Justia U.S. Federal Circuit Court of Appeals Opinion Summaries
Articles Posted in Aerospace/Defense
Shell Oil Co. v. United States
In 1942-1943, the Government contracted with the Oil Companies to purchase aviation gasoline, vital to the war effort, permitting a profit margin “between 6% and 7%.” The manufacture of avgas from crude oil uses a 98% purity sulfuric acid as a catalyst in alkylation, a process that dilutes the sulfuric acid such that it turns it into “spent alkylation acid,” which may be used to catalyze the alkylation process again following purification; produce non-avgas petroleum by-products; or be disposed of. If spent alkylation acid is used to produce other petroleum by-products, it becomes "acidic sludge," a secondary waste with a lesser percentage of acid content that can be used to manufacture fertilizer, burned, or disposed of. Unable to reprocess the increased amount of spent alkylation acid given the prioritization of production, the Companies dumped spent alkylation acid and acid sludge in California: 12 percent of the waste was spent alkylation acid, and 82.5% was acid sludge. In 1991, the Government and California sued the Companies under the Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. 9601, for costs of cleaning up the disposal site. The Companies countersued. After years of litigation, the Claims Court granted the Companies partial summary judgment to prevent discovery into insurance settlements; denied the Government’s motion for leave to assert counterclaims in fraud; held that the Government was liable for clean-up costs for nonbenzol waste--$99,509,847.32, including accrued interest. The Federal Circuit affirmed, rejecting arguments that the Claims Court failed to allocate between recoverable and nonrecoverable costs, wrongfully admitted stipulations to calculate damages, and wrongly refused to allow proof of double recovery by insurance settlements. View "Shell Oil Co. v. United States" on Justia Law
FastShip, LLC v. United States
FastShip’s patents, entitled “Monohull Fast Sealift or Semi-Planing Monohull Ship,” relate to a “fast ship whose hull design in combination with a waterjet propulsion system permits, for ships of about 25,000 to 30,000 tons displacement with a cargo carrying capacity of 5,000 tons, transoceanic transit speeds of up to 40 to 50 knots in high or adverse sea states.” FastShip sued the government, alleging patent infringement under 28 U.S.C. 1498. FastShip alleged that the Navy’s Freedom-class Littoral Combat Ships, LCS-1 and LCS-3, infringed various claims. Following the Court of Federal Claims’ opinion construing various terms, the government successfully moved for partial summary judgment, arguing that the LCS3 was not “manufactured” by or for the government within the meaning of section 1498 before the patents expired. The court held that LCS-1 infringed the claims and awarded FastShip $6,449,585.82 in damages plus interest. The Federal Circuit affirmed, modifying the damages award. The court interpreted “manufactured” in section 1498 in accordance with its plain meaning, such that a product is “manufactured” when it is made to include each limitation of the thing invented and is therefore suitable for use; although other portions of LCS-3 had been completed, the “waterjet” and “hull” limitations had not been completed before the patent’s expiration. View "FastShip, LLC v. United States" on Justia Law
O’Farrell v. Department of Defense
On September 11, 2012, President Obama published notice “continuing for [one] year the national emergency . . . with respect to the terrorist attacks.” In April 2013, O’Farrell, an Army Reservist, received an order directing him to replace another Reservist, an attorney, who had been deployed. After reaching his maximum total years of active commissioned service (28 years), O’Farrell was transferred to the Army Reserve Retired List in October 2013. O’Farrell served his active duty as legal counsel until September 30, 2013. By August 26, 2013, O’Farrell had used his 15 days of military leave, most of his accrued annual leave, and advance annual leave. To avoid being placed on Military Leave Without Pay for the remainder of his active duty service, O’Farrell (unsuccessfully) requested an additional 22 days leave under 5 U.S.C. 6323(a)(1). O’Farrell did not cite any statutory provision that would qualify him as "called to full-time military service as a result of a call or order to active duty in support of a contingency operation." He argued that he was “serving . . . during a national emergency." O’Farrell sued under the Uniformed Services Employment and Reemployment Rights Act, 38 U.S.C. 4301– 4333. The Federal Circuit reversed. Section 6323(b) does not require that “a specific contingency operation" be identified in military orders when an employee is activated; “in support of” includes indirect assistance to a contingency operation, 5 U.S.C. 6323(b)(2)(B), which includes a military operation that results in service members being called to active duty under any law during a national emergency, 10 U.S.C. 101(a)(13). A service member’s leave request need not use particular language. View "O'Farrell v. Department of Defense" on Justia Law
AgustaWestland North America v. United States
