Gulf Grp. Gen. Enters. Co. v. United States
| Decision Date | 02 July 2013 |
| Docket Number | No. 06-853C,No. 06-835C,No. 06-858C,No. 07-82C,06-835C,06-853C,06-858C,07-82C |
| Court | U.S. Claims Court |
| Parties | GULF GROUP GENERAL ENTERPRISES CO. W.L.L., Plaintiff, v. UNITED STATES, Defendant. |
False Claims Act, 31 U.S.C. § 3729; Special Plea in Fraud, 28 U.S.C.
§ 2514; Contract Disputes Act, 41 U.S.C. § 604; Rescission and
Disgorgement; Termination; Breach of Contract; Abuse of Discretion; Demurrage.
Iliaura Hands, Miller & Williamson LLC, New Orleans, LA, for plaintiff. With her was Machale A. Miller, Miller & Williamson LLC, New Orleans, LA.
Timothy P. McIImail, Senior Trial Counsel, Commercial Litigation Branch, Civil Division, United States Department of Justice, Washington, D.C., for defendant. With him were Robert C. Bigler, Stacey K. Grigsby, Kent C. Kiffner, Lartease M. Tiffith, Russell J. Upton, Trial Attorneys, Jeanne E. Davidson, Director, Commercial Litigation Branch, and Stuart F. Delery, Acting Assistant Attorney General, Civil Division. Of counsel, Major Daniel Everett, Major John Gowel, and Captain Dana Collins, United States Army, Litigation Division.
This opinion relates to four consolidated cases filed by the same plaintiff, Gulf Group General Enterprises Co. W.L.L. (Gulf Group), in the United States Court of Federal Claims.1 The cases arise from four awards to Gulf Group by the United States Army in 2004. In the lead case, Case No. 06-835C (), GulfGroup alleges that the government's termination of its BPA call under a general services contract was arbitrary, capricious, and an abuse of discretion. Gulf Group also alleges that the camp package BPA call termination was made in bad faith.2 In Case No. 06-858C (the latrine case), Gulf Group alleges that the government's termination of its contract to supply latrines to Camp Arifjan in Kuwait was arbitrary, capricious, and an abuse of discretion. Gulf Group also alleges that the latrine contract termination was made in bad faith. In Case No. 06-853C (the dumpster case), Gulf Group alleges that the government's termination of its contract to supply dumpsters to Camp Arifjan in Kuwait was arbitrary, capricious, and an abuse of discretion. Gulf Group also alleges that the termination of the dumpster contract was made in bad faith. In Case No. 07-82C (), Gulf Group alleges that the government's requirement that it travel in military convoys to deliver bottled water to base camps in Iraq and Kuwait3 and on return trips resulted in significant delays, as a result of which plaintiff incurred additional costs. Gulf Group contends that the government breached its duty of good faith and fair dealing in delaying plaintiff's delivery of bottled water and that, because of the breach, the government is responsible for demurrage expenses.
The government filed counterclaims and affirmative defenses in each of the four consolidated cases. Regarding the camp package BPA case, Case No. 06-835C, defendant alleges violations of the False Claims Act, 31 U.S.C. § 3729 (2000), amended by Fraud Enforcement & Recovery Act of 2009 (FERA), Pub. L. No. 111-21, 123 Stat. 1617,4 the Contract Disputes Act, 41 U.S.C. § 604 (2000) (current version at 41 U.S.C. § 7103(c)(2) (Supp. V 2011)), and the Special Plea in Fraud statute, 28 U.S.C. § 2514 (2000).5 Defendant seeks forfeiture of plaintiff's entire camp package BPA claim under the Special Plea in Fraud statute, damages in the amount of plaintiff's unsupported claim, as well as defendant's cost of reviewing plaintiff's alleged false claim under the Contract Disputes Act, and treble damages and allowable civil penalties under the False Claims Act. Defendant also seeks rescission of the calls issued under the camp package BPA, which the government alleges were obtained by plaintiff through bribery, conflict of interest, and fraud, and defendant seeks disgorgement of all monies the United States paid for calls issued under the camp package BPA, plus costs.
In the latrine case, Case No. 06-858C, defendant alleges violations of the False Claims Act, the Contract Disputes Act, and the Special Plea in Fraud statute. Defendant seeks forfeiture of plaintiff's entire claim under the Special Plea in Fraud statute, damages in the amount of plaintiff's unsupported claim, as well as defendant's cost of reviewing plaintiff's allegedly false claim under the Contract Disputes Act, and allowable civil penalties under the False Claims Act, plus costs. Although defendant argues that the latrine contract also was tainted by bribery, conflict of interest, and fraud, defendant does not seek rescission of the latrine contract.
