Justia U.S. Federal Circuit Court of Appeals Opinion Summaries

In August 2021, following the withdrawal of U.S. military and diplomatic personnel from Afghanistan due to the Doha Agreement with the Taliban, the U.S. government vacated several leased properties in Kabul, comprising five residential villas owned by Abdul Mutakaber and two military vehicle storage lots owned by Hamidullah. These leases were executed between 2013 and 2020, during Afghanistan’s Ghani administration. After the Taliban seized control of Kabul, they occupied all the properties previously leased by the U.S., preventing the owners from regaining access. The U.S. government then sent notices to terminate the leases, invoking force majeure, and requested refunds of advance rental payments from both landlords.Both Mutakaber and Hamidullah filed certified claims with the State Department under the Contract Disputes Act, seeking unpaid rent, restoration of possession, or purchase of the properties. After the contracting officer denied their claims, they appealed to the United States Civilian Board of Contract Appeals. The Board denied their breach of contract claims, finding that the government did not properly terminate the leases under the force majeure clause but did validly terminate for convenience under the leases’ termination provisions. The Board also determined the government was not obligated to return physical possession of the properties, as the leases did not impose such a duty. The Board awarded judgments for unpaid rent and refunds based on pre-paid amounts: Mutakaber was found to owe the government $115,429.85, while Hamidullah was awarded $193,270.15.The United States Court of Appeals for the Federal Circuit reviewed the Board’s legal conclusions de novo. The court held that the leases did not expressly or impliedly obligate the government to restore physical possession of the properties to the landlords upon termination, nor did Afghan law require such action under the circumstances. The court affirmed the Board’s judgments. View "Mutakaber v. Secretary of State" on Justia Law

A manufacturer of aircraft engines contracted with both the federal government and commercial clients. The contracts at issue were cost-plus agreements, requiring the government to reimburse the manufacturer for a share of overhead costs, calculated under federal Cost Accounting Standards (CAS), specifically CAS 418. The manufacturer used unique “collaboration agreements” with suppliers, involving payments tied to program revenues rather than direct part costs. A central dispute arose over whether certain costs, known as “Drag”—representing amounts paid by collaborators to compensate the manufacturer for shared expenses—should be included in the pool of overhead costs to be allocated, and over how to measure the material costs of parts for allocation purposes.After protracted disagreements and administrative decisions dating back to the 1990s, a contracting officer in 2013 determined that the manufacturer’s accounting violated CAS 418 and that Drag amounts should be excluded from the overhead pool. The manufacturer appealed to the Armed Services Board of Contract Appeals. The Board held in part for each side: it found the Drag agreement between the parties valid, so Drag need not be excluded, but rejected the manufacturer’s method for calculating material costs, settling on a “net revenue share” approach. The Board remanded to the parties to negotiate quantum (the amount owed), retaining jurisdiction if they failed to agree.The United States Court of Appeals for the Federal Circuit reviewed the case. It held that it lacked jurisdiction to review the Board’s decision on the material cost allocation base (CAS 418 Claim) because no final determination of quantum had been made. However, the court found the Board’s decision on the Drag Claim was final and reviewable. The Federal Circuit held that the Drag agreement was unenforceable against the government because it did not comply with required federal regulations for advance agreements, and therefore reversed the Board’s ruling on that point. The case was remanded for further proceedings. View "SECRETARY OF DEFENSE v. PRATT & WHITNEY" on Justia Law

The Department of Veterans Affairs (VA) issued a request for quotes for leasing a cranial surgical navigation system. Beacon Point Associates LLC submitted a quote, which included a payment schedule and terms stating the government must exercise all renewal options if it obtained sufficient funds. The VA awarded the contract to Beacon Point, which included the same payment schedule but did not explicitly incorporate the terms of Beacon Point’s quote.The Civilian Board of Contract Appeals dismissed Beacon Point’s appeal for failure to state a claim, determining that the contract did not incorporate the terms of Beacon Point’s quote. Beacon Point then appealed to the United States Court of Appeals for the Federal Circuit.The United States Court of Appeals for the Federal Circuit reviewed the case and affirmed the Board’s decision. The court held that the contract did not incorporate Beacon Point’s quote by reference. The court noted that the contract’s reference to the quote in block 29 did not clearly communicate an intent to incorporate the quote’s terms into the contract. The court emphasized that incorporation by reference requires clear and express language, which was absent in this case. Consequently, the VA retained complete discretion to exercise the option years as per the incorporated Federal Acquisition Regulation (FAR) clauses, and Beacon Point could not rely on the terms of its quote as binding obligations on the VA. The court affirmed the Board’s dismissal of Beacon Point’s appeal. View "Beacon Point Associates LLC v. Department of Veterans Affairs" on Justia Law

