Information Systems & Networks Corp. v. United States
40 Cont. Cas. Fed. 76,892, 1995 U.S. Claims LEXIS 219, 34 Fed. Cl. 457 (1995)
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Rule of Law:
Summary judgment is inappropriate in a government contract dispute when genuine issues of material fact exist regarding key elements such as causation for a defect, breach of the duty to cooperate, or the reasonableness of the government's delay in terminating a contract for default.
Facts:
- The U.S. Air Force subcontracted with Information Systems and Networks Corporation (ISN) to convert a computer database known as PFORMS.
- The contract's Statement of Work required the new system to support multiple users and specified the use of VSAM software.
- ISN delivered the system on July 3, 1990, but it failed the multi-user requirement, allegedly due to the use of the TSO/ISPF software environment.
- A central dispute arose over whether the government directed ISN to use the TSO/ISPF environment (making it a design specification) or if ISN, as the expert, recommended it (making it a performance specification).
- After ISN missed several revised deadlines, the government sent ISN a Show Cause Notice on October 3, 1990, asking it to explain the delays.
- The parties provided conflicting sworn affidavits regarding whether the Air Force provided ISN with necessary test data to perform its work.
- On May 21, 1991, approximately seven months after issuing the Show Cause Notice, the Air Force terminated ISN's contract for default.
Procedural Posture:
- Information Systems and Networks Corporation (ISN) filed a complaint in the U.S. Court of Federal Claims against the United States.
- The complaint alleged breach of contract and sought to convert the government's termination for default into a termination for convenience.
- The United States filed a counterclaim against ISN for the alleged cost of correcting the defective system.
- ISN, the plaintiff, filed a motion for partial summary judgment on the issue of liability.
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Issue:
Is a contractor entitled to summary judgment on its claims that the government breached a contract and wrongfully terminated it for default when genuine factual disputes exist over which party was responsible for a system failure, whether the government cooperated, and whether the government waived the delivery schedule?
Opinions:
Majority - Moody R. Tidwell, III
No. A contractor is not entitled to summary judgment on claims of breach and wrongful termination when multiple genuine issues of material fact exist that must be resolved at trial. The court cannot grant summary judgment because the parties presented conflicting evidence on several outcome-determinative issues. First, there is a factual dispute over whether the contract contained a design or performance specification for the software that caused the system failure, which is essential for assigning fault. Second, contradictory sworn affidavits create a genuine issue of fact as to whether the government breached its implied duty to cooperate by withholding test data. Finally, applying the test from DeVito v. United States, the questions of whether the government's seven-month delay in termination was 'reasonable' and whether ISN 'relied' on that delay are fact-intensive inquiries that cannot be resolved on the current record.
Analysis:
This case illustrates the high threshold for obtaining summary judgment in complex litigation, particularly in government contract disputes where the parties' obligations and performance are contested. The decision reinforces the principle that a court's role at the summary judgment stage is not to weigh evidence or determine credibility, but merely to identify whether a factual dispute exists. It highlights how the legal distinction between design and performance specifications can be the central, outcome-determinative issue in a case involving defective products. Furthermore, the opinion demonstrates the fact-intensive nature of equitable doctrines like waiver, making summary disposition on such claims difficult when parties present conflicting narratives.
