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

In 1996, the Air Force entered into a contract under which SUFI would install and operate telephone systems in guest lodgings on bases in Europe at no cost to the government; the Air Force agreed that SUFI network was to be the exclusive method available to a guest placing telephone calls at the lodging. The contract permitted SUFI to block other networks and required the Air Force to remove or disable preexisting Defense Switched Network (DSN) telephone lines in hallways and lobbies, but DSN phones remained in place. Call records showed that, with Air Force assistance, guests often placed multiple or lengthy individual calls. After the Air Force declined to implement controls to curb DSN and patched-call abuse, SUFI blocked guest-room access to the DSN operator numbers but permitted morale calls from lobby phones, monitored by sign-in logs. Air Force personnel failed to require guests to sign the logs and gave guests new DSN access numbers, to circumvent SUFI’s charges. After failed attempts to resolve the situation, including through the Armed Services Board of Contract Appeals, SUFI sold the telephone system to the Air Force for $2.275 million and submitted claims, totaling $130.3 million, to the contracting officer. The officer denied the claims, except for $132,922 on a claim involving use of calling-cards. The Board later awarded $7.4 million in damages, plus interest. In an action under the Tucker Act, 28 U.S.C. 1491, the Court of Federal Claims awarded $118.76 million in damages, plus interest. The Federal Circuit vacated in part and remanded for additional findings.View "SUFI Network Servs, Inc. v. United States" on Justia Law

SRA provided network infrastructure support to the FDIC under the General Services Administration (GSA) Government-Wide Acquisition Contract (GWAC). At the same time, Blue Canopy conducted security audits for the FDIC of SRA’s network security. GSA issued a Task Order Request for services to be provided to the FDIC and awarded a task order to CSC. SRA protested to the Government Accountability Office (GAO). GSA terminated the task order for convenience. GSA reissued the Task Order Request with amendments, and again awarded a task order to CSC for $365 million. SRA filed a second protest, alleging organizational conflicts of interest (OCIs) based on CSC’s intended use of Blue Canopy as a subcontractor: SRA alleged that Blue Canopy’s work with the FDIC gave it knowledge of how the FDIC evaluated SRA’s work. CSC dropped Blue Canopy as a subcontractor. SRA insisted that the GAO continue the protest as an “unequal access to information” OCI, claiming that CSC and Blue Canopy violated FDIC regulations by submitting false certifications, before the award, that no OCIs existed. GSA issued a waiver under Federal Acquisition Regulation 9.503, finding the possibility of an OCI “exceedingly remote and unsubstantiated.” GAO dismissed SRA’s protest. The Court of Federal Claims dismissed. The Federal Circuit vacated with instructions to dismiss for lack of jurisdiction, based on the Federal Acquisition Streamlining Act bar on jurisdiction over protests “in connection with the issuance or proposed issuance of a task or delivery order,” 41 U.S.C. 4106(f)(1).View "SRA Int'l, Inc. v. United States" on Justia Law

Darlene Devlin had been married for more than 40 years when her husband died, then a civilian federal employee for nearly six years, entitling Darlene to Basic Employee Death Benefits (BEDB), 5 U.S.C. 8442(b)(1)(A), 8466(b). However, Darlene died before she could sign or file an application for BEDB. Her son, Devlin, completed, signed, and filed an application for BEDB on her behalf. The Office of Personnel Management (OPM) denied the application, concluding that Darlene was not entitled to BEDB because she failed to submit an application for those benefits before her death. Devlin argued that his appointment as a co-administrator of his mother’s estate permitted him to sign and file the application for BEDB on her behalf. The e Merit Systems Protection Board and Federal Circuit affirmed the denial. View "Devlin v. Office of Pers. Mgmt." on Justia Law

