Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca13-13-05110/USCOURTS-ca13-13-05110-0/pdf.json

Parties Involved:
Fireman's Fund Insurance Company
Appellee
Ground Improvement Techniques, Inc.
Appellant
MK Ferguson Company
Appellant
PNC Bank, N.A.
Appellee
R.N. Robinson & Sons, Inc.
Appellee
United States
Appellee

Document Text:

NOTE: This disposition is nonprecedential.

United States Court of Appeals 

for the Federal Circuit ______________________ 

GROUND IMPROVEMENT TECHNIQUES, INC.,

MK FERGUSON COMPANY, FOR THE USE AND 

BENEFIT OF GROUND IMPROVEMENT 

TECHNIQUES, INC.,

Movants-Appellants

v.

UNITED STATES,

Defendant-Appellee

v.

PNC BANK, N.A., FIREMAN'S FUND INSURANCE

COMPANY, R.N. ROBINSON & SONS, INC., 

SECURED CREDITORS OF GROUND 

IMPROVEMENT TECHNIQUES, INC.,

Plaintiffs-Appellees

______________________ 

2013-5110

______________________ 

Appeal from the United States Court of Federal 

Claims in No. 12-CV-0057, Senior Judge Lynn J. Bush.

______________________ 

Decided: July 28, 2015

______________________ 

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2 GROUND IMPROVEMENT TECHNIQUES v. US

STEVEN R. SCHOOLEY, Schooley Law Firm, Orlando, 

FL, argued for movants-appellants.

JEFFREY A. REGNER, Commercial Litigation Branch, 

Civil Division, United States Department of Justice, 

Washington, DC, argued for defendant-appellee. Also 

represented by JOYCE R. BRANDA, ROBERT E. KIRSCHMAN,

JR., STEVEN J. GILLINGHAM. 

ROBERT G. BARBOUR, Watt, Tieder, Hoffar & Fitzgerald, L.L.P., McLean, VA, for plaintiffs-appellees. 

______________________ 

Before PROST, Chief Judge, BRYSON and DYK, Circuit 

Judges.

PROST, Chief Judge. 

Ground Improvement Techniques, Inc. (“GIT”) appeals decisions by the U.S. Court of Federal Claims

holding that GIT is not the real party in interest, granting 

the real party in interest’s motion for substitution and 

denying GIT’s motion to continue as plaintiff, and dismissing certain of GIT’s claims for lack of jurisdiction. 

For the reasons set forth below, we affirm the decisions of 

the U.S. Court of Federal Claims. 

BACKGROUND

In 1983, the Department of Energy (“DOE”) entered 

into a prime contract with Morrison Knudson Company, 

Inc. (the “MK prime contract”) for multiple projects across 

the nation relating to the remediation of uranium mill 

tailings. The MK prime contract was subsequently 

passed from Morrison Knudson Company, Inc. to MKFerguson Company (“MK”). On March 1, 1995, MK 

entered into a subcontract with GIT (the “GIT subcontract”) for work on particular uranium mill sites located in 

Slick Rock, Colorado. The GIT subcontract was specifically titled “CONSTRUCTION SUBCONTRACT” and was

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GROUND IMPROVEMENT TECHNIQUES v. US 3

identified as being “[u]nder DOE Prime Contract No. DEAC04-83AL 18796,” the MK prime contract. J.A. 89. The 

DOE provided its consent for MK and GIT to enter into 

the GIT subcontract. In doing so, the DOE contracting 

officer stated that its consent “shall neither create any 

obligation of the Government to, or privity of contract 

with the subcontractor.” J.A. 362. 

On September 18, 1995, with the consent of DOE, MK 

terminated GIT for default. That termination became the 

subject of multiple years of litigation between MK and 

GIT in the U.S. District Court for the District of Colorado 

(the “GIT-MK litigation”). During the course of the GITMK litigation, GIT filed for Chapter 11 bankruptcy in the 

U.S. Bankruptcy Court for the Western District of Pennsylvania, and GIT’s interest the GIT-MK litigation became an asset of the bankruptcy estate. As part of the 

bankruptcy proceeding, GIT entered into a “Reorganization Plan,” which stated that “GIT will assign . . . any and 

all claims, causes of action, right, title, and interest in and 

to the [GIT-MK litigation]” to five of its secured creditors: 

