The Court of Federal Claims rejected the government’s request for reconsideration of its decision in a case involving additional costs under a federal contract that became the subject of a qui tam suit. After successfully defending itself in that suit, the plaintiff submitted a claim for an equitable adjustment to recover some of its legal costs, which the agency denied. The court agreed that the government’s failure to provide its deliverables under the contract led to the filing of the qui tam case, and therefore it was reasonable for the contractor to recover it costs, even though the contract was firm fixed-price. The government challenged some of the underlying facts upon with the court relied and its claim of jurisdiction over the case, to no avail.
The government moved the Court of Federal Claims to reconsider its decision that plaintiff The Tolliver Group Inc. had properly invoked the court’s jurisdiction and also was entitled to equitable reimbursement of part of its costs in its successful defense of a qui tam suit. The government also challenged various facts the court relied upon when rendering its decision.
The qui tam case involved Tolliver’s contract with the Army to produce a series of technical manuals for a military vehicle. The contract stated that the Army would provide Tolliver with a technical data package and engineering drawings from the manufacturer of the vehicle. However, the Army never obtained the information before proceeding with performance. The Army later issued a contract modification to remove the government’s obligation to provide the manufacturer’s technical data.
A whistleblower alleged Tolliver falsely certified its compliance with the task order requirements because it never received the data package. The government neither intervened nor dismissed the case and Tolliver eventually prevailed. Tolliver then submitted a claim to the contracting officer seeking reimbursement of $195,889.87 for allowable legal fees incurred in defending the suit, or about 80 percent of the total Tolliver expended. The CO denied the claim, explaining that the contract was firm fixed-price.
Tolliver brought its claim to COFC, which held that an equitable reimbursement for the defense costs was appropriate because the qui tam suit was based on Tolliver’s Army-mandated efforts to perform in the absence of the technical data package.
The government sought reconsideration of this decision. First, the government argued the court erred when it stated that the agency’s failure to provide the technical data package prevented Tolliver from performing under the contract. However, the court noted it made no such statement. Instead, the court concluded that the failure to provide the data meant the contract could not be performed as expected, which led to the bilateral modification.
The court also held that the district court in the qui tam case also had the correct understanding. In fact, the CO’s declaration to the district court contradicted the government’s current position. In sum, the court found no issue with the facts upon which it relied in the case.
Next, the government argued that the claim Tolliver presented to the CO and the claim presented in court did not match. The government also argued that the equitable reimbursement claim based on breach of the implied warranty addressed in Spearin is circumscribed by Hercules v. United States, to bar Tolliver from any recovery. Specifically, the government argued that Tolliver neither cited Spearin to the contracting officer nor did it refer explicitly to a breach of the implied warranty that if the contractual specifications were met, performance would have been satisfactory.
The court agreed that Tolliver did not reference Spearin in its claim. However, the court found Tolliver clearly stated that the government’s failure to provide the data package directly resulted in the qui tam action. The court found this latter fact beyond dispute.
The court also rejected the government’s assertion that Hercules Inc. v. United States foreclosed Tolliver’s recovery. The government argued that Hercules limited Spearin to application regarding capability of performance. However, the court found the government ignored the fact that a qui tam case is not a third-party claim, but a claim by an individual on behalf of the government itself. At any point, the government could have stepped in as the real party in interest. Further, suits such as this focus on the contracting party’s performance, and the CO’s declaration to the district court addressed Tolliver’s performance under the contract.
