In this case, the parties entered into a fairly typical big business (FCI) big business (CGI) equipment agreement for the processing of visas for the State Department. The parties negotiated the share of work shares (reading percentage) to obtain the work of FCI, and the team agreement established a framework for the negotiation of a subcontracting between FCI, the proposed general contractor, and CGI, the proposed subcontractor. After some time, the CFI worked with the Department of Foreign Affairs and, as part of the negotiations on this proposal, CGI`s work percentage was reduced in exchange for certain management positions for CGI in relation to the work by amending the original team agreement. However, the next day, the CFI submitted a proposal to the State Department that not only did not occupy the executive positions, but also further reduced CGI`s share of work. The Tribunal then justified this decision by the fact that the method of introducing CGI into the team agreement (whether fraudulent or not) is irrelevant, since CGI confirmed the explicit contract. An explicit contract cannot form the basis for unjust enrichment or any other quasi-contractual requirement. But the CFI did not stop. After resolving some protests, the CFI`s negotiations with CGI began even less than the amended team proposal or agreement. CGI began its work under a temporary agreement, received more than $2 million for its work and was subsequently fired by the CFI from the founding case. CGI sued FCi and claimed: (1) breach of contract because FCi did not renew a 41% subcontract and 10 management positions at CGI; (2) unjust enrichment because CGI would have spent $300,000 to assist FCi in its proposal, which would result in a profit of US$6 million for fCi; and (3) fraudulent incentives for loss of earnings. The jury awarded CGI nearly $12 million, but the Circuit Court set aside the verdict and appealed to the CFI and CGI. The court upheld the Circuit Court on all points.
First, it found that the team agreement (the details of which are well explained in the notice) involved too many contingencies to be an enforceable contract for certain subcontracting provisions, and that a groundbreaking case took place here in Virginia and was decided by the Virginia Supreme Court. This deal is CGI Fed. Inc. v. FCi Fed. Inc. While this is not necessarily a «construction case,» it is useful to set up some of the pitfalls of team agreements in general. The Court then found that the potential harms associated with the fraud that led to the fraud could be speculative, since CGI`s shortfall on the basis of its incentive to contract out in the future (i.e. the team agreement) would not have a provision to quantify the shortfall. The Tribunal upheld the Commission of the Judgment for Unjust enrichment by finding that the merger agreement was an express contract between opposing, reciprocal and explicit, and that, together, these provisions specified that the parties never accepted the final terms of a subcontract and expressly linked the establishment of a subcontract to future events and negotiations.
Just as FCi could not have relied on this agreement to commit CGI to work as a subcontractor, CGI was unable to invoke the agreement to obtain FCi`s work as a subcontractor. The court will not impose a subcontract on the parties to an equipment agreement if they have expressly agreed to negotiate the essential terms of subcontracting in the future.