PNC Bank (“PNC”), Fireman’s Fund Insurance Company 

(“Fireman’s Fund”), Holland & Knight LLP (“Holland & 

Knight”), The Law Offices of Frederick Huff (“Mr. Huff”), 

and R.N. Robinson & Sons, Inc. (“Robinson”) (collectively, 

the “Secured Parties”). J.A. 418. The Reorganization 

Plan further provided that “[i]f the net proceeds of the MK 

case are sufficient to satisfy the claims of [the Secured 

Parties] in full, the remaining proceeds shall be distributed to unsecured creditors on a pro rata basis.” J.A. 418–

19. In a subsequent one-page “Clarifying Order,” the 

Pennsylvania bankruptcy court stated that “the Secured 

Parties may either direct the Debtor to assign to the 

Secured Parties or their designee all of the Debtor’s rights 

and interest in the [GIT-MK litigation] or, at their option, 

continue prosecution of the [GIT-MK litigation] in GIT’s 

name in lieu of an assignment.” J.A. 479. The Secured 

Parties elected to continue litigation against MK in the 

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4 GROUND IMPROVEMENT TECHNIQUES v. US

name of GIT, rather than directing GIT to assign its 

claims against MK to the Secured Parties. In addition to 

the Reorganization Plan, GIT and the Secured Parties 

also entered into an “Agreement Respecting Litigation,” 

which stated that, after payment of litigation costs and 

$125,000 to the unsecured creditors as required by the 

Reorganization Plan, the proceeds not in excess of the 

secured creditors’ claims would be distributed first in part 

to the Secured Parties and then in part to Mr. Kinghorn, 

an equity holder in GIT. J.A. 431–34. As provided by the 

Reorganization Plan, any amounts in excess of the Secured Parties’ claims would go to the unsecured creditors. 

J.A. 418–19. Neither the Agreement Respecting Litigation nor the Reorganization Plan provided for distribution 

of any proceeds to GIT itself. The agreement also apportioned voting interests regarding the decisions to be made 

pertaining to the GIT-MK litigation, and specified that 

choice of counsel required 70% of the voting interests and 

choice of conduct required 75% of the voting interests. 

J.A. 432–34. 

GIT eventually obtained a judgment against MK in 

the GIT-MK litigation for wrongful termination. However, the judgment was only partially satisfied, as MK, too, 

had filed for bankruptcy in the U.S. Bankruptcy Court for 

the District of Nevada. The unsatisfied portion of GIT’s 

judgment against MK, and post-judgment interest, were 

claims to be administered in MK’s bankruptcy. The 

Nevada bankruptcy court required MK to submit a certified claim with DOE to attempt to satisfy GIT’s claims 

against MK related to the DOE project. Although MK did 

so, the certification was contested as inadequate. The 

Nevada bankruptcy court eventually ordered GIT itself to 

file GIT’s claims with DOE’s contracting officer under 

MK’s name, and to certify its own claims. GIT then filed 

both a certified claim in MK’s name and a certified claim 

in its own name with the DOE contracting officer. When 

GIT received no response from the contracting officer, GIT 

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GROUND IMPROVEMENT TECHNIQUES v. US 5

filed a “deemed denied” suit in the U.S. Court of Federal 

Claims. GIT’s suit involved four breach of contract counts 

against the DOE: Counts I-III in GIT’s own name, and 

Count IV in MK’s name, for the benefit of GIT.

On December 5, 2012, the Court of Federal Claims issued a decision addressing two issues raised by the parties. See Ground Improvement Techniques, Inc. v. United 

States, No. 12-57 C, 108 Fed. Cl. 162 (Fed. Cl. Dec. 5, 

2012) (“GIT I”). First, the court agreed with DOE that 

GIT lacked privity with the government, and therefore 

dismissed Counts I–III brought in GIT’s own name 

against the government for lack of subject matter jurisdiction. Id. at 171–83. Second, the court agreed with DOE 

that the Secured Parties, not GIT, were the real parties in 

interest for all four counts, as GIT’s bankruptcy had 

transferred all its claims in the GIT-MK litigation to the 

Secured Parties. Id. at 169–71. Following its decision, 

the court denied GIT’s motion for reconsideration, but 

given that Count IV still remained, ordered briefing from 

both GIT and the Secured Parties addressing if and 

how—under the court’s joinder, ratification, and substitution rules—the suit would go forward on Count IV. See 

Ground Improvement Techniques, Inc. v. United States, 

No. 12-57 C, (Fed. Cl. May 3, 2013) (“GIT II”). In response to the court’s order, GIT sought to continue as 

plaintiff, either through ratification (supported by both 

Mr. Huff, one of the Secured Parties, and Mr. Kinghorn, 

an equity-holder) or through joinder. For their part, three 

of the Secured Parties (PNC, Fireman’s Fund, and Robinson) sought to be substituted as the sole plaintiffs in the 

suit.1 On April 30, 2014, the court issued a decision 

1 Together, these three Secured Parties held the 

requisite voting interests to make decisions regarding the 

GIT-MK case, as set forth in the Agreement Respecting 

Litigation. J.A. 432–34. 

