August 2008

From the editors of CCH's government contracts products, here are summaries of the important recent developments in this practice area for the past month.  Complete coverage of these issues, and many more, appear in the Government Contracts Reporter and related products.

If you have comments or suggestions concerning the information provided or the format used, please feel free to contact me directly at robert.musiala@wolterskluwer.com.

Hot Topic

U.S. Reliance on Contractors in Iraq Unprecedented
The Federal government is relying more heavily on federal contractors in the Iraq war than in previous military conflicts, according to a new report from the Congressional Budget Office.

From 2003 through 2007, U.S. agencies have awarded $85 billion in federal contracts to support military operations, primarily in Iraq. The CBO estimates that at least 190,000 contractor personnel, including subcontractors, were working on U.S.-funded projects in Iraq as of early 2008. (About 20 percent of the personnel were Americans.) The contractor-to-troop ratio is roughly 2.5 percent higher in Iraq than during the Korean War and 5 times higher than during the Vietnam War.

The Defense Department has awarded $76 billion of the $85 billion. Most contract obligations were for logistics support, construction, fuel and food. Total spending for security provided by contractors in Iraq was between $6 billion and $10 billion from 2003 through 2007, the CBO estimates. Approximately 25,000 to 30,000 employees of private security companies were operating in the country in early 2008.

Senate Budget Committee Chairman Kent Conrad, D-N.D., said the number of private security personnel in Iraq raises a host of concerns. "The Bush administration's move to outsource large portions of the Iraq war effort sets a dangerous precedent," said Conrad, who requested the report. "The increasing use of private contractors restricts accountability and oversight, opens the door to corruption and abuse, and, in some instances, may significantly increase the cost to American taxpayers."

The CBO report supports some of Conrad's concerns. The CBO concluded that military commanders have less direct authority over the actions of contractor personnel than over their own subordinates. Additionally, the legal status of contractor personnel, particularly those who are armed, is uncertain, and there have been few tests in the courts to determine how applicable laws pertain to them, the CBO said. Government Contracts Reports, 1972, August 20, 2008.

Bush Designates New GSA Administrator
Bypassing the nomination process, President Bush designated James A. Williams to serve as the acting head of the General Services Administration, effective August 30. Williams currently is the commissioner of the GSA's Federal Acquisition Service.

Williams has 28 years of experience in the federal civil service. He became FAS commissioner in June 2006. Previously, he worked in the Department of Homeland Security, the Internal Revenue Service and, earlier in his career, at GSA as a procurement official.

Bush nominated Williams to become the director of the GSA on June 25. The Senate Homeland Security Committee approved his nomination on June 30. But his confirmation has stalled.

Lawmakers have expressed concerns with his involvement in the renewal of an information technology contract with Sun MicroSystems, despite serious allegations that Sun defrauded the government. Bush designated Williams to be acting GSA administrator on August 19, which will allow Williams to assume the position without Senate confirmation.

Williams is set to replace acting GSA administrator David Bibb, who is retiring. Bibb assumed the top spot after embattled administrator Lurita Doan resigned from the post in May amid long-running allegations of improper behavior. Doan was accused of using the department to bolster the Republican party, awarding a no-bid contract to a business associate and intervening in the Sun case. Government Contracts Reports, 1973, August 27, 2008.

Legal News

Essential Need Letter Was Not Incorporated by Reference
The Court of Federal Claims correctly concluded a contract did not incorporate a side letter by reference, according to the Court of Appeals for the Federal Circuit, because the reference was not explicit and the incorporation was unclear. Before the government issued a software delivery order, a government employee signed a Letter of Essential Need, which stated the software was essential to the operation of, and integral to, a government computer system. The order incorporated the terms and conditions of a lease agreement, which stated the government "provided required information relative to the essential use of the software ... which includes ... a description of the currently identified applications to be supported and planned life-cycle operations" as inducement for the contractor entering into the lease. After testing, the government declined to renew the lease for the final renewal term because the software did not function as expected and was incompatible with the government's systems. The contractor claimed the non-renewal of the lease was a breach of contract, contending the letter was incorporated by reference into the parties' contract and that the government breached its warranty that the software was essential to the government's computer systems and was not acquired on a test or research and development basis. The CFC granted the government's motion for summary judgment, finding the parties' contract did not incorporate the letter by reference, as a matter of law, and even if the letter was part of the contract, the government agreed only that there was the potential for the software to work (51 CCF 78,801).

