ing] for, and provid[ing], a cask(s) and all necessary transportation … to the DOE facility.” In 1983, System Fuels entered Standard Contracts concerning the Grand Gulf and Arkansas Nuclear One power stations. The government has yet to begin accepting spent nuclear fuel. System Fuels obtained damages for costs incurred through August 31, 2005 (Grand) and June 30, 2006 (Arkansas), including costs to construct Independent Spent Fuel Storage Installations (ISFSIs) and later successfully sought damages for continued breach. The Claims Court denied costs incurred to load spent fuel into storage casks at the ISFSIs by first loading it into canisters, then loading those canisters into dry fuel storage casks and welding the casks closed. The Federal Circuit reversed, noting that under the Standard Contracts, DOE cannot accept any of the canistered fuel as is, so System Fuels will incur costs to unload the casks and canisters and to reload fuel into transportation casks if and when DOE performs. View "System Fuels, Inc. v. United States" on Justia Law

SUFI invested money to build and operate telephone systems at Air Force bases and was to earn returns for 15 years from per-call charges, to be shared with the Air Force. The Air Force breached the contract by allowing contractually prohibited diversions of calls from the SUFI phones. SUFI brought claims to the Armed Services Board of Contract Appeals (ASBCA), which awarded $2.8 million (plus interest) on one group of claims and $4.6 million (plus interest) on another. SUFI appealed the award on the second group of claims, invoking the standards of review set by the Wunderlich Act 41 U.S.C. 321 (repealed 2011). The Claims Court granted SUFI relief. The Federal Circuit remanded, holding that the Claims Court had not properly applied that standard. ASBCA conducted remand proceedings and awarded roughly $113 million (plus interest). SUFI promptly accepted the decision. The Claims Court declined the government’s request for review, stating, “[u]nder the Wunderlich Act, only the contractor has the right to appeal from a Board decision.” The Federal Circuit affirmed, stating: “The new decision is no less the position of the United States just because it is not the initial decision.” View "SUFI Network Servs., Inc. v. United States" on Justia Law

AFSCME represents approximately 40,000 state employees working in executive agencies. In 2008, AFSCME and the state negotiated a collective bargaining agreement effective through June 2012, providing for a general wage increase on January 1, 2009, and thereafter on every July 1 and January 1. Individual increases varied, but totaled 15.25%. A 4% increase was scheduled for July 1, 2011. In 2010, facing declining state revenues and the potential layoff of 2,500 state employees, AFSCME and the state agreed to $300 million in cost savings, including deferring the July 2011 increase; a 2% increase would be implemented on July 1, 2011, with the remaining 2% to be implemented on February 1, 2012. After adoption of the fiscal 2012 budget, the Department of Central Management Services notified agencies and labor relations administrators that, due to insufficient appropriations, the wage increase could not be implemented in 14 agencies. In arbitration, the state argued that the Public Labor Relations Act mandates that executive branch expenditures under a CBA are contingent on corresponding appropriations by the General Assembly, that this provision restates the mandate of the Illinois Constitution appropriations clause, and that it was incorporated into the CBA by the statement that “the provisions of this contract cannot supersede law.” The arbitrator issued an award in favor of AFSCME. The Illinois Supreme Court reversed the lower courts and vacated the award, holding that the arbitration award violates Illinois public policy, as reflected in the appropriations clause and the Public Labor Relations Act. View "Illinois v. Am. Fed'n of State, County & Mun. Employees, Council 31" on Justia Law

