Articles Posted in U.S. Court of Appeals for the Federal Circuit

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Tightened security at base, preventing access by contractor's ex-felon employees, did not justify contract adjustment. Malmstrom Air Force Base in Great Falls, Montana, houses intercontinental ballistic missiles. Garco's contract to construct base housing incorporated Federal Acquisition Regulation 52.222-3, providing that contractors may employ ex-felons and requiring contractors to adhere to the base access policy. Malstrom’s access policy indicated that it would run the employees’ names through the National Criminal Information Center. “Unfavorable results will be scrutinized and eligibility will be determined on a case-by-case basis.” Garco’s subcontractor, JTC, experienced difficulty bringing its crew onto the base. JTC used workers from a local prison’s pre-release facility. JTC had not encountered access problems in its performance of other Malmstrom contracts over the preceding 20 years. Security had been tightened after an incident where a prerelease facility worker beat his manager. JTC requested an equitable adjustment of the contract, stating that its inability to use convict labor greatly reduced the size of the experienced labor pool so that it incurred $454,266.44 of additional expenses; JTC did not request a time extension. The Federal Circuit affirmed the Armed Services Board of Contract Appeals’ denial of the claim, rejecting a claim of constructive acceleration of the contract. The court concluded that there was no change to the base access policy. View "Garco Construction, Inc. v. Secretary of the Army" on Justia Law

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The Defense Supply Center Philadelphia (DSCP), a sub-agency of the Defense Logistics Agency, issued a solicitation for an Indefinite-Delivery/Indefinite-Quantity commercial item contract to provide food and non-food products to customers, including the military, in three overseas zones. In May 2003, DSCP awarded a contract to Agility to supply “Full Line Food and Non-Food Distribution” to authorized personnel in Kuwait and Qatar. After many modifications, in December 2005, Agility submitted a Request for Equitable Adjustment for $13.1 million related to trucks being held in Iraq by the government for longer than 29 days. In April 2007, the government’s contracting officer denied Agility’s claim. The Armed Services Board of Contract Appeals denied Agility’s appeal in August 2015, finding that Agility had accepted all risks associated with delays beyond 29 days. The Board stated that it “need not decide whether the government constructively changed contract performance or whether it breached its implied duty of cooperation” because “whether the government breached the contract comes down to contract interpretation.” The Federal Circuit affirmed-in-part, agreeing that the government did not breach the express terms of the contract or a later agreement to consider exceptions, but finding that the Board erred when it concluded that it “need not decide” Agility’s implied duty and constructive change claims. View "Agility Public Warehousing Co. KSCP v. Mattis" on Justia Law

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Within the Department of Defense, DRMS disposes of surplus military property at Defense Reutilization and Marketing Offices (DRMOs). Property that cannot be reutilized is demilitarized and/or reduced to scrap that can be sold. A 2007 DRMS Request for Proposals sought performance of DRMO activities for up to five years. A referenced website showed DRMS’s historical workload and scrap weight; an amendment indicated that “the contractor may experience significant workload increases or decreases” and outlined a process to “renegotiate the price” if workload increased. DRMS awarded its first contract to Agility to operate six DRMOs for one base year with four option years at a fixed price of $45,233,914.92 per year. Upon commencing work in Arifjan, the largest of the DRMOs, Agility immediately fell behind. It inherited a backlog of approximately 30 weeks. From the start, the volume received at Arifjan was greater than Agility anticipated. The parties terminated their contract for convenience in 2010. Agility thereafter requested funding for its additional costs, claiming DRMS provided inaccurate workload estimates during solicitation. The contracting officer awarded Agility only $236,363.93 for its first claim and nothing for the second, noting that Agility received an offset from its scrap sales. The Federal Circuit reversed, as “clearly erroneous,” the Claims Court’s findings that DRMS did not inadequately or negligently prepare its estimates and that Agility did not rely on those estimates. Agility’s receipt of scrap sales and the parties’ agreement did not preclude recovery. View "Agility Defense & Government Services, Inc. v. United States" on Justia Law

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Wilson was a civilian Resource Analyst at the Nuclear Propulsion Directorate at the Naval Sea Systems Command, which required a Department of Energy security clearance. The DOE revoked Wilson’s security clearance, stating that Wilson: knowingly brought a personal firearm onto a Navy facility in violation of regulations; armed himself with a personal weapon while acting as a Metropolitan Police Department reserve officer, contrary to regulations; and made false statements and false time and attendance entries to his civilian employer, the Naval Reserve Unit and the MPD. Wilson maintains that he brought his firearm to the facility in response to the 2013 Washington Navy Yard shooting, in perceived compliance with his duty as a Navy Reservist, and requested reinstatement under the Uniformed Services Employment and Reemployment Rights Act, 38 U.S.C. 4301. The Navy removed Wilson from federal service. A Merit Systems Protection Board administrative judge determined that the Board lacked authority to consider claims of discrimination or reprisal in the context of a removal based on security clearance revocation; that the Navy provided him the procedural protections of 5 U.S.C. 7513(b); and that the Navy did not have a policy to reassign employees to alternate positions that do not require a security clearance. The Federal Circuit affirmed the Board’s finding that it lacked the authority to consider Wilson’s USERRA claim. View "Wilson v. Department of the Navy" on Justia Law

