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2011 Procurement Review--Contract Disputes



 

Boards of Contract Appeals (ASBCA, CBCA, PSBCA, and GAOCAB)

Jurisdiction/Standing/Timeliness/Contract Disputes Act (CDA) Issues    

        Jurisdiction

In Precision Standard, the ASBCA dismissed a claim for lack of CDA jurisdiction because it was for "at least" a specified amount, did not list the amounts requested for each separate category of recovery sought, and, therefore, was not for a "sum certain."

In Diamante Contractors, the CBCA dismissed for lack of jurisdiction a contractor's appeal (filed more than 90 days after a default termination) based on a unilateral contract modification (which was not labeled as a Contracting Officer's decision) that notified the contractor the Government might reprocure and charge the contractor's account. The Board noted that the Fulford doctrine did not apply to these facts.

In AmerescoSolutions, the ASBCA held that a delivery order issued by DESC pursuant to a DOE contract was a separate DoD contract over which the ASBCA had CDA jurisdiction on appeal.

In Green Dream Group, the ASBCA refused to dismiss an appeal, finding that an authorized individual had signed the CDA certification, which was correctable even though defective.

In HomeStar Services, the ASBCA dismissed an appeal from a default termination for lack of jurisdiction because the dissolved corporation lacked the capacity to accept the purchase order that was later terminated.

In Navigant Satotravel, the CBCA held that the Government not required to certify its CDA claim against a contractor.

The Public Warehousing Co. barely dodged the bullet when the ASBCA denied the Government's motion to dismiss the contractor's original appeal based on a theory of unjust enrichment (over which the Board had no jurisdiction) and granted the contractor's motion to amend its complaint to rely, instead, on theories of breach and constructive changes because both the original and revised complaints involved the same operative underlying facts and same requested ultimate relief.

In CME Group, the ASBCA held it lacked jurisdiction over an appeal from a termination for convenience because that termination, standing alone, is not a government claim.

The CBCA dismissed an appeal by Red Gold, Inc. for lack of CDA jurisdiction because its original letters to the Contracting Officer did not (i) state a sum certain, (ii) request a decision, or (iii) contain a CDA certification. 

In Ball Aerospace & Technologies Corp., the ASBCA held that a claim containing the following language adequately claimed a sum certain within the meaning of the CDA: "[t]his claim is for the sum certain amount of$72,730.29 relating to fiscal year . . . 2003 costs that the government has failed to reimburse, plus future costs to be incurred using the FY 2003 indirect rates at issue and interest under the CDA."

In URS Energy & Construction, the CBCA held that a party that assumed a contract by novation was the proper party to pursue the appeal.

In Alpine Armoring,  the CBCA dismissed a bid protest for lack of CDA jurisdiction.

In Tiger Enterprises, the ASBCA dismissed an appeal for lack of jurisdiction because the contractor had not submitted a  claim to the Contracting Officer requesting a decision on disputed invoices that the Government had refused to pay.

In KDI Development, Inc., the CBCA applied the CDA's statute of limitations to a government claim and held that the agency could recoup overpayments for operating costs it made to a contractor under a lease only for a period of six years prior to date the agency provided the contractor with a "claim" for such overpayments. The CDA has been in effect now for more than 30 years, and we still see language like the following in case after case because of the statute's most glaring omission: "Because the statute lacks a definition of 'claim,' one looks to language of implementing regulations, the contract, and facts."

In Trygve Dale Westergard, the CBCA denied the Government's motion to dismiss an appeal to the Board as untimely because the Government could not prove when the contractor received a Contracting Officer's decision sent to it by email.

In Zafer Taahut Insaat ve Ticaret A.S., the ASBCA denied a government motion to dismiss an appeal and held that the contractor's submission met the requirements for a CDA claim: it was certified; it requested a  Contracting Officer's decision; and it was for a sum certain.

In JM Carranza Trucking Co. , the PSBCA held it lacked jurisdiction to stay enforcement of a government claim.

In Charles Mullens, the ASBCA held that, concerning a non-CDA concession contract, the Board lacked jurisdiction over an appeal from a no-fault termination absent an underlying claim.

In Special Operative Group, the ASBCA dismissed an appeal based on a progress payment request in excess of $100,000 for lack of CDA jurisdiction because the request did not include the CDA certification and the progress payment certification it did include was not an adequate substitute.

The ASBCA dismissed the appeal of Broadway Consolidated Companies because the company was in Chapter 7 bankruptcy and lacked standing to pursue the appeal.

In Endless Gutter & Sheet Metal Co., the CBCA held it lacked jurisdiction over an appeal from a claim denial that was not issued by the Contracting Officer.  

In Office Automation & Training Consultants, the ASBCA held, in part, that it lacked jurisdiction over a theory of recovery first presented to the Board as part of the contractor's motion for reconsideration of a prior decision and never presented to the Contracting Officer.