Relator filed a qui tam action under the False Claims Act, 31 U.S.C. 3729-3733, contending that Record Press had submitted a fraudulent bill for printing services to the government. The district court granted judgment for Record Press. The court affirmed the district court's conclusion because there was no evidence that Record Press had submitted any false claims with knowledge it was doing so, as would be required for liability under the Act. In this case, the district court properly considered testimony and evidence indicating that the government agreed with Record Press about the disputed contract rate. Further, the district court did not consider the government’s understanding of the contract as part of any defense. Rather, it relied on the government’s agreement with Record Press about the proper understanding of the contract as evidence that there had been no fraudulent behavior in the first place. The court remanded for further proceedings on Record Press’s motion for attorneys’ fees because the district court did not make the findings necessary to enable the court to review its grounds for denying a fee award. View "United States v. Record Press, Inc." on Justia Law

Plaintiff filed a qui tam suit under the False Claims Act (FCA), 31 U.S.C. 3729–3733, alleging fraud in the performance of a Government contract. The district court dismissed the suit. The court agreed with plaintiff that the district court erred in holding that the complaint was based upon prior public disclosures and was thus precluded by the public disclosure bar of the FCA. In this case, the complaint alleges fraud that is different in kind and degree from the previously disclosed information about Raytheon’s problems in performing on the contract at issue. As such, if his allegations prove to be true, plaintiff will undoubtedly have been one of those whistle-blowing insiders with genuinely valuable information, rather than an opportunistic plaintiff who has no significant information to contribute. Accordingly, the court reversed and remanded. View "United States ex rel Mateski v. Raytheon" on Justia Law

Relator brought a qui tam action (False Claims Act, 31 U.S.C. 3730(b)), alleging KHN (network of hospitals, physicians, and healthcare facilities) falsely certified its compliance with the Health Information Technology for Economic and Clinical Health Act (HITECH), 123 Stat. 226 (2009), to receive “meaningful use” incentive payments. HITECH was designed to encourage the adoption of sophisticated electronic health record technology and creates incentive payments for “meaningful use” of certified technology, 42 U.S.C. 1395. To receive incentive payments, providers must meet meaningful-use objectives and accompanying compliance measures. Stage 1 of Act implementation required a security risk analysis in accordance with 45 C.F.R. 164.308(a)(1); implementation of need security updates; and correction of identified security deficiencies. During Stage 2, providers are required to address[] the encryption/security of data stored in Certified EHR Technology in accordance with 45 C.F.R. 164.312(a)(2)(iv) and 164.306(d)(3). To receive incentive payments, providers must attest to meeting these standards. The Sixth Circuit affirmed dismissal, finding that Relator failed to plausibly allege that KHN’s attestation of HITECH compliance was false and failed to plead a specific claim for payment; and that Relator’s claims were precluded by a prior Ohio state judgment in a case involving similar claims filed by Relator against KHN. View "United States v. Kettering Health Network" on Justia Law

This appeal arose from the City's contract with Ambac to provide municipal bond insurance. The City filed suit against Ambac alleging that Ambac breached an agreement to provide a credit enhancement, that there was error in the principal cause, that Ambac acted in bad faith, and that the City had detrimentally relied on Ambac’s representations and assurances regarding the value of its credit enhancement product. The district court granted Ambac's motion to dismiss. The court concluded that the district court did not err in dismissing the City's breach of contract claim because the district court properly interpreted the Policy and because the City’s argument that it created a written and oral contract with Ambac for credit enhancement is not plausible based on the facts alleged. The court also concluded that any error about what the City was purchasing when it paid Ambac in excess of six million dollars was a unilateral error by the City because of the clear language of the Policy, and any unilateral error by the City about what it was purchasing from Ambac was not reasonable or excusable. Because the City’s proffered error is unreasonable, it does not vitiate consent. Because the City has failed to establish the existence of a larger credit enhancement agreement between it and Ambac, the City’s bad faith claim concerning this purported agreement necessarily fails. Finally, the court affirmed the district court's dismissal of the City's detrimental reliance claim where the City and Ambac are sophisticated parties that engaged in arm’s length negotiations with respect to this bond offering. Accordingly, the court affirmed the judgment. View "New Orleans City v. AMBAC Assurance Corp." on Justia Law