The CFC's decision was affirmed. Noting its case law on incorporation by reference was "somewhat sparse," the Court of Appeals explained "the language used in a contract to incorporate extrinsic material by reference must explicitly, or at least precisely, identify the written material being incorporated and must clearly communicate that the purpose of the reference is to incorporate the referenced material into the contract." It was undisputed the delivery order effectively incorporated by reference the terms and conditions of the lease agreement. However, the terms and conditions did not refer to the letter "explicitly, as by title or date, or otherwise in any similarly clear, precise manner." Further, even if the reference was sufficiently explicit, the terms and conditions did not clearly incorporate the letter. Rather, the language stated only that the government provided the "required information" as inducement for the contractor entering into the lease. Given the lack of explicit language regarding the "required information," the parties could not have intended to incorporate this information by reference. Finally, the terms and conditions, which postdated the letter, contained an integration clause stating the terms and conditions constituted the entire agreement between the parties. (Northrop Grumman Information Technology, Inc. v. U.S., CA-FC, 52 CCF 78,976)

Responsibility Determination Could Consider Affiliate's Violations
According to the Court of Federal Claims, a contracting officer had authority to issue a nonresponsibility determination based on the integrity and business ethics of a protester's parent company, despite a separate government agency's decision not to debar the company for ethics violations, because COs are required to make independent determinations of responsibility. The protester challenged the CO's determination it was not a "presently responsible" bidder for a petroleum tanker charter contract, which required a secret facility clearance. The protester was a recently created indirect subsidiary of a shipping contractor that, after pleading guilty to 33 felony counts for environmental violations, agreed to compliance with a plea agreement in lieu of debarment. The protester contended the decision of the lead agency for the debarment proceedings bound all government agencies and estopped the CO's finding of nonresponsibility.

According to the CFC, the protester's argument "call[ed] for new limits on the contracting officer's discretion where debarment decisions by other agencies ... are involved." A CO is the point person for any government contract, and the Federal Acquisition Regulation requires a ruling on present responsibility before awarding a contract. Although the FAR required the CO to determine the protester's present responsibility independent of the parent's non-debarment and plea agreement, the CO reasonably concluded the parent's violations impaired the protester's ability to obtain the required security clearance. The CO made the nonresponsibility determination six months after the guilty plea and one month after the debarment report. She therefore concluded insufficient time had elapsed for the parent company to reestablish a record of integrity and business ethics. Although the protester could obtain a facility clearance without its parent having a clearance, this was not the general rule. The CO could not rely on an exception in making a responsibility determination, and she reasonably concluded it was uncertain whether the parent would be able to obtain the necessary clearance. (OSG Product Tankers LLC v. U.S., et al., FedCl, 52 CCF 78,971)

Responsibility Determination Disregarded Bid Rigging Violations
The Court of Federal Claims enjoined performance of a construction contract because the contracting officer's determination that the awardee was responsible, notwithstanding its violation of foreign bid rigging laws, was arbitrary and capricious. Prior to the submission of proposals, the Japan Fair Trade Commission issued an administrative order and assessed fines against the awardee for violation of a Japanese antimonopoly law and bid rigging. Later, the Japanese government suspended the awardee's business for violation of the antimonopoly law. The awardee never disclosed the violations in connection with the procurement. The protester argued the awardee should have disclosed this conduct as part of its FAR 52.209-5 certifications, and that if the violations had been disclosed, the CO would have been required to conclude the awardee was non-responsible under FAR 9.104. The government responded the CO was unaware of the negative information when he made his initial responsibility determination, and that he reevaluated his determination after receiving the information and found the awardee to be responsible. At a hearing, the CO "testified that because bid rigging is common in Japan it does not rise to a level serious enough to render the [awardee] not responsible."