In Sharp Electronics Corp., the ASBCA held it lacked jurisdiction over an appeal because the original claim should have been submitted to the Contracting Officer for the GSA schedule contract rather than to the CO of the agency placing a delivery order under the schedule contract.  In Harry Richardson, the same Board reached the same conclusion because no claim at all had been claim submitted to the Contracting Officer.

In American General Trading & Contracting, the ASBCA held that, although it lacked jurisdiction over a claim for extraordinary contractual relief under FAR Part 50, it had jurisdiction over the alternative claim theory of breach of an implied-in-fact contract.

Changes/Constructive Changes/Contract Interpretation/Breach/Authority

In Serco, Inc., the CBCA held that, pursuant to the "Payments Under Time and Materials Labor Hours Contract" clause, the contractor was entitled to reimbursement only for the amounts it actually paid subcontracted employees as opposed to the direct labor rates it billed for its own employees.

In Healthcare Technology Solutions International, the contractor in a services contract signed a bilateral modification (absent any duress) pursuant to which it paid the Government rent to occupy a space for many months and then claimed (unsuccessfully, of course) that the modification was a cardinal change or evidenced a differing site condition. 

In A To Z Wholesale, the CBCA denied a claim for based on a violin (which the buyer did not inspect) and its case purchased at an "As Is" auction that conformed to their description in the auction catalogue, even though the violin in the case did not turn out to be the valuable item the name on the case indicated it would be.

In Office Automation & Training Consultants, the ASBCA granted the Government's motion for summary judgment denying the contractor's claim for reformation on the basis of unilateral mistake, in part because the contractor failed to inquire about a DOL wage determination it now alleges was missing from the solicitation, which the Board said would have been a patent error creating a duty to inquire.

In another AECOM Government Services decision, the ASBCA held that the contractor was not entitled to recover F.I.C.A. taxes on offshore subsidiaries first imposed by the HEART Act six months after a fixed-price contract award on the basis of the contractor's theory reformation based on mutual mistake. Last year, the Board had rejected the same claim but made on a theory of breach of the implied warranty of good faith and fair dealing.  

In Singleton Enterprises-GMT Mechanical,  the CBCA held that the VA changed a construction contract by directing the contractor to attach insulation to the roof in a manner different from that stated in the specifications.

In Revenge Advanced Composites, the ASBCA granted the Government's motion for a summary judgment denying contractor's claim for extra work under the Changes clause because the contract's performance specification required the contractor to provide the navigation system at issue in the appeal.

Walsh/Davis Joint Venture won its CBCA appeal related to constructive changes required by the project architect. Subsequently,  the CBCA denied the GSA's request for reconsideration. In a subsequent decision involving the same contractor, the CBCA denied the Government's motion for summary judgment because the contractor presented evidence that the parties did not intend a seemingly unambiguous general release to cover the subcontractor claim at issue in the Government's motion.

In In-Finn-Ity Geotech Service , the CBCA held the Government breached the implied covenant of good faith and fair dealing by refusing to allow the contractor to use a method of performance permitted by the specifications.

In General Dynamics Ordnance and Tactical Systems , the ASBCA denied the Government's motion for summary judgment in part because the record was not yet sufficiently developed to determine whether the appeal involved a requirements contract or a BOA.

In  DeLeon Industries, the CBCA granted a portion of the Government's motion for summary judgment and held that the Government's breach of one contract did not entitle the contractor to lost profits on other contracts it might have received if it had not lost bonding capacity due to the breach. The Board denied the Government's motion as to other matters, and, in doing so, addressed issues of contract interpretation, course of dealing, and the Government's attempt to enforce a requirement it previously had waived.

In WestWind Technologies, the ASBCA interpreted FAR 52.216-8 ("Fixed Fee") to allow the Government to withhold the stated reserve amount on each, individual task order, rather than just once on contract as a whole.

In Ali Fawzi Gomme, Co-Owner, d/b/a Areebel Engineering & Logistics, the ASBCA dismissed a claim over the contractor's objections because it was clearly covered by a settlement agreement between the parties.

In The Boeing Co. (which involves claims by the contractor for indemnification for the costs of  (i) the investigation and remediation of ground water pollution and (ii) toxic tort litigation), the ASBCA denied the contractor's motion for summary judgment with regard to the Government's affirmative defense that the individual authorizing use of an indemnification clause in one of the subject contracts lacked authority to do so; but granted the contractor's motion with regard to the Government's affirmative defense that the contractor had misrepresented whether it had obtained certain required insurance.

In General Construction Services, the ASBCA granted the Government's motion for summary judgment because the appellant failed to establish that (i) it had a contract with the Government, (ii) the individual who allegedly committed the Government to a verbal agreement had the authority to do so, or (iii) the Contracting Officer ratified the alleged agreement.