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Zafer, an Ankara, Turkey, contractor, and the Army Corps of Engineers (USACE) entered into a firm-fixed-price contract to construct the MILCON Support Facility at the Bagram Air Force Field in Afghanistan. Zafer was responsible for delivering materials to the site, and assumed the risk “for all costs and resulting loss or profit.” After issuing notice to proceed, USACE recognized that it could not make the project site available immediately and increased the contract price and set a new completion date. In November 2011, Pakistan closed its border from the seaport city of Karachi along the land routes into Afghanistan in response to a combat incident with the U.S. and NATO. The route remained closed for 219 days, Zafer notified USACE that the closure would greatly impact its delivery of materials and requested direction on how to proceed. USACE replied that the closure was “purely the act of Pakistan governmental authorities,” that the U.S. government was “not responsible” and denied further compensation. Zafer subsequently, repeatedly, asked for payment for additional costs. In 2013, Zafer submitted an unsuccessful request for an equitable adjustment. The contracting officer found no evidence supporting a constructive change claim. The Claims Court granted USACE summary judgment. The Federal Circuit affirmed. Zafer failed to designate specific facts to establish a constructive change claim based on either a constructive acceleration theory or on a government fault theory. View "Zafer Taahhut Insaat v. United States" on Justia Law

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Plaintiffs, employed by the U.S. Customs and Border Protection, (CBP) as Supply Chain Security Specialists in its Customs-Trade Protection Against Terrorism program, travelled and worked at foreign posts designated by the Secretary of State as “danger pay posts.” They alleged that they did not receive overtime pay as required by the Fair Labor Standards Act, 29 U.S.C. 216(b). Count II, citing the Overseas Differentials and Allowances Act (ODAA) of 1960, 5 U.S.C. 5928, claimed that CBP denied them danger pay allowances for work performed at posts that the Department of State has designated as eligible for such allowances. The Claims Court dismissed Count II for lack of jurisdiction on grounds that ODAA is not a money-mandating statute, that the State Department regulation (DSSR) is not money-mandating, and that CBP has not adopted a policy of paying danger pay to all eligible employees. The Federal Circuit affirmed; section 5928, the DSSR, and the alleged unwritten policy of providing danger pay, cannot reasonably be construed as “money-mandating.” View "Acevedo v. United States" on Justia Law

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In 1996, Zoltek sued, alleging that the process used to produce carbon fiber sheet materials for the B-2 Bomber and the F-22 Fighter Plane, with the consent of the Air Force and Navy, infringed its patent. The Federal Circuit answered a certified question, holding that the patentee has no claim against the government when any step of the patented method is practiced outside of the U.S., as for the F-22. On remand, the Claims Court granted Zoltek leave to substitute as defendant Lockheed, the F-22’s general contractor. The Federal Circuit then acted en banc and reversed its earlier ruling, recognizing the liability of the United States for infringement by acts that are performed with its authorization and consent, citing 28 U.S.C. 1498(a), and dismissed Lockheed. On remand, the Claims Court separated trial of the issues of validity and infringement and denied discovery as to infringement with respect to the F-22. The Federal Circuit denied a petition for mandamus. The Claims Court sustained patent eligibility, but held the asserted claims invalid on the grounds of obviousness and inadequate written description. The Federal Circuit held that in these circumstances, given the government’s official invocation of state secret privilege, the court acted within its discretion in limiting trial initially to issues of validity, but erred in its judgment of patent invalidity. View "Zoltek Corp. v. United States" on Justia Law

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The U.S. Air Force solicited bids from private companies to supply equipment and services to build a new radar system. Raytheon, Northrop Grumman, and Lockheed Martin cleared early hurdles; each received a solicitation for proposals for Engineering and Manufacturing Development. The Air Force subsequently sent Evaluation Notices to Raytheon and Northrop that “contractors would not be permitted to use IR & D costs to reduce their costs of performing . . . if those costs were implicitly or explicitly required for contract performance.” Raytheon objected; Northrop did not.. The Air Force then changed its view and accepted Raytheon’s treatment of certain costs as IR & D costs, but never communicated its new view to Northrop. In final proposals, Raytheon proposed IR & D cost reductions, whereas Northrop did not. The Air Force awarded the contract to Raytheon. Northrop and Lockheed filed protests with the Government Accountability Office (31 U.S.C. 3551). In response, the Air Force “decided to take corrective action” and to reopen discussions. Raytheon filed a protest under 28 U.S.C. 1491(b) to challenge the decision to take corrective action. The Federal Circuit affirmed denial of the protest, concluding that the reopening decision was proper based on the disparate-information violation. View "Raytheon Co. v. United States" on Justia Law

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The National Federation of Federal Employees Local 1442 filed a group grievance on behalf of 138 NFFE bargaining unit employees at Letterkenny Army Depot (LEAD); Local 2109 filed two grievances on behalf of all of bargaining unit employees at Watervliet Arsenal (WVA). In both grievances, the Union challenged the furloughing of bargaining unit employees for six discontinuous days between July and September in Fiscal Year 2013. The furloughs were the result of an automatic process of federal agency spending reductions called “sequestration.” Arbitrator Kaplan ruled that the furloughs of the employees at LEAD were in accordance with law. Months later, Arbitrator Gross ruled that the furloughs of WVA security employees were not in accordance with law, but that the furloughs of non-security bargaining unit employees at WVA were in accordance with law. The Federal Circuit upheld both decisions. Arbitrators Kaplan and Gross had substantial evidence before them demonstrating that the furlough decisions were reasonable management solutions to the financial restrictions placed on DOD by the sequester, thus promoting the efficiency of the service. View "Nat'l Fed'n of Fed. Employees v. Dep't of the Army" on Justia Law