Raytheon Company

Material Facts

• The disputed lots were firm-fixed-price contracts for specified numbers of AMRAAM missiles.
• SOC 2.a required Raytheon to manufacture, test, integrate, and deliver the missiles and included all activities necessary to produce them.
• SOC 2.b required Raytheon to support future missile production and sustainment of fielded missiles through SEPM tasks.
• SOC 2.a had an approximately three-year period of performance, while SOC 2.b had an approximately one-year period of performance for SEPM.
• Raytheon used block charging and charged all production SEPM provided during a given year to the current lot, regardless of which lot's missiles the SEPM supported.
• During Lot 22 negotiations, the parties attempted to move production SEPM from SOC 2.b to SOC 2.a but abandoned that effort because the change would have increased costs and reduced the number of missiles.
• After Lot 22, the parties conducted SEPM reviews and the government monitored SEPM activities through embedded personnel and weekly video conferences.
• Government personnel repeatedly expressed the understanding that SOC 2.b included production SEPM.
• The government later interpreted SOC 2.a as covering production SEPM and rejected Raytheon's proposal to recover the production SEPM gap through the separate PSAS contract.
• Raytheon provided production SEPM supporting the disputed lots after the last disputed lot's SOC 2.b period expired on March 31, 2014.
• Raytheon's accounting expert testified that the actual costs were supported by detailed cost reports and other program records and were reasonable.
• The government presented no cost expert or other evidence contradicting Raytheon's cost evidence.

Parties

Appellant

Raytheon Company

Respondent Agency

United States Air Force

Contracting Agency

United States Air Force

Contract Number

FA8675-11-C-0030; FA8675-12-C-0011; FA8675-13-C-0003