In  BECO Construction Co., the ASBCA held the contractor was entitled to compensation for work it was required to perform in a larger area than was indicated in the contract's specifications and drawings.

In COSTAR III, LLC, the ASBCA held that the contractor was not entitled to reimbursement for health and welfare benefit cost increases in (i) the base year of the contract (because it modified its CBA to effectuate such increases after the beginning of the base year and the applicable contract clause did not provide for base year adjustments) or (ii) in the option years (because the option year mods constituted an accord and satisfaction and did not provide for such increases).

In Eyak Technology, the CBCA held the Contracting Officer lacked the authority to impose the reporting requirements of the American Recovery and Reinvestment Act of 2009 on a contractor midway through its contract by unilaterally inserting FAR 52.204-11 in the contract.

In Minute Man Properties, the PSBCA held that the Government, by holding over, did not constructively exercise a lease renewal option, which required written notice of its exercise.

In Tip Top Construction , the PSBCA held that (i) the contractor could recover its consultant costs incurred up to, but not after, the Government's approval of substitute equipment associated with a change; and (ii) attorney fees incurred in trying to convince Contracting Officer of the amount claimed by contractor for the change were not recoverable.

In D. J. Miller & Assocs., the Board denied a contractor's claim that the Government had breached its requirements contract by diverting work to other entities.

Usually, a forum denies a motion for summary judgment because there are disputed facts that require further development in the record. In Trace Systems, however, the ASBCA denied the Government's motion after the Board found there were no disputed facts and held that (i) the contract contained a latent ambiguity concerning whether R&R travel expenses were reimbursable and (ii) the contractor's interpretation that they were reimbursable was reasonable. 

In  Merchant's Automotive Group, the CBCA held a contractor's unilateral, unfounded error in judgment not communicated to the Government prior to award was not sufficient to entitle it to relief from the terms of a vehicle lease.

In Merlin International, the same board held that the Government did not breach a contract by failing to exercise an option.

In CTI Global Solutions , the CBCA summarily dismissed most of contractor's claims for increased labor rates resulting from increases in DOL wage determinations because the contractor and the agency had agreed on the rates to be paid to the contractor after the revised wage determinations were issued.

In DG21, LLC, the ASBCA denied a claim because, in advancing theories of misrepresentation and superior knowledge, the contractor did not establish that (i) it was misled by, or relied on, a misstatement in the solicitation that there was no historical information available, or (ii) it did not have independent knowledge of that historical information.

In Janssen Contracting, Inc., the CBCA held the contractor had failed to establish any of the elements required to justify reformation of its contract based on a mistake in bid.

Terminations/Liquidated Damages  

In Lasmer Industries, the ASBCA dismissed an appeal over the contractor's objections since the Government's issuance of a no-cost termination "because of the impossible specification" provided all the relief originally requested by the contractor.

In Genome-Communications, the ASBCA granted the contractor's motion for summary judgment that the Government failed to pay for contractually compliant training materials and improperly terminated the contract for cause due to a failure to comply with a cure notice that imposed extra-contractual requirements.

In Fit-Net International Corp., the ASBCA upheld a termination for cause due to late delivery of nonconforming supplies. In New Era Contract Sales, the ASBCA held that the Government properly terminated fixed-price delivery orders for default after the contractor refused to perform because subcontract prices had increased by an amount the contractor considered unacceptable.

In  Free & Ben, Inc. the ASBCA upheld a default termination of a contractor who did not deliver trucks to Iraq because, after award, it requested an End-User Certificate, which the Government refused to issue because the contract did not require it to do so. The Board found, inter alia, (i) that the contractor did not prove such certificates were required by Japan (where the trucks were manufactured) and (ii) that the contractor had not checked this issue prior to bidding. 

In Sundt Construction, the ASBCA held that, under a construction contract task order modification, which established two separate completion dates, the Government could properly assess liquidated damages for the portion of work covered by one of the two dates, which already had passed when the modification was signed.

In FastLinks, the ASBCA upheld a default termination despite the contractor's contention that the specified part could not perform properly, because the reprocurement contractor installed the same part without incident.

In Advance Construction Services, the same board upheld the propriety of another default termination before a cure period had expired because the contractor had no reasonable prospects of finishing the job by the conclusion of the cure period.

In Tawazuh Commercial and Construction Co. Ltd. , the ASBCA upheld a default termination because of defects in road construction work despite the contractor's contention that the Government did not inspect the work promptly.

In Matrix Research, Inc., the ASBCA upheld a default termination because the contractor inexcusably failed to deliver the final 15 items under the contract, and its problems were due to actions of its subcontractor, not those of the Government's inspectors.

