Just Trust Me On This: Allegation Of Contract's Existence Is Sufficient To Establish Jurisdiction Under Contract Disputes Act

• Published date: 12 March 2024
• Subject Matter: Government, Public Sector, Litigation, Mediation & Arbitration, Government Contracts, Procurement & PPP, Trials & Appeals & Compensation
• Law Firm: Crowell & Moring LLP
• Author: Lorraine M. Campos, John E. McCarthy Jr., Jonathan M. Baker, Skye Mathieson, Charles Baek and John Nakoneczny

The U.S. Court of Appeals for the Federal Circuit held in Avue Technologies Corp. v. Department of Health and Human Services that an appellant's non-frivolous allegation of a contract with the government via an end-user license agreement (EULA) incorporated into another contractor's Federal Supply Schedule (FSS) agreement was sufficient to establish jurisdiction under the Contract Disputes Act (CDA).

The Federal Circuit addressed a situation in which the Food and Drug Administration (FDA) purchased a software license from an authorized reseller of Avue's products through a task order issued under a General Services Administration (GSA) FSS contract. The task order and contract incorporated an undated and unsigned version of Avue's EULA. After the task order expired, Avue alleged that the FDA was misappropriating data in violation of the EULA terms and conditions, Avue's intellectual property rights, and the Trade Secrets Act. Avue submitted a claim to the FDA, but the contracting officer instructed Avue that it would need to have the reseller submit a pass-through claim on Avue's behalf. Avue appealed to the Civilian Board of Contract Appeals on a deemed-denial basis.

At the Board, the government initially moved to dismiss the appeal for lack of jurisdiction on the basis that Avue was not a "contractor" within the meaning of the CDA. The Board initially denied the motion but later sua sponte ordered the parties to file supplemental briefs addressing whether a software license is a...