Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca13-14-05078/USCOURTS-ca13-14-05078-0/pdf.json

Parties Involved:
G4S Technology LLC
Appellant
United States
Appellee

Document Text:

United States Court of Appeals 

for the Federal Circuit ______________________ 

G4S TECHNOLOGY LLC,

Plaintiff-Appellant

v.

UNITED STATES,

Defendant-Appellee

______________________ 

2014-5078

______________________ 

Appeal from the United States Court of Federal 

Claims in No. 1:12-cv-00008, Judge Nancy B. Firestone.

______________________ 

Decided: March 6, 2015

______________________ 

LEWIS STEVEN WIENER, Sutherland Asbill & Brennan

LLP, Washington, DC, argued for plaintiff-appellant. 

Also represented by GERIN BRENDAN BALLARD. 

DAVID ALAN LEVITT, Commercial Litigation Branch, 

Civil Division, United States Department of Justice, 

Washington, DC, argued for defendant-appellee. Also 

represented by STUART F. DELERY, ROBERT E. KIRSCHMAN,

JR., SCOTT D. AUSTIN. 

______________________ 

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2 G4S TECHNOLOGY LLC v. US

Before PROST, Chief Judge, NEWMAN and TARANTO,

Circuit Judges.

Opinion for the court filed by Chief Judge PROST. 

Dissenting opinion filed by Circuit Judge NEWMAN. 

PROST, Chief Judge. 

G4S Technology LLC (“G4S”) appeals from the United 

States Court of Federal Claims’ grant of summary judgment for the government. The Court of Federal Claims 

held that G4S is not a third party beneficiary of the 

government’s contract with Open Range Communications, 

Inc. (“Open Range”), and thus that the government is not 

liable on G4S’s contract claims. We affirm.

BACKGROUND

This case arises out of a $267 million loan from the 

Department of Agriculture’s Rural Utilities Service 

(“RUS”) and Open Range to finance construction of wireless broadband networks in 540 RUS-approved markets. 

As part of the project, Open Range also planned to bring 

wireless broadband service to a number of other markets 

outside the scope of the RUS loan. To finance this aspect 

of the construction, Open Range secured $97 million of 

venture capital financing from One Equity Partners III, 

L.P. (“OEP”). These agreements were announced in 

January 2009.

As part of the loan agreement with RUS, Open Range 

was required to keep a pledged deposit account, in which 

RUS would advance loan funds as needed over the course 

of the project. To receive loan funds, Open Range was 

required to submit a financial requirement statement 

(“FRS”) outlining the purpose of the advance and including relevant invoices and purchase orders. While Open 

Range had some limited flexibility to shift funding from 

one purpose to another, Open Range was expected to use 

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G4S TECHNOLOGY LLC v. US 3

the advanced funds for the purpose stated in the corresponding FRS. 

RUS anticipated that Open Range would execute the 

project through use of subcontractors. Accordingly, RUS 

and Open Range agreed that Open Range’s relationships 

with subcontractors would be formalized through master 

service agreements (“MSAs”). Each MSA included technical specifications, pricing information, target completion 

dates, and other requirements. RUS edited and formally 

approved a generic MSA for Open Range to use in contracting with subcontractors. Open Range entered into 

one such MSA with G4S, which at the time was called 

Adesta. 

Unfortunately, the project encountered difficulties 

just eighteen months after the loan agreement was 

signed. In July 2010, the Federal Communications Commission (“FCC”) suspended a spectrum permit belonging 

to Globalstar, Inc. Because Open Range licensed its 

spectrum rights from Globalstar, Open Range lost the 

spectrum rights necessary to operate the planned broadband network. Under the loan agreement, loss of spectrum rights gave RUS the right to terminate the loan. 

Consequently, on July 14, 2010, RUS gave Open Range 

notice of its intent to terminate all remaining funds on 

the loan unless Open Range could obtain replacement 

spectrum rights. 

