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

Articles Posted in Government Contracts
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Oliva worked for the VA, 2000-2016. In 2015, Oliva challenged the VA’s issuance of a letter of reprimand for Oliva accusing a supervisor of improperly pre-selecting an applicant for a position; Oliva claimed that his email constituted protected whistleblowing. Under a Settlement Agreement, the VA agreed to provide a written reference and the assurance of a positive verbal reference, if requested; Oliva’s Waco supervisor would not mention the retracted reprimand. Oliva was terminated from his employment in April 2016, for performance reasons. Oliva claims that the VA twice breached the Settlement: in March 2015, when Oliva applied for a position in the VA’s El Paso medical center the reprimand letter was disclosed and in February 2016, when Oliva applied for a position in the VA’s Greenville healthcare center a Waco employee disclosed that Oliva was on a Temporary Duty Assignment.The Claims Court held that Oliva’s complaint plausibly alleged breaches of the Agreement that resulted in the loss of future employment opportunities. Oliva sought $289,564 in lost salary and lost relocation pay of either $86,304 or $87,312. The Claims Court then held that Oliva had not stated plausible claims to recover lost salary or relocation pay. The Federal Circuit reversed. Oliva plausibly claimed that the alleged breaches were the cause of his lost salary. Oliva’s termination from his Waco job does not undercut that plausibility. View "Oliva v. United States" on Justia Law

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Ginnie Mae (GM), established by 12 U.S.C. 1717(a)(2)(A) to provide stability in the secondary residential mortgage market and promote access to mortgage credit, guarantees mortgage-backed securities (MBS). FMC, a private corporation, was an originator and servicer of government-guaranteed home mortgages and an issuer of MBS in GM’s program. GM learned of FMC actions that constituted the immediate default of the Guaranty Agreements. FMC undertook an investigation and provided the results to GM, while also complying with SEC requests. GM later terminated FMC from its program. The SEC initiated a civil enforcement action, which terminated in a consent agreement, without FMC admitting or denying the allegations but paying disgorgement and penalties. The Consent Agreement provided that it did not affect FMC’s right to take positions in proceedings in which the SEC is not a party but FMC agreed to not take any action or permit any public statement denying any allegation in the SEC complaint FMC later sued, alleging that GM had breached Guaranty Agreements when it terminated FMC from its program and denied violating those Agreements.The Federal Circuit affirmed the Claims Court’s dismissal. FMC’s breach of contract claims are precluded under the doctrine of res judicata. FMC’s action is essentially a collateral attack on the judgment entered in the SEC action. The SEC and GM are in privity for the purposes of precluding FMC’s claims and “successful prosecution of the second action would nullify the initial judgment or would impair rights established in the initial action.” View "First Mortgage Corp. v. United States" on Justia Law

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The Defense Information Systems Agency (DISA) issued a solicitation for the procurement of information technology solutions for various agencies. DISA would award several indefinite-delivery/quantity contracts; task orders issued under the contracts would provide for either cost-reimbursement (CR) or fixed-price (FP) payment. DISA identified 116 labor categories (LCATs) that would likely be required for the work required by the task orders, described the duties associated with each LCAT, and identified the minimum education and experience requirements. DISA would make awards to the lowest-priced, technically acceptable proposals after considering: technical/management approach; past performance; and cost/price. Each bidder was to provide detailed information for all proposed CR labor rates. DISA would perform a cost realism analysis on the proposed CR labor rates and develop an average using the proposed CR rates and calculate the standard deviation for each labor rate.DISA determined that many of Agile’s proposed CR rates fell more than one standard deviation below average rates and that for these rates Agile had based its proposed rates on salaries paid to pools of workers who did not meet minimum requirements. Agile's final proposal yielded a “total evaluated price” that was not among the 20 lowest-priced, technically-acceptable offerors. Agile filed a protest, arguing that DISA violated the solicitation by expanding “its cost realism analysis to all labor rates in Agile’s [FPR], regardless of whether they were more than one standard deviation below the average.” The Claims Court concluded that DISA did not limit itself to only performing cost realism analysis on labor rates that were more than one standard deviation below the average. The Federal Circuit affirmed the rejection of the bid protest. DISA did not contravene the terms of the solicitation when it reviewed the supporting documentation for labor rates. View "Agile Defense, Inc. v. United States" on Justia Law

