Justia Government Contracts Opinion Summaries

Morpho, a California-based corporation that designs and builds explosives and other threat detection technology, contracted with the FAA on behalf of its then-newly established TSA, to supply its Explosive Detection System (EDS) to United States airports. Morpho subsequently sought an increase of the contract price to compensate for state assessments as "after-imposed taxes" pursuant to Clause 3.4.2-7(c) of the Acquisition Management System (AMS). The court denied Morpho's petition for review, agreeing with the TSA's rejection of Morpho's claim on the ground that the taxes at issue did not satisfy the after-imposed tax exception's precise terms. View "Morpho Detection, Inc. v. TSA" on Justia Law

These are two appeals stemming from the government's immediate termination of a Medicare Part D services contract with a prescription drug insurance coverage provider, Fox. Fox subsequently filed actions in the district court challenging both the termination and an order for immediate repayment. The court affirmed the district court's holding that the contract was properly terminated; affirmed the district court's ruling that governing regulations authorized the government's demand for immediate repayment of a prorated share of the funds that had been paid to Fox at the beginning of the month and that Fox would not utilize after the contract's termination; and the government's actions were more than justified, as Fox had risked permanent damage to its enrollees by, inter alia, improperly denying coverage of critical HIV, cancer, and seizure medications, and having no compliance structure in place. View "Fox Ins. Co. v. Centers for Medicare and Medicaid" on Justia Law

Hill, Director of Risk Management for Detroit Public Schools invited Washington to submit a proposal for a wellness program for DPS employees. Washington and others joined Associates for Learning (A4L) and submitted a proposal quoting $150,000 for a pilot study. Contrary to DPS policy, Hill did not open competitive bidding or execute a written contract, and made payments by wire transfer, rather than by check. Hill, who later left DPS testified that he met with Washington to discuss larger amounts. Washington paid Hill five percent of the invoice amount for assistance in getting the invoices paid. Invoices totaling more than a million dollars for “future work” were paid. The partners met in public places to distribute cash. Washington was convicted of conspiracy to commit program fraud, 18 U.S.C. 371 and 666, and conspiracy to commit money laundering, 18 U.S.C. 1956. The district court enhanced Washington’s base offense level by 22 levels, finding that Washington was an “organizer or leader” and that the amount of loss to DPS was more than $2.5 million, and sentenced her to 84 months. The Sixth Circuit affirmed, finding that Washington was not prejudiced by errors made by counsel and that the evidence was sufficient. View "United States v. Washington" on Justia Law

General Dynamics entered into fixed-price contracts, fixed-price incentive contracts, cost-plus-fixed fee contracts, cost-plus-award-fee contracts, and time-and-materials contracts with the Department of Defense. Many require compliance with Cost Accounting Standards (CAS), which provide uniformity in how contractors measure, assign, and allocate costs to government contracts, including guidance for determining and measuring the components of pension cost, CAS 412-20(a). The Defense Contract Management Agency notified General Dynamics in 2006 that its use of a blended rate using partial-year valuations did not comply with CAS 412. The Contracting Officer issued notice of noncompliance in 2007. General Dynamics then submitted a compliant retirement plan, but, in 2008, again submitted a plan using the blended rate for the base year. The CO issued a second determination of noncompliance. The Armed Services Board of Contract Appeals denied General Dynamics’ appeal, determining that use of partial-year asset data reflected short-term fluctuations that could and did introduce distortion prohibited by CAS 412-50(b)(4) and that substitution of a midyear value and a blended rate in place of the 8 percent long-term estimate rate constituted “actuarial assumptions” because they were “estimate[s] of future conditions affecting pension cost” and were encompassed by the prohibitions of CAS 412-50(b)(4). The Federal Circuit affirmed. View "Gen. Dynamics Corp. v. Panetta" on Justia Law

In this interlocutory appeal, the Secretary appealed the district court's order granting Odebrecht a preliminary injunction barring the Department's enforcement of a Florida law known as the Cuba Amendment, 2012 Fla. Laws 196, section 2. The Amendment prevented any company that did business in Cuba - or that was in any way related to a company that did business in Cuba - from bidding on state or local public contracts in the State of Florida. The court concluded that Odebrecht has demonstrated a substantial likelihood of success on its claim that the Cuba Amendment violated the Supremacy Clause of the Constitution under principles of conflict preemption; Odebrecht would have suffered irreparable harm absent the injunction; the balance of harms strongly favored the injunction; and the injunction did not disserve the public interest. Accordingly, the court affirmed the judgment. View "Odebrecht Construction, Inc. v. Secretary, FL DOT" on Justia Law

