Justia Government Contracts Opinion Summaries

The State Ethics Commission (Commission) appealed from an order of the Commonwealth Court that reversed the Commission's findings that Appellee Kenneth Kistler had violated two provisions of the Public Official and Employee Ethics Act (Act). Appellee was a member of the Carbon-Lehigh Intermediate Unit's (CLIU) board of directors from 1998 to 2002. As chairman of the building committee, Appellee was charged with pursuing the board's interests in various construction projects. Appellee also owned two building supply businesses. In late 1999, the board explored the possibility of constructing a garage in which to house its buses. The project's architect contacted Appellee as possible supplier for the project. Subsequently, Appellee resigned from his position with CLIU as a possible conflict-of-interest. At a board meeting, the solicitor for the CLIU opined that Appellee could "properly participate" in construction of the garage, but that he should abstain from any votes relating to that project. More projects were planned, and Appellee's businesses were again considered as suppliers. By this time, Appellee had withdrawn completely from participation with the CLIU's building committee. In 2004, the Commission notified Appellee that he was being investigated for possible violations of the Ethics Act. The Commission thereafter concluded that Appellee unintentionally violated the Act three times. The Commonwealth Court reversed the Commission’s decision. In its interpretation of the Ethics Act, the court found no evidence that Appellee's participation in the building committee's discussions lead to the committee's choosing his private businesses for its building projects. Upon review, the Supreme Court concluded that the Commonwealth Court correctly interpreted the Ethics Act and affirmed its decision.View "Kistler v. State Ethics Comm'n" on Justia Law

LTTS Charter School ("LTTS") was an open-enrollment school that retained C2 Construction, Inc. ("C2") to build school facilities at a site Universal Academy had leased. C2 filed a breach of contract suit and Universal Academy filed a plea to the jurisdiction claiming immunity from suit. The trial court denied the plea and Universal Academy brought an interlocutory appeal under Section 51.014(a)(8) of the Civil Practice and Remedies Code. In the court of appeals, C2 moved to dismiss the interlocutory appeal, arguing that Universal Academy was note entitled to one because it was not a governmental unit under the Torts Claims Act ("Act"), Tex. Civ. Prac. & Rem. Code 101.001(3)(D). At issue was whether an open-enrollment charter school was a governmental unit as defined by Section 101.001(3)(D) and thus, able to take an interlocutory appeal from a trial court's denial of its plea to the jurisdiction. The court held that open-enrollment charter schools were governmental units for the Act purposes because the Act defined government unit broadly to include any other institution, agency, or organ of government derived from state law; the Education Code defined open-enrollment charters schools as part of the public school system, which were created in accordance with the laws of the state, subject to state laws and rules governing public schools and, together with governmental traditional public schools, have the primary responsibility for implementing the state's system of public education; and the Legislature considered open-enrollment charter schools to be governmental entities under a host of other laws outside the Education Code. Accordingly, because Universal Academy was a governmental unit under the Act, the court of appeals had jurisdiction to hear its interlocutory appeal under Section 51.014(a)(8).View "LTTS Charter School, Inc. v. C2 Construction, Inc." on Justia Law

Appellant filed a petition, pursuant to CPLR article 78, to set aside the award of a contract to a third party and to direct the Town of Southeast to award the contract to appellant. At issue was whether the Town Board acted arbitrarily and capriciously and in violation of law in awarding the public bidding contract to a bidder other than the lowest responsible bidder. The court held that General Municipal Law 103 and Town Law 122 precluded a town, in an open bidding process, from choosing a higher bid merely because it subjectively believed that a higher bid was preferable and more responsible than a lower bidder based on criteria not set forth in the bidding proposal. Accordingly, the order of the Appellate Division should be reversed, with costs, and the matter remitted for further proceedings.View "In the Matter of AAA Carting and Rubbish Removal, Inc. " on Justia Law

Plaintiff Richard Loweke was an employee of an electrical subcontractor. Defendant Ann Arbor Ceiling & Partition Company was also a subcontractor. Both parties were hired for work on a construction project at the Detroit Metro Airport. Plaintiff was injured at the site when several cement boards fell on him. Defendant's employees placed the boards against the wall. Plaintiff sued Defendant for negligence. Defendant moved for summary judgment, arguing that it owed Plaintiff no duty that was "separate and distinct" from the contractual duties it owed to the general contractor. The trial court granted Defendant's motion, and the appellate court affirmed the trial court. On appeal to the Supreme Court, Plaintiff argued that Defendant had a common-law duty to avoid physical harm to others from its own actions. Upon consideration of the parties' briefs and the applicable legal authority, the Supreme Court reversed the lower courts' decisions. The Court found that the trial and appeals courts misinterpreted Michigan law with respect to "duty." The Court held that the assumption of contractual obligations does not limit the common law tort duties owed to others in the performance of the contract. The Court remanded the case to the trial court for further proceedings. View "Loweke v. Ann Arbor Ceiling & Partition, Co., LLC" on Justia Law

This case involves the State's "working retiree program," and the propriety of its withholding retirement contributions from eligible members who returned to work with the state prior to July, 2005. Before that time, the program allowed employees to retire, then after a break, be re-hired and receive retirement benefits and a salary of up to $50,000 per year without having to pay into the pension plan. The State was ordered to refund any contributions made since July, 2005 by program members. In 2005, the State Retirement System Preservation and Investment Reform Act amended the program to require retired members pay the employee contribution as if they were active members but without accruing additional service credit. The State appealed the circuit court's order to refund the contributions. The retirees challenged the change in the program, arguing that it was unlawful for the State to change the terms of the working retiree program after the retirees "irreversibly retired" with the understanding that contributions to the pension plan would not be required. Upon careful consideration of the arguments and legal authority, the Supreme Court reversed the circuit court's holding with respect to the State's return of contributions since 2005. The Court found that the Legislature enabled the State to take the contributions when it amended the program by Act in 2005. The Court dismissed the Retirees' challenge to the State Retirement System Preservation and Investment Reform Act, finding no merit in their argument. View "Ahrens v. South Carolina" on Justia Law

