Pae Government Services, Inc. v. Mpri, Inc.

Facts

PAE Government Services, Inc. and MPRI, Inc. sell ser- vices to government agencies. The companies agreed to work together to submit a bid for a government contract, and signed a “Teaming Agreement” that divided duties between them. 16486 PAE GOVERNMENT SERVICES v. MPRI, INC. MPRI submitted the bid as “prime contractor” and won. MPRI thereafter refused to subcontract to PAE all the work specified in the Teaming Agreement—or so PAE claimed in its original complaint.

The district court dismissed that complaint because, in its view, the Teaming Agreement is no more than an “agreement to agree.” The agreement is governed by Virginia law, and the district court held that Virginia won’t enforce agreements to agree.1 PAE thereupon amended its complaint to allege that, after MPRI won the government contract, it entered into a second agreement with PAE. According to the amended com- plaint, this second agreement was “confirmed” in “written communications” and by the parties’ “course of conduct.” The amended complaint also added a promissory estoppel claim against MPRI.

The district court found PAE’s new allegations of a second agreement with MPRI to be “sham pleadings that…