Open Range relied on the RUS loan money to pay its 

subcontractors, including G4S, so the July 14, 2010 RUS 

notice to Open Range worried Open Range’s subcontractors. Soon after the notice, subcontractors’ fears were 

realized as Open Range began failing to meet its payment 

obligations. By mid-September, Open Range had notified 

RUS by email that Open Range was behind in compensating its subcontractors. 

Nonetheless, Open Range kept working to secure replacement spectrum rights. On September 22, 2010, the 

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4 G4S TECHNOLOGY LLC v. US

FCC issued a temporary permit to Open Range giving 

Open Range spectrum access covering 264 of the originally planned 540 communities until January 31, 2011. The 

next day, Open Range emailed RUS to inquire about RUS 

advancing funds, given that some subcontractors were 

threatening to leave the project. Lindsay Daschle, a 

Senior Advisor to the Secretary of Agriculture, responded 

by making loan money available and offering to reassure 

subcontractors that the project was moving forward. 

Daschle also submitted a letter to Open Range to serve as 

RUS’s press release. 

Despite RUS’s efforts to bolster Open Range’s credibility, subcontractors remained concerned about the project’s 

ongoing viability. On October 4, 2010, a lobbyist for Open 

Range requested that RUS confirm in writing that RUS 

would continue to fund the project. RUS responded with 

two more public letters explaining that RUS would continue funding the project, but that the plan would be 

downsized in light of Open Range’s failure to secure 

spectrum rights for the full scope of the original project. 

With Open Range still struggling to meet payment 

deadlines to subcontractors, Open Range and RUS exchanged emails on January 11 and 12, 2011 about funding a G4S subcontract that had been orally approved by 

RUS at the end of 2010. A meeting was quickly set up 

between Open Range and RUS to discuss the issue. Still, 

a weekly status report sent by Open Range to RUS on 

March 11, 2011 revealed that Open Range maintained 

outstanding debts to G4S. 

As it became clear that Open Range would be unable 

to regain the full spectrum rights necessary to complete 

the originally-contemplated project, RUS and Open Range 

executed a loan amendment on April 29, 2011 to reflect 

the project’s decreased scope. The loan amount was 

reduced to $180 million, and the project was downsized to 

cover 160 RUS-approved markets. RUS also required 

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G4S TECHNOLOGY LLC v. US 5

Open Range to secure $40 million of additional capital 

from OEP. In turn, in the equity commitment letter to 

Open Range, OEP conditioned its obligation to make its 

capital payment to Open Range upon prior satisfaction of 

two preconditions—that Open Range and RUS had modified their loan agreement and that RUS had advanced 

funds to Open Range for subcontractor work listed in two 

attached schedules, referred to as Schedules B-1 and B-2. 

Outstanding arrears to G4S were among those listed in 

Schedules B-1 and B-2.

After the equity commitment letter was signed, RUS 

and Open Range made the loan amendment and RUS 

advanced funds to Open Range to cover the amounts in 

Schedules B-1 and B-2, including $2.7 million that Open 

Range then paid to G4S. Still, Open Range was unable to 

pay G4S the full amount it owed.

Despite the loan amendment and new equity commitment letter, Open Range remained unable to satisfy 

its debts. Consequently, Open Range filed for bankruptcy 

on October 6, 2011. 

While the bankruptcy proceedings were ongoing, G4S 

filed the instant suit in the Court of Federal Claims on 

January 3, 2012. The government moved to dismiss, 

arguing that the Court of Federal Claims lacked jurisdiction because G4S was not in contractual privity with the 

government. The Court of Federal Claims ruled that it 

would have jurisdiction if it found G4S to be a third party 

beneficiary of the RUS-Open Range contract, so the Court 

of Federal Claims ordered discovery limited to that issue. 

After discovery was completed, the government renewed 

its motion to dismiss. The Court of Federal Claims denied 

that motion, ruling that G4S had raised a non-frivolous 

claim. However, the Court of Federal Claims also converted the government’s motion into a motion for summary judgment and held that G4S is not a third party 

beneficiary under the RUS-Open Range contract. 