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In 2015, CPA’s predecessor was awarded Defense contracts to provide stevedoring and terminal services along the Eastern Seaboard, including Charleston. The contracts incorporated a Federal Acquisition Regulation provision that gave the government options to extend the term of the agreement for up to four one-year periods by giving “preliminary written notice of its intent to extend at least 60 days before the contract expire[d].” Such notice did not obligate the government to exercise the option. After the preliminary notice, the government was required to exercise the option itself within 15 days of the expiration date. On June 15, 2016, the government exercised the first-year option.During the extension period, CPA purchased its predecessor and began seeking revised pricings, asserting that it might default because the contracts were not profitable. On January 31, 2017, the government’s contracting officer sent an email to CPA, stating: The Government intends to exercise options at awarded rates … expects [CPA] to continue performing per the terms. A May 3, 2017, formal letter to CPA, stated the government's intent to extend the contract through 30 June 2018. CPA responded that the notice was untimely. The government pointed to the January 31 email as the preliminary written notice. In July 2017, CPA sought a declaration that the contract had expired and additional money for its performance under protest. A contracting officer denied the claims. The Board of Contracts Appeals and the Federal Circuit affirmed. The government satisfied the preliminary notice requirement; the email unambiguously provided preliminary written notice of the government’s intent to extend at least 60 days before the contract expired on May 1, 2017. View "Cooper/Ports America, LLC v. Secretary of Defense" on Justia Law

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The plaintiffs each own a wind farm that was put into service in 2012. Each applied for a federal cash grant based on specified energy project costs, under section 1603 of the American Recovery and Reinvestment Tax Act of 2009. The Treasury Department awarded each company less than requested, rejecting as unjustified the full amounts of certain development fees included in the submitted cost bases. Each company sued. The government counterclaimed, alleging that it had actually overpaid the companies.The Claims Court and Federal Circuit ruled in favor of the government. Section 1603 provides for government reimbursement to qualified applicants of a portion of the “expense” of putting certain energy-generating property into service as measured by the “basis” of such property; “basis” is defined as “the cost of such property,” 26 U.S.C. 1012(a). To support its claim, each company was required to prove that the dollar amounts of the development fees claimed reliably measured the actual development costs for the windfarms. Findings that the amounts stated in the development agreements did not reliably indicate the development costs were sufficiently supported by the absence in the agreements of any meaningful description of the development services to be provided and the fact that all, or nearly all, of the development services had been completed by the time the agreements were executed. View "California Ridge Wind Energy, LLC v. United States" on Justia Law

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In 2003, Electric Boat (EB) and the Navy entered into a contract for the construction of up to six nuclear-powered submarines. The Contract includes a “Change-of-Law Clause,” which provides for a price adjustment in the event that compliance with a new federal law, or a change to existing federal laws or regulations, directly increases or decreases EB’s costs of performance.In September 2004, OSHA issued a new regulation, "Fire Protection in Shipyard Employment." In February 2005, EB submitted a Notification of Change, stating that it anticipated that compliance would result in a cost increase exceeding $125,000 per ship. In June 2007, EB sought price adjustments across all six submarines. The Navy challenged the calculations. In April 2009, EB submitted a revised cost proposal. In May 2011, the Contracting Officer formally denied an adjustment of the contract price, citing discrepancies between the proposal and documents related to the OSHA change.. The memorandum stated that if EB decided to further pursue the adjustment, it should file “Requests for Equitable Adjustment’” by June 3, 2011. In December 2012, EB filed a certified claim, seeking a price adjustment. The Contracting Officer, the Armed Services Board of Contract Appeals, and the Federal Circuit concluded that the claim was barred by the six-year limitations period, 41 U.S.C. 7103(a)(4)(A). EB knew of its claim by February 2005 and suffered some injury by August 2005. View "Electric Boat Corp. v. Secretary of the Navy" on Justia Law

