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

Articles Posted in Government Contracts
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The Joint Enterprise Defense Infrastructure Cloud procurement is directed to the long-term provision of enterprise-wide cloud computing services to the Defense Department. Its solicitation contemplated a 10-year indefinite-delivery, indefinite-quantity contract with a single provider. The JEDI solicitation included “gate” provisions that prospective bidders would be required to satisfy, including that the contractor must have at least three existing physical commercial cloud offering data centers within the U.S., separated by at least 150 miles, providing certain offerings that were “FedRAMP Moderate Authorized” at the time of proposal (a reference to a security level). Oracle did not satisfy the FedRAMP Moderate Authorized requirement and filed a pre-bid protest.The Government Accountability Office, Claims Court, and Federal Circuit rejected the protest. Even if Defense violated 10 U.S.C. 2304a by structuring the procurement on a single-award basis, the FedRAMP requirement would have been included in a multiple-award solicitation, so Oracle was not prejudiced by the single-award decision. The FedRAMP requirement “constituted a specification,” not a qualification requirement; the agency structured the procurement as a full and open competition. Satisfying the gate criteria was merely the first step in ensuring that the Department’s time was not wasted on offerors who could not meet its minimum needs. The contracting officer properly exercised her discretion in finding that the individual and organizational conflicts complained of by Oracle did not affect the integrity of the procurement. View "Oracle America Inc. v. United States" on Justia Law

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KBR contracted with the government to provide trailers to house coalition personnel at military camps in Iraq. KBR claimed that the government breached the contract by failing to provide “force protection” to the trucks delivering the trailers to the military camps. KBR sought to recover payments made to its subcontractor, Kuwaiti, for costs caused by the government’s alleged breach. The administrative contracting officer in large part denied the claim. The Armed Services Board of Contract Appeals found that KBR was not entitled to any additional recovery. The Federal Circuit affirmed. The Board properly determined that KBR’s costs had not been shown to be reasonable. The court did not reach the question of whether the government breached the “force protection” provision of the contract. The burden is on the contractor to establish the reasonableness of its costs; there is no presumption of reasonableness nor any presumption that a contractor is entitled to reimbursement “simply because it incurred . . . costs.” View "Kellogg Brown and Root Services, Inc. v. Secretary of the Army" on Justia Law

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The Federal Highway Administration (FHA) issued a solicitation for the "Deweyville" project, consisting of reconstructing approximately 12 miles of road running through Alaska's Tongass National Forest. The FHA provided a Waste Site Report, which identified sites that a contractor could use to dispose of waste materials and provided access to the “Categorical Exclusion,” prepared under the National Environmental Policy Act, 42 U.S.C. 4321–70.2, which stated that waste sites are expected to be sourced at existing quarries identified in the Waste Site Report. The solicitation placed responsibility for licenses and permits on the contractor, including Clean Water Act permits, 33 U.S.C. 1344, and purchasing wetland mitigation credits. Kiewit’s successful bid included approximately $1,000,000 for wetland mitigation fees. Kiewit requested an equitable adjustment for the cost of purchasing mitigation credits for the wetlands it encountered at government-designated waste sites. The Claims Court upheld the denial of that request.The Federal Circuit reversed. The contract documents dictate that, unless a contractor decided to expand the government-designated waste sites, “[n]o further analysis of the environmental impacts of” such sites would be necessary. That the FHA, during the NEPA process, had already assessed the project’s effects on wetlands bolstered Kiewit’s reasonable conclusion that it would not need to conduct further wetlands analysis at designated waste disposal areas. Kiewit reasonably interpreted the documents to mean what they say—that no further environmental impacts analysis would be required if a contractor chose to dispose of waste at government-designated sites. The FHA effected a constructive contract change when it required Kiewit to perform wetland delineation at those sites. View "Kiewit Infrastructure West Co. v. United States" on Justia Law