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6 G4S TECHNOLOGY LLC v. US

G4S appealed, and we have jurisdiction over this appeal pursuant to 28 U.S.C. § 1295(a)(3).

DISCUSSION

Summary judgment is appropriate when the record, 

examined in the light most favorable to the non-movant, 

demonstrates “that there is no genuine issue as to any 

material fact and that the moving party is entitled to a 

judgment as a matter of law.” R. Ct. Fed. Cl. 56(c); see 

also Fed. R. Civ. P. 56(c) (same). We review the Court of 

Federal Claims’ decision granting summary judgment de 

novo, drawing all justifiable factual inferences in favor of 

G4S. Ammex, Inc. v. United States, 384 F.3d 1368, 1371 

(Fed. Cir. 2004). Whether G4S is a third party beneficiary under the RUS-Open Range contract is a mixed 

question of law and fact. Glass v. United States, 258 F.3d 

1349, 1353 (Fed. Cir. 2001).

“A nonparty becomes legally entitled to a benefit 

promised in a contract . . . only if the contracting parties 

so intend.” Astra USA, Inc. v. Santa Clara Cnty., Cal., 

131 S. Ct. 1342, 1347 (2011); see also US Ecology, Inc. v. 

United States, 245 F.3d 1352, 1356 (Fed. Cir. 2001) (analyzing whether the government “intended for the alleged 

contract to ‘confer a right’ on any third party”) quoting 

Montana v. United States, 124 F.3d 1269, 1273 (Fed. Cir. 

1997)). This intent may be either “express or implied,” 

and it must be “fairly attributable to the contracting 

officer.” Glass, 258 F.3d at 1354; Flexfab, L.L.C. v. United 

States, 424 F.3d 1254, 1263 (Fed. Cir. 2005). In addition, 

the benefit to the third party must be “direct.” Glass, 258 

F.3d at 1354; see also Restatement (Second) of Contracts 

§ 302, Illustration 3 (distinguishing between intended and 

incidental beneficiaries based on whether a payment is 

made directly to the third party). “[T]he Supreme Court 

has recognized the exceptional privilege that third-party 

beneficiary status imparts,” and we have accordingly 

cautioned that the privilege of third party beneficiary 

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G4S TECHNOLOGY LLC v. US 7

status “should not be granted liberally.” Flexfab, 424 F.3d 

at 1259 (citing German Alliance Ins. Co. v. Home Water 

Supply Co., 226 U.S. 220, 230 (1912)).

The parties agree that the contract contains no express declaration of intent. “In the absence of clear guidance from the contract language, the requisite intent on 

the part of the government can be inferred from the 

actions of the contracting officer and circumstances 

providing the contracting officer with appropriate notice 

that the contract provision at issue was intended to 

benefit the third party.” Id. at 1262–63. G4S thus relies 

on circumstantial evidence to establish that the government intended to bind itself to Open Range’s subcontractors.

Circumstantial evidence of governmental intent to 

bind itself to a third party must be considered in the 

context of the government’s responsibilities to safeguard 

taxpayer funds and advance the public interest. In part 

to ensure that projects are executed consistent with these 

responsibilities, extensive regulatory schemes often 

govern government contracts. Given that third party 

beneficiary status is an “exceptional privilege,” rarely will 

standard compliance with these regulatory schemes 

impart liability to a third party. German Alliance, 226 

U.S. at 230; see Astra, 131 S. Ct. at 1348 n.4 (“We can 

infer no such [third party beneficiary] authorization 

where a contract simply incorporates statutorily required 

terms and otherwise fails to demonstrate any intent to 

allow beneficiaries to enforce those terms.”). This proposition holds when the government exercises substantial 

oversight over the project. See US Ecology, 245 F.3d at

1356–57 (finding that, despite the government’s intentions to substantially oversee a subcontractor’s work, the 

subcontractor was not a third party beneficiary to the 

government-prime contractor contract). Indeed, the 

government’s duty to the public often compels such oversight. Therefore, while circumstantial evidence may 

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8 G4S TECHNOLOGY LLC v. US

establish that the government intended to bind itself to a 

third party, see, e.g., D&H Distrib. Co. v. United States, 

102 F.3d 542, 546–48 (Fed. Cir. 1996), the government’s 

conduct should be evaluated in the context of its responsibility to protect the public interest.

