Justia Aerospace/Defense Opinion Summaries

Articles Posted in US Court of Appeals for the Federal Circuit
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Boeing entered into contracts with the Air Force that require Boeing to deliver technical data with “unlimited rights,” meaning that the government has the right to “use, modify, reproduce, perform, display, release, or disclose [the] technical data in whole or in part, in any manner, and for any purpose whatsoever, and to have or authorize others to do so.” Notwithstanding the government’s unlimited rights, Boeing retains ownership of any technical data it delivers under the contracts.Boeing marked each submission to the Air Force with a legend that purports to describe Boeing’s rights in the data with respect to third parties. The government rejected Boeing’s technical data, finding that Boeing’s legend is a nonconforming marking because it is not in the format authorized by the contracts under the Defense Federal Acquisition Regulation Supplement, Subsection 7013(f). Boeing argued that Subsection 7013(f) is inapplicable to legends that only restrict the rights of third parties. The Armed Services Board of Contract Appeals agreed with the government.The Federal Circuit vacated. Subsection 7013(f) applies only in situations when a contractor seeks to assert restrictions on the government’s rights. The court remanded for resolution of an unresolved factual dispute remains between the parties regarding whether Boeing’s proprietary legend, in fact, restricts the government’s rights. View "Boeing Co. v. Secretary of the Air Force" on Justia Law

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The Joint Enterprise Defense Infrastructure Cloud procurement is directed to the long-term provision of enterprise-wide cloud computing services to the Defense Department. Its solicitation contemplated a 10-year indefinite-delivery, indefinite-quantity contract with a single provider. The JEDI solicitation included “gate” provisions that prospective bidders would be required to satisfy, including that the contractor must have at least three existing physical commercial cloud offering data centers within the U.S., separated by at least 150 miles, providing certain offerings that were “FedRAMP Moderate Authorized” at the time of proposal (a reference to a security level). Oracle did not satisfy the FedRAMP Moderate Authorized requirement and filed a pre-bid protest.The Government Accountability Office, Claims Court, and Federal Circuit rejected the protest. Even if Defense violated 10 U.S.C. 2304a by structuring the procurement on a single-award basis, the FedRAMP requirement would have been included in a multiple-award solicitation, so Oracle was not prejudiced by the single-award decision. The FedRAMP requirement “constituted a specification,” not a qualification requirement; the agency structured the procurement as a full and open competition. Satisfying the gate criteria was merely the first step in ensuring that the Department’s time was not wasted on offerors who could not meet its minimum needs. The contracting officer properly exercised her discretion in finding that the individual and organizational conflicts complained of by Oracle did not affect the integrity of the procurement. View "Oracle America Inc. v. United States" on Justia Law

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After the U.S. invasion of Iraq, Agility was awarded a contract for support of staging area operations (PCO Contract). Under the Contract, the Coalition Provisional Authority (CPA) could issue individual task orders to Agility. Funds obligated under the contract were sourced from the Development Fund for Iraq (DFI). The CPA controlled the DFI, which consisted of Iraqi money. The Contract provided that “[n]o funds, appropriated or other, of any Coalition country are or will be obligated under this contract” and recognize[d] that a transfer of authority from the CPA to the interim Iraqi Governing Council (IIG) would occur in June 2004. The contracting parties were the CPA and Agility. The Contract expressly preserved the right of the United States to assert claims against Agility. A Contract amendment provided that any claim Agility had after the transfer to IIG could not be brought before the Armed Services Board of Contract Appeals but could only be brought in an Iraqi court. The U.S. Army was designated as the administrator of the PCO contract.In 2010, following an audit of the PCO Contract, the Army contracting officer sent demand letters for overpayments allegedly made under 12 task orders. The Claims Court upheld the offsets, holding that the United States (rather than Iraq) was owed the alleged overpayment and the United States was authorized to offset the alleged overpayment. The Federal Circuit in part and vacated in part. The Claims Court did not evaluate the merits of the offset determination nor the procedures required by law. View "Agility Public Warehousing Co. v. United States" on Justia Law

