Court Opinion

ID: 2784475
Source: CourtListenerOpinion
Date Created: 2015-03-06 16:01:35.507084+00
Date Added: 2024-06-11T12:08:26.514146
License: Public Domain

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.
                 ______________________
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 judg-
ment 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 wire-
less 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 includ-
ing 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
G4S TECHNOLOGY LLC   v. US                                3

the advanced funds for the purpose stated in the corre-
sponding 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 tech-
nical specifications, pricing information, target completion
dates, and other requirements. RUS edited and formally
approved a generic MSA for Open Range to use in con-
tracting 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 Com-
mission (“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 broad-
band network. Under the loan agreement, loss of spec-
trum 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 subcontrac-
tors. 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 compensat-
ing its subcontractors.
    Nonetheless, Open Range kept working to secure re-
placement spectrum rights. On September 22, 2010, the
4                                 G4S TECHNOLOGY LLC   v. US

FCC issued a temporary permit to Open Range giving
Open Range spectrum access covering 264 of the original-
ly 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 credibil-
ity, 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 con-
tinue 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 ex-
changed emails on January 11 and 12, 2011 about fund-
ing 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
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 modi-
fied 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 com-
mitment 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 jurisdic-
tion 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 con-
verted the government’s motion into a motion for sum-
mary judgment and held that G4S is not a third party
beneficiary under the RUS-Open Range contract.
6                                 G4S TECHNOLOGY LLC   v. US

    G4S appealed, and we have jurisdiction over this ap-
peal 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 benefi-
ciary 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) (ana-
lyzing 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
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 ex-
press declaration of intent. “In the absence of clear guid-
ance 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 govern-
ment intended to bind itself to Open Range’s subcontrac-
tors.
    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 proposi-
tion 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 inten-
tions 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 over-
sight. Therefore, while circumstantial evidence may
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 responsi-
bility to protect the public interest.
    Turning to the facts of this case, G4S cites several
pieces of evidence which it argues indicate the govern-
ment’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 Require-
ments Statement indicating the purpose of the advance.
Open Range also had to submit supporting materials such
as invoices or purchase orders. Because RUS often ad-
vanced 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 demon-
strate 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
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 demon-
strate 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 gov-
ernment 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 Contract-
ing, 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
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 guaran-
tee 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 entire-
ly 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 subcon-
tractor work to be advanced to Open Range. G4S charac-
terizes 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
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 gov-
ernment 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 subcontrac-
tors 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 conclu-
sion that Open Range, not RUS, was the party entering
into obligations with subcontractors such as G4S. Be-
cause Open Range had the ultimate authority over sub-
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 subcontrac-
tors. Therefore, the government did not express any
intent that it be held liable for payments to subcontrac-
tors.
    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 especial-
ly 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 subcontrac-
tors. After Open Range replied that a conference call
would be insufficient, RUS issued two additional public
letters to Open Range. These letters give certain finan-
cial 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 perfor-
mance, 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
G4S TECHNOLOGY LLC   v. US                                13

J.G.B., the government made no special payment ar-
rangements. In fact, RUS did not even directly communi-
cate with G4S.         While RUS offered to speak to
subcontractors, the purpose of those conversations was
always to rebuild Open Range’s credibility and subcon-
tractors’ 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 communica-
tions 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 deviat-
ed 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 in-
tended 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 benefi-
ciary 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
  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. Fire-
stone.
                ______________________
NEWMAN, Circuit Judge, dissenting.
    I respectfully dissent. The panel majority, in sustain-
ing 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 repre-
sentations. Maj. Op. at 13.
2                                  G4S TECHNOLOGY LLC   v. US

    The government ambitiously planned the construction
of an electronic and digital information and communica-
tions 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 in-
tention 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 interven-
tion. 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 any-
thing, this sort of governmental response should be en-
couraged.”). 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 subcon-
tractors 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 col-
leagues state, and depends on the actual relationship
among those concerned.
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 accord-
ance with the subcontract terms approved and in large
part drafted by the government.
    The complex of these arrangements is not that of sim-
ple 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 govern-
ment, 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 determi-
nation 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 perfor-
mance 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 & Pro-
ducing 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 individu-
als.”) (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).
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, rea-
soning 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 au-
thorized work was done by G4S in reliance on the gov-
ernment’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.