The court granted the protester's motion for a preliminary injunction, finding in light of the "ethical and statutory" violations, it was "doubtful" the awardee was legally eligible for the contract and "crystal clear" the CO did not make an adequate determination of the awardee's eligibility. The CO testified he relied on legal advice in making his decision, but the government claimed the advice was privileged and never revealed it to the court. Further, the CO testified he reevaluated the responsibility determination, but his testimony also suggested he was under the impression he could not disrupt the award. Although the government may "accept the violations as appropriate for foreign policy reasons or other legitimate reasons of national or military policy," the "policy call" on the appropriate ethical standard must be made by a higher-level government official, and not the CO. The court ordered the government to either resolicit the contract or to designate a new CO to make a new responsibility determination. If the government selected the second option, a Naval flag officer or presidential appointee was to provide the CO "with a clear statement with regard to [the government's] policy regarding the level of business integrity required in order to find a contractor responsible." (Watts-Healy Tibbitts A JV v. U.S., et al., FedCl, 52 CCF 78,979)

Contractor Bore Risk of Loss for Abandoned Vehicles, Fuel
Claims seeking compensation for lost vehicles and fuel under a jet fuel contract calling for delivery to a military combat zone were summarily denied by the Armed Services Board of Contract Appeals because the contract terms put the risk of loss on the contractor. Due to an unforeseen deterioration of security conditions, the government directed the contractor to abandon or destroy disabled, repairable vehicles, and to spill fuel to prevent its acquisition by enemy combatants. The contractor sought compensation for the lost vehicles and fuel, arguing the government breached the contract by denying the contractor a reasonable opportunity to repair, tow, or recover the disabled vehicles. The contractor also claimed recovery based on an alleged oral settlement agreement and mutual mistakes of fact regarding the parties' expectations of the risk of loss, insurance costs, and military directives that would materialize during performance. Finally, the contractor claimed the government improperly failed to disclose superior knowledge of the likelihood of the need to abandon the disabled vehicles and did not give the contractor time to make repairs.

The contractor's claims were denied based on the plain language of the contract. The Risk of Loss clause provided the contractor would bear all risk and responsibility for any damage to, or loss of, equipment during performance, and there were no express or implied terms granting the contractor the right to interrupt performance to repair disabled vehicles. Moreover, any oral discussions regarding the alleged settlement agreement lacked the legal consideration, actual authority, and signed writing necessary to modify the contract. There was neither evidence of a mutual mistake of fact concerning the extent of hostilities to be encountered during performance, nor of any government superior knowledge of the hostilities or the resulting orders to abandon the vehicles. A related claim seeking compensation for vehicles stolen from a United States military base could not be summarily determined due to jurisdictional concerns, because it was unclear whether the claim sounded in tort or whether it was a new claim requiring independent certification to the contracting officer. (International Oil Trade Center, ASBCA, 92,350)

Surety's Pledge of Mined Coal Was Unacceptable Asset
According to the Court of Federal Claims, the government reasonably determined a protester's proposal for a construction contract was unacceptable based on the bid bond surety's pledge to secure performance with marketable coal, because the coal was not an acceptable asset under FAR 28.203-2. The invitation for bids gave bidders the option of using individual sureties for the bid bond and required such sureties to provide full representation of their pledged assets. The protester proposed an individual surety whose pledged asset was described as approximately $191 million worth of marketable coal. The contracting officer excluded the protester from competition based on his determination the marketable coal was an unacceptable, "speculative asset" pursuant to FAR 28.203-2(c)(7). The protester appealed the CO's decision in the Government Accountability Office, but the Comptroller General denied the protest (23 CGEN 112,596), finding the coal was an unacceptable asset because it could not be placed in an escrow account as required by FAR 28.203-1(b). In its appeal to the CFC, the protester argued the escrow requirement in FAR 28.203-1(b) only applied to cash assets and the CO had a duty to raise the issue and allow the protester an opportunity to substitute assets pursuant to FAR 28.203-4.

