Northrop Grumman Computing Systems, Inc. v. United States

93 Fed. Cl. 144, 2010 WL 2365470
CourtUnited States Court of Federal Claims
DecidedJune 9, 2010
DocketNo. 07-613C
StatusPublished
Cited by19 cases

This text of 93 Fed. Cl. 144 (Northrop Grumman Computing Systems, Inc. v. United States) is published on Counsel Stack Legal Research, covering United States Court of Federal Claims primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Northrop Grumman Computing Systems, Inc. v. United States, 93 Fed. Cl. 144, 2010 WL 2365470 (uscfc 2010).

Opinion

OPINION

ALLEGRA, Judge.

Plaintiff, Northrop Grumman Computing Systems, Inc. (Northrop), brings this action seeking damages for the alleged breach of an agreement with the Department of Homeland Security, Bureau of Immigration and Customs Enforcement (DHS/ICE).2 Under that agreement, Northrop leased surveillance software to DHS/ICE to be used in intercepting the internet communications of the targets of criminal investigations arising under Title III of the Omnibus Crime Control and Safe Streets Act of 1968, 18 U.S.C. § 2510, et seq. The ease is pending before [147]*147the court on the parties’ cross-motions for summary judgment under RCFC 56. Because there are genuine issues of material fact, the court denies the cross-motions and will set this ease down for trial.

I.

Prior to entering into the lease agreement, DHS/ICE used other software to gather evidence, during a criminal investigation, of a subject’s internet usage. This software, however, could capture data only from [ ] and thus could not []. In September of 2004, DHS/ICE decided that it needed software that could overcome this [ ] limitation. After conducting market research, it chose Northrop’s Internet Observer software, also known as the Oakley software. That software, unlike [the prior] software, was [].

To acquire the right to use this software, DHS/ICE relied on a preexisting contract it had with plaintiff — Contract No. NAS5-01143 (the SWEP III contract). Pursuant to this contract, on September 24, 2004, DHS/ ICE awarded Delivery Order COW-4-D-1025 (Delivery Order), leasing from plaintiff the Oakley software and obtaining associated equipment, technical support and training. The Delivery Order provided that plaintiff would deliver the Oakley software to DHS/ ICE and perform specified support services for a one-year base period in return for payment of $900,000. It further provided for three one-year options at $899,186 per year, at the conclusion of which DHS/ICE was to have a perpetual license in the software. On September 28, 2004, DHS/ICE supplied an “essential use statement” to Northrop that included, inter alia, a description of the intended use of the Oakley software. This statement, apparently designed to facilitate third-party funding for the Oakley software, also indicated that funding for the Delivery Order would be provided from “[ijorfeiture funds obtained through criminal investigations.”

On or about October 13, 2004, plaintiff timely delivered the Oakley software and, thereafter, performed all its obligations under the contract. DHS/ICE, however, continued to use the previously-utilized [ ] software and, for reasons unexplained, never, in fact, employed the Oakley software in an actual investigation. Nonetheless, DHS/ICE paid plaintiff $900,000 for the base year, using discretionary asset forfeiture funds supplied by the Department of Treasury’s Executive Office For Asset Forfeiture. From September 30, 2004, to October 18, 2004, DHS/ICE executed three modifications to the Delivery Order. The second of these, issued on October 14, 2004, indicated that—

It is expressly understood and agreed that the Department of Homeland Security shall use its best efforts to seek and utilize funding from all sources, and to request and reserve funds from the annual budget as a first priority designation to pay the required lease payments under this lease Agreement. If the lease is discontinued due to non-appropriation of funds ..., the Department of Homeland Security agrees that it will not replace the software, nor pursue outsource contracting, with software which performs similar or comparable functions, of which the acquired software was intended to perform, for a period of the remaining full term of the lease or a period of twelve (12) months from the date the Department of Homeland Security discontinues its performance obligations under the lease, whichever is longer.

No similar language is found in the SWEP III contract.

As the beginning of Fiscal Year 2005 approached, the Technical Operations Program Office at DHS/ICE (Tech Ops) designated the Oakley software as “mission critical” in its funding requests, although it did not specifically designate the Oakley software as a “first priority” for funding. While Tech Ops made several attempts to secure funding for the Oakley software, those efforts ultimately proved unsuccessful. Yet, Tech Ops managed to fund several other initiatives for Fiscal Year 2005 in an amount totaling $3,000,000. On September 27, 2005, DHS/ ICE informed plaintiff that it was not renewing the contract owing to a lack of available funds; formal notification of this was provided to Northrop on September 30, 2005. On February 22, 2006, Northrop requested further information as to the agency’s basis for this decision. On April 14, 2006, DHS/ICE [148]*148responded by indicating that the Oakley software contract was “one of a number of discretionary IT contracts that were considered to be of insufficient priority to continue to be funded.” In response, on September 21, 2006, plaintiff filed a claim under the Contract Disputes Act of 1978, 41 U.S.C. § 601, et seq., seeking $2,697,558, plus interest, and asserting that DHS/ICE had not complied with the contractual restrictions contained in the licensing agreement, as amended. On December 29, 2006, the contracting officer denied this claim.

On August 20, 2007, plaintiff filed suit in this court, asserting that defendant failed to comply with the contract’s restrictions on its exercise of the options and had breached a covenant to seek funding for the options. After fact discovery was completed, the parties filed cross-motions for summary judgment, which have now been fully briefed and argued.

II.

Summary judgment is appropriate when there is no genuine dispute as to any material fact and the moving party is entitled to judgment as a matter of law. RCFC 56; Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). Disputes over facts that are not outcome-determinative will not preclude the entry of summary judgment. Id. at 248, 106 S.Ct. 2505. However, summary judgment will not be granted if “the dispute about a material fact is ‘genuine,’ that is, if the evidence is such that a reasonable [trier of fact] could return a verdict for the nonmoving pai’ty.” Id.; see also Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986); Becho, Inc. v. United States, 47 Fed.Cl. 595, 599 (2000).

When reaching a summary judgment determination, the court’s function is not to weigh the evidence, but to “determine whether there is a genuine issue for trial.” Anderson, 477 U.S. at 249, 106 S.Ct. 2505; see also Agosto v. INS, 436 U.S. 748, 756, 98 S.Ct. 2081, 56 L.Ed.2d 677 (1978) (“[A] [trial] court generally cannot grant summary judgment based on its assessment of the credibility of the evidence presented”); Am. Ins. Co. v. United States, 62 Fed.Cl. 151, 154 (2004).

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Bluebook (online)
93 Fed. Cl. 144, 2010 WL 2365470, Counsel Stack Legal Research, https://law.counselstack.com/opinion/northrop-grumman-computing-systems-inc-v-united-states-uscfc-2010.