Justia Government Contracts Opinion Summaries

Plaintiffs, the family members and a former coworker of three Americans who were kidnapped and killed while providing contract security services during the U.S. military occupation of Iraq, brought suit against U.S. government officials challenging policies governing the supervision of private contractors and the response to the kidnappings of American citizens in Iraq (“policy claims”) and claiming that the government was withholding back pay, insurance proceeds, and government benefits owed to the families of the deceased contractors (“monetary claims”). The district court dismissed Plaintiffs’ claims. The Ninth Circuit affirmed in part and vacated in part, holding that the district court (1) correctly dismissed the policy claims for lack of standing and for presenting nonjusticiable political questions; but (2) erred in dismissing the monetary claims for failure to establish a waiver of the government’s sovereign immunity from suits for damages and for failure to state a claim, as, although Plaintiffs failed to allege a governmental waiver of sovereign immunity that would confer jurisdiction in the district court over the monetary claims, the United States Court of Federal Claims had jurisdiction over the claims for withheld back pay and insurance proceeds. Remanded for the district court to transfer those claims. View "Munns v. Kerry" on Justia Law

In 2013, the Department of Homeland Security issued a final decision removing Garcia from the U.S. Border Patrol for misconduct. Garcia received notice the same day. Under 5 U.S.C. 7121(e)(1), Garcia had the option to appeal his removal to the Merit Systems Protection Board (MSPB) or to invoke arbitration, under his union’s collective bargaining agreement (CBA). Article 34 of the CBA states that in cases involving adverse actions, such as removal, requests for arbitration “must be filed . . . not later than thirty (30) calendar days after the effective date of the action.” His union mailed a letter to the Agency requesting arbitration 28 days after the effective date of Garcia’s removal. The Agency did not receive this request until seven days later. After an arbitrator was appointed, the Agency moved to dismiss. The Arbitrator found the plain meaning of “filed” in the CBA requires actual receipt of the request for arbitration, relying on the definition of “file” used in federal court proceedings. The Federal Circuit reversed, holding that the request for arbitration need only be mailed within the 30-day time period. View "Garcia v. Dep't of Homeland Sec." on Justia Law

Bannum protested decisions of the Bureau of Prisons of the U.S. Department of Justice to award two contracts to other bidders, alleging a common defect in the terms of the solicitations and problems in the evaluation of competing bids. Bannum cited a requirement of compliance with Prison Rape Elimination Act of 2003, 42 U.S.C. 15601–15609 and the government’s failure to provide pricing information with respect to the requirement. In each case, the Court of Federal Claims dismissed Bannum’s suit. Finding that Bannum’s proposal, by failing to commit Bannum to a fixed price, was materially out of compliance with the terms of the solicitation, the court concluded that Bannum was not an “interested party” entitled to bring its protest under 28 U.S.C. 1491(b). The Federal Circuit affirmed in consolidated appeals, holding that, because Bannum did not adequately present its objection to the solicitations before the awards, Bannum waived its ability to challenge the solicitations. On appeal, Bannum failed to preserve its separate challenges to the bid evaluations. View "Bannum, Inc. v. United States" on Justia Law

The federal Centers for Medicare and Medicaid Services (CMS) uses contractors to determine if Medicare claims were correctly paid. If the contractor identifies an overpayment, CMS sends a demand letter to the provider seeking repayment. Under contracts from 2008, the contractors invoiced CMS for a contingency fee when the overpayment was collected, typically 41 days after the demand letter. In 2014, CMS issued new requests for quotes for these recovery services, with new terms requiring the contractors to wait to invoice CMS until any challenge to the repayment request passed the second level of a five-level appeal process, typically 120 to 420 days after the demand letter. Five contractors bid; CGI did not. Before bidding closed, CGI filed a pre-award protest at the Government Accountability Office. While the protest was pending, bidding closed. The GAO subsequently denied the protest. CGI filed a protest in the Court of Federal Claims. That court granted the government judgment on the administrative record, holding that the modified payment terms did not violate statutory or regulatory provisions nor unduly restrict competition. The Federal Circuit reversed, holding that CGI had standing and citing Federal Acquisition Regulation Part 12’s prohibition against including contract terms inconsistent with customary commercial practice. View "CGI Fed. Inc. v. United States" on Justia Law

