Vectrus Systems Corporation

Material Facts

• The FSET II contract was an indefinite-delivery, indefinite-quantity contract that permitted cost-plus-fixed-fee task orders.
• The task order was a cost-plus-fixed-fee, level-of-effort term contract for technical systems engineering support services.
• The solicitation stated that actual contract performance could vary from the estimated labor hours and that the Government could not guarantee the estimated hours.
• The task order estimated 333,962 labor hours for each performance period.
• The task order specified fixed fees and fee-per-direct-labor-hour rates for the base period and option periods.
• The task order provided that fixed fee would be paid for each direct labor hour performed by Vectrus or a subcontractor, subject to an 85 percent hold-back until final payment.
• Clause SEA 5252.216-9122(g) addressed the circumstance in which the total specified level of effort was not provided and authorized a proportional fee reduction or continued performance without an increase in fee.
• The Navy ordered 234,140 labor hours for the base period and 220,077 labor hours for option year 1.
• Vectrus prepared a reduced-hours rough order of magnitude using the same methodology and percentages used for its original lump-sum fee.
• Vectrus’s claims sought the difference between the fixed fee associated with the full estimated hours and the fee actually paid for the base period and option year 1.

Parties

Appellant

Vectrus Systems Corporation

Respondent Agency

Navy

Contracting Agency

Navy

Contract Number

N00178-15-D-8477