The Boeing Company

Material Facts

• The Air Force awarded Boeing a development contract and four production contracts for a short range attack missile between 1966 and 1973.
• Boeing awarded Lockheed entities subcontracts to develop and produce the missile propulsion system.
• The second production prime contract was awarded on 19 October 1971 and incorporated the ASPR 10-702(b)(2) indemnification clause.
• Deputy Assistant Secretary Racusin signed the 25 August 1971 memorandum approving indemnification for the second production prime contract.
• Executive Order No. 11610 required indemnification provisions to be approved in advance by an official at a level not below that of the Secretary of a military department.
• Secretary Seamans did not authorize the indemnification at the time of award, and the record contained no documentary evidence that he explicitly ratified Racusin's act.
• The record showed no requirement in the development, first production, second production, or fourth production prime contracts that Boeing obtain pollution insurance or groundwater-contamination insurance.
• The development, first, second, and third production subcontracts contained indemnification provisions, and the production subcontracts included specified insurance provisions or provisions concerning insurance approval.
• The fourth production subcontract required Lockheed to procure and maintain, to the extent available, insurance against unusually hazardous risks as Boeing might require or approve.
• A pollution exclusion was first inserted into Lockheed's insurance policies starting in 1971.
• TCE was discovered in Redlands-area groundwater in or about 1980, AP was later found there, cleanup orders were issued to Lockheed, and Lockheed was named in numerous toxic-tort suits.
• Boeing's certified claim sought indemnification for environmental response and remediation activities and costs of defending third-party tort claims.

Parties

Appellant

The Boeing Company

Respondent Agency

Air Force

Contracting Agency

Air Force

Contract Number

AF33(657)-16584