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Hitkansut owns the patent, entitled “Methods and Apparatus for Stress Relief Using Multiple Energy Sources.” While the application that later issued as that patent was pending, Hitkansut entered into a non-disclosure agreement with Oak Ridge National Laboratory (ORNL) and provided ORNL with a copy of the then-unpublished patent application. ORNL staff prepared research reports, received funding, authored publications, and received awards for research, based upon unauthorized use of the patent. Hitkansut sued ORNL, alleging infringement under 28 U.S.C. 1498. The Claims Court determined that certain claims of the patent were invalid but that other claims were valid and infringed. Although Hitkansut originally sought a royalty between $4.5-$5.6 million, based on a percentage of the research funding obtained by ORNL, the Claims Court awarded $200,000, plus interest, as the hypothetically negotiated cost of an up-front licensing fee. The Federal Circuit affirmed.Hitkansut then sought attorneys’ fees and expenses under 28 U.S.C. 1498(a). The Claims Court awarded $4,387,889.54.The Federal Circuit affirmed. Section 1498(a) provides for the award of attorneys’ fees under certain conditions, unless “the court finds that the position of the United States was substantially justified.” The “position of the United States” in this statutory provision refers to positions taken during litigation and does not encompass pre-litigation conduct by government actors, but the examples of conduct cited by the Claims Court demonstrate that the position of the United States was not substantially justified even under this narrow definition View "Hitkansut LLC v. United States" on Justia Law

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The Army sought to procure the services of certified registered nurse anesthetists for the Fort Bragg Army Medical Center. Eskridge bid but the solicitation was canceled. A new solicitation received 18 timely, complete proposals. Eskridge filed a pre-award protest with the Government Accountability Office (GAO), alleging that the Army “acted in bad faith” by failing to include language allegedly agreed-upon following the cancellation. Eskridge withdrew its protest after the Army responded. Eskridge’s bid was not ranked among the five lowest proposals. The Army awarded the contract to Ansible as the lowest-priced, technically acceptable proposal. Eskridge filed another protest. The Army indicated it would “better document the selection” and reviewed the 10 lowest-priced bidders on technical and past performance bases. Of the five technically acceptable bidders, Eskridge bid the highest total price. The Army awarded the Contract to Ansible. Eskridge filed a post-award protest.The GAO and the Claims Court dismissed Eskridge’s claims, finding Eskridge had no substantial chance of winning the Contract and that the claimed errors would affect each of the five lowest-priced, technically acceptable proposals equally. The Federal Circuit affirmed. Eskridge does not possess a direct economic interest. The relevant inquiry is whether the bidder “establish[ed] not only some significant error in the procurement process but also that there was a substantial chance it would have received the contract award but for that error.” The court found no error in the Army’s compensation realism analysis. View "Eskridge & Associates v. United States" on Justia Law

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The VA issued a contract to OPSS for developing and managing the VA’s program to provide veterans access to community-based healthcare in Region 3 of the WellPoint, an unsuccessful bidder, brought a bid protest action. The Claims Court found that the VA conducted a reasonable best value determination, denied WellPoint’s request for injunctive relief, and dismissed WellPoint’s bid protest challenge. The Federal Circuit affirmed. The VA’s methodology for evaluating price in connection with this procurement was both reasonable and in accordance with the terms of the Solicitation. The court noted the three levels at which the proposals were evaluated and found no showing that alleged errors in first-tier revies carried over to the final decision. Even if an error had been carried over, WellPoint has not demonstrated that “but for the error, it would have had a substantial chance of securing the contract.” View "WellPoint Military Care Corp. v. United States" on Justia Law

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The 1961 National Housing Act provided financial incentives to private developers to build low-income housing, including below-market mortgages insured by HUD. Participating developers had limited ability to increase rents while HUD insured the mortgage. The mortgage term was 40 years but developers could prepay their mortgages after 20 years and convert to market-rate housing. The 1988-1990 Preservation Statutes eliminated the prepayment option, 12 U.S.C. 4101. The 1996 Housing Opportunity Program Extension Act restored prepayment rights to developers still in the program.Four “first wave plaintiffs” (FWPs) owned their properties before the Preservation Statutes and sold after their enactment, consistent with the 1990 Low-Income Housing Preservation and Resident Homeownership Act (LIHPRHA) to organizations that preserved the rent restrictions. One FWP owned its property before the Preservation Statutes and remained in the program, obtaining HUD financial incentives in exchange for abiding by the restrictions for the property's "remaining useful life.” The final FWP (Casa) purchased its property in 1991 and sold pursuant to LIHPRHA. The FWPs alleged regulatory taking. The Claims Court applied the “Penn Central” three-factor test and rejected the claims on summary judgment.The Federal Circuit affirmed with respect to Casa, a sophisticated investor that voluntarily purchased its property with knowledge that it had no prepayment option and had no reasonable investment-backed expectation. The court otherwise vacated. The character of the governmental action and the investment-backed expectations weighed against summary judgment and the Claims Court did not consider certain genuine issues of fact regarding the calculations of economic impact. View "Anaheim Gardens, L.P. v. United States" on Justia Law