 

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substituting PNC, Fireman’s Fund, and Robinson as the 

sole plaintiffs in the suit and denying GIT’s request to 

continue as plaintiff. See Ground Improvement Techniques, Inc. v. United States, No. 12-57 C, 2014 WL 

1711004 (Fed. Cl. Apr. 30, 2014) (“GIT III”). The court 

subsequently directed entry of judgment pursuant to Rule 

54(b) of the Rules of the U.S. Court of Federal Claims 

(“RCFC”). 

GIT appealed to this court. Specifically, GIT seeks 

reversal of: (i) the determination that GIT is not the real 

party in interest; (ii) the substitution of PNC, Fireman’s 

Fund, and Robinson as plaintiffs, and the denial of GIT’s 

request to continue as plaintiff; and (iii) the dismissal of 

Counts I–III for lack of privity. PNC, Fireman’s Fund, 

and Robinson moved, with the government’s consent, for 

voluntary dismissal of the appeal and the return of jurisdiction to the Court of Federal Claims; GIT opposed. We 

requested briefing from all three parties, and for the 

reasons explained below, affirm the decisions of the Court 

of Federal Claims. 

DISCUSSION

“This court reviews judgments of the Court of Federal 

Claims to determine whether they are premised on clearly 

erroneous factual determinations or otherwise incorrect 

as a matter of law.” Wheeler v. United States, 11 F.3d 

156, 158 (Fed. Cir. 1993). The court below addressed the 

real party in interest question under RCFC 12(b)(6) and 

the privity question under both RCFC 12(b)(1) and 

12(b)(6). We review the court’s determinations under 

both rules de novo. Id. The court addressed the substitution and joinder questions under RCFC 19 and 20. While 

we have not yet stated whether such determinations are 

reviewed de novo or for abuse of discretion, United Keetowah Band of Cherokee Indians of Okla. v. United States, 

480 F.3d 1318, 1324 (Fed. Cir. 2007), we need not decide 

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GROUND IMPROVEMENT TECHNIQUES v. US 7

the question here because our outcome would be the same 

under either standard.

I 

We begin by addressing the real party in interest 

question. Under the applicable rule of the Court of Federal Claims, “[a]n action must be prosecuted in the name 

of the real party in interest.” RCFC 17(a)(1). The Court 

of Federal Claims has defined a real party in interest as 

“the party that ‘possesses the right to be enforced.’” Grass 

Valley Terrace v. United States, 69 Fed. Cl. 543, 546 

(2006) (quoting Mitchell Food Prods., Inc. v. United 

States, 43 Fed. App’x. 369, 369 (Fed. Cir. 2002)); see also 

Crone v. United States, 538 F.2d 875, 882 (Ct. Cl. 1976) 

(describing the real party in interest as the party “to 

whose present, personal benefit a money judgment may 

run”). Failure to prosecute an action in the name of the 

real party in interest results in dismissal of the claim, 

unless cured. Aldridge v. United States, 59 Fed. Cl. 387, 

390 (Ct. Cl. 2004); Norega v. United States, 113 F. Supp. 

463, 464 (Ct. Cl. 1953). 

The Court of Federal Claims held that GIT’s bankruptcy effected a transfer of GIT’s claims related to the 

DOE project to the Secured Parties, and that the Secured 

Parties were therefore the real parties in interest for all of 

GIT’s claims in this suit.2 GIT I, 108 Fed. Cl. at 171–83. 

For the reasons explained below, we agree. 

2 The Court of Federal Claims held this to be true 

regardless of “whether the claims are described as claims 

against MK or against the United States,” as all of GIT’s 

claims were founded on either the unsatisfied judgment 

and post-judgment interest against MK obtained by GIT, 

or additional, related claims against MK and/or the 

United States which arise from the DOE project. GIT I, 

108 Fed. Cl. at 170. The court therefore concluded, and 

 

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8 GROUND IMPROVEMENT TECHNIQUES v. US

It is undisputed that when GIT filed for bankruptcy, 

its assets—including its claims in the GIT-MK litigation—became part of the bankruptcy estate. See 11 

U.S.C. § 541(a); Aaron v. United States, 65 Fed. Cl. 29, 31 

(Fed. Cl. 2005) (“It is well established that the bankruptcy 

estate thus includes all ‘causes of action’ owned by the 

debtor at the time of filing for bankruptcy.”). The central 

question in this case, therefore, is whether the events 

during bankruptcy transferred GIT’s claims from its 

bankruptcy estate to the Secured Creditors. Based on the 

plain language of the documents involved in the bankruptcy proceedings, the answer is clearly yes. 

