Background
During the COVID-19 pandemic, the Bureau of Prisons awarded Wright Construction Group a $3.99 million contract for one million N95 masks. When Wright could not obtain the originally proposed 3M masks, it proposed masks supplied by BiotechInnova. The contracting officer asked whether the alternatives were NIOSH approved; after Wright described testing and FDA clearance, the officer told Wright to proceed.
Wright and BiotechInnova then agreed that Wright would assign $2.5 million of the contract proceeds to BiotechInnova. Wright notified the contracting officer, supplied the assignment agreement, revised the notice at her request to specify the payment allocations, and obtained her signature under “acknowledged and agreed.” The BOP later rejected BiotechInnova’s masks as not NIOSH approved, but modified the contract to substitute Kimberly Clark masks. Wright delivered those masks and received full payment; BiotechInnova’s masks were returned and it was not paid.
The Court’s Holding
Judge Holte dismissed without prejudice BiotechInnova’s claims against Wright because the Court of Federal Claims may enter money judgments against the United States, not a private contractor. BiotechInnova’s parallel contract claims against Wright therefore fell outside the court’s jurisdiction.
The court denied the government’s jurisdictional challenge to BiotechInnova’s claims against the United States. Applying the totality-of-the-circumstances test for governmental recognition of an assignment, the court held that the notice, attached assignment agreement, requested revisions, and signed acknowledgment were enough at this stage to support a finding that the government waived Anti-Assignment Act requirements. The court also denied summary judgment because material factual disputes remain over whether the government’s payment to Wright was payment under the assigned, modified contract or payment under a separate settlement agreement.
Key Takeaways
- The Court of Federal Claims lacks jurisdiction over contract claims seeking relief from a private prime contractor.
- A contracting officer’s informed, signed acknowledgment of an assignment can support governmental recognition even without payment to the assignee.
- Whether payment for replacement goods was made under the original modified contract or a separate settlement can determine whether an assignee may claim the proceeds.
Why It Matters
The decision underscores that the Anti-Assignment Act inquiry is fact-specific. A government agency cannot necessarily avoid an acknowledged assignment merely because the assignee’s own goods were rejected, where the prime contractor later performs under what may be the same modified contract.
The ruling does not establish that BiotechInnova is entitled to the proceeds. It permits discovery and further litigation on assignment recognition and the nature of the government’s payment to Wright.