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In the Patient Protection and Affordable Care Act (ACA), Congress directed each state to establish an online exchange through which insurers may sell health plans if the plans meet certain requirements. One requirement is that insurers must reduce the “cost-sharing” burdens—such as the burdens of making co-payments and meeting deductibles—of certain customers. When insurers meet that requirement, the Secretary of Health and Human Services shall reimburse them for those cost-sharing reductions, 42 U.S.C. 18071(c)(3)(A). In October 2017, the Secretary stopped making reimbursement payments, due to determinations that such payments were not within the congressional appropriation that the Secretary had, until then, invoked to pay the reimbursements. Sanford, a seller of insurance through the North Dakota, South Dakota, and Iowa exchanges, and Montana Health, a seller through the Montana and Idaho exchanges, sued.The trial courts granted the insurers summary judgment, reasoning that the ACA reimbursement provision is “money-mandating” and that the government is liable for damages for its failure to make reimbursements for the 2017 reductions. The court did not reach the contract claim in either case. The Federal Circuit affirmed, citing the Supreme Court’s 2020 “Maine Community,” addressing a different payment-obligation ACA provision. Maine Community indicates that the cost-sharing-reduction reimbursement provision imposes an unambiguous obligation on the government to pay money; that obligation is enforceable in the Claims Court under the Tucker Act, 28 U.S.C. 1491(a)(1). View "Sanford Health Plan v. United States" on Justia Law

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The Patient Protection and Affordable Care Act (ACA), 124 Stat. 119, directed each state to establish an online exchange through which insurers may sell health plans that meet certain requirements. Insurers must reduce the “cost-sharing” burdens, such as co-payments and deductibles, of certain customers. When insurers meet that requirement, the Secretary of Health and Human Services (HHS) shall reimburse them for the required cost-sharing reductions, 42 U.S.C. 18071(c)(3)(A). In October 2017, the Secretary stopped making reimbursement payments, due to determinations that such payments were not within the congressional appropriation that the Secretary had invoked to pay the reimbursements. Insurers sued.The Federal Circuit affirmed summary judgment in favor of the insurers on liability, reasoning that the ACA reimbursement provision is “money-mandating” and that the government is liable for damages. The court cited the Supreme Court’s 2020 “Maine Community,” addressing a different ACA payment-obligation as indicating that the cost-sharing-reduction reimbursement provision imposes an unambiguous obligation on the government to pay money; that obligation is enforceable through a damages action under the Tucker Act, 28 U.S.C. 1491(a)(1). The court remanded the issue of damages. The government is not entitled to a reduction in damages with respect to cost-sharing reductions not paid in 2017. As to 2018, the Claims Court must reduce the insurers’ damages by the amount of additional premium tax credit payments that each insurer received as a result of the government’s termination of cost-sharing reduction payments. View "Community Health Choice, Inc. v. United States" on Justia Law

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After the U.S. invasion of Iraq, Agility was awarded a contract for support of staging area operations (PCO Contract). Under the Contract, the Coalition Provisional Authority (CPA) could issue individual task orders to Agility. Funds obligated under the contract were sourced from the Development Fund for Iraq (DFI). The CPA controlled the DFI, which consisted of Iraqi money. The Contract provided that “[n]o funds, appropriated or other, of any Coalition country are or will be obligated under this contract” and recognize[d] that a transfer of authority from the CPA to the interim Iraqi Governing Council (IIG) would occur in June 2004. The contracting parties were the CPA and Agility. The Contract expressly preserved the right of the United States to assert claims against Agility. A Contract amendment provided that any claim Agility had after the transfer to IIG could not be brought before the Armed Services Board of Contract Appeals but could only be brought in an Iraqi court. The U.S. Army was designated as the administrator of the PCO contract.In 2010, following an audit of the PCO Contract, the Army contracting officer sent demand letters for overpayments allegedly made under 12 task orders. The Claims Court upheld the offsets, holding that the United States (rather than Iraq) was owed the alleged overpayment and the United States was authorized to offset the alleged overpayment. The Federal Circuit in part and vacated in part. The Claims Court did not evaluate the merits of the offset determination nor the procedures required by law. View "Agility Public Warehousing Co. v. United States" on Justia Law