Turning to the facts of this case, G4S cites several 

pieces of evidence which it argues indicate the government’s intent to guarantee that subcontractors were paid. 

First, G4S places heavy reliance on the government’s use 

of a pledged deposit account (“PDA”) to advance funds to 

Open Range so that subcontractors like G4S could be 

paid. The loan agreement between Open Range and RUS 

required Open Range to maintain a PDA as a condition 

for obtaining draws on loan funds. To receive funds, Open 

Range had to request an advance in a Financial Requirements Statement indicating the purpose of the advance. 

Open Range also had to submit supporting materials such 

as invoices or purchase orders. Because RUS often advanced funds to the PDA for specific, approved work by 

subcontractors, G4S argues that the government intended 

that subcontractors benefit from the loan agreement.

There are several flaws in G4S’s position. First, the 

PDA was a general fund used by RUS and Open Range to 

pay the costs of the project. Rather than to serve as a 

mechanism to guarantee that subcontractors were paid, 

the purpose of the PDA was to assist the government in 

reviewing and approving the costs of the project, whether 

or not they were related to subcontractor work. While 

RUS often advanced funds to Open Range that were tied 

to specific subcontractor work, this alone does not demonstrate that the government intended to make itself liable 

to subcontractors.

Second, longstanding precedent requires that the 

benefit to a third party beneficiary be “direct,” and here 

the benefit to subcontractors from the loan agreement 

was not. See German Alliance, 226 U.S. at 230 (“Before a 

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G4S TECHNOLOGY LLC v. US 9

stranger can avail himself of the exceptional privilege of 

suing for a breach of an agreement to which he is not a 

party, he must, at least, show that it was intended for his 

direct benefit.”); Glass, 258 F.3d at 1354 (“In order to 

prove third party beneficiary status, a party must demonstrate that the contract not only reflects the express or 

implied intention to benefit the party, but that it reflects 

an intention to benefit the party directly.”). Here, all 

payments from RUS were distributed to G4S indirectly. 

RUS always paid Open Range, which then paid G4S 

pursuant to the Open Range-G4S contract.

In cases where we have found a subcontractor to be a 

third party beneficiary based on a payment mechanism, 

the subcontractor was always paid by the government 

more directly than in the circumstances of this case. For 

example, in D&H Distributing Co. v. United States, the 

government made the prime contractor and subcontractor 

joint payees under the government-prime contractor 

contract. 102 F.3d at 546–48. And in J.G.B. Enterprises, 

Inc. v. United States, the government payments to the 

prime contractor were held in escrow for the third party 

subcontractor. 497 F.3d 1259, 1260, 1261 n.1 (Fed. Cir. 

2007). These payment arrangements are not the only 

payment mechanisms that can make a subcontractor a 

third party beneficiary, but our cases require more than a 

payment to a contractor’s general fund, even if the government knows that subcontractors will be due certain 

portions of the fund.

Third, a PDA is a standard aspect of every RUS 

Broadband Initiatives Program contract. See Rural 

Utilities Service Broadband Initiatives Program Contracting, Work Order and Advance Procedures Guide, 9, 

available at

http://www.rurdev.usda.gov/supportdocuments/BIP_Contr

acting_and_Advance_Procedures_Guide_3-4-10.pdf. The 

government’s procedures for approving Open Range’s 

expenditures and advancing funds certainly fall within 

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10 G4S TECHNOLOGY LLC v. US

the government’s responsibilities to safeguard taxpayer 

funds and advance the public interest. As the PDA was a 

standard RUS contractual provision designed to effect 

these governmental responsibilities—and not to guarantee that G4S was paid—the PDA does not weigh in favor 

of finding that the government intended to make itself 

liable to G4S. Astra, 131 S. Ct. at 1348 n.4.