Most significantly, GIT’s Reorganization Plan states 

that: “GIT will assign . . . any and all claims, causes of 

action, right, title, and interest in and to the [GIT-MK 

litigation]” to the Secured Parties and provides for the 

distribution of proceeds in excess of the Secured Parties’ 

claims to the unsecured creditors. J.A. 418. A debtor 

submitting such a plan only retains the power over claims 

or interests if the plan expressly states so. See 11 U.S.C. 

§ 1123(b)(3)(B). Here, not only did the Reorganization 

Plan fail to include any such reservation clause, the plan 

instead specifically passed GIT’s rights in the GIT-MK 

litigation over to the Secured Parties. 

Additional documents involved in the proceedings confirm the transfer of claims in the GIT-MK litigation to the 

Secured Parties. For example, under the Agreement 

Respecting Litigation, the proceeds from the GIT-MK 

litigation were to be distributed to the bankruptcy estate 

and the creditors, but not to GIT itself. J.A. 432–42. And 

we agree, that all of GIT’s claims in this case “arise from 

and are inseparable from” those that GIT brought against 

MK in the GIT-MK litigation, and that the real party in 

interest is the same regardless of how the claims are 

described. Id. 

 

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the bankruptcy court’s Clarifying Order specified that, 

pursuant to the transfer clause in the Reorganization 

Plan, “the Secured Parties may either direct the Debtor to 

assign to the Secured Parties or their designee all of the 

Debtor’s rights and interest in the [GIT-MK litigation] or, 

at their option, continue prosecution of the [GIT-MK 

litigation] in GIT’s name in lieu of an assignment.” J.A. 

479. Together, the Reorganization Plan, Agreement 

Respecting Litigation, and Clarifying Order all make 

clear that the Secured Parties had replaced GIT as the 

ones “to whose present, personal benefit a money judgment” from the GIT-MK litigation runs. Crone, 538 F.2d 

at 882. 

GIT’s arguments to the contrary are unpersuasive. 

First, GIT’s reading of the Clarifying Order borders on the 

incredible. The Clarifying Order clearly states that “the 

Secured Parties” could continue prosecution of the GITMK litigation in GIT’s name in lieu of an assignment. 

J.A. 479 (emphasis added). To support its claim that GIT 

continued to control the litigation, GIT simply replaces

“the Secured Parties” with “GIT.” See Corrected Appellants’ Br. 21–22 (“It is clear from the language of the 

Order that GIT could continue ‘prosecution of the MK 

Case in GIT’s name in lieu of an assignment.’”). This 

overt misreading of the court’s order cannot support GIT’s 

claim. 

Second, GIT’s focus on the language “will assign” from 

the Reorganization Plan, J.A. 479, and the fact that “[n]o 

assignment or transfer was ever consummated,” Corrected Appellants’ Br. 22, gets it no further. Of course there 

was no assignment; as permitted by the Clarifying Order, 

the Secured Parties elected the option of continuing 

litigation in the name of GIT, rather than having GIT 

directly assign its claims over to the Secured Parties. 

GIT’s complaint that there was never a formal assignment is beside the point.

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Finally, GIT’s argument that it remained a “debtor-inpossession” with both the power to pursue the GIT-MK 

litigation claims as well as the fiduciary obligation to its 

unsecured creditors to do so also fails. While a debtor-inpossession may have most of the powers of a bankruptcy 

trustee to pursue claims on behalf of the bankruptcy 

estate when the bankruptcy proceedings are initiated, 11 

U.S.C. § 1107(a), the bankruptcy estate—and accordingly,

the debtor-in-possession’s authority to pursue claims—

ceases to exist upon confirmation of a reorganization plan, 

In re United Operating, LLC, 540 F.3d 351, 355 (5th Cir. 