Associated Energy Group, LLC (AEG) initiated multiple bid protests concerning contracts managed by the U.S. Department of Defense, Defense Logistics Agency Energy (DLA) to deliver fuel to a U.S. military base and nearby airfield in Djibouti. This appeal concerns whether AEG has standing to bring its second bid protest in the U.S. Court of Federal Claims, challenging a one-year sole-source bridge contract awarded to the incumbent contractor. AEG argued that officials within the Djiboutian Ministry of Energy and Natural Resources were preventing contract performance by threatening AEG’s contracted fuel delivery truck drivers and refusing to issue or renew petroleum activity licenses (PALs) to AEG and its contractors.The U.S. Court of Federal Claims dismissed AEG’s complaint for lack of subject matter jurisdiction, ruling that AEG lacked both Article III constitutional standing and Tucker Act statutory standing to challenge the sole-source bridge contract awarded to United Capital Investments Group, Inc. (UCIG). The Claims Court found that neither AEG nor its contractors possessed the required PAL, making AEG ineligible to bid on the contract.The United States Court of Appeals for the Federal Circuit reviewed the case and affirmed the Claims Court’s dismissal. The court held that AEG lacked Article III standing because it could not bid on or compete for the bridge contract due to the lack of a PAL. Additionally, the court found that AEG lacked statutory standing under the Tucker Act, as it did not have a substantial chance of winning the contract even if the alleged errors by DLA were corrected. The court concluded that an exception to mootness applied to the case, but AEG’s inability to secure the required PAL meant it had no concrete stake in the lawsuit. View "ASSOCIATED ENERGY GROUP, LLC v. US " on Justia Law

FlightSafety International Inc. (FlightSafety) supplied the U.S. Air Force with commercial technical data under subcontracts awarded by CymSTAR, LLC. The data included restrictive markings, which the Air Force challenged. The Armed Services Board of Contract Appeals (Board) determined that the restrictive markings were improper under applicable statutes and regulations, leading FlightSafety to appeal.The Board found that the restrictive markings placed by FlightSafety on the technical data were improper. The Board concluded that the government had unrestricted rights to the data, as it was necessary for operation, maintenance, installation, or training (OMIT data). The Board also determined that the government could challenge the restrictive markings under the Validation Clause, which was not limited to challenges based on the funding source of the data.The United States Court of Appeals for the Federal Circuit reviewed the case and affirmed the Board's decision. The court held that the government had unrestricted rights to the OMIT data and that the restrictive markings placed by FlightSafety contradicted these rights. The court also held that the government could challenge the restrictive markings under the Validation Clause, which was not limited to challenges based on the funding source of the data. The court found that the restrictive markings, including the terms "proprietary" and "confidential," as well as the requirement for written authorization, were impermissible as they contradicted the government's unrestricted rights. The court also found that the copyright notice in the markings was misleading and contradicted the government's rights. View "FLIGHTSAFETY INTERNATIONAL INC. v. AIR FORCE " on Justia Law

The case involves 27-35 Jackson Avenue LLC ("Jackson"), the owner of a New York City office building, which leased two floors to the United States government for the United States Citizenship and Immigration Services (USCIS) Field Office. The lease, starting in May 2009, included a clause allowing termination if the premises were rendered untenantable by fire or other casualty, as determined by the government. In January 2015, a burst sprinkler head caused extensive water damage, leading the government to vacate the premises and eventually terminate the lease, citing untenantability.The United States Court of Federal Claims granted summary judgment in favor of the government, finding that the government did not breach the lease agreement. The court held that the government’s determination of untenantability was within its discretion and was not made in bad faith. Jackson's claim that the government acted unreasonably and in bad faith was rejected, as the court found no evidence to support these allegations.The United States Court of Appeals for the Federal Circuit reviewed the case and affirmed the lower court's decision. The appellate court held that the government’s determination of untenantability was not arbitrary, capricious, or unreasonable. The court emphasized that the lease explicitly allowed the government to make this determination. Additionally, the court found that Jackson failed to provide clear and convincing evidence of bad faith or a breach of the implied covenant of good faith and fair dealing. The court concluded that the government acted within its contractual rights and upheld the summary judgment in favor of the government. View "27-35 JACKSON AVE LLC v. US " on Justia Law

CKY, Inc. entered into a fixed-price construction contract with the United States Army Corps of Engineers (Corps) in October 2012. CKY encountered unexpected conditions, including heavy rainfall and undisclosed culverts, which led to additional expenses. CKY sought compensation for these expenses, but the Corps denied the requests. CKY then filed a claim under the Contract Disputes Act, seeking $1,146,226 for the additional costs incurred. The Armed Services Board of Contract Appeals (Board) ruled in favor of CKY regarding the undisclosed culverts but denied compensation for other claims.The Board awarded CKY $185,000 plus interest for the expenses related to the undisclosed culverts. CKY then applied for attorney’s fees and expenses under the Equal Access to Justice Act (EAJA). The Board granted the application, concluding that the government’s position regarding the undisclosed culverts was not substantially justified. The Board limited its substantial-justification inquiry to the government’s litigation position on the specific claim where CKY prevailed.The United States Court of Appeals for the Federal Circuit reviewed the case. The court held that the Board erred by categorically narrowing its substantial-justification inquiry to the government’s litigation position and to the specific claim on which CKY prevailed. The court emphasized that the substantial-justification inquiry should consider both the agency’s pre-litigation conduct and its litigation position, and should treat the case as an inclusive whole rather than focusing on individual claims. The court vacated the Board’s decision and remanded the case for reconsideration without the categorical limitations previously applied. View "In Re SECRETARY OF THE ARMY " on Justia Law