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The Navy began a program to design and build littoral combat ships (LCS) and issued a request for proposals. During the initial phase of the LCS procurement, FastShip met with and discussed a potential hull design with government contractors subject to non-disclosure and confidentiality agreements. FastShip was not awarded a contract. FastShip filed an unsuccessful administrative claim, alleging patent infringement. The Claims Court found that the FastShip patents were valid and directly infringed by the government. The Federal Circuit affirmed.The Claims Court awarded FastShip attorney’s fees and expenses ($6,178,288.29); 28 U.S.C. 1498(a), which provides for a fee award to smaller entities that have prevailed on infringement claims, unless the government can show that its position was “substantially justified.” The court concluded that the government’s pre-litigation conduct and litigation positions were not “as a whole” substantially justified. It unreasonable for a government contractor to gather information from FastShip but not to include it as part of the team that was awarded the contract and the Navy took an exceedingly long time to act on FastShip’s administrative claim and did not provide sufficient analysis in denying the claim. The court found the government’s litigation positions unreasonable, including its arguments with respect to one document and its reliance on the testimony of its expert to prove obviousness despite his “extraordinary skill.” The Federal Circuit vacated. Reliance on this pre-litigation conduct in the fee analysis was an error. View "FastShip, LLC v. United States" on Justia Law

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UTC’s patent is generally directed to a gas turbine engine having a gear train driven by a spool with a low stage count low-pressure turbine, designed for use in airplanes. GE sought inter partes review. The Patent Trial and Appeal Board found that the claims at issue were not unpatentable for obviousness. UTC moved to dismiss GE’s appeal for lack of standing, arguing that an appellant does not automatically possess standing to appeal an adverse Board decision.GE submitted a Declaration by Long, GE’s Chief IP Counsel, explaining that because the design of aircraft engines can take eight years or more, GE develops new engines based on old designs; in the 1970s, GE developed a geared turbofan engine for NASA. GE asserted that UTC's patent impedes its ability to use that design as a basis for future geared turbofan engine designs, thereby limiting the scope of GE’s engine designs and its ability to compete. Long declared that designing around the patent restricts GE’s design choices and forced GE to incur additional research and development expenses. Long declared that Boeing requested information from GE and its competitors for engine designs for future Boeing aircraft with information regarding designs for both geared-fan engines and direct-drive engines; GE researched a geared-fan engine design that would potentially implicate UTC’s Patent but chose not to submit a geared-fan engine design.The Federal Circuit dismissed the appeal for lack of Article III standing. GE’s purported competitive injuries are too speculative to support constitutional standing. Long’s declarations are the only evidence of standing and neither shows concrete and imminent injury to GE related to the patent. View "General Electric Co. v. United Technologies Corp." on Justia Law

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In 1942-1943, the Government contracted with the Oil Companies to purchase aviation gasoline, vital to the war effort, permitting a profit margin “between 6% and 7%.” The manufacture of avgas from crude oil uses a 98% purity sulfuric acid as a catalyst in alkylation, a process that dilutes the sulfuric acid such that it turns it into “spent alkylation acid,” which may be used to catalyze the alkylation process again following purification; produce non-avgas petroleum by-products; or be disposed of. If spent alkylation acid is used to produce other petroleum by-products, it becomes "acidic sludge," a secondary waste with a lesser percentage of acid content that can be used to manufacture fertilizer, burned, or disposed of. Unable to reprocess the increased amount of spent alkylation acid given the prioritization of production, the Companies dumped spent alkylation acid and acid sludge in California: 12 percent of the waste was spent alkylation acid, and 82.5% was acid sludge. In 1991, the Government and California sued the Companies under the Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. 9601, for costs of cleaning up the disposal site. The Companies countersued. After years of litigation, the Claims Court granted the Companies partial summary judgment to prevent discovery into insurance settlements; denied the Government’s motion for leave to assert counterclaims in fraud; held that the Government was liable for clean-up costs for nonbenzol waste--$99,509,847.32, including accrued interest. The Federal Circuit affirmed, rejecting arguments that the Claims Court failed to allocate between recoverable and nonrecoverable costs, wrongfully admitted stipulations to calculate damages, and wrongly refused to allow proof of double recovery by insurance settlements. View "Shell Oil Co. v. United States" on Justia Law

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FastShip’s patents, entitled “Monohull Fast Sealift or Semi-Planing Monohull Ship,” relate to a “fast ship whose hull design in combination with a waterjet propulsion system permits, for ships of about 25,000 to 30,000 tons displacement with a cargo carrying capacity of 5,000 tons, transoceanic transit speeds of up to 40 to 50 knots in high or adverse sea states.” FastShip sued the government, alleging patent infringement under 28 U.S.C. 1498. FastShip alleged that the Navy’s Freedom-class Littoral Combat Ships, LCS-1 and LCS-3, infringed various claims. Following the Court of Federal Claims’ opinion construing various terms, the government successfully moved for partial summary judgment, arguing that the LCS3 was not “manufactured” by or for the government within the meaning of section 1498 before the patents expired. The court held that LCS-1 infringed the claims and awarded FastShip $6,449,585.82 in damages plus interest. The Federal Circuit affirmed, modifying the damages award. The court interpreted “manufactured” in section 1498 in accordance with its plain meaning, such that a product is “manufactured” when it is made to include each limitation of the thing invented and is therefore suitable for use; although other portions of LCS-3 had been completed, the “waterjet” and “hull” limitations had not been completed before the patent’s expiration. View "FastShip, LLC v. United States" on Justia Law