In upholding a termination for cause in Ryll International, the CBCA wrote in part as follows:

We conclude that [the] CO . . . had a reasonable, contract-related basis to support termination for cause. Ryll failed to complete the contract despite the CO’s best efforts to mediate negotiations between appellant and its subcontractors. It is notable that in Ryll’s . . . letter . . . requesting a termination for convenience with costs, the contractor wrote that its "financial difficulties have been caused by the apparent collusion of certain companies and are not the fault of the government."

In two cases, the Government was denied recovery of excess reprocurement costs after a valid default termination simply because it neglected to present any evidence on the subject of the similarity of the reprocurement contract to the terminated contract. In Odessa R. Brown, for example, the PSBCA wrote: "Respondent did not submit into the record a copy of the replacement contract or any other evidence which could establish the type, frequency or timing of the service required by the replacement contract." Similarly, in  Gordon T. Smart, the PSBCA noted that the Government failed to present any evidence that the reprocurement contract was for the same, or similar, services.  

In Roger W. Holcombe, the PSBCA held that a default termination was justified by a contractor's failure to disclose on a pre-award form negative employment history of prior bad acts, even though the Government did not discover this omission until after it had terminated the contract on other grounds.

In Environmental Safety Consultants, the ASBCA converted a default termination to a termination for convenience because (i) the Government "dallied" for 11 months after the contract completion date before terminating, demonstrating that time was not the essence, and (ii) the Government, therefore, should have established a new completion date before terminating.  

In Data Integrators, Inc., the GAO's Contract Appeals Board denied the contractor's appeal from a default termination by the Government Printing Office because the contractor failed to complete a preproduction test within the allotted time, despite being given two chances to do so. 

Delay

In The Davis Group, the ASBCA denied the contractor's claim for an extension of the performance period because the contractor's own delays were primarily responsible for the delay in the Government's approval of the contractor's  submittal.

Costs and Cost Accounting Standards (CAS)

In The Boeing Co. v. DOE, the CBCA granted the contractor's motion for summary judgment that it was entitled to the costs of defense of qui tam suit (in which it was ultimately found not liable) from the time the suit was originally filed until the Government intervened as plaintiff.

In SRI International, the ASBCA held that the costs of maintaining a standby Letter of Credit (LOC) under several contracts  over two fiscal years in order to guarantee the contractor's ability to repay the entire amount of its long-term debt in two years were allowable costs for the following reasons:  

First, FAR 31.205-20 is inapplicable to disallow the LOC costs because SRI treated the full amount of its long-term . . .[b]ond debt as a part of its "[c]urrent liabilities" not as its "long-term liabilities," and the government has failed to show this treatment is inappropriate. Second, paying an annual fee (the LOC costs) for a one-year bank LOC for the purpose of collateralizing or guaranteeing its ability to repay the full amount of its long-term . . . [b]ond debt in the short-term (one year) qualifies as administrative costs for short-term borrowing for working capital allowable under FAR 31.205-27(a)(3). Third, the LOC costs in dispute are not fixed and upfront costs and are therefore different in kind from the typical costs of financing.

Subsequently, on the Government's motion for reconsideration, the Board held that the amount due the contractor should be determined by the procedures set forth in the "Allowable Cost and Payment" clause rather than being predetermined by the Board as suggested by its prior decision

In Raytheon Co., the ASBCA granted summary judgment in favor of the contractor because the aggregate effect on all affected contracts of a voluntary change in cost accounting practices related to the actuarial value of pension plans did not result in increased costs to Government.

In Golden Wings, Inc., the ASBCA held that the Government was not liable for the contractor's vehicle storage costs incurred after the Government returned the leased vehicles to the contractor at the end of the lease.

In ARCTEC Services, the ASBCA held that, under both the "Service Contract Act--Price Adjustment" and "Incentive Price Revision--Firm Target" clauses of its contract, a contractor was entitled to a price adjustment for the cost of severance benefits paid to unionized employees pursuant to collective bargaining agreements following expiration of the  contract.

In Todd Pacific Shipyards Corp., the ASBCA denied the contractor's claim that it should be allowed to re-classify certain indirect costs as direct costs because it had treated the costs as indirect costs for an extended period of time and they benefited more than one contract.

In Thomas Assocs., the ASBCA discussed (a) the allowability of (i) life insurance costs for the contractor's President and (ii) the cost of a Jeep transferred to an employee and treated as fringe-benefit compensation to that individual and (b) the applicability of the penalty for expressly unallowable costs pursuant to FAR 42.709. On reconsideration, the ASBCA modified its original decision. 

In Kearfott Guidance & Navigation Corp., the ASBCA allowed reformation of several contracts because identifiable intangible asset write-up amortization costs had been mistakenly omitted from the calculation of contractor's G&A rates and FCCOM factors.

In General Dynamics Corp., the ASBCA held that the contractor's use of intra-year pension fund returns in the contractor's forward pricing estimates of pension costs violated CAS 412.

