Mabus v. General Dynamics C4 Systems, Inc.
633 F.3d 1356
Fed. Cir.2011Background
- Navy/ Motorola IDIQ contract for Digital Modular Radios; Ordering Clause restricts orders to mail unless schedule authorizes electronic methods.
- Option years exercised from 2000-2003; down-select favored Motorola; GD acquired contract Sept 2001 with knowledge of unprofitability.
- DOs were issued by mail or email; contract modification did not clearly extend email-issue allowances; disputes centered on DOs issued via email in later option period.
- General Dynamics rejected disputed DOs (DO17-20, DO22-29) as noncompliant with Ordering Clause; Navy demanded performance under Changes Clause.
- Board held DOs invalid and denied estoppel; Navy appealed; issue is whether equitable estoppel can excuse GD’s noncompliance under ID/IQ contract terms.
- Court reverses Board, finding estoppel doctrine applicable under Aukerman four-part test; GD’s acceptance of emailed DOs did create reliance and prejudice to Navy; contract terms ultimately enforced rather than waived.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Aukerman four-part test governs estoppel in procurement | Mabus/ Navy argues Aukerman test applies | Dynamics argues Aukerman misapplied; four-part test not controlling | Aukerman four-part test applies; estoppel found against GD |
| Whether Navy relied on GD’s conduct by accepting email DOs | Navy relied on GD’s pattern of accepting email DOs | GD contends reliance weak due to negotiations and timing | Reliance established; Navy relied by continuing to order via email |
| Whether GD knew the email-delivery prohibition or should be charged with knowledge of conduct | Navy asserts GD knew or should have known email practice could be restricted | GD argues knowledge of terms not required; they accepted orders | Knowledge of conduct issue satisfied; estoppel valid despite GD’s knowledge of contract terms |
| Whether the Board abused its discretion in denying estoppel | Board misapplied standard and ignored proper Aukerman framework | GD argues Board correctly denied estoppel | Board abused discretion; estoppel affirmed against GD |
| Whether equitable estoppel can apply to ID/IQ contracts despite noncompliance with ordering terms | Navy seeks estoppel despite nonconforming delivery orders | GD contends no estoppel for ID/IQ with noncompliant DOs | Equitable estoppel may apply to ID/IQ; contract terms can be enforced through estoppel |
Key Cases Cited
- Advanced Materials, Inc. v. Perry, 108 F.3d 307 (Fed.Cir.1997) (estoppel requires knowledge of the true facts and reliance elements)
- JANA, Inc. v. United States, 936 F.2d 1265 (Fed.Cir.1991) (four-part test for government estoppel in contracts)
- Rel-Reeves, Inc. v. United States, 534 F.2d 274 (Ct.Cl.1976) (four-part estoppel predicate inquiries in procurement context)
- Madigan v. Hobin Lumber Co., 986 F.2d 1401 (Fed.Cir.1993) (enforcement of contract terms and lack of excuses for deviations)
- Maxima Corp. v. United States, 847 F.2d 1549 (Fed.Cir.1988) (contracting parties held to their agreements; rigidity in government contracts)