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On September 11, 2012, President Obama published notice “continuing for [one] year the national emergency . . . with respect to the terrorist attacks.” In April 2013, O’Farrell, an Army Reservist, received an order directing him to replace another Reservist, an attorney, who had been deployed. After reaching his maximum total years of active commissioned service (28 years), O’Farrell was transferred to the Army Reserve Retired List in October 2013. O’Farrell served his active duty as legal counsel until September 30, 2013. By August 26, 2013, O’Farrell had used his 15 days of military leave, most of his accrued annual leave, and advance annual leave. To avoid being placed on Military Leave Without Pay for the remainder of his active duty service, O’Farrell (unsuccessfully) requested an additional 22 days leave under 5 U.S.C. 6323(a)(1). O’Farrell did not cite any statutory provision that would qualify him as "called to full-time military service as a result of a call or order to active duty in support of a contingency operation." He argued that he was “serving . . . during a national emergency." O’Farrell sued under the Uniformed Services Employment and Reemployment Rights Act, 38 U.S.C. 4301– 4333. The Federal Circuit reversed. Section 6323(b) does not require that “a specific contingency operation" be identified in military orders when an employee is activated; “in support of” includes indirect assistance to a contingency operation, 5 U.S.C. 6323(b)(2)(B), which includes a military operation that results in service members being called to active duty under any law during a national emergency, 10 U.S.C. 101(a)(13). A service member’s leave request need not use particular language. View "O'Farrell v. Department of Defense" on Justia Law

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On September 11, 2012, President Obama published notice “continuing for [one] year the national emergency . . . with respect to the terrorist attacks.” In April 2013, O’Farrell, an Army Reservist, received an order directing him to replace another Reservist, an attorney, who had been deployed. After reaching his maximum total years of active commissioned service (28 years), O’Farrell was transferred to the Army Reserve Retired List in October 2013. O’Farrell served his active duty as legal counsel until September 30, 2013. By August 26, 2013, O’Farrell had used his 15 days of military leave, most of his accrued annual leave, and advance annual leave. To avoid being placed on Military Leave Without Pay for the remainder of his active duty service, O’Farrell (unsuccessfully) requested an additional 22 days leave under 5 U.S.C. 6323(a)(1). O’Farrell did not cite any statutory provision that would qualify him as "called to full-time military service as a result of a call or order to active duty in support of a contingency operation." He argued that he was “serving . . . during a national emergency." O’Farrell sued under the Uniformed Services Employment and Reemployment Rights Act, 38 U.S.C. 4301– 4333. The Federal Circuit reversed. Section 6323(b) does not require that “a specific contingency operation" be identified in military orders when an employee is activated; “in support of” includes indirect assistance to a contingency operation, 5 U.S.C. 6323(b)(2)(B), which includes a military operation that results in service members being called to active duty under any law during a national emergency, 10 U.S.C. 101(a)(13). A service member’s leave request need not use particular language. View "O'Farrell v. Department of Defense" on Justia Law

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The Court of Federal Claims enjoined the U.S. Army from proceeding with, or awarding, a contract to Airbus Helicopter, finding that Army Execution Order 109-14, which implemented the Army’s Aviation Restructure Initiative designating the UH-72A Lakota helicopter as the Army’s “Institutional Training Helicopter,” was a procurement decision in violation of the Competition in Contracting Act and the Federal Acquisition Regulation. The court also found the Sole Source Justification and Approval (J&A) was arbitrary and capricious. The Federal Circuit reversed and vacated the injunction, holding that Execution Order 109-14 was not a procurement decision subject to Tucker Act review because it did not begin “the process for determining a need for property or services.” The Order simply formalized the Army’s decision designating the UH-72A Lakota as the Army’s training helicopter. The Sole Source J&A was not arbitrary and capricious, and it was an abuse of discretion to supplement the administrative record. The J&A sufficiently supports the Army’s decision to award a sole-source follow-on contract because it is likely that award to any other source would result in substantial duplication of cost to the government that is not expected to be recovered through competition, or unacceptable delays in fulfilling the agency’s requirements.” View "AgustaWestland North America v. United States" on Justia Law