On cross-motions for judgment on the administrative record, the CFC found the CO reasonably exercised his discretion in finding the coal unacceptable. Whether the coal was an acceptable asset was an issue of responsibility to be determined by the CO in accordance with the principles of FAR Subpart 9.1 and FAR 28.203, which requires a CO to reject an offeror as nonresponsible when the offeror proposes to use a surety whose bid guarantee is unacceptable, and gives the CO discretion in determining whether pledged assets are acceptable. Although the phrase "may be provided" in FAR 28.203-1 (b) creates "some degree of ambiguity," when FAR 28.203-1(b) is read in conjunction with FAR Subpart 28.2 as a whole, the provision requires pledged assets other than real property to be deposited into an escrow account in order to be acceptable. The requirement for an escrow account is illustrated by the language of Standard Form 28 and the contract clause at FAR 52.228-11, both of which are required to be executed by individual sureties under FAR Subpart 28.2. To the extent the escrow requirement could be interpreted differently, any ambiguities were patent and thus should have been raised by the contractor prior to submitting its bid. Finally, FAR 28.203-4 permits, but does not require, the CO to allow substitution of assets. Here, the CO reasonably denied substitution based on the fact the protester's surety never submitted a written request for substitution of assets as required by FAR 28.203-4. (Tip Top Construction, Inc. v. U.S., FedCl, 52 CCF 78,977)

Regulatory News

DFARS Interim Rule Adds Export Control Requirements
The Department of Defense has issued an interim rule (DFARS Case 2004-D010) amending the Defense Federal Acquisition Regulation Supplement to address requirements for complying with export control laws and regulations when performing DoD contracts. Specifically, the rule sets forth a contractor's responsibility to abide by existing Department of State and Department of Commerce regulations. DoD initially issued a proposed rule (70,020.205) on the requirements for preventing unauthorized disclosure of export-controlled information and technology. A second proposed rule (70,020.210) simplified the policy framework in recognition of existing policy found in the International Traffic in Arms Regulations and the Export Administration Regulations. Section 890(a) of the National Defense Authorization Act for Fiscal Year 2008 (PL 110-181), enacted on January 28, 2008, required DoD to prescribe regulations, not later than July 26, 2008, to address requirements for DoD contractors to comply with laws and regulations applicable to goods or technology subject to export controls. In view of this new statutory requirement, and in consideration of the public comments received in response to the second proposed rule, DoD developed this interim rule to address export controls.

The rule adds a new Subpart at DFARS 204.73 implementing the statute and setting forth applicable definitions (DFARS 204.7301), general requirements (DFARS 204.7302), relevant policy (DFARS 204.7303) and procedures (DFARS 204.7304), and at DFARS 204.7305 prescribing two new contract clauses – DFARS 252.204-7008 and DFARS 252.204-7009 -- to be used when export-controlled items, including information or technology, are expected to be involved in contract performance, or when there is a possibility these items may be used during the period of contract performance. Also, two new provisions added to the DFARS companion resource, Procedures, Guidance and Information, PGI 204.7302 and PGI 204.7304, provide further policy requirements. Under DFARS Part 235, Research and Development Contracting, the rule redesignates DFARS 235.071 as DFARS 235.072 and adds a new DFARS 235.071referencing the administrative procedures added at DFARS Subpart 204.73. Corresponding technical amendments are made to DFARS 252.235-7002, DFARS 252.235-7003, DFARS 252.235-7010, and DFARS 252.235-7011. Comments are due September 19, 2008. For the text of the interim rule, which carries a July 21, 2008, effective date, see 70,016.480.

Rule Conforms DFARS to FAR Changes
The Department of Defense has issued a final rule (DFARS Case 2008-D004) amending the Defense Federal Acquisition Regulation Supplement to update text addressing contractor standards of conduct and the handling of extraordinary contractual actions. The changes make the DFARS consistent with recent amendments to the Federal Acquisition Regulation. Specifically, the rule revises DFARS Part 250 (DFARS 250.100 – DFARS 250.104-3-70) for consistency with the structure of FAR Part 50 as amended by Federal Acquisition Circular 2005-21 (FAR Case 2006-023), which implemented the Support Anti-terrorism by Fostering Effective Technologies Act of 2002. The DFARS changes update headings, numbering, and cross-references, and reflect the dollar threshold currently specified in the FAR with regard to delegation of authority for approval of extraordinary contractual actions. This final rule also adds a new regulation at DFARS 203.1004 to provide address information for use in completion of the clause at FAR 52.203-14, Display of Hotline Poster(s). The rule removes DFARS Subpart 203.70, and the corresponding contract clause at DFARS 252.203-7002, because policy on this subject was added to the FAR by FAC 2005-22 (FAR Case 2006-007). Corresponding changes were made to the DFARS companion resource, Procedures, Guidance, and Information at PGI 250.105, which is redesignated as PGI 250.101-3, PGI 250.305, which is redesignated as PGI 250.103-5, and PGI 250.306, which is now PGI 250.103-6. Public comment under 41 USC 418b was not required because this rule does not have a significant cost or administrative impact on contractors or offerors, or a significant effect beyond DoD's internal operating procedures. However, DoD will consider comments from small entities concerning the affected DFARS subparts in accordance with 5 U.S.C. 610. The rule, effective August 12, 2008, appears at 70,016.482.

