Lockheed Martin Aeronautics Company

Material Facts

• The CCIP production contract involved firm-fixed prices for the base period and Option 1 MMC 5000 systems, spare components, and services, with not-to-exceed prices for later option years.
• The Bridge subcontract primarily involved MMC 3000 components and included only a small number of developmental MMC 5000 components, while the MRC concerned production MMC 5000 systems.
• LM Aero and Raytheon agreed on a bottom-line Bridge subcontract price on 23 July 1999 but did not allocate that price among individual MMC components until 6 August 1999.
• The CCIP production contract price agreement occurred on 30 July 1999, before the Bridge component allocations were finalized.
• The Bridge delivery plan contemplated delivery of 46.41 equivalent shipsets over four months from September through December 2000.
• The MRC pricing varied according to the Average Monthly Delivery Rate, and the comparable Bridge delivery rate was in the 10-15 AMDR range.
• The DCAA audit compared the Bridge price with MRC prices in the 4-9 AMDR range and used a blended price for older MMC 3000 and newer MMC 5000 systems.
• The contracting officer's final decision adopted the audit's defective-pricing theory and alleged that the CCIP contract price was overstated because of the nondisclosure.
• The government's revised damages theories applied a proposed 26.3% second-period decrement that was not supported by the auditor's independent judgment or other persuasive record evidence.

Parties

Appellant

Lockheed Martin Aeronautics Company

Respondent Agency

Air Force

Contracting Agency

Air Force

Contract Number

F33657-98-C-0035