The Centech Group, Inc. v. United States, 19-1752

CENTECH was awarded a task order by the U.S. Air Force (USAF) to design and install communications infrastructure at Vandenberg Air Force Base (VAFB), including acquisition of materials after USAF approval.
CENTECH subcontracted part of the work, including procurement of materials, to Iron Bow Technologies. After obtaining USAF approval, CENTECH instructed Iron Bow to purchase materials valued at approximately $2 million.
Disputes arose after labor cost estimates for installation were submitted, leading USAF to question the project and eventually instruct CENTECH to halt installation and cancel the material order.
Many of the materials had already been ordered, were not returnable, and were not accepted by the USAF; Iron Bow sued CENTECH for nonpayment, and further litigation ensued with the supplier.
CENTECH filed a certified claim against the USAF for the cost of materials, associated handling costs, and legal fees. The USAF denied the claim, arguing non-compliance, lack of acceptance, and that the materials were not required under the contract.
The parties filed cross-motions for summary judgment. This opinion resolves those motions on liability and damages, granting partial summary judgment for CENTECH on the breach but reserving damages (including for legal fees) for trial due to factual disputes.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Duty to Reimburse for Materials	USAF approved purchase, obligating payment for materials	Materials not used by project, not delivered or accepted; thus not reimbursable	USAF breached by failing to pay for approved materials
Materiality of Invoicing Noncompliance	Invoice was submitted by email; requirement not essential	Compliance with invoicing method (WAWF) is essential; lack of compliance bars payment	Invoicing method noncompliance not material; does not excuse USAF's breach
Causation and Recoverability of Damages	Costs for materials/handling/insurance directly caused by breach	Handling/insurance costs are too remote or independent, not caused by government breach	Damages foreseeable, direct, and reasonably certain—but mitigation disputed
Attorneys’ Fees as Allowable Costs	Legal fees (pre-claim) for negotiations are contract admin. costs	Fees not allowable; not incurred while Iron Bow was a subcontractor; focus on litigation	Factual disputes on whether fees are admin. or claim prosecution; no judgment

San Carlos Irrigation & Drainage Dist. v. United States, 877 F.2d 957 (Fed. Cir. 1989) (recites elements of government contract breach of contract claim)
Coast Fed. Bank, FSB v. United States, 323 F.3d 1035 (Fed. Cir. 2003) (plain-meaning rule applies to unambiguous contract terms)
LAI Servs., Inc. v. Gates, 573 F.3d 1306 (Fed. Cir. 2009) (threshold question is if contract language supports only one reading)
Restatement (Second) of Contracts § 241 (used in determining materiality of breach)
Park Props. Assocs., L.P. v. United States, 82 Fed. Cl. 162 (Fed. Cl. 2008) (a party cannot rely on non-occurrence of a condition precedent it prevented)
Bill Strong Enters., Inc. v. Shannon, 49 F.3d 1541 (Fed. Cir. 1995) (distinction between administration and claim prosecution costs for allowability under FAR)
Hometown Fin., Inc. v. United States, 409 F.3d 1360 (Fed. Cir. 2005) (materiality of a breach is a mixed question of law and fact)
First Annapolis Bancorp, Inc. v. United States, 75 Fed. Cl. 280 (Fed. Cl. 2007) (Restatement factors applied to materiality of breach)