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

Bannum protested decisions of the Bureau of Prisons of the U.S. Department of Justice to award two contracts to other bidders, alleging a common defect in the terms of the solicitations and problems in the evaluation of competing bids. Bannum cited a requirement of compliance with Prison Rape Elimination Act of 2003, 42 U.S.C. 15601–15609 and the government’s failure to provide pricing information with respect to the requirement. In each case, the Court of Federal Claims dismissed Bannum’s suit. Finding that Bannum’s proposal, by failing to commit Bannum to a fixed price, was materially out of compliance with the terms of the solicitation, the court concluded that Bannum was not an “interested party” entitled to bring its protest under 28 U.S.C. 1491(b). The Federal Circuit affirmed in consolidated appeals, holding that, because Bannum did not adequately present its objection to the solicitations before the awards, Bannum waived its ability to challenge the solicitations. On appeal, Bannum failed to preserve its separate challenges to the bid evaluations. View "Bannum, Inc. v. United States" on Justia Law

The federal Centers for Medicare and Medicaid Services (CMS) uses contractors to determine if Medicare claims were correctly paid. If the contractor identifies an overpayment, CMS sends a demand letter to the provider seeking repayment. Under contracts from 2008, the contractors invoiced CMS for a contingency fee when the overpayment was collected, typically 41 days after the demand letter. In 2014, CMS issued new requests for quotes for these recovery services, with new terms requiring the contractors to wait to invoice CMS until any challenge to the repayment request passed the second level of a five-level appeal process, typically 120 to 420 days after the demand letter. Five contractors bid; CGI did not. Before bidding closed, CGI filed a pre-award protest at the Government Accountability Office. While the protest was pending, bidding closed. The GAO subsequently denied the protest. CGI filed a protest in the Court of Federal Claims. That court granted the government judgment on the administrative record, holding that the modified payment terms did not violate statutory or regulatory provisions nor unduly restrict competition. The Federal Circuit reversed, holding that CGI had standing and citing Federal Acquisition Regulation Part 12’s prohibition against including contract terms inconsistent with customary commercial practice. View "CGI Fed. Inc. v. United States" on Justia Law

The Department of Agriculture’s Rural Utilities Service (RUS) made a $267 million loan to Open Range to finance construction of wireless broadband networks in 540 RUS-approved markets. Open Range subcontracted with G4S. The FCC suspended a permit, so that Open Range lost the spectrum rights necessary to operate the planned network. RUS gave notice of its intent to terminate remaining funds on the loan unless Open Range could obtain replacement rights. Open Range began failing to meet its obligations to subcontractors. The Secretary of Agriculture made loan money available, provided a press release, and offered to reassure subcontractors, but Open Range was unable to regain the full spectrum rights necessary to complete the original project. RUS and Open Range executed an amendment to reflect a loan amount reduced to $180 million, and 160 RUS-approved markets, but Open Range remained unable to satisfy its debts and filed for bankruptcy. G4S filed suit. The Claims Court held that G4S was not a third party beneficiary to the agreement. The Federal Circuit affirmed, stating that G4S asked that the government incur liability simply because it talked to the individuals in charge of a failing project in an attempt to fix the problems. View "G4S Tech., LLC v. United States" on Justia Law

In 2003, the VA entered into a contract with Reliable for electrical improvements at a VA medical center, requiring installation of three backup generators, “new and of the most suitable grade.” Federal Acquisition Regulation 52.211-5, incorporated by reference, requires that supplies be “new, reconditioned, or remanufactured,” and defines “new” as “composed of previously unused components.” Reliable sub-contracted to Fisk, which contracted with DTE. In 2004, DTE delivered two Cummins Power Generation generators to the construction site. The VA’s senior resident engineer inspected the generators and determined that they were not “new.” He wrote to Reliable, stating: They show a lot of wear and tear including field burns to enlarge mounting holes. Are they new and will you certify them as such? I cannot pay you … without that certification. Fisk and Reliable initially agreed that the generators did not meet the contract specification. After investigation, they concluded that the generators, manufactured in 2000, had been previously purchased by others but never used. Fisk obtained different generators, which were accepted by the VA. In 2007, Reliable submitted a claim, seeking $1,100,000 for additional costs incurred as a result of rejection of the original generators. In 2013, the Board of Contract Appeals denied Reliable’s claim. The Federal Circuit vacated, holding that the Board erred in its interpretation of the contract. View "Reliable Contracting Grp., LLC v. Dep't of Veterans Affairs" on Justia Law

In 2010, while Kerner was an Evidence Custodian, GS-05, with the Department’s Fish and Wildlife Service, he applied for two vacancies: Wildlife Inspector, GS-09/11, and Wildlife Inspector, GS-11/11. Both positions were merit-promotion vacancies. Each required federal employee applicants to meet a time-in-grade requirement. A federal civil service applicant must have completed at least 52 weeks of experience equivalent to GS-07 to be qualified for the GS- 09 position, and at least 52 weeks of experience equivalent to GS-09 to be qualified for the GS-11 position. The vacancies also required one year of specialized experience in the federal civil service equivalent to GS-07 or GS-09, respectively. Kerner had no federal civil service experience at the GS-07 or GS-09 level and, therefore, did not meet the time-in-grade requirements. The Department determined that he did not qualify for either vacancy. Kerner then filed a Veterans Employment Opportunity Act claim with the Department of Labor, alleging that the Department violated his VEOA rights. The Department of Labor and Merit Systems Protection Board rejected the claim. The Federal Circuit affirmed. The provisions cited by Kerner only apply to preference-eligible veterans not already employed in federal civil service, not to current federal employees seeking merit promotions. View "Kerner v. Dep't of the Interior" on Justia Law