The Court of Federal Claims enjoined the U.S. Army from proceeding with, or awarding, a contract to Airbus Helicopter, finding that Army Execution Order 109-14, which implemented the Army’s Aviation Restructure Initiative designating the UH-72A Lakota helicopter as the Army’s “Institutional Training Helicopter,” was a procurement decision in violation of the Competition in Contracting Act and the Federal Acquisition Regulation. The court also found the Sole Source Justification and Approval (J&A) was arbitrary and capricious. The Federal Circuit reversed and vacated the injunction, holding that Execution Order 109-14 was not a procurement decision subject to Tucker Act review because it did not begin “the process for determining a need for property or services.” The Order simply formalized the Army’s decision designating the UH-72A Lakota as the Army’s training helicopter. The Sole Source J&A was not arbitrary and capricious, and it was an abuse of discretion to supplement the administrative record. The J&A sufficiently supports the Army’s decision to award a sole-source follow-on contract because it is likely that award to any other source would result in substantial duplication of cost to the government that is not expected to be recovered through competition, or unacceptable delays in fulfilling the agency’s requirements.” View "AgustaWestland North America v. United States" on Justia Law
Garco Construction, Inc. v. Secretary of the Army
Tightened security at base, preventing access by contractor's ex-felon employees, did not justify contract adjustment. Malmstrom Air Force Base in Great Falls, Montana, houses intercontinental ballistic missiles. Garco's contract to construct base housing incorporated Federal Acquisition Regulation 52.222-3, providing that contractors may employ ex-felons and requiring contractors to adhere to the base access policy. Malstrom’s access policy indicated that it would run the employees’ names through the National Criminal Information Center. “Unfavorable results will be scrutinized and eligibility will be determined on a case-by-case basis.” Garco’s subcontractor, JTC, experienced difficulty bringing its crew onto the base. JTC used workers from a local prison’s pre-release facility. JTC had not encountered access problems in its performance of other Malmstrom contracts over the preceding 20 years. Security had been tightened after an incident where a prerelease facility worker beat his manager. JTC requested an equitable adjustment of the contract, stating that its inability to use convict labor greatly reduced the size of the experienced labor pool so that it incurred $454,266.44 of additional expenses; JTC did not request a time extension. The Federal Circuit affirmed the Armed Services Board of Contract Appeals’ denial of the claim, rejecting a claim of constructive acceleration of the contract. The court concluded that there was no change to the base access policy. View "Garco Construction, Inc. v. Secretary of the Army" on Justia Law
Posted in:
Aerospace/Defense, Government Contracts
Agility Public Warehousing Co. KSCP v. Mattis
The Defense Supply Center Philadelphia (DSCP), a sub-agency of the Defense Logistics Agency, issued a solicitation for an Indefinite-Delivery/Indefinite-Quantity commercial item contract to provide food and non-food products to customers, including the military, in three overseas zones. In May 2003, DSCP awarded a contract to Agility to supply “Full Line Food and Non-Food Distribution” to authorized personnel in Kuwait and Qatar. After many modifications, in December 2005, Agility submitted a Request for Equitable Adjustment for $13.1 million related to trucks being held in Iraq by the government for longer than 29 days. In April 2007, the government’s contracting officer denied Agility’s claim. The Armed Services Board of Contract Appeals denied Agility’s appeal in August 2015, finding that Agility had accepted all risks associated with delays beyond 29 days. The Board stated that it “need not decide whether the government constructively changed contract performance or whether it breached its implied duty of cooperation” because “whether the government breached the contract comes down to contract interpretation.” The Federal Circuit affirmed-in-part, agreeing that the government did not breach the express terms of the contract or a later agreement to consider exceptions, but finding that the Board erred when it concluded that it “need not decide” Agility’s implied duty and constructive change claims. View "Agility Public Warehousing Co. KSCP v. Mattis" on Justia Law
Agility Defense & Government Services, Inc. v. United States