Updated Requirements for Unique Identification and Valuation
The Department of Defense has issued a final rule (DFARS Case 2007-D007) amending the Defense Federal Acquisition Regulation Supplement to update and clarify requirements for unique identification and valuation of items delivered under DoD contracts. The rule, which adopts a proposed rule (70,020.243), revises the contract clause at DFARS 252.211-7003 to reflect the current requirements. The changes include: updated references to standards and other documents; clarification of the definition of unique item identifier; specifically addressing the DoD recognized unique identification equivalent, where applicable; clarification of data submission requirements for end items and embedded items; clarification of requirements for inclusion of the clause in subcontracts; and updated referenced Internet addresses. For the text of the rule, which is effective August 12, 2008, see 70,016.487.

DoD Finalizes Two Interim Rules
The Department of Defense has finalized, without change, two interim rules that amended the Defense Federal Acquisition Regulation Supplement. The effective date for both final rules is August 12, 2008.

The DoD interim rule associated with DFARS Case 2007-D016 implemented Section 130 of the National Defense Authorization Act for Fiscal Year 2007 (PL 109-364), which required DoD to establish a quality control policy for the procurement, modification, repair, and overhaul of ship critical safety items. Section 802 of the National Defense Authorization Act for Fiscal Year 2004 (PL 108-136), which is implemented in DFARS Subpart 209.2, contained a similar requirement applicable to aviation critical safety items. The interim rule amended DFARS 209.270 through DFARS 209.270-4, and related text at DFARS 209.202, DFARS 217.7502, DFARS 246.407, and DFARS 246.504, to address ship critical safety items as well as aviation critical safety items. The rule identified the responsibilities of the head of the design control activity with regard to quality control of critical safety items and related services. In addition, the rule made corresponding changes to the DFARS companion resource, Procedures, Guidance, and Information, at PGI 209.270-4 and PGI 246.407. For the text of the final rule, see 70,016.485.

The DFARS Case 2007-D023 interim rule amended the DFARS to incorporate increased dollar thresholds for application of the World Trade Organization Government Procurement Agreement and the Free Trade Agreements, as determined by the United States Trade Representative. Every two years, the trade agreements thresholds are escalated according to a predetermined formula set forth in the agreements. The United States Trade Representative published new thresholds in the Federal Register (72 FR 71166; corrected at 72 FR 73904). Accordingly, the interim rule amended the clause prescriptions at DFARS 225.1101 and DFARS 225.7503 to reflect increased dollar thresholds for application of the trade agreements. For the text of the final rule, see 70,016.486.

DoD Proposes Atomic Energy Protocol Notice Requirement
A Department of Defense proposed rule (DFARS Case 2004-D003) seeks to amend the Defense Federal Acquisition Regulation Supplement to add a contract clause requiring a contractor to notify DoD if the contractor is required to report its activities under the U.S.-International Atomic Energy Agency Additional Protocol. Under the U.S.-IAEA AP, the United States must declare a wide range of public and private nuclear-related activities to the IAEA and potentially provide access to IAEA inspectors for verification purposes. The U.S.-IAEA AP permits the U.S. to declare unilaterally exclusions from inspection requirements for activities with direct national security significance. The rule would provide for exceptions to inspection requirements that might otherwise apply to contractors, if DoD determines that an exception is necessary in the interest of national security. The clause, proposed for DFARS 252.204, would be included in contracts for research and development or major defense acquisition programs involving fissionable materials, other radiological source materials, or technologies directly related to nuclear power production. The rule would also add provisions on related administrative matters at DFARS 204.470 through DFARS 204.470-3. Comments on this proposed rule, identified by DFARS Case 2004-D003, are due by October 17, 2008. For the text of the rule, see 70,020.252.