In the dumpster case, Case No. 06-853C, defendant alleges violations of the False Claims Act, the Contract Disputes Act, and the Special Plea in Fraud statute. As in the latrine case, defendant seeks forfeiture of plaintiff's entire claim under the Special Plea in Fraud statute, damages in the amount of plaintiff's unsupported claim, as well as defendant's cost of reviewing plaintiff's allegedly false claim under the Contract Disputes Act, and allowable civil penalties under the False Claims Act, plus costs. As in the latrine case, although defendant argues that the dumpster contract was tainted by bribery, conflict of interest, and fraud, defendant does not seek rescission of the dumpster contract.
As to the bottled water BPA case, Case No. 07-82C, defendant alleges violations of the False Claims Act, the Contract Disputes Act, and the Special Plea in Fraud statute. As in the camp package BPA case, defendant seeks forfeiture of plaintiff's entire claim under the Special Plea in Fraud statute, damages in the amount of plaintiff's unsupported claim and the cost of reviewing plaintiff's allegedly false claim under the Contract Disputes Act, and treble damages, as well as allowable civil penalties under the False Claims Act. Defendant also seeks rescission of the BPA calls, which defendant alleges were obtained by plaintiff through bribery, conflict of interest, and fraud, and seeks disgorgement of all monies the United States paid for calls issued under the bottled water BPA, plus costs.
Pursuant to the False Claims Act, the government alleges that Gulf Group knowingly submitted false or fraudulent claims to the government on the camp package BPA, the latrine contract, the dumpster contract, and the bottled water BPA. Regarding the camp package BPA, defendant claims that plaintiff violated the False Claims Act in submitting invoices for a call issued under the camp package BPA and in submitting to the government its claims for monies due because the award of the camp package BPA was tainted by bribery, plaintiff inflated the amount of its claims relating to BPA call 00016 for services and supplies it had not rendered, and plaintiff supported at least one of its claims with an invoice for services rendered by another government contractor, Green Valley Company (Green Valley).7 According to defendant, plaintiff also inflatedthe amount of its latrine and dumpster contract claims for services and supplies it did not render, inflated the amount due on its claims for demurrage under the bottled water BPA, and obtained the bottled water BPA, and latrine and dumpster contracts through bribery.
Pursuant to the Contracts Disputes Act, defendant alleges that Gulf Group cannot support the monetary claims submitted in the above-captioned cases due to misrepresentation of fact or fraud. In each case, defendant asserts that plaintiff submitted a claim for an amount significantly greater than the contract or BPA call price. As to the camp package BPA, defendant contends that plaintiff claimed $4,544,339.84,8 although BPA call 0001 was only for $1,447,457.22, the call was only twelve days into performance when it was terminated, and as with the False Claims Act allegations, plaintiff supported its claim with an invoice from Green Valley. Under the latrine contract, defendant alleges that plaintiff claimed $4,558,428.60, although the contract was only for $613,142.86, the contract was terminated after twenty days of performance, and the contract was obtained through bribery. Defendant also alleges that plaintiff certified entitlement to $999,994.67 under the dumpster contract, although the contract was only for $346,998.00, the contract was terminated thirty-two days into the performance period, and the contract was tainted by bribery. Defendant further argues that plaintiff claimed $1,065,711.39 for demurrage under the bottled water BPA, although its documented demurrage charges do not total $1,065,711.39. Defendant also alleges that the bottled water BPA was obtained through bribery. Therefore, defendant contends, plaintiff must pay the government the amount of money it has claimed which is unsupported, plus the government's costs generated in reviewing the claims.
Pursuant to the Special Plea in Fraud statute, asserted in Case No. 06-835C, the camp package BPA case, Case No. 06-858C, the latrine case, Case No. 06-853C, the dumpster case, and Case No. 07-82C, the bottled water BPA case, the governmentalleges that the contracts and BPA calls were awarded in exchange for "money, trips, and other things of value" given by Gulf Group to Carolyn Blake, the sister of John Cockerham, a former Army Major, contract specialist, and contracting officer at Camp Arifjan, Kuwait, who was involved in the award, and terminations, of some of Gulf Group's contracts. Defendant asserts that Gulf Group's actions constitute fraud under the Special Plea in Fraud statute, requiring forfeiture of plaintiff's claims, as Gulf Group's actions created an unlawful conflict of interest and violated 18 U.S.C. § 201(b)(1) (2000), which prohibits the offering or promising of anything of value to a public official with the intent to influence an official act. Defendant further alleges that Gulf Group violated the Special Plea in Fraud statute by...
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