Free Motion for Judgment on the Pleadings - District Court of Federal Claims - federal

Case 1:07-cv-00156-MCW

Document 25

Filed 08/20/2008

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IN THE UNITED STATES COURT OF FEDERAL CLAIMS

GENERAL INJECTABLES & VACCINES, INC., Plaintiff, v. Filed Electronically on August 20, 2008 THE UNITED STATES, Defendant. No. 07-156C (Judge Williams)

PLAINTIFF'S MOTION FOR JUDGMENT ON THE PLEADINGS OR, ALTERNATIVELY, FOR SUMMARY JUDGMENT Plaintiff General Injectables & Vaccines, Inc. ("GIV") respectfully moves for judgment on the pleadings or, alternatively, for summary judgment pursuant to Rules 12(c) and 56(a) of the Rules of the Court of Federal Claims. This is an excess-reprocurement-cost case in which Defendant United States, acting through the Defense Supply Center Philadelphia ("DSCP"), seeks $1,494,671.05 from GIV related to DSCP's decision to terminate GIV's contract to supply injectable flu vaccine and DSCP's alleged replacement of the contracted-for vaccine with a much more expensive non-injectable flu vaccine. As set forth more fully in the memorandum of law and Proposed Findings of Uncontroverted Facts filed herewith, GIV's motion should be granted for three independent reasons. First, GIV is entitled to judgment as a matter of law because Defendant violated the plain language of the Federal Acquisition Regulation ("FAR") by failing to issue a timely demand for excess reprocurement costs. The FAR provides that if the Government wishes to issue a demand for excess reprocurement costs, it must do so "without delay" after "completion and final payment of the repurchase contract." FAR 32.610(a), 49.402-6(c). DSCP waited more than seven-

Case 1:07-cv-00156-MCW

Document 25

Filed 08/20/2008

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teen months after completion and final payment of the repurchase contract to assert its demand for excess reprocurement costs. Because GIV was prejudiced by Defendant's persistent refusal to issue a timely demand for excess reprocurement costs even after GIV raised the issue in proceedings before the Armed Services Board of Contract Appeals, this Court should reject Defendant's untimely demand for excess reprocurement costs. Second, GIV is entitled to judgment as a matter of law because the replacement vaccine Defendant purchased was not sufficiently similar to that for which Defendant originally contracted. The original contract in question required the vaccine to be injectable and suitable for persons four years of age or older. Defendant replaced the contracted-for vaccine with a much more expensive non-injectable flu virus vaccine not suitable for persons four years of age or older. Under United States v. Axman, 234 U.S. 36 (1914), and its progeny, Defendant is not entitled to excess reprocurement costs. Third, at a minimum, GIV is entitled to judgment as a matter of law rejecting that portion of Defendant's demand for excess reprocurement costs related to Defendant's purchase of vaccine before it terminated GIV's original contract. The plain language of the FAR provides that the Government's "right" to procure "similar" items does not accrue until after the contracting officer terminates the contract for cause. DSCP purchased over 40 percent of the vaccine in question more than one month before it terminated GIV's contract. As a result, costs stemming from Defendant's pre-termination purchase of vaccine are not properly chargeable to GIV as excess reprocurement costs.

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Filed 08/20/2008

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WHEREFORE, the Court should grant GIV's motion and enter judgment in GIV's favor. Dated: August 20, 2008 Respectfully submitted,

Of Counsel: James F. Segroves PROSKAUER ROSE LLP 1001 Pennsylvania Avenue, NW Suite 400 South Washington, DC 20004-2533 202.416.6871 202.416.6899 (fax) [email protected]

s/Bruce E. Fader by s/James F. Segroves Bruce E. Fader PROSKAUER ROSE LLP 1585 Broadway New York, NY 10036-8299 212.969.3415 212.969.2900 (fax) [email protected] Attorney of Record for Plaintiff General Injectables & Vaccines, Inc.

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CERTIFICATE OF FILING I hereby certify that on August 20, 2008, a copy of Plaintiff's Motion for Judgment on the Pleadings or, Alternatively, for Summary Judgment; the Memorandum of Law in Support of Plaintiff's Motion for Judgment on the Pleadings or, Alternatively, for Summary Judgment; Plaintiff's Proposed Findings of Uncontroverted Facts and all exhibits thereto were filed electronically. I understand that notice of this filing will be sent to all parties by operation of the Court's electronic filing system. Parties may access this filing through the Court's system.

s/Bruce E. Fader by s/James F. Segroves BRUCE E. FADER