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

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

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