Raytheon Missile Systems Company

Material Facts

• NAVAIR awarded Raytheon a firm-fixed-price contract for full-rate production of Block IV Tomahawk Cruise Missiles.
• The contract required all AUR missiles to be fueled with new JP-10 and included FAR 52.243-1, CHANGES-FIXED-PRICE (AUG 1987).
• Raytheon's updated proposal stated that JP-10 would be procured by Raytheon and listed a unit cost of $14.00 per gallon.
• DESC was the Integrated Material Manager and purchasing agent for JP-10, and Raytheon was an authorized DESC customer.
• Dixie was the only United States manufacturer and source of JP-10 available to Raytheon, and DESC would not authorize direct sales from Dixie to Raytheon.
• DESC increased its JP-10 standard price from $13.09 per gallon to $25.00 per gallon beginning in fiscal year 2007.
• DESC used proceeds from the $25.00 per gallon price to finance a DFSP and purchase reserve inventory owned by DESC.
• DESC's standard-price explanation included the budgeted cost of transporting, storing, and managing the government fuel system and adjustments reflecting gains or losses of the revolving fund.
• Raytheon paid $25.00 per gallon for JP-10 ordered during fiscal years 2007 through 2010.
• Raytheon alleged that the price increase and the refusal to permit bulk or direct purchases caused financial damage.

Parties

Appellant

Raytheon Missile Systems Company

Respondent Agency

Navy

Contracting Agency

NAVAIR

Contract Number

N00019-04-C-0569