Sufi Network Services, Inc. v. United States, 817 F.3d 773

Background

SUFI Network Services contracted with the Air Force to build/operate base telephone systems and to receive per-call revenue shares for 15 years; the Air Force diverted calls, breaching the contract and reducing SUFI's revenue.
SUFI pursued Board claims (ASBCA) and obtained awards: an earlier award (~$2.8M) became final; on other claims the Board originally awarded ~$4.6M, which SUFI challenged in the Court of Federal Claims (CFC) under the Wunderlich Act standards.
The CFC granted SUFI relief; the United States appealed to the Federal Circuit; the Federal Circuit remanded portions to the ASBCA for further factfinding in 2014.
On remand the ASBCA issued a new, much larger award (~$113M) in 2015; SUFI accepted that Board decision in the existing Wunderlich Act docket.
The Department of Justice, on behalf of the United States, sought review of the ASBCA remand decision in the CFC; the CFC dismissed the Government’s request, holding that where a contractor accepts a Board decision and no fraud/bad faith is alleged, the Government lacks a right to seek review under the Wunderlich Act.
The Federal Circuit affirmed the CFC, holding the long-standing Wunderlich Act line of cases binds the United States to its Board’s determinations when the contractor accepts them and no fraud/bad faith is alleged; the court also rejected the Government’s arguments about statutory repeal and mandate noncompliance.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the United States may seek judicial review of an ASBCA decision accepted by the contractor when no fraud/bad faith is alleged	SUFI: Gov’t cannot appeal a Board decision that contractor accepts; contractor waived remedies in contract disputes clause	U.S.: As the sovereign, it may seek review of its Board’s adverse decision even if contractor accepted it	Held: Government may not seek review; longstanding Wunderlich Act precedent bars such review absent fraud/bad faith
Whether the ASBCA remand decision is less binding because it was issued after remand (not an initial Board decision)	SUFI: Remand decision is still the United States’ position via its Board and binding when accepted	U.S.: The post-remand nature permits judicial review to ensure Board complied with Federal Circuit mandate	Held: Post-remand status does not change the rule; the Government is bound when the contractor accepts and no fraud/bad faith exists
Whether repeal of the Wunderlich Act or applicability of the Contract Disputes Act permits Government appeals	SUFI: Repeal irrelevant to this case; Wunderlich-era precedents govern these proceedings	U.S.: Repeal and CDA provisions authorize Government appeals of adverse Board rulings	Held: Repeal/CDA do not justify disregarding Wunderlich-era precedent applicable to this case
Whether a mandate-compliance exception allows Government review to police Board adherence to Federal Circuit remand instructions	SUFI: No such exception undermines the contractually bargained-for dispute-resolution scheme	U.S.: Courts must be able to ensure Board complied with remand mandate	Held: No mandate-compliance exception to the Wunderlich rule here; moreover, the Court found no violation of the 2014 mandate in the Board’s remand decision

Key Cases Cited

S & E Contractors, Inc. v. United States, 406 U.S. 1 (1972) (establishes limits on government review of board decisions when contractor accepts award)
Roscoe-Ajax Constr. Co. v. United States, 499 F.2d 639 (Ct. Cl. 1974) (applies Wunderlich rule and explains policy of finality and cost reduction)
Fischbach & Moore Int’l Corp. v. United States, 617 F.2d 223 (Ct. Cl. 1980) (characterizes boards as agencies whose decisions bind the Government absent fraud/bad faith)
United States v. Anthony Grace & Sons, Inc., 384 U.S. 424 (1966) (respect for contractual dispute-resolution provisions)
Bigelow v. RKO Radio Pictures, Inc., 327 U.S. 251 (1946) (adverse inference doctrine considered in evaluating lost-evidence issues)