Texas Instruments Incorporated v. The United States

991 F.2d 760, 38 Cont. Cas. Fed. 76,505, 28 Fed. Cl. 760, 1993 U.S. App. LEXIS 7815, 1993 WL 107833
CourtCourt of Appeals for the Federal Circuit
DecidedApril 13, 1993
Docket91-5136
StatusPublished
Cited by19 cases

This text of 991 F.2d 760 (Texas Instruments Incorporated v. The United States) is published on Counsel Stack Legal Research, covering Court of Appeals for the Federal Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Texas Instruments Incorporated v. The United States, 991 F.2d 760, 38 Cont. Cas. Fed. 76,505, 28 Fed. Cl. 760, 1993 U.S. App. LEXIS 7815, 1993 WL 107833 (Fed. Cir. 1993).

Opinion

PLAGER, Circuit Judge.

Plaintiff-Appellant Texas Instruments Incorporated (TI or appellant) appeals from an Order of the United States Court of *761 Federal Claims, 1 which granted Defendant-Appellee United States’ (Government or ap-pellee) motion to dismiss two related, consolidated actions for failure to state a claim upon which relief can be granted. 2 In the underlying actions, TI sought damages for breach of two separate contracts, based on “serious instances of misconduct” which they allege breached the Government’s express and implied contractual duties of good faith and fair dealing, including those appurtenant to the Disputes Clause found in each of the contracts. We affirm.

BACKGROUND

TI’s actions before the Court of Federal Claims were consolidated for the purposes of the Government’s motion to dismiss. The two actions, each with its own Court of Federal Claims docket number, stem from different but similar fact patterns.

A. Wright-Patterson Air Force Base, Docket No. 90-367C

On June 17, 1976, the Department of the Air Force, Aeronautical Systems Division, Wright-Patterson Air Force Base, entered into a firm fixed price contract with TI for the purchase of homing and warning computers, consoles, and spare parts for the Air Force F-4G Wild Weasel Program. Later, the Government took the position that the pricing in the contract had been defective; TI disagreed.

On February 7, 1985, the contracting officer (CO) issued his decision, concluding that TI had engaged in defective pricing by committing an error in its calculations of General and Administrative expenses. The CO also noted that TI had not used the acceptable weighted average pricing for certain parts, and that TI had failed to disclose to the Government its pricing and its lower costs. The CO issued a unilateral change order to adjust the contract price downward for the defective amount — $114,-246.

TI appealed the CO’s decision to the Armed Services Board of Contract Appeals (ASBCA or board), pursuant to the Disputes Clause of the underlying contract. On November 7, 1988 the ASBCA ruled in favor of TI, concluding that “the Government has not shown that non-disclosure had an effect on, or increased, the negotiated price.” Appeal of Texas Instruments Inc., 89-1 BCA ¶ 21,489, 1988 WL 134394.

On August 28, 1989, TI submitted a claim to the CO, seeking payment of the attorney fees it had incurred in appealing the defective pricing decision of the CO to the board. The fees were claimed as damages incurred as a result of the Government’s alleged breach of contract, specifically, abuse of the disputes resolution process. The CO issued his final decision on October 26, 1989, denying the claim.

TI appealed the denial of its claim to the Court of Federal Claims. TI argued that the Government breached its contract when it conducted its audits and wrongfully raised and pursued its claim and issued its decision that TI had been guilty of defective pricing. The Government was alleged to have breached both its obligation under the Disputes Clause and its implied obligation of good faith and fair dealing. TI sought the attorney fees and investigative expenses incurred in appealing the CO’s defective pricing decision to the board.

B. Department of the Army, Docket No. 90-492C

Pursuant to a basic ordering agreement entered into on December 16, 1977, the Department of the Army issued two delivery orders for supplies and services on September 29, 1978. On September 25, 1981, the CO issued a final decision which concluded that TI had engaged in defective pricing by failing to provide the Government with the most accurate pricing data at its disposal. The CO issued a change order assessing $265,824 against TI.

On December 18, 1981, TI timely appealed the decision to the board. The parties *762 subsequently stipulated that the only issues to be tried in the initial, entitlement stage of the appeal would be 1) whether the Defense Contract Audit Agency (DCAA) office at TI was the authorized representative of the CO to receive certain cost or pricing data for the proposals in issue, and 2) whether TI’s delivery of a labor microfiche containing certain data to the DCAA office constituted submission of TI’s cost or pricing data.

On June 22, 1987, after protracted discovery but apparently before any substantive action by the board, the CO issued a decision retracting his earlier decision. The CO changed his earlier position because “due to the passage of time and the understandable difficulty of key witnesses to recall critical events that occurred from six to eight years ago, the Government’s claim for defective pricing cannot be successfully pursued.” Thus, despite the CO’s continued opinion “that the cost and pricing data submitted by Texas Instruments, Inc. was not current, accurate, or complete as of 2 Oct 79, as certified by Texas Instruments, Inc. in compliance with the Truth in Negotiations Act,” he concluded that “witnesses’ lack of memory results in the Government having insufficient evidence to establish the necessary factual predicate to prove the extent of the Government’s reliance on the data submitted by Texas Instruments.”

The Government filed a motion to dismiss the appeal as moot. TI opposed the motion and asked that the appeal be sustained, on the basis that the dispute was not really resolved because the Government could later re-assert the same charges. TI also moved for sanctions, charging that the Government: 1) failed to make reasonable inquiry prior to making and pursuing its claim, thereby abusing the disputes process and violating Fed.R.Civ.P. 11; and 2) failed to comply with certain scheduling orders of the board. TI also charged that the DCAA tampered with a deposition witness. TI requested, as sanctions, that the board render a decision sustaining the appeal and holding in TPs favor on the two issues referred to earlier in the parties’ stipulation.

The CO wrote to TI, with a copy to the board, to explicitly make the earlier withdrawal of the final decision prejudicial to any later revival of the same charges, and to note that the Government “waives and releases the claims asserted in the [withdrawn] final decision.” The board consequently dismissed the appeal with prejudice on October 13,1987. The board stated that it was “unable to render a decision on the merits ... for the reason that the Government’s claim has been withdrawn with prej-udice____” The board also denied TPs motion for sanctions on the grounds that the Rule 11 and witness tampering charges had not been pursued first in a claim to the CO, and thus were not properly before the board, and that the scheduling order charges were untimely.

TI moved for reconsideration by the board. On March 8, 1988, the board issued its reconsideration opinion.

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991 F.2d 760, 38 Cont. Cas. Fed. 76,505, 28 Fed. Cl. 760, 1993 U.S. App. LEXIS 7815, 1993 WL 107833, Counsel Stack Legal Research, https://law.counselstack.com/opinion/texas-instruments-incorporated-v-the-united-states-cafc-1993.