This case involved a second set of appeals arising from an action challenging the bidding process for the Idaho Education Network (“IEN”). Syringa Networks, LLC, sued Qwest Communications, LLC, ENA Services, LLC, and the Idaho Department of Administration (“DOA”) and certain DOA employees, alleging injury arising from contract awards and amendments that DOA issued to Qwest and ENA related to the IEN. The district court dismissed all of Syringa’s claims. On appeal the Idaho Supreme Court held that Syringa had standing to pursue Count Three, which alleged that DOA violated Idaho Code section 67-5718A. Count Three was remanded to the district court for further proceedings. On remand, the district court entered partial summary judgment for Syringa on Count Three, holding that the amendments and the underlying contracts were void for violating state procurement law. The district court denied Syringa’s motion to order DOA to demand repayment of money advanced under the void contracts. The district court also awarded Syringa attorney fees. Syringa, Qwest, ENA, and DOA each appealed: Syringa appealed the district court’s denial of its request to order DOA to demand repayment from Qwest and ENA; the other parties appealed the district court’s grant of partial summary judgment to Syringa, arguing that the district court’s conclusions were procedurally improper and substantively incorrect for a variety of reasons. DOA also challenges the district court’s award of attorney fees to Syringa. Finding no reversible error in the district court's judgment, the Supreme Court affirmed. View "Syringa Networks v. Dept of Administration" on Justia Law

Under the Urbanized Area Formula Program, 49 U.S.C. 5307, the Federal Transportation Administration (FTA) administers grant funding to urban transit programs for “operating costs of equipment and facilities for use in public transportation.” Recipients must submit “financial, operating, and asset condition information” to the National Transit Database. The agency apportions grants based, in part, on the number of Vehicle Revenue Miles (VRM) that accrue while a vehicle is “in revenue service,” available to the general public. In 2005, the Illinois House of Representatives called for a performance audit of the Chicago Transit Authority (CTA). The audit concluded that the CTA, from possibly as early as 1986, had been overstating its VRM and had received higher than justified UAFP disbursements. Notified of the report, the FTA required that CTA revise its data from 2011 forward. In 2012, a nonprofit watchdog organization contacted the Department of Justice requesting an investigation into the CTA’s reporting practices. The group then filed suit under the qui tam provision of the False Claims Act, 31 U.S.C. 3730. The Seventh Circuit affirmed dismissal, agreeing that the district court lacked subject matter jurisdiction because the allegations of wrongdoing had been publicly disclosed at the time the action was filed. View "Cause of Action v. CTA" on Justia Law

Agent Parkinson, of the FBI’s Sacramento field office, was the leader of a special operations group, tasked with relocating a previously compromised undercover facility. In 2006, the FBI leased a facility from Rodda, who agreed to contribute $70,000 to “construction, construction documents, permits and fees. Parkinson negotiated the lease on behalf of the FBI, and managed the tenant improvement funds. In 2008, during the work, Parkinson made whistleblower-eligible disclosures, implicating two pilots involved with the group in misconduct. Parkinson’s supervisor issued Parkinson a low-performance rating, removed him as group leader, and reassigned him. Believing this to be retaliation, Parkinson sent a letter to Senator Grassley, who forwarded Parkinson’s allegations to the Department of Justice’s Office of the Investigator General (OIG) for investigation. The OIG sent the FBI its report. Ultimately, the Merit Systems Protection Board upheld Parkinson’s termination for lack of candor under oath and obstruction of process of the Office of Professional Responsibility. The Federal Circuit reversed in part and remanded. The court sustained the obstruction charge and dismissal of Parkinson’s affirmative defense of violations of the Uniformed Services Employment and Reemployment Rights Act of 1994, but found the lack of candor charge unsupported by substantial evidence and that the Board improperly precluded Parkinson from raising an affirmative defense of whistleblower retaliation. View "Parkinson v. Dep't of Justice" on Justia Law