Justia Government Contracts Opinion Summaries

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

The Forest Service awarded EM Logging a timber sale contract for the Kootenai National Forest in Montana. The contract’s load limit clause states that “[a]ll vehicles shall comply with statutory load limits unless a permit from the Forest Service and any necessary State permits are obtained,” the haul route clause states that “[a]ll products removed from Sale Area shall be transported over the designated routes of haul” and a notification clause requires that “Purchaser shall notify Forest Service when a load of products … will be delayed for more than 12 hours in reaching weighing location.” The provision under which the Forest Service terminated the contract refers to: “a pattern of activity that demonstrates flagrant disregard for the terms of this contract.” The Forest Service issued multiple notifications of breach with respect to the clauses, suspended operations, and terminated the contract. The Federal Circuit reversed, finding that one instance of route deviation necessitated by illness, one load limit violation, and two instances of delayed notifications. None of the alleged violations independently substantiated the finding of flagrant disregard. Even together, the violations were not substantial evidence of a pattern of activity demonstrating that EM’s actions were in flagrant disregard of the contract. View "EM Logging v. Dep't of Agric." on Justia Law

Since 1962, Athens has been the exclusive residential waste hauling franchisee for Montebello. In 2008, a candidate for the City Council approached Athens about becoming the city’s exclusive commercial waste hauling franchisee. The candidate won election and the Council approved a contract granting Athens an exclusive residential and commercial waste hauling franchise. The Mayor, who had voted against the exclusive franchise, refused to sign the contract. The City Attorney advised the Mayor that he had a ministerial duty to execute contracts passed by the Council under Government Code 40602. If the Mayor refused to do so, the City Attorney warned, he would be deemed “absent” under Government Code 40601 and the Mayor Pro Tempore would be directed to execute the contract in his stead. Weeks passed without the Mayor signing the contract, until, at the apparent direction of the City Attorney, the Mayor Pro Tempore signed it. Torres sought to invalidate the contract. The trial court found the contract void ab initio because it had not been executed by the Mayor. The court of appeal affirmed; neither the City Attorney nor the Mayor Pro Tempore had authority to deem the Mayor “absent” under the statute, so the signature was ineffective. View "Torres v. City of Montebello" on Justia Law

In 2004, K-Con entered into a contract with the federal government to construct a Coast Guard building in Port Huron Michigan for $582,641. Once K-Con finished, the government imposed liquidated damages of $109,554 for tardiness of 186 days in completion. KCon sued, seeking remission of the liquidated damages on two grounds—that the contract’s liquidated-damages clause was unenforceable and that KCon was entitled to an extension of the completion date. KCon also requested additional compensation based on work performed in response to government requests that K-Con alleges amounted to contract changes. The Court of Federal Claims held that the contract’s liquidated damages clause was enforceable; that K-Con did not comply with the written-notice precondition for invoking the contract clause governing changes; and that K-Con’s claim for an extension on the completion date must be dismissed for lack of jurisdiction. The Federal Circuit affirmed. K-Con failed to comply with the changes clause, and its after-the-fact speculations about what would have happened had it complied do not create a genuine dispute of material fact regarding whether it should be excused for its failure. View "K-Con Bldg. Sys., Inc. v. United States" on Justia Law

Alabama Mutual Insurance Corporation ("AMIC") appealed the trial court's order certifying a class in the action filed by the City of Vernon and a class of similarly situated entities that had purchased uninsured motorist/underinsured-motorist coverage ("UM/UIM coverage") from AMIC. Vernon was the original class representative; however, after AMIC filed its notice of appeal of the class-certification order, Vernon settled its claims against AMIC and withdrew as the class representative. Because there was no longer a representative to "fairly and adequately protect the interests of the class," the Supreme Court remanded the case back to the trial court for a new class representative to be substituted for Vernon. The City of Fairfield substituted for Vernon as the class representative. After review of the parties' arguments on appeal, the Supreme Court did not reach the merits of the underlying dispute: the Court concluded that the trial court lacked subject-matter jurisdiction over this dispute. Initial jurisdiction over this dispute was with the Alabama Department of Insurance and its commissioner. Therefore, the Supreme Court vacated the trial court's class-certification order, and remanded for dismissal. View "Alabama Mutual Insurance Corporation v. City of Fairfield" on Justia Law

Rosaura Building Corp. (“Rosaura”) filed a lease contract petition form offering its building as property for Head Start classrooms. The Mayor of the Municipality of Mayguez rejected the contract. Rosaura brought a civil rights claim for equitable relief and damages pursuant to 42 U.S.C. 1983 against the Mayor and the municipal government (collectively, “Defendants”), claiming that Defendants’ rejection of the contract was solely motivated by Rosaura’s political beliefs. The district court granted summary judgment in favor of Defendants. The First Circuit affirmed, holding that the district court (1) did not err in granting the dismissal of the claims against the Municipality, as there was no practical effect in dismissing the claims against the municipal government where a mayor’s “employment decisions ipso facto” constitute the official policy of the municipality; and (2) did not err in dismissing the claims against the Mayor in his official capacity, as Rosaura failed to state a First Amendment retaliation cause of action and failed to state an equal protection claim by not alleging what protected activity it exercised and was a substantial motivating factor in bringing about the Mayor’s purported retaliation. View "Rosaura Building Corp. v. Municipality of Mayaguez" on Justia Law