The Department of Agriculture’s Rural Utilities Service (RUS) made a $267 million loan to Open Range to finance construction of wireless broadband networks in 540 RUS-approved markets. Open Range subcontracted with G4S. The FCC suspended a permit, so that Open Range lost the spectrum rights necessary to operate the planned network. RUS gave notice of its intent to terminate remaining funds on the loan unless Open Range could obtain replacement rights. Open Range began failing to meet its obligations to subcontractors. The Secretary of Agriculture made loan money available, provided a press release, and offered to reassure subcontractors, but Open Range was unable to regain the full spectrum rights necessary to complete the original project. RUS and Open Range executed an amendment to reflect a loan amount reduced to $180 million, and 160 RUS-approved markets, but Open Range remained unable to satisfy its debts and filed for bankruptcy. G4S filed suit. The Claims Court held that G4S was not a third party beneficiary to the agreement. The Federal Circuit affirmed, stating that G4S asked that the government incur liability simply because it talked to the individuals in charge of a failing project in an attempt to fix the problems. View "G4S Tech., LLC v. United States" on Justia Law

In 2003, the VA entered into a contract with Reliable for electrical improvements at a VA medical center, requiring installation of three backup generators, “new and of the most suitable grade.” Federal Acquisition Regulation 52.211-5, incorporated by reference, requires that supplies be “new, reconditioned, or remanufactured,” and defines “new” as “composed of previously unused components.” Reliable sub-contracted to Fisk, which contracted with DTE. In 2004, DTE delivered two Cummins Power Generation generators to the construction site. The VA’s senior resident engineer inspected the generators and determined that they were not “new.” He wrote to Reliable, stating: They show a lot of wear and tear including field burns to enlarge mounting holes. Are they new and will you certify them as such? I cannot pay you … without that certification. Fisk and Reliable initially agreed that the generators did not meet the contract specification. After investigation, they concluded that the generators, manufactured in 2000, had been previously purchased by others but never used. Fisk obtained different generators, which were accepted by the VA. In 2007, Reliable submitted a claim, seeking $1,100,000 for additional costs incurred as a result of rejection of the original generators. In 2013, the Board of Contract Appeals denied Reliable’s claim. The Federal Circuit vacated, holding that the Board erred in its interpretation of the contract. View "Reliable Contracting Grp., LLC v. Dep't of Veterans Affairs" on Justia Law

In 1943, Congress approved a Compact between Kansas, Nebraska, and Colorado to apportion the “virgin water originating in” the Republican River Basin. In 1998, Kansas filed an original action in the Supreme Court contending that Nebraska’s increased groundwater pumping was subject to the Compact to the extent that it depleted stream flow in the Basin. The Court agreed. Negotiations resulted in a 2002 Settlement, which identified the Accounting Procedures by which the states would measure stream flow depletion, and thus consumption, due to groundwater pumping. The Settlement reaffirmed that “imported water,” brought into the Basin by human activity, would not count toward consumption. In 2007, Kansas claimed that Nebraska had exceeded its allocation. Nebraska responded that the Accounting Procedures improperly charged it for imported water and requested that the Accounting Procedures be modified. The Court appointed a Special Master, whose report concluded that Nebraska “knowingly failed” to comply, recommended that Nebraska disgorge part of its gains in addition to paying damages, and recommended denying an injunction and reforming the Accounting Procedures. The Supreme Court adopted the recommendations. Nebraska failed to establish adequate compliance mechanisms, given a known substantial risk that it would violate Kansas’s rights; Nebraska was warned each year that it had exceeded its allotment. Because of the higher value of water on Nebraska’s farmland than on Kansas’s, Nebraska could take Kansas’s water, pay damages, and still benefit. The disgorgement award is sufficient to deter future breaches. Kansas failed to demonstrate a “cognizable danger of recurrent violation” necessary to obtain an injunction. Amending the Accounting Procedures is necessary to prevent serious inaccuracies from distorting intended apportionment. View "Kansas v. Nebraska" on Justia Law