Major Contract Awards

General Dynamics Land Systems - $766.8 Million. General Dynamics Land Systems, operating through its division General Dynamics Amphibious Systems, Woodbridge, Va., is being awarded a $766,816,525 cost-plus-incentive-fee contract for the development and manufacture of System Development and Demonstration two (SDD-2) Expeditionary Fighting Vehicle (EFV) prototypes. In addition, the contractor will modify existing EFV prototypes, procure preliminary spares and repair parts, long lead materials for the SDD-2 prototypes, and conduct systems engineering, studies and analysis, logistics support and test support. Work will be performed in Va., (55 percent), Ind., (10 percent), Mich., (9 percent), Germany, (9 percent), Ohio, (4 percent), and various other states (13 percent), and work is expected to be completed Sept. 2012. Contract funds will not expire at the end of the current fiscal year. This contract was not competitively awarded. The Marine Corps Systems Command, Quantico, Va., is the contracting activity (M67854-08-C-0003). Government Contracts Reports 1970, August 6, 2008.

The Boeing Co. - $722.7 Million. The Boeing Co., Ridley Park, Pa., was awarded on Aug 26, 2008, a $722,713,876 firm fixed price contract. CH-47 multiyear contract for five years, 109 each CH-47F new build aircraft, 72 each CH-47F remanufacture aircraft, priced options for 34 each CH-47F new build aircraft. Work will be performed in Ridley Park, Calif., with an estimated completion date of Sept 30, 2013. One bid was solicited and one bid was received. US Army aviation & missile Command, Redstone Arsenal, Ala., is the contracting activity (W58RGZ-08-C-0098). Government Contracts Reports 1974, September 3, 2008.

Red Star Enterprises - $720.6 Million. Red Star Enterprises Limited, Gibraltar is being awarded a maximum $720,568,375 fixed price with economic price adjustment, sole source contract for fuel deliveries. Other location of performance is Bagram Air Base Afghanistan. Using service is Army. This was proposal was originally Web solicited with one response. This contract is for a period of two years with a one year option. Contract funds will not expire at the end of the current fiscal year. The date of performance completion is Sept. 1, 2011. The contracting activity is Defense Energy Support Center, Fort Belvoir, Va., (SP0600-08-D-1017). Government Contracts Reports 1970, August 6, 2008.

Suez Energy Resources - $646 Million. Suez Energy Resources NA, Inc., Houston, Texas is being awarded a maximum $646,007,724 fixed price with economic price adjustment contract for electrical services. Other locations of performance are in Maryland, and New Jersey. Using services are Army, Navy, Air Force and federal civilian agencies. There were originally 195 proposals solicited with 11 responses. Contract funds will not expire at the end of the current fiscal year. The date of performance completion is Dec. 31, 2013. The contracting activity is Defense Energy Supply Center, Fort Belvoir, Va. (SP0600-08-D-8027). Government Contracts Reports 1973, August 27, 2008.

Science Applications International Corp. - $500 Million. Science Applications International Corp., Fairfield, N.J., is being awarded a maximum $500,000,000 fixed price with economic price adjustment, indefinite delivery/quantity contract for maintenance, repair, and operations supplies contract. Using services are Army, Navy, Air Force, Marine Corps, and other federal civilian agencies. Contract is exercising option year three. The original proposal was Web-solicited with six responses. Contract funds will not expire at the end of the current fiscal year. The date of performance completion is Aug. 30, 2009. The contracting activity is Defense Supply Center Philadelphia, Philadelphia, Pa., (SPM500-04-D-BP24). Government Contracts Reports 1974, September 3, 2008.