Within the Department of Defense, DRMS disposes of surplus military property at Defense Reutilization and Marketing Offices (DRMOs). Property that cannot be reutilized is demilitarized and/or reduced to scrap that can be sold. A 2007 DRMS Request for Proposals sought performance of DRMO activities for up to five years. A referenced website showed DRMS’s historical workload and scrap weight; an amendment indicated that “the contractor may experience significant workload increases or decreases” and outlined a process to “renegotiate the price” if workload increased. DRMS awarded its first contract to Agility to operate six DRMOs for one base year with four option years at a fixed price of $45,233,914.92 per year. Upon commencing work in Arifjan, the largest of the DRMOs, Agility immediately fell behind. It inherited a backlog of approximately 30 weeks. From the start, the volume received at Arifjan was greater than Agility anticipated. The parties terminated their contract for convenience in 2010. Agility thereafter requested funding for its additional costs, claiming DRMS provided inaccurate workload estimates during solicitation. The contracting officer awarded Agility only $236,363.93 for its first claim and nothing for the second, noting that Agility received an offset from its scrap sales. The Federal Circuit reversed, as “clearly erroneous,” the Claims Court’s findings that DRMS did not inadequately or negligently prepare its estimates and that Agility did not rely on those estimates. Agility’s receipt of scrap sales and the parties’ agreement did not preclude recovery. View "Agility Defense & Government Services, Inc. v. United States" on Justia Law
Wilson v. Department of the Navy
Wilson was a civilian Resource Analyst at the Nuclear Propulsion Directorate at the Naval Sea Systems Command, which required a Department of Energy security clearance. The DOE revoked Wilson’s security clearance, stating that Wilson: knowingly brought a personal firearm onto a Navy facility in violation of regulations; armed himself with a personal weapon while acting as a Metropolitan Police Department reserve officer, contrary to regulations; and made false statements and false time and attendance entries to his civilian employer, the Naval Reserve Unit and the MPD. Wilson maintains that he brought his firearm to the facility in response to the 2013 Washington Navy Yard shooting, in perceived compliance with his duty as a Navy Reservist, and requested reinstatement under the Uniformed Services Employment and Reemployment Rights Act, 38 U.S.C. 4301. The Navy removed Wilson from federal service. A Merit Systems Protection Board administrative judge determined that the Board lacked authority to consider claims of discrimination or reprisal in the context of a removal based on security clearance revocation; that the Navy provided him the procedural protections of 5 U.S.C. 7513(b); and that the Navy did not have a policy to reassign employees to alternate positions that do not require a security clearance. The Federal Circuit affirmed the Board’s finding that it lacked the authority to consider Wilson’s USERRA claim. View "Wilson v. Department of the Navy" on Justia Law
Zafer Taahhut Insaat v. United States
Zafer, an Ankara, Turkey, contractor, and the Army Corps of Engineers (USACE) entered into a firm-fixed-price contract to construct the MILCON Support Facility at the Bagram Air Force Field in Afghanistan. Zafer was responsible for delivering materials to the site, and assumed the risk “for all costs and resulting loss or profit.” After issuing notice to proceed, USACE recognized that it could not make the project site available immediately and increased the contract price and set a new completion date. In November 2011, Pakistan closed its border from the seaport city of Karachi along the land routes into Afghanistan in response to a combat incident with the U.S. and NATO. The route remained closed for 219 days, Zafer notified USACE that the closure would greatly impact its delivery of materials and requested direction on how to proceed. USACE replied that the closure was “purely the act of Pakistan governmental authorities,” that the U.S. government was “not responsible” and denied further compensation. Zafer subsequently, repeatedly, asked for payment for additional costs. In 2013, Zafer submitted an unsuccessful request for an equitable adjustment. The contracting officer found no evidence supporting a constructive change claim. The Claims Court granted USACE summary judgment. The Federal Circuit affirmed. Zafer failed to designate specific facts to establish a constructive change claim based on either a constructive acceleration theory or on a government fault theory. View "Zafer Taahhut Insaat v. United States" on Justia Law
Acevedo v. United States
Plaintiffs, employed by the U.S. Customs and Border Protection, (CBP) as Supply Chain Security Specialists in its Customs-Trade Protection Against Terrorism program, travelled and worked at foreign posts designated by the Secretary of State as “danger pay posts.” They alleged that they did not receive overtime pay as required by the Fair Labor Standards Act, 29 U.S.C. 216(b). Count II, citing the Overseas Differentials and Allowances Act (ODAA) of 1960, 5 U.S.C. 5928, claimed that CBP denied them danger pay allowances for work performed at posts that the Department of State has designated as eligible for such allowances. The Claims Court dismissed Count II for lack of jurisdiction on grounds that ODAA is not a money-mandating statute, that the State Department regulation (DSSR) is not money-mandating, and that CBP has not adopted a policy of paying danger pay to all eligible employees. The Federal Circuit affirmed; section 5928, the DSSR, and the alleged unwritten policy of providing danger pay, cannot reasonably be construed as “money-mandating.” View "Acevedo v. United States" on Justia Law