Lydig Construction was the general contractor on a large public works project. Martinez Steel was the original steel supply subcontractor on the project. Lydig sued Martinez for additional costs Lydig incurred because Martinez failed to timely supply steel for the project; Lydig, with the public agency's approval, had been required to replace Martinez as the steel supplier. Lydig moved for a right to attach order and a writ of attachment and presented the trial court with its business records and declarations from its employees. Martinez opposed Lydig's motion and presented declarations from one of its employees that set forth its contention Lydig owed it for, among other items, steel Martinez had delivered to the project. Martinez filed a cross-complaint in which it alleged claims that, if successful, would entirely offset Lydig's claims against it. The trial court granted Lydig's motion and issued writs of attachment in the amount of $203,315. The court of appeal affirmed, rejecting Martinez's contentions that its cross-complaint, as a matter of law, prevented the trial court from issuing a writ of attachment against it and that Lydig's application for a writ of attachment was not supported by substantial evidence. View "Lydig Constr., Inc. v. Martinez Steel Corp." on Justia Law

The False Claims Act (FCA) imposes civil liability for fraudulent claims for payment to the United States, 31 U.S.C. 3729(a)(1), and authorizes qui tam suits, in which private parties bring civil actions in the government’s name. A relator must first disclose his claims to the government, which then decides whether to take over the action. Whipple alleged that Erlanger knowingly submitted fraudulent claims to federally funded healthcare programs and that he discovered the fraud while working at Erlanger in 2006, by analyzing past billings, reviewing patient records, and observing operations. He claimed to have direct knowledge of fraudulent practices from supervising patient admissions, planning discharges, and reviewing submission of claims. Unbeknownst to Whipple, the government conducted an audit and investigation; the matter was resolved without a hearing by Erlanger’s 2009 payment of a $477,140.42 refund to the government. Whipple disclosed his qui tam claims to the government in 2010 and filed suit in 2011, and the government declined to intervene. The district court dismissed, finding the claims jurisdictionally barred under the FCA’s public-disclosure bar. The Sixth Circuit reversed. Holding that the government audit was not a “public disclosure” sufficient to trigger the jurisdictional bar, the court did not decide whether the original-source exception to that bar would apply. View "United States v. Chattanooga-Hamilton Cnty. Hosp." on Justia Law

In 2010, while Kerner was an Evidence Custodian, GS-05, with the Department’s Fish and Wildlife Service, he applied for two vacancies: Wildlife Inspector, GS-09/11, and Wildlife Inspector, GS-11/11. Both positions were merit-promotion vacancies. Each required federal employee applicants to meet a time-in-grade requirement. A federal civil service applicant must have completed at least 52 weeks of experience equivalent to GS-07 to be qualified for the GS- 09 position, and at least 52 weeks of experience equivalent to GS-09 to be qualified for the GS-11 position. The vacancies also required one year of specialized experience in the federal civil service equivalent to GS-07 or GS-09, respectively. Kerner had no federal civil service experience at the GS-07 or GS-09 level and, therefore, did not meet the time-in-grade requirements. The Department determined that he did not qualify for either vacancy. Kerner then filed a Veterans Employment Opportunity Act claim with the Department of Labor, alleging that the Department violated his VEOA rights. The Department of Labor and Merit Systems Protection Board rejected the claim. The Federal Circuit affirmed. The provisions cited by Kerner only apply to preference-eligible veterans not already employed in federal civil service, not to current federal employees seeking merit promotions. View "Kerner v. Dep't of the Interior" on Justia Law