Lockheed Martin Aeronautics Company

Material Facts

• The Air Force awarded Lockheed Martin the RERP contract to modernize 49 government-owned C-5 Galaxy aircraft, with work primarily performed under fixed-price CLINs.
• The contract incorporated the H106 Rapid Repair and Response clause, which permitted government-directed repair of legacy discrepancies and provided for an equitable adjustment when an R3 activity increased cost or performance time.
• O&A repair work was outside the RERP statement of work but was performed through government-approved MDRs, and CAT-2 MDRs were financially the Air Force's responsibility.
• The H106 and Changes Clauses required an equitable adjustment when a change increased the cost or time required for performance of any part of the contract work.
• DCMA imposed inspection practices, including a like-new standard and additional inspections of areas unrelated to RERP modifications, that increased O&A work and caused stoppages, reassignment of mechanics, resequencing, and repeated testing.
• Lockheed Martin could not connect each CAT-2 MDR to each resulting inefficiency hour by hour, but it tracked production and O&A labor data through its accounting and reporting systems.
• Lockheed Martin's claim used actual RERP touch labor data, a measured mile comparison between less-impacted and impacted aircraft, and adjustments intended to remove hours attributable to causes other than O&A work.
• DCAA audited and validated the extracted claim data, and DCAA took no exception to the conversion of labor hours to dollar amounts.
• Lockheed Martin's disruption expert supported the measured mile methodology and analyzed the CAT-2 MDRs for aircraft P-7 through P-27.
• The Air Force did not present expert or percipient evidence contesting the reasonableness of the added costs and did not call an expert witness to contest Lockheed Martin's quantum evidence.

Parties

Appellant

Lockheed Martin Aeronautics Company

Respondent Agency

United States Air Force

Contracting Agency

United States Air Force

Contract Number

FA8625-07-C-6471