In 1983, Central entered into a contract with the U.S. Bureau of Reclamation for an appropriation of water from the New Melones Reservoir in California’s San Joaquin Valley. Upon enactment of the Central Valley Project Improvement Act (CVPIA) in 1992, Reclamation made statements indicating that it would not be able to meet the quantity commitments in its contracts because of other demands for the water. In 1993, Central sued for breach of contract. After holding that breaches had occurred in certain years, the Federal Circuit reversed and remanded for determination of damages. The district court, on remand, awarded Central $149,950.00 in cost of cover damages, but denied any expectancy damages. The Federal Circuit reversed and remanded. The trial court erred by not properly considering the effect of Reclamation’s announced breaches on the amount of water that Central may have expected to need to meet demand. This caused the trial court to discount Central’s arguments regarding what would have happened in the non-breach world. View "Stockton E. Water Dist. v. United States" on Justia Law

The survivors of eight firefighters who died in 2003 sought survivors’ benefits under the Public Safety Officers’ Benefits Act, 42 U.S.C. 3796. The eight were employed by First Strike, a private company that works with governmental and private entities to help suppress wildfires, under agreements that characterized them as independent contractors. The Public Safety Officers’ Benefits Office denied the claims, and they requested redetermination by the Director of the Bureau of Justice Assistance (BJA), which also denied the claims. The Federal Circuit affirmed, finding that the BJA did not err in concluding that the firefighters were not public safety officers within the meaning of the Benefits Act. View "Moore v. Dep't of Justice" on Justia Law

Veridyne’s first contract to provide logistics services to the Maritime Administration (MARAD), was awarded pursuant to the Small Business Administration’s (SBA) 8(a) program for small, disadvantage businesses, 15 U.S.C. 637(a). To obtain extension of the contract without it being submitted to bidding, Veridyne estimated that the new contract would not exceed “$3,000,000 in the aggregate.” Veridyne and MARAD officials knew that the services to be provided under the extension would cost far more than $3,000,000. MARAD proposed that SBA approve the new contract without opening it to competition. MARAD, Veridyne, and the SBA executed the new contract. From 2001 to 2004, MARAD issued additional work orders to Veridyne and paid Veridyne $31,134,931.12. In part due to MARAD’s cost overruns, the Office of Inspector General investigated and concluded that Veridyne had obtained the extension through fraud. After a stop order issued, Veridyne continued to work for MARAD and submitted additional invoices. Veridyne sued to recover $2,267,163. The government entered a defense under the Fraudulent Claims statute, 28 U.S.C. 2514, and counterclaimed for penalties under the False Claims Act, 31 U.S.C. 3729, and the Contracts Disputes Act, 41 U.S.C. 7103. The Claims Court held that Veridyne’s contract claim was forfeited under the Fraudulent Claims Act, but awarded Veridyne partial recovery under a quantum meruit theory, while awarding penalties to the government under the False Claims Act and the Contract Disputes Act. The Federal Circuit reversed the quantum meruit award, but affirmed the award of penalties.View "Veridyne Corp. v. United States" on Justia Law

Following the 1941 attack on Pearl Harbor, each of the Oil Companies entered into contracts with the government to provide high-octane aviation gas (avgas) to fuel military aircraft. The production of avgas resulted in waste products such as spent alkylation acid and “acid sludge.” The Oil Companies contracted to have McColl, a former Shell engineer, dump the waste at property in Fullerton, California. More than 50 years later, California and the federal government obtained compensation from the Oil Companies under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), 42 U.S.C. 9601, for the cost of cleaning up the McColl site. The Oil Companies sued, arguing the avgas contracts require the government to indemnify them for the CERCLA costs. The Court of Federal Claims granted summary judgment in favor of the government. The Federal Circuit reversed with respect to breach of contract liability and remanded. As a concession to the Oil Companies, the avgas contracts required the government to reimburse the Oil Companies for their “charges.” The court particularly noted the immense regulatory power the government had over natural resources during the war and the low profit margin on the avgas contracts. View "Shell Oil Co. v. United States" on Justia Law

