Lockheed Martin Aeronautics Company

Material Facts

• The Air Force contracted with Lockheed Martin to upgrade F-16 fighter aircraft for two foreign governments under the Foreign Military Sales program.
• The two contracts were undefinitized contract actions awarded before the final prices were set.
• The contracts permitted Lockheed Martin to charge the government for costs incurred during performance before definitization and included not-to-exceed amounts.
• The contracts contained definitization provisions requiring the contracting officer, with approval, to determine a reasonable price if the parties could not agree.
• The contracts included the FAR 52.233-1 Disputes clause.
• The parties were unable to agree on the contract prices after several years of negotiations.
• On February 12, 2020, the contracting officer issued modifications unilaterally setting the prices for both contracts.
• At the time Lockheed Martin filed its appeals, both contracts allegedly had more than a year of performance remaining and its costs had not exceeded the prices unilaterally set by the contracting officer.

Parties

Appellant

Lockheed Martin Aeronautics Company

Respondent Agency

Air Force

Contracting Agency

Air Force

Contract Number

FA8615-16-C-6048; FA8615-17-C-6045