2008). Thus, while GIT may have initially possessed 

rights to pursue the claims in the GIT-MK litigation, 

those rights were extinguished upon the Pennsylvania 

bankruptcy court’s confirmation of the Reorganization 

Plan. This conclusion is not obviated by the GIT’s citation 

to snippets from the Reorganization Plan and other places 

where the bankruptcy court continued to refer to GIT as a 

debtor-in-possession. The court’s use of such language 

appears merely to be boilerplate, and in any event, cannot 

overcome the strong evidence showing that a transfer of 

rights occurred in this case. 

For all of these reasons, we agree with the Court of 

Federal Claims that GIT’s bankruptcy effected a transfer 

of GIT’s claims related to the DOE project to the Secured 

Parties, and that the Secured Parties, and not GIT, are 

the real parties in interest in this case. 

II

When it has been determined that a plaintiff is not 

the real party in interest, the court must allow the plaintiff a reasonable amount of time to cure the defect 

through substitution, joinder, or ratification. See RCFC

17(a)(3). Here, the Court of Federal Claims requested 

briefing from both GIT and the Secured Parties regarding 

how to move forward in light of the real parties in interest 

issue. The parties responded with conflicting proposals: 

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GROUND IMPROVEMENT TECHNIQUES v. US 11

while GIT sought to continue as a plaintiff (supported by 

ratifications of Mr. Huff and Mr. Kinghorn), three of the 

Secured Parties (PNC, Fireman’s Fund, and Robinson) 

sought to be substituted as the sole plaintiffs in the suit

with the obligation to distribute the proceeds in accordance with the Agreement Respecting Litigation and the 

Reorganization Plan. The Court of Federal Claims opted 

for substitution, finding that PNC, Fireman’s Fund, and 

Robinson “possess[ed] the voting power to make operating 

decisions for plaintiffs in this suit” and that joinder of GIT 

was inappropriate “for the simple reason that postbankruptcy GIT has no financial interest in claims arising 

from the DOE project.” See GIT III, 2014 WL 1711004, at 

*6–7. 

On appeal, GIT argues that the Court of Federal 

Claims should have permitted GIT’s continued presence

as a ratified plaintiff under either the rules governing 

required joinder, RCFC 19, or permissive joinder, RCFC

20. According to GIT, it must remain a plaintiff in this

suit in order “to ensure the procedural integrity of the 

action and to protect the rights and interest of Huff, 

Kinghorn, and the unsecured creditors.” Corrected Appellants’ Br. 42. In response, PNC, Fireman’s Fund, and 

Robinson argue that their substitution is fully supported 

by the Agreement Respecting Litigation, and that the 

requirements for neither required nor permissive joinder 

are met here.

We agree with PNC, Fireman’s Fund, and Robinson. 

Most important to our conclusion is the Agreement Respecting Litigation, which was signed by all five of the 

Secured Parties (including Mr. Huff) as well as Mr. Kinghorn. GIT has not disputed that, pursuant to the agreement’s terms, PNC, Fireman’s Fund, and Robinson 

together hold the requisite 70% and 75% interests to 

control decisions regarding choice of counsel and litigation 

conduct, respectively. J.A. 431–42. Mr. Huff and Mr. 

Kinghorn, pursuant to terms to which they agreed, do not 

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hold enough interest to direct such decisions. Given that 

Mr. Huff and Mr. Kinghorn have expressly signed away 

their control, GIT’s argument, premised as it is on protecting the rights of Mr. Huff and Mr. Kinghorn, loses its 

force. As the Court of Federal Claims rightly held: “Just 

because one of the Secured Parties (Mr. Huff) and an 

equity holder in GIT (Mr. Kinghorn) might be able to 

benefit from a judgment won in this court does not mean 

that Mr. Kinghorn or Mr. Huff may flout the Agreement 

[Respecting Litigation] and its terms.” GIT III, 2014 WL 

1711004, at *5. 

GIT’s argument that it must continue as plaintiff in 

order to protect the rights of the unsecured creditors also 

fails, this time because of the provisions of the Reorganization Plan. In order for a bankruptcy court to confirm a 

debtor’s reorganization plan, the debtor must show that 

the reorganization plan adequately protects the rights 

and interests of the unsecured creditors. See 11 U.S.C. 

§ 1129(b)(2)(B). Here, GIT’s Reorganization Plan addresses the interests of the unsecured creditors in multiple places. Most particularly, the plan requires that 

creditors holding unsecured claims be paid on a pro rata

basis in the following manner: (1) the first $125,000 of the 

net proceeds of the GIT-MK litigation; (2) the net proceeds 

of the GIT-MK litigation, if any, remaining after the 

claims of the Secured Parties are satisfied in full; (3) up to 

$120,000 to be paid by GIT’s shareholders over a period of 

five years; and (4) a dividend of $600,000 to be paid by 

GIT, with payments made on an annual basis over a 

period of five years. J.A. 423. The Reorganization Plan

thus already sets forth the ways in which the claims of 

the unsecured creditors shall be satisfied.