In 2006, the U.S. Army Contracting Agency solicited bids for repair, maintenance, and construction services at Fort Rucker, Alabama, with indefinite delivery and quantity terms. The mechanism for pricing such jobs involves identification of costs and multiplication by certain “coefficients” set in the contract. It was well known that construction costs in the region had increased after Hurricane Katrina, 15 months before the government solicited bids. The Army awarded the contract to Lakeshore in 2007. In 2008, Lakeshore began 78 construction projects at Fort Rucker. When the Army exercised its option to extend the contract, it increased payments based on the contract’s price-adjustment clause. Lakeshore began 74 more delivery orders. After two years under the contract, Lakeshore concluded that it had incurred higher costs than were covered by payments under the contract and requested an equitable adjustment. The government denied the request. Acting under the Contract Disputes Act, 41 U.S.C. 7101, the contracting officer denied a claim for recovery of $1,996,152.40. The Claims Court rejected claims of breach of contract, breach of the covenant of good faith and fair dealing, breach of implied warranty, and mistake on summary judgment, stating that the government was not obliged to provide accurate local prices or to bear “economic consequences if one or more prices in the guide proved inaccurate.” The Federal Circuit affirmed. View "Lakeshore Eng'g Servs., Inc. v. United States" on Justia Law

Cunningham worked for the U.S. Office of Personnel Management in 2004-2005. He appealed his termination to the Merit Systems Protection Board, alleging discrimination based on marital status. Cunningham agreed to withdraw his appeal; OPM agreed to pay him $50,000. The agreement designated the OPM’s director of human resources as the contact for reference inquiries and permitted disclosure of dates of service only. The termination letter was to be removed from the personnel file and both parties were prohibited from disclosing the agreement or the grievance. In 2006, Cunningham accepted a position with USIS, a private company that contracts with federal agencies to perform background investigations. A week after Cunningham began training USIS suspended him without pay at the direction of OPM's security office. OPM employees (not the Director of Human Resources) had discussed Cunningham’s termination. An administrative judge found that OPM had breached the agreement, but that MSPB could not award damages. Cunningham was only entitled to rescind the agreement, reinstate his appeal, and return the $50,000 payment. MSPB adopted the findings. Cunningham did not want his appeal reinstated and sought breach-of-contract damages. The Claims Court found that it had subject matter jurisdiction under the Tucker Act, but dismissed based on res judicata. The Federal Circuit vacated, agreeing that the court had jurisdiction, but holding that res judicata did not apply because jurisdictional limits on the MSPB did not permit him to seek damages in the prior matter.View "Cunningham v. United States" on Justia Law

In the early 2000s, Raytheon underwent a major reorganization, including the sale of several business segments, including AIS, Optical, and Aerospace (segments at issue). As part of each sale, Raytheon retained the assets and liabilities of defined-benefit pension plans associated with the segments. Raytheon also calculated segment closing adjustments as required by CFR Cost Accounting Standards (CAS). Raytheon determined that some of its segments had pension surpluses, but the segments at issue had deficits. Although Raytheon paid the government its share of the surpluses, the government refused to pay its share of the deficits. Raytheon submitted certified claims for recovery of the deficits under the Contract Disputes Act, 41 U.S.C. 7103 (2011). The contracting officer issued final decisions denying these claims, reasoning that the adjustments were subject to the Federal Acquisition Regulation’s timely funding requirement, 48 CFR 31.205-6(j)(2)(i), and the deficits were therefore unallowable because Raytheon failed to fund the full amount of the pension deficits in the same year as the closings and that Raytheon’s segment closing calculations “do[] not comply with CAS 413[.]” The Claims Court awarded Raytheon $59.209,967 and rejected a claim for recovery with respect to one segment, finding that Raytheon applied the wrong asset allocation method in its adjustment calculation. The Federal Circuit affirmed.View "Raytheon Co. v. United States" on Justia Law