A similar analysis applies to the evidence regarding 

the MSA and Schedules B-1 and B-2. Both are common 

documents. As to the MSA, Open Range submitted a 

generic MSA for RUS comment and approval. RUS 

approved a MSA template for Open Range to use with its 

subcontractors. When contracting with G4S, Open Range 

used a materially identical version of the generic MSA, 

but RUS apparently never reviewed the Open Range-G4S 

MSA. The MSA template included various technical 

specifications and work requirements. The government 

thus used MSAs to exercise oversight over Open Range 

and its subcontractors. However, that oversight is entirely consistent with the government’s general duty to 

protect the public interest. If anything, the fact that RUS 

did not individually approve Open Range’s MSAs with 

each subcontractor indicates that RUS kept some distance 

between itself and the subcontractors. Rather than 

establish that RUS communicated any intent that it be 

bound to G4S, the MSA merely set baseline requirements 

for what constitutes acceptable work.

Schedules B-1 and B-2, which were attached to the 

loan amendment, outline the revised amounts for subcontractor work to be advanced to Open Range. G4S characterizes the schedules as proof of direct payments from 

RUS to G4S. However, Schedules B-1 and B-2 are little 

different from the financial requirements statements 

Open Range was required to periodically submit to RUS 

over the course of the contract. Significantly, Schedules 

B-1 and B-2 demonstrate only that RUS was aware that 

subcontractors like G4S were contracted by Open Range 

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G4S TECHNOLOGY LLC v. US 11

to work on the project and that the subcontractors would 

likely be paid out of funds RUS advanced to Open Range. 

This evidence is hardly sufficient to prove that the benefit 

to G4S was direct and that the government intended to 

bind itself to G4S. Schedules B-1 and B-2 are just further 

examples of standard documents showing that the government exercised typical project oversight to be expected 

of a governmental body entrusted with taxpayer funds.

G4S also directs the court to several statements by 

RUS expressing concern about subcontractors not being 

paid by Open Range. For example, after learning that 

vendors were becoming seriously concerned that Open 

Range would not meet its payment obligations, RUS 

issued a September 23, 2010 letter in which it authorized 

“immediate release of the present in-house advance 

request for $14 million and the additional request for $5 

million . . . .” Further, Lindsay Daschle, a Senior Advisor 

to the Secretary of Agriculture mentioned earlier, told 

Open Range that her “team feels the letter will serve as 

the press release and we will continue to talk to anyone 

(vendors, press, etc.) who we need to help calm fears and 

rebuild credibility.” 

Although G4S characterizes these statements as 

showing that RUS wanted to guarantee that subcontractors were paid, G4S overreads the statements. In fact, 

RUS’s public letter and Daschle’s email to Open Range 

express concern about Open Range’s credibility with 

subcontractors after Open Range had failed to timely pay 

them for their work. Consequently, Daschle proposed the 

solution of talking to subcontractors like G4S for the 

purpose of rebuilding Open Range’s credibility with 

subcontractors. G4S provides no evidence that it ever 

communicated directly with RUS. The communications 

between RUS and Open Range thus reinforce the conclusion that Open Range, not RUS, was the party entering 

into obligations with subcontractors such as G4S. Because Open Range had the ultimate authority over subCase: 14-5078 Document: 29-2 Page: 11 Filed: 03/06/2015
12 G4S TECHNOLOGY LLC v. US

contractors, RUS—which was primarily responsible for 

ensuring the project was eventually completed—

prioritized supporting Open Range so that Open Range 

could maintain a good relationship with its subcontractors. Therefore, the government did not express any 

intent that it be held liable for payments to subcontractors.