At its core, GIT’s argument is that, “because a significant portion of the Secured Creditors claims have been 

disbursed, there is no incentive for the Secured Creditors 

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to maximize recovery against the government.” Corrected 

Appellants’ Br. 42. While this may or may not be true,3 it 

is not reason to avoid the plain language of the governing 

documents in this case.

We also agree with the Court of Federal Claims that 

joinder of GIT is not appropriate under either RCFC 19 or 

20. Under RCFC 19, a person must be joined as a party if

that person “claims an interest relating to the subject of 

the action and is so situated that disposing of the action 

in the person’s absence may . . . as a practical matter 

impair or impede the person’s ability to protect the interest.” RCFC 19(a)(1)(B)(i). Under RCFC 20, persons may 

be joined as a party if “they assert any right to relief 

jointly, severally, or in the alternative with respect to or 

arising out of the same transaction, occurrence, or series 

of transactions or occurrences; and . . . any question of law 

or fact common to all plaintiffs will arise in the action.” 

RCFC 20(a)(1). 

Here, as the Court of Federal Claims observed, GIT 

no longer has any “financial interest in claims arising 

from the DOE project. Those claims were transferred to 

the Secured Parties in the GIT bankruptcy litigation.” 

GIT III, 2014 WL 1711004, at *7. GIT, therefore, does not 

“claim[] an interest relating to the subject of the action” 

as required by RCFC 19 or have “any right to relief” as 

required by RCFC 20. Thus, neither mandatory nor 

permissive joinder is appropriate.

3 It remains unclear to us which of the multitude of 

competing bankruptcy claims have been fully satisfied, 

which have been partially satisfied, and which remain 

outstanding. Thus, even if we were inclined to elevate 

GIT’s fairness concerns over the language of the governing documents (which we are not), we are unable to fully 

analyze GIT’s argument. 

 

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III

The Court of Federal Claims dismissed Counts I–III

(brought in GIT’s own name) for lack of privity between 

GIT and the government, and therefore lack of jurisdiction. GIT I, 108 Fed. Cl. at 172–82.4 In doing so, the 

court examined and found lacking GIT’s many arguments 

based on theories of direct contract, implied-in-fact contract, and agency. On appeal, GIT again argues that 

privity between itself and the government exists under 

multiple theories. Like the Court of Federal Claims, we 

reject GIT’s arguments. 

Pursuant to the Tucker Act, the Court of Federal 

Claims has jurisdiction over claims against the government involving “any express or implied contract with the 

United States.” 28 U.S.C. § 1491(a)(1). Similarly, the 

Contract Disputes Act provides that “a contractor may 

bring an action directly on the claim in the United States 

Court of Federal Claims.” 41 U.S.C. § 7104(b)(1). Because a subcontractor ordinarily lacks privity with the 

government, the Court of Federal Claims generally lacks 

jurisdiction over claims brought by a subcontractor 

4 Although the Court of Federal Claims viewed 

GIT’s claims against the government as indistinct from 

those transferred to the Secured Parties in GIT’s bankruptcy, the court nonetheless went on to consider whether, “to the extent that GIT has alleged that it possessed 

distinct claims against the United States,” there was 

privity of contract between GIT and the government such 

that subject matter jurisdiction over such claims existed. 

GIT I, 108 Fed. Cl. at 171–72.

Because we hold that GIT is not in privity with the 

government, we have no occasion to consider whether 

GIT, which we have held is no longer a debtor-inpossession, has any standing to assert a claim against the 

government. 

 

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against the government, though there are some exceptions. See J.G.B. Enters., Inc. v. United States, 497 F.3d 

1259, 1261 (Fed. Cir. 2007) (“A subcontractor typically is 

unable to seek relief against the United States on a 

dispute over the contract since it is not a party to the 

contract and thus lacks privity with the United States.”); 

United States v. Johnson Controls, Inc., 713 F.2d 1541 

(Fed. Cir. 1983) (concluding that the case did not “fall 

within any recognized exception to the well-entrenched 

rule that a subcontractor cannot bring a direct appeal 

against the government”). Whether a contract exists is a 

mixed question of law and fact, but where “the parties do 

not dispute the relevant facts, the privity issue reduces to 

a question of law, which we review de novo.” Cienega 

Gardens v. United States, 194 F.3d 1231, 1239 (Fed. Cir. 