In Westech International, the ASBCA held that the contractor satisfied the requirements for reimbursement of Arizona transaction privilege taxes plus penalties and interest pursuant to FAR 31.205-41. 

In COSTAR III, LLC, the ASBCA held that the contractor was not entitled to reimbursement for health and welfare benefit cost increases in (i) the base year of the contract (because it modified its CBA to effectuate such increases after the beginning of the base year) or (ii) in the option years (because the option year mods constituted an accord and satisfaction and did not provide for such increases).

In SplashNote Systems, Inc., the ASBCA denied a contractor's appeal from a government claim for repayment of unallowable costs because (i) costs now claimed as deferred IR&D costs had not been specifically identified and authorized in the contract; (ii) the bonus paid to the contractor's owner/CEO was an unallowable distribution of profits; and (iii)  numerous local meals allegedly conducted to discuss recruiting were unallowable under several claimed costs principles, chiefly because the contractor had not presented sufficient documentation to establish their allowability. 

Quantum 

In KDI Development, the CBCA recognized the Government's right to offset amounts due it under one lease against amounts it owed under a second lease with the same contractor.

In Southwest Marine, Inc., the ASBCA determined the quantum due the Navy as a result of debt concessions made by creditors after confirmation of a Chapter 11 reorganization plan of a company in bankruptcy. The case was on remand after the original board decision was reversed by a district court whose decision was then upheld by the Ninth Circuit.

In W. G. Yates and Sons Construction Co., the CBCA denied the Government's motions to submit new evidence and to reconsider the Board's prior decision concerning the proper measure of an equitable adjustment after the retroactive correction of an erroneous Davis Bacon Act wage determination originally included in a contract.

In Raytheon Co. (on remand from the Federal Circuit), the ASBCA held that interest on the interest due the Government for CAS 413 noncompliance continues to accrue until the date the interest is paid rather than only to the date the principal is repaid (as the contractor had argued).

Discovery/Procedure

In Parsons-UXB Joint Venture, the ASBCA denied the Government's motion to compel production of documents based upon the Government's contention that the contractor had engaged in a blanket waiver of the attorney-client privilege.

In Free & Ben, Inc., the ASBCA held that a motion for reconsideration sent by email and received after Board's business hours but before midnight on the last day for filing was timely.

In W. G. Yates and Sons Construction Co., the CBCA denied the Government's motions to submit new evidence and to reconsider the Board's prior decision concerning the proper measure of an equitable adjustment after the retroactive correction of an erroneous Davis Bacon Act wage determination originally included in a contract.

In Americom Government Services, the CBCA denied the Government motion to dismiss the appeal because the contractor's affidavit raised a factual question concerning the Government's contention that there was no contract between the appellant and the Government.

In Cooley Constructors , the ASBCA denied a government motion for summary judgment because there were issues of fact regarding contract interpretation requiring further development in the record.

In Raytheon Missile Systems, the ASBCA denied the contracting agency's motion for summary judgment because of material disputed facts over whether that agency's relationship with another government agency resulted in the increases in fuel prices for which contractor is seeking recovery under theories of constructive change and breach of the duty of non-interference with contractual performance.

Equal Access to Justice Act

In Job Options, the ASBCA held that, even though the contractor won its appeal on the merits, it could not recover its attorney fees under the EAJA because the Government's position had been substantially justified, in that: "the appeal involved [the Board's] determination of close factual questions[;] the pre-hearing documentary record established a prima facie case supporting the government’s deductions[;] and the government’s position was supported by legal precedent involving the same agency on closely analogous, albeit distinguishable, facts." In States Roofing, the Board reduced contractor's EAJA claim for, inter alia, the "disproportionate amount" of fees incurred after the contractor's rejection of the Government's lump sum settlement offer.

In Lasmer Industries, the ASBCA denied an EAJA application because, after having initially denied a government motion to dismiss appeals as mooted by a proposed bilateral modification that did not contain all the language desired by the plaintiff, the Government inserted the desired language, and the Board then had dismissed the appeal as moot without ever issuing a decision on the merits. The lesson is that, even when a board decision causes the Government to take action favoring the appellant, that is not enough to trigger an EAJA award unless the board decision is on the merits. 

In Janet L. Fox and Todd Fox, the PSBCA dismissed an untimely-filed application for attorneys fees under the EAJA.

        

Court of Federal Claims

Contract Disputes Act (CDA) / Tucker Act / Jurisdiction / Standing 

In Environmental Safety Consultants, Inc., the court dismissed an appeal for lack of jurisdiction because contractor failed to file valid CDA claim with Contracting Officer within CDA's six-year statute of limitations, and, in doing so, the court explained the difference between the CDA's and the Tucker Act's six-year statutes of limitations.

