G4s Technology LLC v. United States
114 Fed. Cl. 662
Fed. Cl.2014Background
- G4S alleges it was an intended third-party beneficiary of a 2009 Loan Agreement between RUS and Open Range to fund a rural broadband network.
- Loan proceeds were to be deposited into a pledged account and disbursed to Open Range, not directly to Open Range’s vendors.
- MSA between Open Range and vendors like G4S set out work, invoicing, and payment terms, with RUS oversight but no direct payment obligation to vendors.
- Open Range faced cash-flow problems after RUS suspended loan advances in 2010 due to spectrum issues, reducing funded markets from 540 to 264.
- Open Range later amended the loan and related agreements in 2011; Open Range filed bankruptcy in 2011.
- G4S asserted rights under the Tucker Act as an intended beneficiary; the government moved to dismiss or for summary judgment, and the court ultimately granted summary judgment for the government.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether G4S is an intended third-party beneficiary | G4S contends the Loan Agreement directly benefits vendors like it. | G4S is an incidental beneficiary; the government did not intend direct payment to vendors. | G4S failed to prove intended-beneficiary status; summary judgment for government granted |
| Whether the court has subject-matter jurisdiction under the Tucker Act | Tucker Act jurisdiction exists for intended beneficiaries to sue the government. | No contractual privity or express intention to benefit G4S, so no Tucker Act jurisdiction. | Court denied 12(b)(1) dismissal and proceeded on merits; ultimately granted summary judgment for government |
Key Cases Cited
- D&H Distrib. Co. v. United States, 102 F.3d 542 (Fed. Cir. 1996) (joint payee concept for intended third-party beneficiary)
- Flexfab, L.L.C. v. United States, 424 F.3d 1254 (Fed. Cir. 2005) (requirements to show contracting officer intended to benefit a subcontractor)
- JGB Enters., Inc. v. United States, 497 F.3d 1259 (Fed. Cir. 2007) (contracting officer’s intent and direct payment mechanisms for subcontractors)
- Glass v. United States, 258 F.3d 1349 (Fed. Cir. 2001) (sovereign-immunity exception for third-party beneficiaries is narrow)