G4S’s remaining evidence supports the conclusion 

that G4S is not a third party beneficiary of the RUS-Open 

Range contract. Eleven days after the September 23, 

2010 letter, Open Range sent an email to RUS in which it 

indicated that it was facing severe financial trouble and 

that several subcontractors, including G4S, were especially concerned. RUS Assistant Administrator David Villano 

responded the next day on October 5, 2010, stating that 

he was willing to have a conference call with subcontractors. After Open Range replied that a conference call 

would be insufficient, RUS issued two additional public 

letters to Open Range. These letters give certain financial details, state that the project is going forward, and 

assure Open Range that RUS will continue to pay Open 

Range as work is done. 

These further communications are subject to the same 

analysis as the September 23, 2010 letter and following 

emails. Even though RUS exhibits substantial concern 

for Open Range’s financial obligations to subcontractors, 

this concern is always directed toward Open Range and 

the project’s viability. RUS recognized that the project 

would not go forward if subcontractors ceased performance, so RUS committed to affirming Open Range’s 

credibility and solvency. Significantly, however, RUS 

always left Open Range to use its new credibility in 

separate dealings with its subcontractors.

To summarize, RUS could have provided guarantees 

directly to G4S. RUS could have arranged to pay G4S 

itself. However, it did neither. Unlike in D&H and

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G4S TECHNOLOGY LLC v. US 13

J.G.B., the government made no special payment arrangements. In fact, RUS did not even directly communicate with G4S. While RUS offered to speak to 

subcontractors, the purpose of those conversations was 

always to rebuild Open Range’s credibility and subcontractors’ confidence in the project. These actions evince 

only that RUS intended that the project move forward 

and that its investment of public funds not be wasted. 

Therefore, the September and October 2010 communications do not raise a genuine issue of material fact as to the 

government’s intent to bind itself to G4S.

In conclusion, the government’s actions never deviated from the scope of its sovereign responsibilities to 

safeguard taxpayer funds and advance the public interest. 

G4S asks that the government incur liability because it 

talked to the individuals in charge of a failing project in 

an attempt to fix the problems. If anything, this sort of 

governmental response should be encouraged. If G4S 

were to prevail here, almost any subcontractor over which 

the government exerts meaningful oversight and whose 

work is funded indirectly by the government would be a 

third party beneficiary of the government’s contract with 

the prime contractor. That cannot be so. As such, the 

evidence, viewed in the light most favorable to G4S, is 

insufficient to establish that RUS and Open Range intended that G4S be legally entitled to directly benefit 

from the contract. Therefore, the Court of Federal Claims 

properly granted the government’s motion for summary 

judgment and held that G4S is not a third party beneficiary to the RUS-Open Range contract.

CONCLUSION

Accordingly, we affirm the Court of Federal Claims’ 

grant of the government’s motion for summary judgment. 

G4S is not a third party beneficiary of RUS’s contract 

with Open Range.

AFFIRMED

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United States Court of Appeals 

for the Federal Circuit ______________________ 

G4S TECHNOLOGY LLC,

Plaintiff-Appellant

v.

UNITED STATES,

Defendant-Appellee

______________________ 

2014-5078

______________________ 

Appeal from the United States Court of Federal 

Claims in No. 1:12-cv-00008-NBF, Judge Nancy B. Firestone. 

______________________ 

NEWMAN, Circuit Judge, dissenting.

I respectfully dissent. The panel majority, in sustaining summary judgment in favor of the government, holds 

that the Rural Utilities Service of the Department of 

Agriculture (the “government” or “RUS”) cannot be liable 

for payment to the sub-contractor for work performed in 

response to the government’s requests to continue with 

the project, amid government reassurances and actions 

“to rebuild Open Range’s credibility and subcontractors’ 

confidence in the project.” The government provided such

reassurance repeatedly, for “RUS intended that the 

project move forward;” whereupon the subcontractor 

continued to perform based on these government representations. Maj. Op. at 13.

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2 G4S TECHNOLOGY LLC v. US

The government ambitiously planned the construction 

of an electronic and digital information and communications system to provide broadband service to the vast

rural areas of the nation. The project was implemented 

by “master service agreements” between Open Range and 

each subcontractor; each master service agreement was 

reviewed, adjusted, and approved by RUS. Each contract 

phase required prior authorization and approval by RUS. 