In Parkwood Assocs. Limited Partnership, the court dismissed a claim for breach of contract as time-barred under 28 U.S.C. 2501 because it "first accrued" more than six years before the plaintiff brought suit. Judge Allegra made this mundane holding memorable by the language he chose to express it:

It is safe to say that some things in life ought not be feigned. "Do not feign affection," a famous poem admonishes. Nor should an official invoke "feigned necessities," characterized by Cromwell as "the greatest cozenage that men can put upon the Providence of God, and make pretence to break known rules by." And when it comes to contracts, one probably should add to this list – not feigning a demand for performance. Doing so when performance is not truly desired, and when there is no genuine intent to pursue damages upon nonfeasance, is a pretense that, over time, can serve to render important rights unenforceable – as this case, unfortunately for plaintiff, so well illustrates. [footnotes omitted; the "famous poem" is Max Ehrmann's Desiderata]

In FloorPro, the court held that a subcontractor had standing (as the intended third-party beneficiary of a contract modification) to bring a suit for damages against the Government after the Government breached the mod by failing to issue checks jointly to the prime and the sub.  

In Bowers Investment Co., the court relied on the claim preclusion doctrine to dismiss claims that could (and should) have been litigated during earlier CBCA appeal. (I'm not convinced. The claims were mentioned in the decision in the earlier CBCA appeal, but were not submitted to the Contracting Officer for a decision prior to that earlier appeal, so I would say that they could not have been part of the earlier CBCA appeal and, therefore, should not be barred in the current litigation). 

In Newtech Research Systems, the court dismissed a contractor's appeal for lack of CDA jurisdiction because (i) one underlying claim had not been submitted to the Contracting Officer within six  years from the date it accrued; (ii) another had not been appealed to the court within 12 months of receiving a Contracting Officer's decision; and (iii) an undated letter to the Inspector General did not constitute a claim.

In Northrop Grumman Computing Systems, the court held it lacked jurisdiction over a dispute involving a claim that did not notify the Contracting Officer that it had been assigned and, therefore, did not meet the requirement that it contain a clear and unequivocal statement that gave the Contracting Officer adequate notice of the basis of the claim.

In Insurance Co. of the West, the court dismissed for lack of jurisdiction an action brought by a surety as the alleged equitable subrogee and assignee of a contractor's claim because the surety did not prove the Government had waived the protections of the Assignment of Claims Act.

In Liberty Ammunition, the court refused to summarily dismiss the plaintiff's claim for the Government's breach of non-disclosure agreements (NDAs) because questions remain whether either the "waiver" or "operation of law" exceptions to the Anti-Assignment Act apply to the assignment of the NDAs.

Changes/Breach/Contract Interpretation/Defective Specs/Authority

In denying the Government's motion for summary judgment in Lublin Corp., t/a Century 21, Advantage Gold, the court held that government officials need not have explicit authority to enter into contracts generally in order to be found to have implied actual authority to enter into a particular contract.

In Gonzales-McCauley Investment Group, the court held that correspondence between the Government and the plaintiff concerning the plaintiff's quotation, which the Government ultimately decided not to pursue because of suspected plagiarism, was insufficient to establish a procurement contract  based on offer and acceptance.

In Metcalf Construction Co., the court denied multiple claims by a construction contractor for, inter alia, constructive changes, breach of the duty of good faith and fair dealing, and differing site conditions, but awarded the contractor more than a year in excusable delays due to (i) the Government's delayed notice to proceed and (ii) the Government's failure to promptly investigate soil conditions as required by the "Differing Site Conditions" clause.

In Timber Products Co., the court held the Government breached its implied duties to cooperate with the contractor and not to hinder its performance by awarding (and later suspending) a timber sales contract without revealing to the contractor that the Government's interpretation of the law as permitting it to forego environmental surveys was unlikely to prevail in a pending district court suit.

In System Planning Corp., the court denied a contractor's claim because the option clause containing the language on which the claim was based was never exercised.

In Jullie G. Horn, the court held that even though a Bureau of Prisons "contract" for dental hygienist services contained boilerplate language identifying it as a requirements contract (and both parties read it to be such a contract), its other provisions clearly established it was neither a requirements contract nor an indefinite quantity contract, and, therefore, the contractor had no recourse when the Government decided to use in-house services shortly after performance period began:

It is unfortunate that the Government has continued to use this standard form document that appears to the non-legal reader as a binding contract, but is in fact not. It is clear that this document misled [the plaintiff] into believing she had an agreement with the Government when, in reality, the agreement was unenforceable. More to the point, even the Government officials with whom she dealt did not seem to understand the document’s lack of enforceability. This point is particularly troublesome to the Court. While there are certainly instances where a contract contains a latent defect rendering it unenforceable, this is not the case here. As early as 1929, the Supreme Court put the Government on notice that this type of contractual language created an unenforceable instrument. See Willard, Sutherland & Co., 262 U.S. at 493. In 1984, the Court in Ralph Constr. Inc. similarly declared an indefinite quantities contract unenforceable that contained seemingly identical FAR language. See Ralph Const. Inc., 4 Cl. Ct. at 731-32. Yet, more than a quarter of a century later, these FAR provisions are still rendering contracts unenforceable and unsuspecting contractors are being denied the opportunity to pursue what may be meritorious claims. 

