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

Articles Posted in Government Contracts
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Aspen sought compensation for the U.S. Army Corps of Engineers’ failure to deposit contractual payments in the account designated in its contract to outfit U.S. military health and dental clinics in Germany. The contract required payment using the Electronic Funds Transfer (EFT) information contained in the Central Contractor Registration (CCR) database. After making two payments to an account (CZ) not listed in the database for Aspen, the government maintained that Aspen held the payee out as having “apparent authority to negotiate” on behalf of Aspen and “to sign contract modifications, submit invoices, submit requests for equitable adjustments[,] and submit delay cost proposals.” The Armed Services Board of Contract Appeals held that the government did not breach the contract.The Federal Circuit reversed. When the government made the payments to the CZ account, Aspen had not changed its EFT information in the CCR database to the CZ account. The government breached the contract by making its payments to an account other than the one listed in the CCR database; the breach was material. On remand, the Board must determine whether the government has established an affirmative defense of payment. The parties dispute whether depositing funds into the CZ account benefitted Aspen but that issue cannot be resolved on appeal. View "Aspen Consulting, LLC v. Secretary of the Army" on Justia Law

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The Army requested bids for helicopter flight training and awarded the contract to L3. In a bid-protest action filed by disappointed bidder S3, the Claims Court set aside the award. After reevaluation of the bids, the Army awarded the contract to CAE. S3 filed another bid protest.The Claims Court rejected most of S3’s arguments but agreed that the assignment by the Army’s source selection authority (SSA) of a certain “strength” to CAE was irrational because that strength, which purported to provide a “significant cost savings benefit,” would result in only small and unpredictable savings, if any. Nevertheless, the Claims Court upheld the award, finding no prejudice to S3 from the identified error. The Claims Court observed that the erroneously found strength had been treated as falling within a non-price-factor category for which CAE’s proposal had been “clearly superior,” an assessment that would not be altered by the loss of a strength for which the only possible benefit could be monetary; when explicitly comparing the added benefits of the CAE proposal with its higher price in the best-value tradeoff analysis, the SSA had not made any adjustment to CAE’s price based on a cost-saving from the strength.The Federal Circuit affirmed, rejecting an argument that there is a presumption of prejudice whenever the Claims Court determines that the agency acted irrationally in making an award decision and finding no clear error in the determination that there was no prejudice. View "System Studies & Simulation, Inc. v. United States" on Justia Law

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Tolliver had a contract with the United States under which Tolliver was obliged to write technical manuals for government-used equipment. The government was obliged to supply Tolliver information relevant to that task. When the government failed to obtain and therefore failed to supply that information, the parties modified the contract. Tolliver ultimately produced the manuals. After the modification, however, a third party sued Tolliver in the name of the government under the False Claims Act, alleging that Tolliver had made a false certification of compliance with the original contract. The government, rather than intervening in the qui tam case and then dismissing it, allowed it to proceed. With evidentiary help from the government, Tolliver prevailed after incurring substantial legal fees.The contracting officer denied Tolliver's claim under the Contract Disputes Act, 41 U.S.C. 7101, for an “equitable adjustment” for reimbursement of “allowable legal fees.” The Claims Court entered judgment for Tolliver, concluding that the United States had breached an implied warranty of performance. The Federal Circuit vacated. Because Tolliver never submitted a claim of breach of that warranty to the contracting officer, the Claims Court lacked jurisdiction to adjudicate such a claim. The claim that Tolliver presented to the contracting officer was, on its face, based on legal fees, not on a breach of the implied warranty of performance. View "Tolliver Group, Inc. v. United States" on Justia Law

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U.S. Customs and Border Protection (CBP) controls and monitors traffic at the borders, including the flow of vehicles, cargo, and people. CBP’s Cargo Systems Program Directorate (CSPD) manages a commercial trade processing system, the Automated Commercial Environment (ACE), which provides automated tools and information for making admissibility decisions before shipments reach U.S. borders and supports cargo revenue collection. ACE “is not a single operating system but a collection of applications built on diverse multivendor technological platforms.” In 2018, CBP issued a solicitation requesting quotes for “application development and operation and maintenance support services” as part of CSPD’s effort to develop and support cargo systems applications. Harmonia submitted an unsuccessful pre-award agency-level protest to CBP concerning amendments to the solicitation and CBP’s limitation of bid revisions.The Claims Court rejected Harmonia’s subsequent suit on the Administrative Record. The Federal Circuit reversed in part. The Claims Court erred in determining that Harmonia waived its right to assert before the court the same challenges that it asserted in its pre-award protest. The Federal Circuit vacated a holding that CPD did not act in an arbitrary or capricious manner in evaluating Harmonia’s proposal and in making an award decision. The Claims Court must determine the merits of Harmonia’s pre-award protest and what relief, if any, Harmonia is entitled to based on that protest. View "Harmonia Holdings Group, LLC v. United States" on Justia Law