The work for which G4S here seeks payment had been 

authorized and approved by RUS.

When G4S and other subcontractors declared their intention to cease work because Open Range was not paying 

them the approved amounts for work already done, RUS

provided reassurance to the subcontractors, issued press 

releases, deposited additional funds with Open Range, 

and urged that performance continue. My colleagues 

state that they “encourage” such governmental intervention. See id. at 13 (“G4S asks that the government incur 

liability because it talked to the individuals in charge of a 

failing project in an attempt to fix the problems. If anything, this sort of governmental response should be encouraged.”). But even as the court recognizes that the 

government persuaded the subcontractors to continue 

performance, the court also holds that the government 

can avoid payment for the performance it solicited and

obtained. 

The government moved in the Court of Federal 

Claims for summary judgment of no liability, and that 

court granted the motion on the ground that the subcontractors are not “third party beneficiaries” of the prime 

contract. No other theory was discussed in the court’s 

decision. The panel majority affirms on the ground that 

G4S, as a subcontractor, is not a third party beneficiary of 

the contract between RUS and Open Range. However, 

third-party-beneficiary theory is not as rigid as my colleagues state, and depends on the actual relationship 

among those concerned.

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G4S TECHNOLOGY LLC v. US 3

The claim before us is for payment for the work G4S 

did, after receiving the government’s and Open Range’s 

reassurances of payment. G4S seeks this payment for 

work done at the urging of the government, work that had 

previously been authorized by the government in accordance with the subcontract terms approved and in large 

part drafted by the government.

The complex of these arrangements is not that of simple prime- and sub-contractor obligations. The summary 

judgment record is not fully developed, but the facts at 

this stage plausibly support an obligation on the government, in law and/or in equity, to pay for that which it 

requested and urged. Such an obligation may arise on the 

facts of particular relationships, not on the generalities of 

third party beneficiary law. I would remand for determination of the obligations incurred on the specific facts of 

this case.

The United States, like other parties in contractual 

relationships, may be liable for benefits solicited and 

received, for which compensation was promised and 

expected. As explained in Metcalf Construction Company, 

Inc. v. United States, “[e]very contract imposes upon each 

party a duty of good faith and fair dealing in its performance and enforcement.” 742 F.3d 984, 990 (Fed. Cir. 

2014) (citing Restatement (Second) of Contracts § 205 

(1981)). This principle applies to contracts with the 

federal government. E.g., Mobil Oil Exploration & Producing S.E., Inc. v. United States, 530 U.S. 604, 607 

(“When the United States enters into contract relations, 

its rights and duties therein are governed generally by 

the law applicable to contracts between private individuals.”) (quoting United States v. Winstar Corp., 518 U.S. 

839, 895 (plurality opinion) (internal quotation marks 

omitted)); Precision Prime & Timber, Inc. v. United 

States, 596 F.3d 817, 828 (Fed. Cir. 2010); Malone v. 

United States, 849 F.2d 1441, 1445–46 (Fed. Cir. 1988). 

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4 G4S TECHNOLOGY LLC v. US

The panel majority holds that the government cannot 

be held liable for paying for the work done by G4S, reasoning that it is a “sovereign responsibili[ty] to safeguard 

taxpayer funds.” Maj. Op. at 13. The sovereign has many 

responsibilities, including that of paying for work that it 

requests and receives. See Metcalf Constr. Co., 742 F.3d 

at 994 (“[A] breach of the implied duty of good faith and 

fair dealing does not require a violation of an express 

provision in the contract.”) (emphases in original); Eric A. 

Frechtel, “The Government Must Administer its Contracts 

Fairly and Reasonably,” 54 CONTRACT MGMT. 30 (2014). 

In sum, in view of the undisputed premise that authorized work was done by G4S in reliance on the government’s assurances, this case warrants exploration of 

the equities as well as the law. The Court of Federal 

Claims did not reach this aspect. I would remand for this 

purpose. 

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