Terminations 

In Armour of America, the court (i) denied the contractor's claims that a default termination (for failure to make progress) was made in bad faith and that the Government breached its duty of cooperation and its duty not to hinder performance and (ii) granted  the Government's counterclaim for excess reprocurement costs. 

In OK's Cascade Co., the court held that a contractor whose protested contract was terminated for convenience and replaced by another contract for essentially the same work was not entitled to a termination-for-convenience claim recovery.

In AEY, Inc., the court upheld a default termination premised on the contractor's provision of ammunition manufactured by a Communist China munitions company in violation of DFARS 252.225-7007 despite the contractor's claim of estoppel against the Government based on the Contracting Officer's knowing acceptance of the nonconforming supplies because the court held that not even the Contracting Officer had the authority to accept supplies that violated the clause, the point being that there are limits even to a PCO's authority.

NCLN20, Inc., is complicated, but is worth reading as an instruction concerning how difficult it is to prove bad faith (and breach) on the part of the Government, which this contractor for armed guard services failed to do even though (i) the Government improperly terminated it for default without giving it a fair chance to begin performance after giving it only one day to cure its failure to provide a significantly increased number of armed guards (of the need for which the Government notified it immediately after award); (ii) an IG report found many faults with the Government's treatment of the contractor and administration of its contract; (iii) the court, itself, found the contracting officer's behavior toward the contractor to be overbearing a times; and (iv) after the Government determined the default termination was improper, it dallied about releasing funds that it had improperly offset against another contract to cover excess reprocurement costs because the contractor allegedly was not submitting invoices in a format that was to the Government's. 

In Martin Construction, Inc., the court held a termination for default was improper because the Government's defective design caused excusable delays well beyond the contract's stated completion date.

Costs; Cost Accounting Standards (CAS)

In a Raytheon CAS 413 segment-closing decision, the court held that the Government was entitled to an equitable adjustment to the extent that the application of revised CAS 413 to segment closings resulted in the Government owing more under revised CAS 413 for pension costs attributable to pension costs arising under original CAS 413 contracts. The court also reaffirmed prior decisions that (i) the FAR's Limitation of Funds and Limitation of Cost clauses do not limit CAS 413 segment-closing adjustments because such adjustments of previously determined pension costs do not increase contract-specific costs; and (ii) recovery for segment closing adjustments is not dependent on the contractor having fully funded them in accordance with CAS 412 and the FAR's pension cost regulations because segment closings are not pension costs.

In denying two government motions in limine in Sikorsky Aircraft Corp., the court included an extensive interpretation and analysis of the coverage and and interplay of subsections 50(d) and (e) of CAS 418.

Quantum

In The Redland Co., the  court held, inter alia, that a contractor was not entitled to Eichleay or unabsorbed overhead damages during a suspension of work that was ordered before initial performance began, especially when the contractor offered no proof that it remained on standby during the suspension.

In Scott Timber Co., the court determined the damages, including lost profits, due the contractor for the Government's breach of timber sales contracts.

In K-Con Building Systems, Inc., the court discussed how courts evaluate the enforceability of liquidated damages provisions.

Discovery, Evidence, Procedure

In  Gulf Group General Enterprises Co. W.L.L., the court  held, inter alia, that the Army's regulations at 32 C.F.R. §§ 516.51(a) and 516.52, which purport to be an absolute bar against former Army employees providing expert testimony adverse to the United States, are invalid. 

In another Gulf Group General Enterprises decision, which involves attorney-client privilege and work product issues, the court  held that (in part because the Government did not comply with an agreement to make such witnesses available for deposition prior to trial)  the contractor could call as a witness a civilian attorney who helped the Contracting Officer investigate the facts underlying terminations for default and who gathered and provided factual information used in the termination decisions.  

In Government Technical Services , the court granted an unopposed motion to stay proceedings pending a related criminal investigation.

In M.E.S., Inc., the court granted a surety's motion to intervene in a dispute over an assessment of excess reprocurement costs by the Postal Service against its contractor because of the surety's potential liability on the performance bond.

In Veridyne Corp., the court (i) granted the plaintiff's motion in limine to preclude the testimony of an SBA official (who had been hired after the facts involved in the dispute at bar) concerning the generally detrimental effect of fraud on the SBA's 8(a) program and (ii) held that, regardless whether it was considered expert testimony or lay opinion testimony, the SBA official's proffered testimony did not satisfy the standards for admissibility.