In 2005, Curtis McGhee and another individual brought claims against the City alleging violations of civil rights sounding in malicious prosecution. The City sought coverage under insurance policies issued by CIC and Columbia. On appeal, the City and McGhee challenged the district court's order granting summary judgment to CIC and Columbia, on CIC's and Columbia's declaratory judgment claims concerning coverage under the various insurance policies. The court concluded that the district court correctly refused to consider and correctly denied additional discovery of extrinsic evidence. The court also concluded that the alleged malicious prosecution and resulting personal injuries occurred when the underlying charges were filed against McGhee in 1977. Therefore, the court affirmed the district court's judgment that the following policies did not afford coverage to the City for the malicious prosecution claims: the two excess liability policies issued by CIC; four of the special excess liability policies issued by Columbia; and the commercial umbrella liability policy issued by Columbia. As to the 1977-78 special excess liability policy issued by Columbia, the court reversed the district court's judgment regarding the applicability of the reasonable expectations doctrine. The court remanded for further proceedings. View "Chicago Ins. Co., et al v. City of Council Bluffs, et al" on Justia Law

Kentucky provided medical care to its poorest citizens through Medicaid (42 U.S.C. 1396-1) using a traditional fee-for-service model until 2011, when it transitioned to a managed-care program and awarded Coventry a contract to administer Medicaid services in southeastern Kentucky. Coventry entered into a temporary agreement with Appalachian, the dominant hospital care provider in that area, to provide members in-network hospital care and other services. Coventry soon realized it was losing money, partly because its network included Appalachian, whose patients, on average, were sicker and more expensive to treat. Coventry learned that its competitors were not required to contract with Appalachian and unsuccessfully sought an increase in payment rates. Coventry then noticed termination of Appalachian’s contract, which would have made thousands of Medicaid recipients unable to access healthcare providers at Appalachian’s facilities without first paying fees. Appalachian sued Coventry and state defendants. The district court required Coventry to keep Appalachian in its network for four months longer than the contract specified (until November 1, 2012) and denied Coventry’s motion to require Appalachian to post a security bond. The Sixth Circuit affirmed with respect to the bond and otherwise dismissed an appeal as moot because no recognized exception permits review of an expired injunction. View "Appalachian Reg'l Healthcare, Inc. v. Coventry Health & Life Ins. Co." on Justia Law

Under the Medicaid program, the federal government offsets some state expenses for medical services to low-income persons; a state’s plan must cover medical assistance for specific populations, but a state may expand its Medicaid program by obtaining a waiver for an “experimental, pilot, or demonstration project.” In 1993, Tennessee obtained a waiver for TennCare, to cover uninsured and uninsurable individuals. Following approval, hospitals received reimbursement under the umbrella of TennCare. Because hospitals serving large numbers of low-income patients generally incur higher costs than Medicaid flat payment rates reflect, hospitals that treated a disproportionate share of low-income patients could apply for the “DSH” adjustment. A fiscal intermediary processed requests for reimbursement, including DSH adjustment payments. Due to discrepancies between the practices of fiscal intermediaries in different states, the Secretary issued a 2000 rule, providing that eligibility waiver patients were to be included as individuals “eligible for medical assistance” under Medicaid for purposes of DSH adjustment calculations. The 2005 Deficit Reduction Act ratified the rule. Adventist, a not-for-profit hospital network, provided more than 1,200 patient care days to TennCare expansion waiver patients 1995-2000. The fiscal intermediary did not include those days in calculating the adjustment. The Secretary’s Provider Reimbursement Review Board upheld the exclusion. The district court dismissed, concluding that section 1315 provided the Secretary discretion to exclude expansion waiver patient days from the DSH calculation. The Sixth Circuit affirmed. View "Adventist Health Sys./Sunbelt, Inc. v. Sebelius" on Justia Law

Defendants' convictions arose out of a series of events that took place while Defendant Robles was Treasurer of the City of South Gate, California. Robles, along with Defendant Garrido, a local businessman and friend, were implicated in two schemes to award city contracts to particular companies while reaping substantial benefits for themselves. On appeal, defendants challenged their convictions. In light of the the Supreme Court's decision in Skilling v. United States, which narrowed the scope of 18 U.S.C. 1346 to include only honest services fraud based on bribery and kickback schemes, the court reversed Robles's and Garrido's honest services fraud convictions and reversed Robles's money laundering convictions. The court affirmed Robles's bribery convictions under 18 U.S.C. 666 because such convictions did not required the defendant to be engaged in an official act. Accordingly, the court remanded for further proceedings. View "United States v. Garrido" on Justia Law

The Village commenced this action against the Corps to require it to honor commitments made to the Village and other North Carolina towns when developing its plan to widen, deepen, and realign portions of the Cape Fear River navigation channel. The district court dismissed the complaint for lack of subject matter jurisdiction. The court agreed with the district court's holding that the Corps' failure to implement "commitments" made to the Village during development of the plans for the project was not final agency action subject to judicial review. The court also concluded that the alleged contracts on which the Village relied for its contract claims were not maritime contracts that justified the exercise of admiralty jurisdiction. Accordingly, the court affirmed the judgment. View "Village of Bald Head Island v. U. S. Army Corps" on Justia Law