Monday, December 5, 2011
The Department of Health and Human Services (HHS) provides training courses for its employees through HHS University (HHSU). In May 2007, HHS put out a request for quotations (RFQ) to provide grant management courses covering eight topics at HHSU. The Gonzales-McCaulley Investment Group, Inc. (GMIG). GMIG submitted a cover letter ad quote. It referenced "course book" binder that had apparently already been submitted to HHS.
The training program manager at HHS sent an e-mail to GMIG attaching "confirmation of selection to provide training in Grants Management to HHS University" and suggesting further contacts to discuss date for training sessions. Throughout June 2007, the parties exchanged communications setting up dates for the trainings. At that point, Kimberly Hill, HHSU's Manager of the Center for Administrative and Systems Training reviewed GMIG's submissions and compared them with the website of Management Concepts, the organization that had previously been providing services to HHSU, finding them virtually identical. On that basis, Ms. Hill concluded that GMIG had engaged in plagiarism, and she informed GMIG that HHSU would not be using its services. CMIG filed a pretest to the Government Accountability Office (GAO), arguing that GMIG never had an opportunity to defend itself against the charge of plagiarism. When HHS subsequently cancelled the original Request for Quotations (RFQ), the GAO dismissed the protest as "academic."
GMIG persisted, claiming that the decision to rescind the RFQ was pretextual. The GAO recommended that upon reinstating the RFQ, HHSU should give due consideration to all of the responding vendors. HHS instead decided to do all future HHSU training in-house. GMIG sued seeking $900,000 in general and consequential damages, and the suit, originally filed in California, was transferred to the Court of Federal Claims. After some procedural complexities, the Court of Federal Claims heard HHS's motion to dismiss or for summary judgment on the ground that there could be no breach of contract because there had never been a valid acceptance.
In a November 14, 2011 opinion and order, the Court of Federal Claims granted summary judgment to HHS. The court reviewed the elements of a breach of contract and concluded as follows:
“To prove the existence of a contract with the government, a plaintiff must prove four basic elements: (1) mutuality of intent to contract; (2) offer and acceptance; (3) consideration; and (4) a government representative having actual authority to bind the United States.” Hometown Fin., Inc. v. United States, 409 F.3d 1360, 1364 (Fed. Cir. 2005). Here, at a minimum, there was no offer and acceptance.
Since the federal rules do not consider a quotation to be an offer, the issuance by the government of an order in response to a quotation cannot establish a contract. But if GMIG's quotation was not the offer, perhaps the order was the offer, which was accepted through the exchange of e-mails. Unfortunately for GMIG, according to the court, the resulting e-mails merely discussed tentative dates and never amounted to an agreement. In the post-Iqbal and Twombly atmosphere, GMIG's inability to point to a "particular order and acceptance in its pleadings" is fatal to its claim.