The Court of Federal Claims reviewed the default termination and found in favor of the contractor on its claim for the balance of the rent, plus interest. The court ruled that the default termination by the government was improper. It concluded the defects were largely cosmetic and easily could have been repaired if the V.A. had permitted Moreland to do so. It held that the building was safe to occupy during the repairs and the V.A.'s refusal to allow repairs breached the lease. Terming the government's conduct in its administration of the lease as "deplorable by any measure," the court held that even if the contractor had been in technical default, the V.A.'s bad faith compels the court to overturn the termination for default." The court invited Moreland to apply for attorneys' fees under the Equal Access to Justice Act. The V.A. breached it covenant of good faith and fair dealing implied into every contract, including Government contracts." The court found two instances of bad faith by the V.A., the first was when the Contracting Officer denied two claims for added labor costs during construction, even though he believed they were meritorious and was prepared to grant nearly $300,000 in changes for them. The Contracting Officer denied the claims on advice of the V.A.'s legal counsel, "so the agency would have greater leverage in negotiating other claims."

Noting that government contractors are required to submit accurate and complete claims, the court held that the government has a reciprocal obligation to act in good faith. The court held that the outright denial of meritorious claims to obtain bargaining advantage over a contractor "will not be condoned by this Court" The second act of bad faith related to the V.A's need to install an auxiliary HVAC system on the roof, not part of the contract specifications. The V.A. demanded that Moreland conduct a structural loading study at no cost to the V.A. and justified its request with a two page report in which a V.A. engineer claimed there were many structural deficiencies in the building. Moreland declined to perform the study after consulting with the project's architect and engineer.

Finally, the court found that the V.A. report was used as a pretext to shift the cost of the structural study to Moreland and gave no credence to it because of the V.A.'s ulterior motive in having it prepared. The court awarded Moreland $17,673,850, plus interest and $438,188 in attorneys' fees under the Equal Access to Justice Act.

Moreland Corp. v. United States, 76 Fed.Cl. 268 (2007)

Employers may use the Form I-9 with the revision date of either August 7, 2009 or February 2, 2009. The revision dates are located on the bottom right-hand portion of the form. For more information on USCIS and its programs, or to obtain Form I-9 and the Handbook for Employers visit www.USCIS.gov/I-9

Chamber of Commerce of the United States of America v. Janet Napolitano, Civil Action No. AW-08-3444 (D. Maryland M.D.) See Regulation 73 Fed. Reg. 67,651 (November 14, 2008).

Following a trial on the merits, the Court of Federal Claims (COFC) awarded Bell $2,058,456 for "labor inefficiency costs attributable to the cumulative impact of the [series of government] changes. Bell BCI Co., v. United States, 81 Fed.Cl. 617, 619, (2008). As noted by the Federal Circuit:

"In finding for Bell, the Court of Federal Claims drew a distinction between a "delay" claim and a "disruption" for "cumulative impact" claim . . . ."

The Court then looked to the contract's "Changes" clause and determined that "[u]nless provided otherwise, the bi-lateral modifications will compensate the Contractor for the changed work, but no for the impact for the multiple change orders on the unchanged work."

Because in the court's view, Modification 93 did not "provide otherwise," the Court concluded that Bell did release its cumulative impact claims. The Federal Circuit reversed the COFC, however, the Federal Circuit examined the plain language of the release and, after determining that its terms were ambiguous, ruled that "Bell released the government from any and all liability for equitable adjustments attributable to Modification 93." The Federal Circuit then remanded the issue to the COFC to determine "which of Bell's cumulative impact claims, if any, are "attributable to" modifications other than those modifications that contain the release language discussed above.

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• Adopt a written code of business ethics and conduct and make its "available to each employee during the covered contract;
• Exercise "due diligence" to prevent and detect criminal conduct;
• Promote an organizational culture that encourages ethical conduct and compliance;
• Make a timely written disclosure to the agency inspector general with a copy to the contracting officer whenever the contractor as "credible evidence: of a violation of the Civil False Claims Act or a federal criminal law involving fraud, conflict of interest, bribery or gratuity violations.

Every contractor (except for small business) must establish a business ethics and awareness program and an internal control system within 90 days of contract award. The contractor's system and program shall include:

• Reasonable steps to communicate standards, procedures and provide training;
• An internal control system that includes standards and procedures to facilitate timely discovery of improper conduct, periodic assessments of criminal conduct, reporting mechanisms such as a hotline and disciplinary action for improper conduct for failing to prevent or detect improper conduct;
• Disclosure of improper conduct to the federal government. Not only must the contractor comply with these business and ethics provisions, these provisions must be included in subcontracts in purchase orders in excess of $5 million and 120 day's duration.

In addition, the contractor must verify subcontractor and supplier compliance. The Associated General Contractor's (AGC) Federal Government Contractor Ethics And Compliance Programs, tool kit and guidance publication includes generic ethics and compliance programs. This sample program assists contractors to navigate these complex and new regulatory waters.

The Court of Appeals ruled that the Trusts' liens against the bond and retainage were improper. The Court of Appeals was bound by the Washington State Supreme Court's decision in I.B. E.W., Local No. 46 v. Trig Electric Construction Company, 142 Wn.2d 431, 13 P.3d 622 (2000), which held that trust funds, such as those in the Leo Finnegan case, that were created under federal law and governed by the Employee Retirement Income Security Act (ERISA), were governed by federal law that preempted the Trusts' right to recover against the payment bond and retention under Washington state law.

The case demonstrates that until the Trig Electric case is overruled by the Washington Supreme Court, lower Washington courts will hold that trust fund liens against the payment bond and retainage are invalid.

While this was certainly the World Series of bid protests, as noted in the previous posting, the process undertaken by Boeing and its team of attorneys is the same required by construction contractors in their protests of most federal procurements.

While the GAO recommendation is not determinative as to who will eventually be awarded the government contract, it provides Boeing another shot to obtain the enormous procurement. 

The GAO issued a full 69 page decision which is currently subject to a protective order because it contains proprietary and source sensitive information.  A copy of the GAO's preliminary statement regarding its decision can be found here.

In most instances the GAO and the Office of the Comptroller General of the United States consider protests to the award of federal government construction contracts.

Bellingham argued that Matia's lawsuit was barred because Matia did not notify the City before it filed its lawsuit as required by a City ordinance and state statute.  Cities can enact ordinances providing for claim filing requirements but they cannot be more restrictive than the authorizing state statute.  The authorizing state statute, RCW 4.96.010, provides that the pre-lawsuit claim filing requirements apply only to tort claims (i.e. personal injury, negligence, etc.).  Therefore, because Matia's claim was for breach of contract, and not tort, it was not required to comply with the pre-lawsuit claim filing requirements of the City and the state statute. 

Although the Division One Court of Appeals' ruling in this case may seem self apparent, the Division Three Court of Appeals reached the opposite result in a case decided in 2004.