from the United States Court of Federal Claims in No.
1:17-cv-00657-EDK, Judge Elaine Kaplan.
Stephen Knight, Smith, Pachter, McWhorter, PLC, Tysons
Corner, VA, argued for plaintiff-appellant. Also represented
by Edmund Michael Amorosi.
Geoffrey Martin Long, Commercial Litigation Branch, Civil
Division, United States Department of Justice, Washington,
DC, argued for defendant-appellee. Also represented by Joseph
H. Hunt, Robert Edward Kirschman, Jr., Patricia M. McCarthy.
Newman, Schall, and Dyk, Circuit Judges.
National, Inc. ("Bechtel") appeals from a decision
of the United States Court of Federal Claims ("Claims
Court") granting summary judgment in favor of the
government. The Claims Court held that our decision in
Geren v. Tecom, Inc., 566 F.3d 1037 (Fed. Cir.
2009), precluded reimbursement of costs that Bechtel incurred
in defending two sexual and racial discrimination and
retaliation suits brought by former employees.
that Tecom governs the allowability of Bechtel's
defense costs and affirm the Claims Court's decision.
1943 and 1990, the government produced plutonium for nuclear
weapons at the Hanford Site in the state of Washington,
leaving behind "approximately 56 million gallons of
nuclear waste" stored in underground tanks. Bechtel
Nat'l, Inc. v. United States, 137 Fed.Cl. 423, 425
(2018). On December 11, 2000, Bechtel was awarded a
cost-plus-incentive fee contract by the Department of Energy
("DOE") "for the design, construction, and
operation" of a nuclear waste treatment plant at the
Hanford Site in Washington. Id. The contract
incorporated by reference provisions of the Federal
Acquisition Regulation ("FAR") and the Department
of Energy Acquisition Regulation ("DEAR").
performance of the contract, two former Bechtel employees at
the Hanford Site separately sued Bechtel under 42 U.S.C.
§ 1981 and state law, alleging sexual and racial
discrimination and subsequent retaliation for raising their
complaints. Bechtel settled these lawsuits and then sought
$500, 000 in reimbursement from the DOE for the costs it
incurred in defending the two suits. Bechtel did not seek
reimbursement for the settlement payments related to the
litigation, likely because the settlement amounts were
covered by insurance. The DOE provisionally approved
Bechtel's request and reimbursed Bechtel for the full
11, 2016, the contracting officer issued a notice of intent
to disallow the costs. The contracting officer informed
Bechtel that "[he had] determined that the costs
incurred by [Bechtel] in defending these matters [were]
unallowable under the standards set forth in
Tecom." Bechtel, 137 Fed.Cl. at 427
(alterations in original).
responded on July 13, 2016, arguing that Tecom did
not govern the allowability of the costs. Rather, it
contended that a provision of the contract, DEAR 970.5204-31
(1997), "alone dictates the treatment and
re-imbursability of legal costs." J.A. 691. The DEAR
provision, entitled "Insurance-litigation and
(e) Except as provided in subparagraphs (g) and (h) of
this clause, or specifically disallowed elsewhere in this
contract, the contractor shall be reimbursed . . .
(2) For liabilities (and reasonable expenses incidental to
such liabilities, including litigation costs) to third
persons not compensated by insurance or otherwise . . . .
(g) Notwithstanding any other provision of this contract, the
contractor shall not be reimbursed for liabilities (and
expenses incidental to such liabilities, including litigation