1998). 

Here, it is indisputable that no direct contract between GIT and the government exists. There are two 

relevant contracts in this case. The first is the MK prime 

contract, which was entered into between MK and DOE 

more than a decade before GIT’s involvement in the 

project. The second is the GIT subcontract, which plainly 

states that it is a “SUBCONTRACT” between MK and 

GIT and was made “[u]nder DOE Prime Contract No. DEAC04-83AL 18796,” the MK prime contract. J.A. 89. 

Given the plain language of these contracts, GIT admits, 

as it must, that it does not have a direct contract with the 

government. See Corrected Appellants’ Br. 39 (“[T]he GIT 

contract is not expressly with the Government . . . . ”). 

There is also no implied-in-fact contract between GIT 

and the government. “An implied-in-fact contract is one 

‘founded upon a meeting of the minds, which, although 

not embodied in an express contract, is inferred, as a fact 

from conduct of the parties showing, in the light of the 

surrounding circumstances, their tacit understanding.’” 

City of Cincinnati v. United States, 153 F.3d 1375, 1377 

(Fed. Cir. 1998) (quoting Baltimore & Ohio R.R. Co. v 

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16 GROUND IMPROVEMENT TECHNIQUES v. US

United States, 261 U.S. 592, 597 (1923)); see also City of 

El Centro v. United States, 922 F.2d 816, 820 (Fed. Cir. 

1990) (“An implied-in-fact contract requires findings of: 1) 

mutuality of intent to contract; 2) consideration; and 3) 

lack of ambiguity in offer and acceptance.”). Here, GIT 

has failed to show that there was a meeting of the minds 

between the government and GIT that an implied-in-fact 

contract existed. To the contrary, the DOE contracting 

offer expressed the opposite intent by specifically disclaiming “any privity of contract with the subcontractor” 

when providing its consent for the GIT subcontract. J.A 

362. Moreover, there cannot be an implied-in-fact contract between GIT and the government when, as here, 

there are already two express contracts governing the 

same subject matter for which GIT now seeks to establish 

an implied contract. See Schism v. United States, 316 

F.3d 1259, 1278 (Fed. Cir. 2002) (en banc) (“It is well 

settled that the existence of an express contract precludes 

the existence of an implied-in-fact contract dealing with 

the same subject matter, unless the implied contract is 

entirely unrelated to the express contract.”). 

GIT’s leading argument for the existence of privity in 

this case is based on drawing factual analogies to a decision by the Energy Board of Contract Appeals (“EBCA”), 

McMillan Bros. Constr., EBCA No. 328–10–84, 86–3 

B.C.A. P. 17179, 1986 WL 20168 (July 11, 1986). But 

decisions of the EBCA are not binding on this court. 

Rather, we examine questions relating to privity under 

our own jurisprudence. Here, as we held in Johnson 

Controls, GIT has failed to show that this case “fall[s] 

within any recognized exception to the well-entrenched 

rule that a subcontractor cannot bring a direct appeal 

against the government.” 713 F.2d at 1550.

Specifically, in Johnson Controls, we recognized that 

privity between a subcontractor and the government may 

exist if the prime contractor was acting as an agent of the 

government. Id. at 1551–52. However, we rejected in 

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that case a subcontractor’s claim based on agency privity 

because the following three “crucial factors” were missing: 

The prime contractor was (1) acting as a purchasing agent for the government, (2) the agency relationship between the government and the prime 

contractor was established by clear contractual 

consent, and (3) the contract stated that the government would be directly liable to the vendors for 

the purchase price.

Id. at 1551.

These three factors are missing in this case as well. 

Here, the relevant contracts did not state that MK was 

acting as the purchasing agent for DOE, did not provide

“clear contractual consent” for such relationship, and did 

not state that DOE would be directly liable to GIT for the 

contract price. Specifically, with respect to the first two 

factors, the MK prime contract specified that MK itself—

not DOE—was to enter into subcontracts. J.A. 193–95. 

And it made clear that MK was responsible, not simply

for contracting with someone else to work for DOE, but 

actually performing work under the contract, including 

“furnish[ing] all labor, material, facilities, services, 

equipment, superintendence and administration necessary to accomplish engineering, design, construction, and 

inspection services.” J.A. 178–79. With respect to the 

third factor, the GIT subcontract provided that MK, not 

DOE, would pay GIT the price for the subcontract. J.A. 

