I.         Informational Items

1. Marathon Oil Company and Mobil Oil Exploration & Producing Southeast, Inc. v. United States, CAFC No. 03-5147, June 30, 2004. The court affirms a COFC decision denying interest on claims by the oil companies demanding post-judgment interest on the Federal Circuit contract judgment. The oil companies argue that they are entitled to interest pursuant to 28 U.S.C. 1961(c) (2). Judge Clevenger considers the other statues referenced in Section 1961 and concludes that section 1961(c) (2) does not unambiguously waive sovereign immunity for post-judgment interest on "all" judgments of the Federal Circuit. Judge Prost dissents finding that there is only one plausible reading of 1961(c) (2) and "It is the reading that maintains that interest shall be allowed on all final judgments against the United States in the United States Court of Appeals for the Federal Circuit."
2. Coast-to-Coast Financial Corporation v. US, COFC No. 95-525C, June 1, 2004. Winstar discussion of restitution damages. "The case arises out of the acquisition from the United States of a defunct thrift, Old Lyons, a federally chartered mutual association," by four institutions, including Coast-to-Coast Financial. "Two breaches are asserted in the complaint. The first is that the adoption of the Financial Institutions Reform, Recovery, and Enforcement Act ("FIRREA") constituted a breach of the promise made by the United States at the time of acquisition of the defunct bank that supervisory goodwill could be used to satisfy regulatory capital requirements. The second is that there was an independent breach of contract resulting from the passage in 1993 of the "Guarini" legislation, which had the effect of eliminating part of the tax benefits upon which the transaction was predicated." Two earlier decisions ruled in favor of Coast-to-Coast on these two breaches, but the parties "continued to operate under most terms of their contractual arrangement until 1998, three years after this law suit was filed." Coast-to-Coast asks for the return of its initial cash investment, $42.5 million, saying that this money "was, in effect, left in the bank during the ten years it operated. [Lyons] would have been $42.5 million further in the red in 1998, in other words, but for the government's retention of CTC's initial investment." Judge Bruggink rejects Coast-to-Coast's motion for summary judgment and grants the government's motion for summary judgment. Includes a discussion on contract restitution damages, citing both Mobil Oil Exploration v. United States and Hansen v. United States.
3. Gentex Corporation v. US, COFC No. 03-728C, June 18, 2004 (Originally Filed Under Seal 6/10/04). In an earlier decision in this case, the court found that Gentex was entitled to recover its Bid and Proposal (B&P) costs. Genetex now requests reimbursement of the B&P costs, including those of its teammates, plus profits on those costs. Judge Williams grants the government's motion for summary judgment finding that "Because Plaintiff is not obligated to pay its 2 teammates' bid preparation and proposal costs and has not itself incurred those costs, it cannot recover them in this action. Nor can Gentex recover profit on its B&P effort. B&P costs are a type of reliance damages intended to reimburse an offeror for the costs or expenses wasted in preparing an offer which was not fairly considered. Profit is not an element of those costs."

 

II.        Regulatory Developments

1. Department of Defense Proposed Rule Re: Payment And Billing Instructions, 69 FR 35564, June 25, 2004. This proposed rule would amend the DFARS to improve payment and billing instructions in DOD contracts. "This proposed rule is a result of a transformation initiative undertaken by DOD to dramatically change the purpose and content of the DFARS." The DFARS would be changed "to improve the efficiency and effectiveness of the acquisition process, while allowing the acquisition workforce the flexibility to innovate." Draft comments should be submitted to the Regulatory Coordinating Committee by August 6, 2004.
2. Federal Acquisition Regulation Case 2003-00-8, Proposed Rule Re: Share-In-Savings Contracting, 69 FR 40513, July 2, 2004. The Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council (Councils) are proposing to amend the FAR to implement Section 210 of the EGovernment Act of 2002. Section 210 authorizes Governmentwide use of Share-in-Savings (SIS) contracts for information technology. SIS contracts offer an approach for encouraging industry to share creative technology solutions with the Government. Through a properly structured SIS contract, agencies may lower costs and improve service delivery without large up front investments by having the contractor provide the technology investment and allowing the contractor to share with the government in the savings achieved. Interested parties should submit comments in writing on or before August 31, 2004 to be considered in the formulation of a final rule.
3. Federal Acquisition Circular 2001-24, 69 FR 34223, June 18, 2004. This document summarizes the FAR rules agreed to by the Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council in Federal Acquisition Circular 2001-24. A companion document, the Small Entity Compliance Guide, follows this FAC. Items include:
1. Incentives for Use of Performance-Based Contracting for Services (Interim)
2. Definitions Clause
3. Procurement Lists
4. Determining Official for Employment Provision Compliance Immigration and Nationality Act (INA)
5. Federal Supply Schedules Services and Blanket Purchase Agreements (BPAs)
6. Designated Countries-New European Communities Member States
7. But American Act-Nonavailable Articles
8. Application of Cost Principles and Procedures and Accounting for Unallowable Costs
9. Gains and Losses, Maintenance and Repair Costs, and Material Costs
10. Technical Amendments
4. DOD, GSA, NASA: Final Rule Re: Amend FAR Cost Principles, 69 FR 34241, June 18, 2004. "The . . . Council have agreed on a final rule amending the FAR by revising FAR 31.204, Application of Principles and Procedures, to improve the clarity and structure of the regulation." Effective date: July 19, 2004.
5. DOD, GSA, NASA: Final Rule Re: Gains And Losses, Maintenance And Repair Costs, And Material Costs, 69 FR 34242, June 18, 2004. "The . . . Councils have agreed on a final rule amending the FAR by deleting the cost principle regarding maintenance and repair costs, and revising the cost principles regarding contingencies, material costs, and training and education costs. The rule revises the cost principles by improving clarity and structure, and removing unnecessary and duplicative language. The revisions are intended to amend the FAR regarding contract cost principles and procedures in light of the evolution of generally accepted accounting principles (GAAP), the advent of acquisition reform, and experience gained from implementation of the FAR regarding contract cost principles and procedures. Effective date: July 19, 2004.
6. Postal Service-Establishment Of The Purchasing Manual To Replace The Procurement Manual; Incorporation By Reference, Final Rule, 69 FR 36018, June 28, 2004. The Postal Service has issued completely revised purchasing regulations, replacing the former U.S. Postal Service Procurement Manual with a new Postal Service Purchasing Manual. The Purchasing Manual focuses on using the purchasing process to further the business and competitive interests of the Postal Service. As such, the new Purchasing Manual reflects a fundamental change to Postal Service purchasing policies and procedures. This final rule is effective on June 28, 2004.

 

 

III.      ABA Annual Meeting in Atlanta – August 6 to 9, 2004

 

A.   Council Meeting Saturday, August 7

B.    Accounting Cost & Pricing committee meeting on Sunday, August 8, 2004 from 1:00 to 2:30 PM.