The Forest Service awarded EM Logging a timber sale contract for the Kootenai National Forest in Montana. The contract’s load limit clause states that “[a]ll vehicles shall comply with statutory load limits unless a permit from the Forest Service and any necessary State permits are obtained,” the haul route clause states that “[a]ll products removed from Sale Area shall be transported over the designated routes of haul” and a notification clause requires that “Purchaser shall notify Forest Service when a load of products … will be delayed for more than 12 hours in reaching weighing location.” The provision under which the Forest Service terminated the contract refers to: “a pattern of activity that demonstrates flagrant disregard for the terms of this contract.” The Forest Service issued multiple notifications of breach with respect to the clauses, suspended operations, and terminated the contract. The Federal Circuit reversed, finding that one instance of route deviation necessitated by illness, one load limit violation, and two instances of delayed notifications. None of the alleged violations independently substantiated the finding of flagrant disregard. Even together, the violations were not substantial evidence of a pattern of activity demonstrating that EM’s actions were in flagrant disregard of the contract. View "EM Logging v. Dep't of Agric." on Justia Law

In 2004, K-Con entered into a contract with the federal government to construct a Coast Guard building in Port Huron Michigan for $582,641. Once K-Con finished, the government imposed liquidated damages of $109,554 for tardiness of 186 days in completion. KCon sued, seeking remission of the liquidated damages on two grounds—that the contract’s liquidated-damages clause was unenforceable and that KCon was entitled to an extension of the completion date. KCon also requested additional compensation based on work performed in response to government requests that K-Con alleges amounted to contract changes. The Court of Federal Claims held that the contract’s liquidated damages clause was enforceable; that K-Con did not comply with the written-notice precondition for invoking the contract clause governing changes; and that K-Con’s claim for an extension on the completion date must be dismissed for lack of jurisdiction. The Federal Circuit affirmed. K-Con failed to comply with the changes clause, and its after-the-fact speculations about what would have happened had it complied do not create a genuine dispute of material fact regarding whether it should be excused for its failure. View "K-Con Bldg. Sys., Inc. v. United States" on Justia Law

In the 1950s and ’60s, to encourage private developers to construct, own, and manage housing projects for low- and moderate-income families, the government insured mortgages on those projects in exchange for provisions, such as a 40-year mortgage term, an agreement to maintain affordability restrictions for the duration of the mortgage, and prepayment limitations or prohibitions. The Emergency Low Income Housing Preservation Act of 1987 and the Low-Income Housing Preservation and Resident Homeownership Act of 1990 instituted a process to request the right to prepay mortgages. There were substantive restrictions on HUD granting prepayment requests, limiting its discretion, 12 U.S.C. 4108(a)). Prepayment is one step toward renting at market prices. The Acts permit HUD to grant incentives rather than permission to prepay. Owners claimed that the Acts constituted an as-applied taking. The Claims Court granted the government’s motions: for summary judgment that the takings claims for some properties were unripe for failure to exhaust administrative remedies; for summary judgment that no taking occurred for properties for which mortgages did not include a prepayment right; and for summary judgment of collateral estoppel as to one owner. The Federal Circuit affirmed as to ripeness and prepayment, but reversed as to collateral estoppel. View "Biafora v. United States" on Justia Law

Sikorsky Aircraft has had several government contracts that are subject to the government Cost Accounting Standards (CAS), which govern the allocation of costs among the various contracts being performed by a government contractor. Allocation of costs between government contracts and non-government (or commercial) contracts is particularly important. Between 1999 and 2005, Sikorsky allocated its materiel overhead costs as between government and nongovernment contracts according to a direct labor base. The government contracting officer issued a final decision that Sikorsky’s allocations between 1999 and 2005 noncompliant with CAS 418 and concluding that Sikorsky owed the government approximately $65 million in principal and $15 million in interest. The Court of Federal Claims held that the government failed to establish by a preponderance of the evidence that Sikorsky violated CAS 418. The Federal Circuit affirmed, finding that that subsection (e) governs and that the government did not show that Sikorsky has adopted an inappropriate measure of resource consumption. View "Sikorsky Aircraft Corp. v. United States" on Justia Law

Kingdomware is a VA-certified service-disabled veteran-owned small business. The Small Business Act, 15 U.S.C. ch. 14A, states that small businesses generally will receive “a fair proportion of the total purchases and contracts for property and services for the Government.” Veteran-Owned Small Businesses (VOSBs) and Service-Disabled Veteran-Owned Small Businesses (SDVOSBs) are expressly recognized in the Small Business Act and the Federal Acquisition Regulation (FAR), 48 C.F.R. ch. 1, which implements the Office of Federal Procurement Policy Act, 41 U.S.C. ch. 7. Agency-specific contract regulations are stated in the Veterans Affairs Acquisition Regulation (VAAR), 48 C.F.R. ch. 8. In 2012, the VA decided to implement an Emergency Notification Service in medical centers. The VA contracting officer chose to use the General Services Administration (GSA) Federal Supply Schedule (FSS) to procure the needed services, and awarded the contract to a FSS vendor which was not a VOSB. Kingdomware filed a bid protest with the Government Accountability Office (GAO), which rejected the VA’s argument, and issued a recommendation that the VA cancel the award. The VA did not acquiesce. The Claims Court upheld the VA determination, interpreting 38 U.S.C. 8127(c), concerning use of restricted competition, as not creating a mandatory set-aside. The overarching policy of the FAR generally demands ‘full and open competition,” which is deemed satisfied by FSS contracts. The FAR specifies that an agency is encouraged to obtain goods and services from FSS contractors before purchasing from commercial sources, which include privately owned VOSBs and SDVOSBs. The Federal Circuit affirmed.View "Kingdomware Techs, Inc. v. United States" on Justia Law