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Boeing permissibly changed cost accounting practices for its Defense contracts simultaneously. Some changes raised the government's costs; others lowered those costs. The Defense Contract Management Agency, invoking Federal Acquisition Regulation 30.606, determined the amount of the cost-increasing changes and demanded that Boeing pay that amount plus interest. Boeing did so, then sued, asserting that the government, in following FAR 30.606, committed a breach of contract and effected an illegal exaction. Boeing argued that FAR 30.606 is contrary to 41 U.S.C. 1503(b), which requires that simultaneously adopted cost-increasing and cost-lowering accounting changes be considered together and that, by following FAR 30.606’s command to disregard the cost-lowering changes, the government unlawfully charged it too much. The trial court held that Boeing had waived its breach of contract claim by failing to object to FAR 30.606 before entering into the contracts and that it lacked jurisdiction to consider Boeing’s illegal exaction claim, which was not based on a “money-mandating” statute.The Federal Circuit reversed. A pre-award objection by Boeing would have been futile, as the government concededly could not lawfully have declared FAR 30.606 inapplicable in entering into the contract. A contractor is not required to pursue judicial relief before the award to avoid waiver. To establish Tucker Act jurisdiction for an illegal exaction claim, a party that has paid money over to the government and seeks its return must make a non-frivolous allegation that the government, in obtaining the money, has violated the Constitution, a statute, or a regulation. View "Boeing Co. v. United States" on Justia Law

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In 2003, the government awarded Parsons a $2.1 billion indefinite-delivery, indefinite-quantity contract for planning and construction work to be described in subsequent task orders. In 2005, the government issued a $34 million task order to complete an existing, concept-level design and construct the Temporary Lodging Facility and Visiting Quarters, at the McGuire Air Force Base. Design and construction were completed. The Air Force accepted the completed facilities for “beneficial use” in September 2008. In 2012, Parsons submitted a claim for approximately $34 million in additional costs that Parsons allegedly incurred in the design and construction process. The Armed Services Board of Contract Appeals awarded Parsons about $10.5 million plus interest.The Federal Circuit reversed in part after holding that the Board had Contracts Dispute Act jurisdiction 41 U.S.C. 7102(a)(1), (3). The court dismissed Parsons’ appeal as to its payroll claim and reversed the Board’s denial of recovery to Parsons for its claim to construction costs. On remand, the Board must award Parsons the difference between its cost in constructing a substituted design compared to the cost Parsons would have incurred in constructing a structural brick design. The court affirmed the Board’s conclusion that Parsons’ costs awarded by the Board were reasonable. View "Parsons Evergreene, LLC v. Secretary of the Air Force" on Justia Law

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The Navy began a program to design and build littoral combat ships (LCS) and issued a request for proposals. During the initial phase of the LCS procurement, FastShip met with and discussed a potential hull design with government contractors subject to non-disclosure and confidentiality agreements. FastShip was not awarded a contract. FastShip filed an unsuccessful administrative claim, alleging patent infringement. The Claims Court found that the FastShip patents were valid and directly infringed by the government. The Federal Circuit affirmed.The Claims Court awarded FastShip attorney’s fees and expenses ($6,178,288.29); 28 U.S.C. 1498(a), which provides for a fee award to smaller entities that have prevailed on infringement claims, unless the government can show that its position was “substantially justified.” The court concluded that the government’s pre-litigation conduct and litigation positions were not “as a whole” substantially justified. It unreasonable for a government contractor to gather information from FastShip but not to include it as part of the team that was awarded the contract and the Navy took an exceedingly long time to act on FastShip’s administrative claim and did not provide sufficient analysis in denying the claim. The court found the government’s litigation positions unreasonable, including its arguments with respect to one document and its reliance on the testimony of its expert to prove obviousness despite his “extraordinary skill.” The Federal Circuit vacated. Reliance on this pre-litigation conduct in the fee analysis was an error. View "FastShip, LLC v. United States" on Justia Law

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The U.S. Defense Information Systems Agency (DISA) awarded contracts for the opportunity to sell information technology services to various federal government agencies. Inserso did not receive an award; its total evaluated price was the 23rd lowest in a competition for 20 slots. DISA attached a debriefing document to its notice, including the total evaluated price for the awardees and some previously undisclosed information on how DISA evaluated the cost element of the proposals. Inserso sent follow-up communications, noting that several awardees in the small-business competition had also competed in the full-and-open competition as part of joint ventures or partnerships. Inserso asked whether those entities had received similarly detailed debriefings and expressed concern that, if so, the earlier debriefing would have provided unequal information giving a competitive advantage to some bidders. DISA stated that all unsuccessful bidders in both competitions were given similarly detailed information. The Federal Circuit ruled in favor of the government. Because Inserso did not object to the solicitation before the awards, when it was unreasonable to disregard the high likelihood of the disclosure at issue, Inserso forfeited its ability to challenge the solicitation. The court did not reach the issue of whether DISA’s disclosure prejudiced Inserso. View "Inserso Corp v. United States" on Justia Law