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In 2015, JKB and the Army entered into a three-year indefinite-delivery, indefinite-quantity contract. JKB agreed to provide instructional services up to 14 classes per year. The contract incorporates Federal Acquisition Regulation (FAR) 52.212-4, which includes a termination for convenience clause for the government, and incorporates Defense Federal Acquisition Regulation Supplement (DFARS) 252.216-7006, which requires all supplies and services furnished under the contract to be ordered by issuance of delivery or task orders. The Army issued three year-long task orders, each listing one lot of training-instructor services, the price per class, and a total price corresponding to the price of 14 classes. Each year, the Army used JKB for fewer than 14 classes and paid for each class actually taught, refusing to pay the total price listed in the task orders.JKB sued for breach of contract. The Claims Court ultimately granted the government summary judgment based on FAR 52.212-4 and the doctrine of constructive termination for convenience. The Federal Circuit vacated. FAR 52.212-4 governs the termination of commercial item contracts for the government’s convenience; it does not apply to service contracts, such as the contract at issue. On remand, the Claims Court may consider whether the “Christian doctrine” applies to incorporate a termination for convenience clause and whether the doctrine of constructive termination for convenience applies. View "JKB Solutions and Services, LLC v. United States" on Justia Law

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Triple Canopy, a private security company, had six fixed-price contracts for security services in Afghanistan, awarded by the Department of Defense. Each contract required that Triple Canopy comply with local law and incorporated Federal Acquisition Regulation 52.229-6, which states: [T]he contract price shall be increased by the amount of any after-imposed tax or of any tax or duty … if the Contractor states in writing that the contract price does not include any contingency for such tax and if liability for such tax, interest, or penalty was not incurred through the Contractor’s fault, negligence, or failure to follow instructions of the Contracting Officer or to ... take all reasonable action to obtain exemption." After repeatedly seeking exemptions, Triple Canopy paid a penalty ($430,994.97) that the Afghan government imposed based on the company having more than 500 employees.Within six years of making payment, Triple Canopy submitted claims. The Armed Services Board of Contract Appeals denied the claims as untimely, 41 U.S.C. 7103(a)(4)(A).The Federal Circuit reversed. Triple Canopy’s claims did not accrue until July 6, 2011, when the Afghan government responded to Triple Canopy’s April 8, 2011 appeal. Triple Canopy’s June 6, 2017 claim submission was within the six-year limitations period Triple Canopy had to comply with the requirement that it “take all reasonable action” to obtain “exemption” from the assessment, which meant appealing the assessment. View "Triple Canopy, Inc. v. Secretary of the Air Force" on Justia Law

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In 2017 the Army issued a logistics support services solicitation, to award several indefinite-delivery, indefinite-quantity contracts—each covering services among six geographic commands, plus Afghanistan. Contracting officers often must discuss deficiencies and significant weaknesses in proposals with offerors before proposals are final. When an offeror proposes a price that is unreasonably high, the government must discuss that unreasonableness with the offeror, potentially giving it a chance to revise its proposal. If the price is too high yet not unreasonable, the government need not discuss it. As a result. an offeror whose initial proposal is unreasonably priced may fare better than one whose is not. Six firms sought to perform the Army’s logistics work. DynCorp lost. Its prices were higher than the others; its proposed technical approach was worse. After balancing four proposal-evaluation factors, none of which DynCorp was best on, the Army went with other offerors.The Federal Circuit affirmed the dismissal of DynCorp’s bid protest, rejecting an argument that the price it gave the Army was so high as to be unreasonable—and that the Army should have concluded as much and given it the opportunity to revise its proposed approach. The court found no error in the Army’s price-reasonableness analysis. View "DynCorp International, LLC v. United States" on Justia Law

