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United States Court of Appeals for the Federal Circuit
December 23, 2020, Decided
[*1006] BRYSON, Circuit Judge.
BGT Holdings LLC appeals from a decision of the United States Court of Federal Claims ("the Claims Court") dismissing its claims arising from the U.S. Navy's withholding of certain government-furnished equipment under a fixed-price contract. The dismissal followed the court's ruling that BGT had contractually waived its claims of constructive change through ratification, official change through waiver, and breach for failure to award an equitable adjustment. The court also held that BGT insufficiently alleged a breach of the implied duty of good faith and fair dealing. We affirm the dismissal of the breach of good [**2] faith and fair dealing claim but vacate the court's dismissal of the remaining claims.
In 2014, BGT contracted with the Navy to construct and deliver a gas turbine generator. The Navy agreed to supply certain government-furnished equipment ("GFE") that BGT would use to construct the generator. Two of the GFE items identified in the contract—an exhaust collector and engine mounts—are relevant to this appeal because the Navy ultimately did not deliver those items to BGT. The withdrawal of those items and the Navy's failure to compensate BGT for that withdrawal are the source of the dispute in this case.
The contract incorporated various clauses from the Federal Acquisition Regulation ("FAR"). For convenience, we cite to the FAR when referencing those contract clauses. One such clause, the "government property" clause, provides as follows in relevant part:
(d) Government-furnished property.
(1) The Government shall deliver to the Contractor the Government-furnished property described in this contract. . . .
(2) The delivery and/or performance dates specified in this contract are based upon the expectation that the Government-furnished property will be suitable [*1007] for contract performance and [**3] will be delivered to the Contractor by the dates stated in the contract.
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984 F.3d 1003 *; 2020 U.S. App. LEXIS 40249 **; 2020 WL 7635980
BGT HOLDINGS LLC, Plaintiff-Appellant v. UNITED STATES, Defendant-Appellee
Prior History: [**1] Appeal from the United States Court of Federal Claims in No. 1:18-cv-00178-PEC, Judge Patricia E. Campbell-Smith.
BGT Holdings, LLC v. United States, 142 Fed. Cl. 474, 2019 U.S. Claims LEXIS 283 (Apr. 5, 2019)
Disposition: AFFIRMED IN PART, VACATED IN PART, AND REMANDED.
contracting, changes, equitable adjustment, withdrawal, ratification, good faith, exhaust, engine, mounts, fair dealing, waived, Contractor, deliver, communicated, contractual, decrease, rights, alleges, argues, Government-furnished, implied duty, unauthorized, amended complaint, fixed-price, breached, ratified, counts, complaint alleges, cost saving, modifications
Contracts Law, Contract Interpretation, Good Faith & Fair Dealing, Governments, Courts, Courts of Claims, Public Contracts Law, Bids & Formation, Authority of Government Officers, Actual Authority, Contract Performance, Alterations & Modifications, Authorized Changes, Contracting Officers