130. And, contrary to GIT’s argument, the fact that the 

DOE posted a letter of credit to ensure payment, and 

directed payment through a dedicated bank account, is 

not enough to establish an agency relationship between 

MK and DOE here. 

GIT argues that “the totality of the individual contractual provisions present a principal-agent relationship,” pointing in support to clauses requiring MK to 

obtain DOE approval for certain actions. But the need for 

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18 GROUND IMPROVEMENT TECHNIQUES v. US

MK to obtain DOE approval does not create an agency 

relationship. As we observed in Johnson Controls, “[i]t is 

true that the government here has retained a great deal 

of control over the actions of [the contractor] in its dealings with the subcontractors on the project. But it is also 

apparent that the government meant to use [the contractor] as a buffer between it and the claims of subcontractors.” 713 F.2d at 1552. In sum, GIT has failed to 

establish privity with DOE under an agency theory. 

GIT has also failed to establish privity with DOE under four additional factors discussed in Johnson Controls, 

sometimes referred to as the “otherwise in privity” test. 

Id. at 1552–53; RMI Titanium Co. v. Westinghouse Elec. 

Corp., 78 F.3d 1125, 1139 (6th Cir. 1996). Those four 

factors, which led to the conclusion that a direct subcontractor appeal was not permitted in Johnson Controls,

are: 

(1) the government and [subcontractor] never entered into a direct contractual relationship; (2) the 

‘ABC’ clause, contained in both the prime contract 

and the subcontract, specifically disclaimed a contractual relationship between the government and 

[subcontractor]; (3) [the contractor] was required 

to obtain a Miller Act payment bond, which provided a recourse by the subcontractor other than a 

direct appeal; and (4) there is no provision in any 

of the contract documents that clearly authorizes 

a direct appeal by a subcontractor. 

713 F.2d at 1552–53.

On balance, these four factors weigh against GIT’s direct subcontractor appeal in this case as well. With 

respect to the first factor, no direct contractual relationship between GIT and the government exists, for the 

reasons already explained. With respect to the second 

factor, GIT is correct that there is no contractual provision expressly disclaiming privity between GIT and the 

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government. But the DOE, in providing its consent for 

the GIT subcontract, specifically stated that there would 

be no privity of contract with the subcontractor. J.A. 362. 

And although this disclaimer was not written into the 

contract, as it was in Johnson Controls, its presence 

nonetheless weighs against a finding of privity. With 

respect to the third factor, it is true that GIT did not 

obtain Miller Act payment bonds as a substitute for a 

direct remedy against the government, as the subcontractor did in Johnson Controls. But Johnson Controls does 

not state that the absence of Miller Act bonds creates

jurisdiction over direct subcontractor appeals. And in any 

event, the fourth factor—whether any contractual provision “clearly authorizes a direct appeal by a contractor”—

weighs against GIT’s direct action against the government in this case. Here, the “Disputes” clause upon which 

GIT relies says merely that the applicable substantive 

law is the “body of law applicable to procurement of goods 

and services by the Government.” J.A. 131. As already 

explained, the rule under the relevant “body of law” is 

that “[a] subcontractor typically is unable to seek relief 

against the United States on a dispute over the contract 

since it is not a party to the contract and thus lacks 

privity with the United States.” J.G.B. Enters., 497 F.3d 

at 1261. GIT has failed to show why that rule does not 

apply here. 

We therefore agree with the Court of Federal Claims 

that privity, and thus jurisdiction, is lacking as to GIT’s 

Counts I–III brought in its own name against the government. We do not address Count IV, brought in MK’s 

name for the benefit of GIT, which still remains in this 

case.

CONCLUSION

For the foregoing reasons, we affirm the decisions by 

the Court of Federal Claims that: (i) GIT is not the real 

party in interest for the claims in this suit; (ii) PNC, 

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20 GROUND IMPROVEMENT TECHNIQUES v. US

Fireman’s Fund, and Robinson should be substituted as 

sole plaintiffs in this suit; and (iii) there is no privity 

between GIT and the government, and thus no jurisdiction over GIT’s Counts I–III brought in GIT’s own name 

against the government. Given our decision on the merits, we deny as moot the motion by PNC, Fireman’s Fund, 

and Robinson for voluntary dismissal of this appeal. We 

note that our decision does not address any remaining 

issues with respect to Count IV, which we leave for further consideration by the Court of Federal Claims. 

AFFIRMED

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