United States ex rel. Cody v. Mantech Int'l Corp.

• Decision Date: 14 September 2016
• Docket Number: Civil Action No. 1:16–cv–132 (AJT/JFA)
• Parties: UNITED STATES of America, EX REL., Kevin CODY and Muge Cody, Plaintiffs, v. MANTECH INTERNATIONAL CORPORATION, Defendant.
• Court: U.S. District Court — Eastern District of Virginia

207 F.Supp.3d 610

UNITED STATES of America, EX REL., Kevin CODY and Muge Cody, Plaintiffs,

v.MANTECH INTERNATIONAL CORPORATION, Defendant.

Civil Action No. 1:16–cv–132 (AJT/JFA)

United States District Court, E.D. Virginia, Alexandria Division.

Signed September 14, 2016

Lauren A. Wetzler, Richard W. Sponseller, United States Attorney Office, Alexandria, VA, David Lawrence Scher, John Thomas Harrington, Jr., Robert Scott Oswald, The Employment Law Group PC, Washington, DC, for Plaintiffs.

Christine Nicole Walz, Steven D. Gordon, Holland & Knight LLP, Washington, DC, Vince L. Farhat, Holland and Knight LLP, Los Angeles, CA, for Defendant.

MEMORANDUM OPINION

Anthony J. Trenga, United States District Judge

Plaintiffs Kevin and Muge Cody, husband and wife, have filed a retaliation claim under the False Claims Act and the Defense Contractor Whistleblower Protection Act against their former employer, defendant ManTech International Corporation ("ManTech"). The Codys allege that ManTech retaliated against them for questioning the propriety of certain of ManTech's bidding practices in connection with a large government procurement contract from the United States Army, first by diminishing their responsibilities, then ultimately by terminating their employment.

Following the completion of discovery, ManTech filed a motion for summary judgment which the Court took under advisement following a hearing on August 19, 2016. For the reasons stated herein, ManTech's motion will be GRANTED in part and DENIED in part. The motion will be GRANTED with respect to plaintiffs' claims for retaliation based on conduct other than the filing of this action on the grounds that, as a matter of law, plaintiffs did not otherwise engage in conduct that constituted "protected activity" for the purposes of a cognizable retaliation claim. The motion will be DENIED with respect to plaintiffs' claims for retaliation as a result of the filing of this qui tam lawsuit. There is no dispute that plaintiffs' filing of this action constituted "protected activity" and that their subsequent termination constituted an "adverse" employment action. Accordingly, the case will proceed to trial on the issue whether plaintiffs' filing of this action was a "contributing factor" to their termination by ManTech.

I. PROCEDURAL HISTORY

Plaintiffs originally filed this qui tam action under seal on December 12, 2013 in the United States District Court for the Central District of California alleging three causes of action against ManTech: (i) a violation of the False Claims Act, 31 U.S.C. § 3729 et seq. (the "FCA") in the course of bidding for and performing a contract for the United States Army Tank–Automotive and Armaments Command ("TACOM"); (ii) retaliation in violation of the FCA, 31 U.S.C. § 3730(h) for attempting to prevent ManTech's alleged FCA violations; and (iii) retaliation under the Dodd–Frank Wall Street Reform and Consumer Protection Act, 12 U.S.C. §§ 5301 et seq.See generally [Doc. No. 1].

On November 18, 2014, the Government filed a notice declining to intervene in this action and the suit was unsealed on November 21, 2014. [Doc. Nos. 15, 16]. ManTech thereinafter filed a motion to transfer the case to this District, which the Central District of California granted by order dated February 9, 2015. [Doc. No. 29]. ManTech moved to dismiss plaintiffs' original complaint on February 25, 2016. [Doc. No. 35]. On March 16, 2016, plaintiffs filed their First Amended Complaint [Doc. No. 43] (the "Complaint"). In the Complaint, plaintiffs have eliminated any claim that ManTech had violated a substantive provision of the FCA and allege only claims for retaliation in violation of the FCA's anti-retaliation provision, 31 U.S.C. § 3730(h), and the Defense Contractor Whistleblower Protection Act ("DCWPA"), 10 U.S.C. § 2409.¹ ManTech moved for summary judgment on June 30, 2016 [Doc. No. 54] (the "Motion") and the Court held a hearing on the Motion on August 19, 2016 [Doc. No. 72].²

II. FACTUAL RECORD

Unless otherwise stated herein, the following are undisputed facts or are disputed facts viewed most favorably to plaintiffs:

The Codys are former executives of ManTech, a multinational government contractor specializing in providing technological services to the United States Government, including its armed services. Kevin Cody began his employment with ManTech in 1990 and was terminated by ManTech effective March 20, 2015. Compl. ¶¶ 32, 255.³ Muge Cody began her employment with ManTech in 2001 and was terminated effective July 1, 2015. Id. ¶¶ 37, 260. ManTech placed both the Codys on administrative leave on January 12, 2015, after being served in this action on January 8, 2015. The Codys remained on administrative leave until their respective terminations.