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In 1942-1943, the government contracted with the Oil Companies to rapidly expand aviation gas (avgas) production facilities and sell vast quantities of avgas to the government with an artificially low profit margin. The government assumed certain risks, agreeing to reimburse “any new or additional taxes, fees, or charges” which the Companies “may be required by any municipal, state, or federal law ... to collect or pay by reason of the production, manufacture, sale or delivery of the [avgas].” The increased production led to increased amounts of acid waste that overwhelmed existing reprocessing facilities. The Companies contracted to dispose of the acid waste at the McColl site in Fullerton, California.In 1991, the United States and California sued under the Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. 9601, seeking to require the Companies to pay cleanup costs. The Ninth Circuit held that the government was 100% liable for the cost of cleaning up the benzol waste (about 5.5% of the waste) at the McColl site. The Companies have borne nearly all of the clean-up costs incurred since 1994; they submitted a contract termination claim, seeking reimbursement. The Claims Court ultimately found the government liable for all cleanup costs at the McColl site and awarded the Companies $99,509,847.32 for costs incurred through November 2015. The government paid. Remediation at McColl remains ongoing. The Companies sought damages incurred after November 2015. The Federal Circuit affirmed that the government is liable for those costs plus interest, rejecting arguments that res judicata bars the claims and that the Claims Court did not have jurisdiction under the Contract Settlement Act of 1944. View "Shell Oil Co. v. United States" on Justia Law

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ICE issued a solicitation for the provision of detention, food, and transportation at its Florence Detention Center. Asset was the incumbent contractor. ICE responded "yes" to, “Arizona charges 4.5% ‘business tax’; will the Federal Government issue a tax exemption certificate to the successful offeror?” Asset’s initial proposal indicated that “[s]ales taxes were not charged” based on that answer. ICE selected Akima's proposal. Asset filed a bid protest. ICE took voluntary corrective action and issued Amendment 17; Amendment 19 subsequently clarified that ICE “CANNOT delegate its tax-exempt status” and instructed that offerors review their proposals and provide their best and final prices. Asset responded that it had reviewed Amendment 19 and that its proposal did not require revision but did not remove the tax-exempt language from its proposal. ICE again clarified the tax-exempt status question via Amendment 20. Asset again responded that it did not need to amend its proposal but the tax-exempt certificate language remained. ICE ultimately selected Akima, concluding that Asset was ineligible for the award because the tax-exempt certificate language rendered its proposal a contingent price. Asset filed another bid protest, disputing ICE’s best-value analysis. The GAO agreed that ICE improperly determined that Asset’s bid contained contingency pricing but concluded that Asset “was not prejudiced” because ICE’s best-value analysis was “reasonable,”The Claims Court concluded that Asset lacked standing to bring the bid protest. The Federal Circuit affirmed. Asset’s proposal was non-responsive to the requirements of the Solicitation, as explicitly amended, making it ineligible for the award. View "Asset Protection and Security Services, L.P. v. United States" on Justia Law

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The Census Bureau issued a request for quotations seeking statistical analysis system and database programming support services. The Bureau intended to issue a time and materials task order, set aside for women-owned small businesses; the contract award would be made on a best-value basis, considering price and four nonprice factors. The Bureau’s technical evaluation team assigned Harmonia’s proposal nine strengths, no weaknesses, and two risks under factor one, the technical factor; its proposals to cross-train its development staff and to introduce an extract, transform, and load (ETL) automation tool could provide efficiencies but Harmonia’s proposed cross-training and use of an ETL automation tool could result in delays in contract performance. The contracting officer found no meaningful differences in the Harmonia and Alethix proposals with respect to factors two, three, and four; the tradeoff analysis was rooted in the technical factor: The Bureau awarded Alethix the contract.Harmonia filed a protest, challenging the technical evaluation, alleging that the contracting officer violated 48 C.F.R. 19.301-1(b) by failing to refer Alethix to the Small Business Administration for a size determination, and challenging the best-value determination, The Federal Circuit affirmed the Claims Court in granting the government judgment on the administrative record with respect to Counts I and III and dismissing Count II for failure to exhaust administrative remedies. Harmonia had not availed itself of the SBA’s procedures for bringing a size protest. View "Harmonia Holdings Group, LLC v. United States" on Justia Law