Graybar Electric Co, Inc. - $400 Million. Graybar Electric Co., Inc., St. Louis, Mo., is being awarded a maximum $400,000,000 fixed price with economic price adjustment indefinite delivery/quantity contract for maintenance, repair and operations for the Northeast Region. Using services are Army, Navy, Air Force, Marine Corps, and federal civilian agencies. Contract is exercising option year three. Proposals were originally Web-solicited with seven responses. Contract funds will not expire at the end of the current fiscal year. The date of performance completion is Aug. 30, 2009. The contracting activity is Defense Supply Center Philadelphia, Philadelphia, Pa., (SPM500-04-D-BP25). Government Contracts Reports 1974, September 3, 2008.

Hellfire Systems Limited Liability Co. - $356.7 Million. Hellfire Systems Limited Liability Co., Orlando, Fla., was awarded on Aug. 15, 2008, a $356,665,089 firm-fixed price contract for Hellfire II High-Energy Anti-Tank missiles. Work will be performed in Orlando, Fla., and is expected to be completed by Oct. 31, 2011. Contract funds will not expire at the end of the current fiscal year. One bid was solicited on Oct. 22, 2007. U.S. Army Aviation & Missile Command, Redstone Arsenal, Ala., is the contracting activity (W31P4Q-08-C-0361). Government Contracts Reports 1973, August 27, 2008.

Northrop Grumman Systems Corp. - $324.6 Million. The Air Force is modifying a fixed price incentive firm contract with Northrop Grumman Systems Corp., Integrated Systems Air Combat Systems, of San Diego, Calif., not to exceed $324,600,000. This contract will provide 2 RQ-4B Block 301 Global Hawk Air Vehicles, 3 RQ-4B Block 40 Air Vehicles with MP-RTIP sensor, one Mission Element, one Launch and Recovery Element, and associated equipment; option for four EISS sensor payloads. At this time $180,351,181 has been obligated. 303 AESG/PK, Wright-Patterson AFB, Ohio, is the contracting activity (FA8620-07-C-4015 P00008). Government Contracts Reports 1970, August 6, 2008.

Hensel Phelps Construction Co. - $312.4 Million. Hensel Phelps Construction Co., Chantilly, Va., is being awarded a $312,495,000 firm-fixed-price contract for design/build to collocated Military Department (MILDEP) Investigative Agencies, Marine Corps Base, Quantico, Va. The contract value includes contract line item 000l, base bid, three chillers enhancement, heater exchange enhancement, upgraded lobby/finish enhancement, and upgrade executive spaces enhancement. The contract is incrementally funded with the first increment of $134,066,765 being allocated at the time of award. The scope of the contract includes complete design and construction of the Collocated MILDEP Investigative Agencies, authorized under the 2005 Base Realignment and Closure Commission (BRAC) initiatives. This project involves the construction of a multi-story facility/facilities for the BRAC directed collocation of Military Department Investigative Agencies (MDIA) composed of the Counterintelligence Field Activity (CIFA), Headquarters Naval Criminal Investigative Service (NCIS), Headquarters Air Force Office of Special Investigations (AFOSI), Headquarters Army Criminal Investigation Command (CID) and the Defense Security Service (DSS). It also includes the construction of a collocated "School House" for the Joint Counterintellegence Training Academy (JCITA) and the DSS and off-site development of utilities, bridge and roadway improvements. The work will be performed at the Marine Corps Base, Quantico, Va., and is expected to be complete by June 2011. Contract funds will not expire at the end of the current fiscal year. The contract was competitively procured via the Navy Electronic Commerce Online and Federal Business Opportunities websites, where five proposals were received for Phase I. Three proposals were submitted under Phase II and a negotiation period followed with conclusion by submission of a final proposal. Naval Facilities Engineering Command Washington, Washington, DC, is the contracting activity, contract number (N40080-08-C-0020). Government Contracts Reports 1970, August 6, 2008.

Red Star Enterprises - $308.2 Million. Red Star Enterprises, Limited, Gibraltar is being awarded a maximum $308,257,762 fixed price with economic price adjustment contract for jet fuel. Other location of performance is in Bagram, Afghanistan. Using service is Army. This proposal was originally solicited on FedBizOps with 14 responses. This contract represents a two year period with a one year option. Contract funds will not expire at the end of the current fiscal year. The date of performance completion is Aug.31, 2011. The contracting activity is Defense Energy Supply Center, Fort Belvoir, Va. (SP0600-08-D-1017). Government Contracts Reports 1973, August 27, 2008.