Fraud

In Alcatec, LLC, the court held that the plaintiff had forfeited its claim pursuant to the Forfeiture of Fraudulent Claims Act, 28 U.S.C. § 2514, and that the Government was entitled to penalties and damages (for its costs of investigating the plaintiff's actions) under the False Claims Act, 31 U.S.C. § 3729(a)(1), because the plaintiff had engaged in a scheme to defraud the Government by over-billing for preventative maintenance inspections of trailers in the wake of Hurricane Katrina. 

EAJA/Attorneys Fees 

In International Industrial Park, Inc., the court held on reconsideration that the plaintiff was entitled to recover attorneys fees regardless of the applicability of the EAJA because the contract at issue specifically provided for such recovery.

Court of Appeals for the Federal Circuit

Jurisdiction/Standing/Res Judicata 

In Slattery, et al. v. United States, over a strong, four-judge dissent, the CAFC held that Tucker Act jurisdiction exists over claims for breach of contract by the FDIC and, more generally,  that "(1) when a government agency is asserted to have breached an express or implied contract that it entered on behalf of the United States, there is Tucker Act jurisdiction of the cause unless such jurisdiction was explicitly withheld or withdrawn by statute, and (2) the jurisdictional foundation of the Tucker Act is not limited by the appropriation status of the agency’s funds or the source of funds by which any judgment may be paid."

In Lumbermens Mutual Casualty Co., the court held that: (i) a Miller Act surety's claims against the Government seeking to recover allegedly improper progress payments made to a contractor before the Government received notice of the contractor's default are not claims for equitable subrogation cognizable under the Tucker Act; (ii) there is no Tucker Act jurisdiction over claims for impairment of suretyship apart from the theory of equitable subrogation; and (iii) the requirements of the CDA apply to a surety’s claim against the United States arising from a takeover agreement which the government and surety have entered into for the completion of a bonded contract following the principal obligor’s default.

In Todd Construction, L.P., the court affirmed the CoFC's decision that, although the court had CDA jurisdiction to consider the contractor's claim that the Government gave it an unfair performance evaluation, the complaint failed to state a claim under Rule 12(b)(6) because the contractor did not allege that all its delays were excusable and, thus, there was no basis for concluding the Government's evaluation was  arbitrary or capricious.

In Cardiosom, L.L.C., the court reversed the CoFC and held that court had Tucker Act jurisdiction over a contractor's breach of contract claim following termination in accordance with the 2008 amendment to the Medicare Improvements for  Patients and Providers Act.

In Systems Development Corp., the court affirmed the ASBCA's dismissal for lack of jurisdiction because the contractor failed to appeal a termination settlement cost claim to the Board within 90 days of receiving the Contracting Officer's decision and failed to submit equitable adjustment claims within the CDA's six-year statute of limitations.

In Engage Learning, Inc., the CAFC reversed the CBCA's summary dismissal of an appeal for lack of subject matter jurisdiction because, after the contractor initially pled that its appeal involved a contract covered by the CDA, the CBCA made summary conclusions about the credibility of evidence as to the existence of a contract. The CAFC held the Board should have treated the situation as a motion to dismiss for failure to state a claim (where the factual allegations in the complaint must be accepted as true) as opposed to a motion to dismiss for lack of subject matter jurisdiction (where only the uncontroverted factual allegations are accepted for purposes of the motion). 

Contract Interpretation/Changes/Authority/Breach

In General Dynamics C4 Systems, the CAFC reversed the ASBCA's prior decision (partially because the Board applied the wrong test for equitable estoppel) and held that the fact that the contractor on an ID/IQ contract accepted some emailed delivery orders, when the contract required them to be mailed, estopped the contractor from claiming an equitable adjustment when the Government directed it to proceed after it refused to perform subsequent, similarly defective delivery orders. The correct test for equitable estoppel is the Federal Circuit's own test from the Aukerman case, which requires a showing of "(1) misleading conduct, which may include not only statements and actions but silence and inaction, leading another to reasonably infer that rights will not be asserted against it; (2) reliance upon this conduct; and (3) due to this reliance, material prejudice if the delayed assertion of such rights is permitted."

In Klamath Irrigation District, the court held that impossibility of performance is a factor to be taken into account in considering the sovereign acts doctrine.

In Dominion Resources, the CAFC affirmed a Court of Federal Claims decision that that the Assignment of Claims Act does not prohibit the assignment of existing contract claims in a spent nuclear fuel case because the Nuclear Waste Policy Act, 42 U.S.C. 10222, allows such assignments.

 

      

Supreme Court

In General Dynamics Corp. v. United States, the Supreme Court vacated the prior opinion by the Court of Appeals for the Federal Circuit and held that in a contract concerning which the state secrets doctrine made it impossible to adjudicate a Government contractor’s prima facie valid affirmative defense to the Government’s allegations of contractual breach, the proper remedy is to leave the parties where they were on the day they filed suit. 


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