Reimbursement providers for inpatient services rendered to Medicare beneficiaries is adjusted upward for hospitals that serve disproportionate numbers of patients who are eligible for Supplemental Security Income. The Centers for Medicare & Medicaid Services annually submit the SSI fraction for eligible hospitals to a “fiscal intermediary,” a Health and Human Services contractor, which computes the reimbursement amount and sends the hospitals notice. A provider may appeal to the Provider Reimbursement Review Board within 180 days, 42 U. S. C. 1395oo(a)(3). The PRRB may extend the period, for good cause, up to three years, 42 CFR 405.1841(b). A hospital timely appealed its SSI fraction calculations for 1993 through 1996. The PRRB found that errors in CMS’s methodology resulted in a systematic under-calculation. When the decision was made public, hospitals challenged their adjustments for 1987 through 1994. The PRRB held that it lacked jurisdiction, reasoning that it had no equitable powers save those granted by legislation or regulation. The district court dismissed the claims. The D. C. Circuit reversed. The Supreme Court reversed. While the 180-day limitation is not “jurisdictional” and does not preclude regulatory extension, the regulation is a permissible interpretation of 1395oo(a)(3). Applying deferential review, the Court noted the Secretary’s practical experience in superintending the huge program and the PRRB. Rejecting an argument for equitable tolling, the Court noted that for nearly 40 years the Secretary has prohibited extensions, except as provided by regulation, and Congress not amended the 180-day provision or the rule-making authority. The statutory scheme, which applies to sophisticated institutional providers, is not designed to be “unusually protective” of claimants. Giving intermediaries more time to discover over-payments than providers have to discover underpayments may be justified by the “administrative realities” of the system: a few dozen intermediaries issue tens of thousands of NPRs, while each provider can concentrate on its own NPR. View "Sebelius v. Auburn Reg'l Med. Ctr." on Justia Law

The Indian Self-Determination and Education Assistance Act (ISDA), 25 U.S.C. 450 et seq., directed the Secretary of the Interior to enter into contracts with willing tribes, pursuant to which those tribes would provide services such as education and law enforcement that otherwise would have been provided by the Federal government. ISDA mandated that the Secretary shall pay the full amount of "contract support costs" incurred by tribes in performing their contracts. At issue was whether the Government must pay those costs when Congress appropriated sufficient funds to pay in full any individual contractor's contract support costs, but not enough funds to cover the aggregate amount due every contractor. The Court held that, consistent with longstanding principles of Government contracting law, the Government must pay each tribe's contract support costs in full. View "Salazar v. Ramah Navajo Chapter" on Justia Law

After petitioners fell behind schedule in developing a stealth aircraft (A-12) for the Navy, the contracting officer terminated their $4.8 billion fixed-price contract for default and ordered petitioners to repay approximately $1.35 billion in progress payments for work the Government never accepted. Petitioners filed suit in the Court of Federal Claims ("CFC"), challenging the termination decision under the Contract Disputes Act of 1978, 41 U.S.C. 609(a)(1). The CFC held that, since invocation of the state-secrets privilege obscured too many of the facts relevant to the superior-knowledge defense, the issue of that defense was nonjusticiable, even though petitioners had brought forward enough unprivileged evidence for a prima facie showing. Accordingly, at issue was what remedy was proper when, to protect state secrets, a court dismissed a Government contractor's prima facie valid affirmative defense to the Government's allegations of contractual breach. The Court concluded that it must exercise its common-law authority in this situation to fashion contractual remedies in Government-contracting disputes and held that the proper remedy was to leave the parties where they were on the day they filed suit. View "General Dynamics Corp. v. United States; The Boeing Co. v. United States" on Justia Law

Like many Michigan municipalities, Pontiac has experienced significant economic difficulties, especially since 2008. Michigan’s Governor appointed Schimmel as Pontiac’s emergency manager. Acting under Michigan’s then-existing emergency manager law (Public Act 4), in 2011, Schimmel modified the collective bargaining agreements of Pontiac’s retired employees and modified severance benefits, including pension benefits, that Pontiac had given retirees not covered by collective bargaining agreements. The retired employees claim that Schimmel and Pontiac violated their rights under the Contracts Clause, the Due Process Clause, and the Bankruptcy Clause. The district court denied the retirees an injunction. The Sixth Circuit vacated and remanded for expedited consideration of state law issues. Michigan voters have since rejected Public Act 4 by referendum, which may have rendered Schimmel’s actions void.The court also questioned whether two-thirds of both houses of the Michigan Legislature voted to make Public Act 4 immediately effective. The court noted that similar issues face many Michigan municipalities. View "City of Pontiac Retired Emps. Ass'n v. Schimmel" on Justia Law

Fahs, a general contractor, filed suit against defendant, a construction supervisor with DOT, alleging First Amendment and Equal Protection claims. On appeal, Fahs challenged the district court dismissal of its claims. The court affirmed the dismissal of the First Amendment claim where Fahs's speech was not on a matter of public concern but rather on matters of purely personal significance, and affirmed the dismissal of the Equal Protection claim where the only differential treatment alleged in the complaint took place outside the limitations period. The court considered Fahs's remaining arguments and found them unpersuasive. View "Fahs Construction Group, Inc. v. Gray" on Justia Law