The context surrounding the Codys' retaliation claims is ManTech's contract with the U.S. Army, through TACOM, for the maintenance in Afghanistan and Kuwait of Mine Resistant Ambush Protected ("MRAP") vehicles, which are designed to withstand improvised explosive devices and tactical ambushes. TACOM had awarded ManTech numerous sole source contracts with respect to that work since at least 2008, but in 2011, ManTech was required to compete for the continuation of its MRAP work. ManTech submitted its initial competitive bid on September 23, 2011. TACOM awarded ManTech the contract on May 31, 2012.⁴ The awarded contract, Contract W56HZV–12–C–0127 (the "MRAP Contract" or the "Contract"), was a "cost-reimbursement" contract worth $2.85 billion in revenues to ManTech over five years and constituted at that time ManTech's largest and most lucrative contract. Management of the MRAP Contract was assigned to Kevin Cody's "business unit" Muge Cody served as Program Manager for the Contract along with others in her Program Management Office ("PMO").

A. The MRAP Contract Issues

As of 2011, ManTech employees deployed in Afghanistan were paid for 84 hours of work each week (12 hours per day, 7 days per week). In addition to base pay, ManTech paid certain employees premiums for being deployed to hazardous and isolated locations. At that time, deployed employees were paid both a "Haz" premium and an "Iso" premium (collectively "Haz/Iso") for each of the 84 hours worked each week. For employees in Afghanistan, each of these premiums amounted to 35% of base pay. In order to lower its overall bid and thereby position itself more competitively, ManTech's initial September 2011 competitive bid proposal included costs for Haz/Iso premium for only 40 of the 84 hours that employees were working.

Following the submission of initial bids, TACOM opened discussions with the offerors and utilized written Evaluation Notice Discussions ("ENDs") to clarify or revise certain aspects of the offerors' proposals. During this process, the Army questioned—via END Control Number END–MTT–CP–039A ("END 039A")—whether ManTech could retain its incumbent MRAP technician workforce to perform the Contract if it only paid Haz/Iso premiums on the first 40 hours worked each week rather than on all 84. After receiving TACOM's END 039A, ManTech proposed a "retention premium" that would be paid to incumbent employees during the first 14 months of contract performance to offset the reduction in Haz/Iso pay. ManTech represented that the cost of the retention premium would be included as part of its fringe benefits pool, categorized for accounting purposes as an "indirect cost." In that regard, ManTech had established in 2011, with government approval, a Global Contingency Operations ("GCO") cost center, which generated the applicable indirect rate for the MRAP Contract.⁵ ManTech also projected a reduction in its direct labor ("DL") rates to the level at which it had most recently been able to hire employees on the existing contract.

In response to ManTech's ongoing bid revisions with regard to END 039A, and specifically ManTech's proposal to include a retention premium to make up for the deficit in Haz/Iso pay, TACOM issued to ManTech another END: END Control Number END–MTT–CP–039B ("END 039B"). In END 039B, TACOM requested information regarding ManTech's "new ‘Retention Premium’ to incumbent employees with associated costs as part of its Fringe Pool." [Doc. No. 55, Ex. 1 at l]. In response to this second END, ManTech disclosed that the retention premium had a projected cost of $37.9 million. [Ibid. ]. In late April 2012, ManTech submitted a "final revised proposal" ("FRP") to TACOM incorporating those disclosures.

TACOM awarded ManTech the MRAP Contract on May 31, 2012 and ManTech began performing under the Contract in that fall. Shortly after the Contract award, TACOM directed ManTech to "ramp up" its manpower to levels beyond those assumed in its initial contract bid and FRP due to increased troop activity in Iraq and Afghanistan. Later, in 2013, TACOM directed ManTech to decrease its labor force dramatically in connection with the "drawdown" of forces in Afghanistan. By letter dated October 29, 2013, ManTech formally requested approval to merge its GCO cost center with another indirect cost center, the IS cost center, retroactive to January 1, 2013. The Government approved this request by letter dated August 7, 2014.

B. The Codys' Internal Communications Concerning ManTech's MRAP Contract Bids

Both before and after the MRAP Contract award in May 2012, the Codys, and Kevin Cody in particular, raised issues concerning the extent to which ManTech had disclosed to the Army all of the costs it anticipated in connection with performance under the MRAP Contract. Beginning in early March 2012 through April 2012, Kevin Cody raised his concerns within ManTech while ManTech was in the process of revising its initial September 2011 proposal and responding to TACOM's END inquiries. Specifically, on March 6, 2012, during a meeting to discuss MRAP premium costs with Claude Etzler, ManTech's Vice President of Financial Operation and Compliance, Kevin Cody stated that the MRAP premium costs should be...