Securiforce International America, LLC v. United States
879 F.3d 1354
| Fed. Cir. | 2018Background
- Securiforce contracted in Sept. 2011 to deliver fuel to eight Iraqi sites; two sites were partially terminated for convenience by the Defense Logistics Agency (DLA) shortly after award because sourcing from Kuwait could implicate the Trade Agreements Act (TAA).
- The government placed small oral orders for two of the remaining sites with delivery by Oct. 24; Securiforce repeatedly delayed delivery to November and then late November, prompting the government to warn of possible termination for default and ultimately to terminate for default on Nov. 15, 2011.
- Securiforce filed in the Court of Federal Claims (CFC) on Nov. 6, 2012 seeking a declaration that the default termination was improper; on Nov. 16 it sent the contracting officer (CO) a letter challenging the convenience termination but did not state a sum certain; the CO denied the letter as not stating damages in a sum certain.
- The CFC found it had CDA jurisdiction over both the convenience and default termination issues, held the convenience termination was an abuse of discretion (breach), but upheld the default termination as proper; it also denied Securiforce’s discovery/sanctions motions.
- The Federal Circuit affirmed most of the CFC’s rulings but vacated and remanded the CFC judgment insofar as it adjudicated Securiforce’s affirmative declaratory claim about the convenience termination for lack of CDA jurisdiction.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether CFC had CDA jurisdiction to adjudicate Securiforce’s affirmative declaratory claim that the convenience termination was improper | Securiforce: its letter to the CO sought non-monetary declaratory relief and need not state a sum certain | U.S.: the letter sought breach damages in substance and lacked a sum certain, so CDA presentment/jurisdictional requirement not met | Held: No jurisdiction — the claim was essentially monetary and the CO letter lacked a sum certain, so CFC must dismiss that affirmative claim |
| Whether Securiforce could pursue the convenience-termination issue as a defense to the default termination (prior material breach) | Securiforce: improper convenience termination was a prior material breach excusing later nonperformance | U.S.: such defenses must be presented to the CO for a final decision before judicial review | Held: CFC had jurisdiction to consider common-law defenses like prior material breach when asserted as a defense (no CO presentment required) |
| Whether the partial termination for convenience was an abuse of discretion / breach | Securiforce: CO abdicated decision-making and/or termination was substantively unreasonable given waiver possibilities and timing | U.S.: DLA reasonably concluded a TAA waiver from USTR would take too long for two State-staffed sites; termination fell within Government’s interest | Held: No breach — no abuse of discretion and Torncello-type bad-faith finding not supported by record |
| Whether the Government’s actions (lack of escorts, badge assistance, small orders, allowing others to supply) constituted prior material breaches excusing Securiforce’s default | Securiforce: government failed to provide required escorts, blocked private security, delayed badging, placed “proof-of-principle” orders and ordered from others | U.S.: contract and Mod. 2 limited escorts after 12/31/2011; evidence showed Securiforce caused or contributed to delays; government ordering from others was reasonable once Securiforce could not timely perform | Held: None of these actions amounted to breach that excused Securiforce’s nonperformance; default termination was proper |
| Whether the CFC abused its discretion in denying Securiforce’s discovery-based sanctions | Securiforce: government belatedly produced documents, disclosed additional deliveries, and its 30(b)(6) witness was unprepared | U.S.: disclosures were made, additional witnesses were offered, and circumstances justified denying sanctions | Held: No abuse of discretion — CFC did not err in declining sanctions |
Key Cases Cited
- John R. Sand & Gravel Co. v. United States, 457 F.3d 1345 (Fed. Cir.) (CDA presentment and CO final decision requirement)
- Northrop Grumman Computing Sys., Inc. v. United States, 709 F.3d 1107 (Fed. Cir.) (CDA presentment prerequisite for CFC jurisdiction)
- M. Maropakis Carpentry, Inc. v. United States, 609 F.3d 1323 (Fed. Cir.) (presentation requirement applies to affirmative defenses seeking contract adjustments)
- Laguna Constr. Co. v. Carter, 828 F.3d 1364 (Fed. Cir.) (defenses that do not seek money or contract modification need not be presented to CO)
- Alliant Techsystems, Inc. v. United States, 178 F.3d 1260 (Fed. Cir.) (CFC discretion to grant declaratory relief limited; money damages are default remedy for breach)
- United States v. Winstar Corp., 518 U.S. 839 (U.S.) (damages as default remedy for breach of contract)
- Empire Energy Mgmt. Sys., Inc. v. Roche, 362 F.3d 1343 (Fed. Cir.) (standard for default termination review: no requirement that a particular official render decision)
- Torncello v. United States, 681 F.2d 756 (Ct. Cl.) (government knowingly contracting with intent not to perform may not avoid liability by invoking convenience termination)