The United States Department of the Navy issued a solicitation requesting technical support for its electromagnetic spectrum resources, requiring proposals to be submitted via email by a specified deadline. eSimplicity, Inc. submitted its proposal before the deadline, but it was not received by the Contracting Officer due to the email exceeding the maximum file size and being bounced back. The Navy deemed eSimplicity's proposal untimely and did not consider it.eSimplicity filed a pre-award bid protest with the United States Court of Federal Claims. The Claims Court ruled in favor of eSimplicity, concluding that the file size was an unstated evaluation criterion and that the government control exception could apply to electronically submitted proposals. The court remanded the case for the Navy to reconsider its decision or to take other actions consistent with the court's opinion. Subsequently, the Navy issued an amended solicitation and awarded the contract to eSimplicity.The United States Court of Appeals for the Federal Circuit reviewed the case. The court determined that the appeal was moot because the original solicitation had expired, and the contract had been awarded under a new solicitation. The court found that there was no longer a live controversy, as the issues presented on appeal concerned the now-expired solicitation. The court also rejected the government's argument that the case fell under the "capable of repetition yet evading review" exception to mootness, noting that the government had other opportunities to appeal similar issues in the past but chose not to do so. Consequently, the appeal was dismissed. View "ESIMPLICITY, INC. v. US " on Justia Law

Sage Acquisitions LLC ("Sage") entered into contracts with the United States Department of Housing and Urban Development ("HUD") to provide management and marketing services for properties in HUD's Real Estate Owned ("REO") disposition program. Sage was awarded three contracts for different geographic areas. Sage filed claims with the HUD contracting officer for settlement costs due to the termination for convenience of the contracts, equitable adjustments for reduced property assignments, and damages for scope reduction. Sage also claimed damages for HUD's alleged breach of a contractual option provision and a related bridge contract.The Civilian Board of Contract Appeals ("Board") denied Sage's claims. The Board held that the contracts were Indefinite Delivery/Indefinite Quantity ("IDIQ") contracts, not requirements contracts, and that HUD had met its obligations by ordering the guaranteed minimum quantities. The Board also found that HUD did not breach the contracts by issuing six-month task orders instead of one-year orders and that HUD did not breach the bridge contract by using REO alternatives.The United States Court of Appeals for the Federal Circuit reviewed the case and affirmed the Board's decision. The court held that the contracts were indeed IDIQ contracts, as they explicitly stated and included guaranteed minimums. The court found that the language in the contracts did not confer exclusivity to Sage, and HUD's reservation of the right to work with other contractors was incompatible with a requirements contract. The court also held that HUD's issuance of six-month task orders was permissible under the contract terms. Finally, the court concluded that HUD did not breach the bridge contract, as Sage was aware of HUD's use of REO alternatives, and HUD's actions were based on legitimate business purposes. View "SAGE ACQUISITIONS LLC v. HUD " on Justia Law

The Boeing Company filed a complaint against the United States, challenging a contracting officer's decision that required Boeing to pay over $1 million due to changes in its cost accounting practices. Boeing argued that the government's demand violated the relevant Federal Acquisition Regulation (FAR) and Cost Accounting Standards (CAS) provisions, which should offset increased costs with decreased costs, resulting in no net increase. Boeing's complaint included three contract claims and an illegal exaction claim.The United States Court of Federal Claims dismissed Boeing's contract claims without prejudice, stating it lacked jurisdiction to review the validity of the regulation under the Administrative Procedure Act (APA). The court also dismissed the illegal exaction claim with prejudice, despite acknowledging jurisdiction, because it believed it lacked the authority to consider the claim under the Contract Disputes Act (CDA).The United States Court of Appeals for the Federal Circuit reversed the lower court's decision. The appellate court held that the Court of Federal Claims has jurisdiction under the CDA to resolve the contract dispute, including the validity of the underlying regulation. The court also held that the Court of Federal Claims has jurisdiction over Boeing's illegal exaction claim under the Tucker Act, 28 U.S.C. § 1491(a)(1), and that the CDA does not preclude this jurisdiction. The case was remanded for further proceedings consistent with these holdings. View "BOEING COMPANY v. US " on Justia Law