Government Contracts Update January 2008

January 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 aaron.broaddus@wolterskluwer.com.

Hot Topic

GAO Upholds Part of Boeing Contract Award Protest
Alabama Aircraft Industries, Inc. said January 2 that the General Accounting Office has upheld one of several issues raised in its protest of the contract award granted by the U.S. Air Force to Boeing Aerospace Operations for depot maintenance on the KC-135 aircraft. The contract is estimated to be worth over $1.1 billion. AAII was formerly known as Pemco Aeroplex Inc.

The GAO said the Air Force failed to conduct a proper cost/price evaluation or risk evaluation of Boeing's proposal. The GAO noted the absence of "any Air Force analysis as to the realism of certain changes Boeing introduced in its final proposals, or the potential risk associated with those changes." It recommended that the Air Force conduct a new cost/price evaluation in accordance with applicable legal requirements. The contract provides for a five-year base term and five additional one-year options on maintenance and modification services.

Ron Aramini, AAII president and chief executive officer, noted that this is the second time the GAO has upheld a protest by AAII of an award to Boeing in connection with this program. "AAII believes that this decision will introduce an element of fairness into the process and a proper evaluation will establish that AAII is the low cost, low risk, best value provider of KC-135 PDM services. We continue to believe the other issues we raised in the protest have merit and could be sustained in civil litigation," he added.

The GAO noted that AAII made allegations of bias with respect to Charles Riechers, the source selection authority for the procurement. Riechers was found dead in mid-October from an apparent suicide. The GAO said an investigation by local law enforcement and federal government investigators "will encompass matters that may have a bearing on Pemco's allegations of bias." The GAO added that in light of the ongoing investigation, its decision does not express any opinion regarding AAII's bias allegations.

The decision, which sustained the protest in part, is subject to a GAO protective order and may not be released to the public. A redacted version of the decision is being prepared by GAO for public release and will be reported in a future issue of CCH Government Contracts Reports. By Sarah Borchersen-Keto, CCH News Staff.

Legal News

Termination of Housing Assistance Contract Was Breach
The government breached a Housing Assistance Payment contract, the Court of Federal Claims has held, because it terminated the contract before the contract expired and did not give the contractor a fair and meaningful opportunity to respond to deficiencies identified in the notice of default. The contractor argued the government breached the HAP contract by not implementing its one-year term and three automatic, one-year renewals and the default termination was not justified. The government contended the effective four-year term was an error and the contract expired on its own terms after three months. A government official testified that, when the contractor executed the contract, it was aware of the error and the government's intention to issue a three-month contract to "incentivize" the contractor to improve its performance. The government also asserted the contractor acknowledged the error by executing a series of short-term contracts.

The court determined the government failed to provide credible evidence of mutual mistake. Contrary to the government's assertions, the minutes of the meeting at which the contract was executed did not show the parties discussed the term. No evidence reflected a prior understanding the contract was going to be a short-term contract markedly different from prior contracts between the parties. Rather, the contractor had requested a four-year contract to aid in refinancing, and the government budgeted for the full first year, as indicated in a contract exhibit. The fact the government's internal computer system showed the contract was renewed for three months merely supported a possible unilateral mistake on the government's part. In addition, the contractor's execution of a series of short-term contract extensions did not rescind the longer term. The contractor's attorney stated the contractor initially hoped the short-term extensions would total the contract's four-year term, and the contractor sought declaratory and injunctive relief soon after the government indicated the housing residents would receive vouchers and the contract would be terminated. It also was illogical to conclude the contractor willingly converted its anticipated four-year contract into uncertain, short-term contracts of varying length while it sought to refinance and transfer management and ownership to a new entity. Under the facts and circumstances, there was no mutual assent or sufficient consideration for the contractor to relinquish the anticipated four-year term. Rather, the record showed the government unilaterally imposed the short-term contracts.

The government also failed to justify the default termination based on deficiencies identified in an inspection report and the contractor's alleged failure to maintain the property "in decent, safe and sanitary condition." Although the contract gave the contractor the opportunity to cure deficiencies, the government's decision to terminate was made before it received the contractor's plan of correction. In addition, the notice of default indicated the contractor had not corrected all exigent health and safety items within 72 hours as required, but the contractor certified the items were corrected on the same or next day and the government did not identify allegedly uncorrected items. Within 30 days after the inspection report, the contractor repaired most of the other identified deficiencies and submitted a detailed plan of correction, which the government refused to consider. The contractor's failure to identify a source of funding to correct problems was not a defect because the completed repairs supported testimony the contractor's maintenance staff could complete most of the remaining repairs. The contractor's inability to obtain refinancing did not affect its response to the inspection report but rather its ability to put the property in "like new" condition, which exceeded the decent, safe and sanitary standard. The government's assertion the poor physical conditions were chronic also did not justify the termination, because prior inspections were resolved, leaving only the most recent inspection as the basis for the termination decision. Englewood Terrace L.P. v. U.S., FedCl, 52 CCF ¶78,863.

Noncompliance with Subcontracting Limit Voided Award
Corrective action setting aside a protester's contract award was proper, according to the Court of Federal Claims, because the protester's proposal violated the limitation on subcontracting provision in FAR 52.219-14(b), which made the protester ineligible for the contract and the award void. The protester sought reinstatement of its services contract, awarded as a small business set-aside. The solicitation incorporated FAR 52.219-14, which imposes a limitation on subcontracting by requiring at least 50 percent of personnel costs to be expended on the offeror's employees. The protester had offered to perform less than 50 percent of the labor costs with its own personnel, relying on mistaken government advice that offerors could comply with the LOS clause collectively with small business members of an informal joint venture or with a small business first-tier subcontractor. The award provoked a protest, and the Government Accountability Office determined the award was improper because the awardee's proposal did not meet the LOS requirement (22 CGEN ¶112,347). Defending the award, the protester argued compliance with the LOS clause was not a mandatory, material requirement of the solicitation, but rather a matter of post-award contract administration.

However, the LOS clause reflects a requirement of the Small Business Act (15 USC 644(o)), and the GAO correctly characterized the LOS clause as a mandatory, material solicitation requirement that rendered the protester's proposal ineligible for award. In addition, whether the protester could meet the LOS requirement after award was irrelevant because the original award was premised on legal error and therefore a nullity, and allowing the protester to alter its offer would be fundamentally unfair to the other offerors. The protester did not demonstrate the corrective action was arbitrary or an abuse of discretion, and it therefore was not entitled to injunctive relief. The court nevertheless remanded the protester's claim for bid and proposal preparation costs to the government because the protester relied on the erroneous government advice in submitting its offer, and it may have been entitled to recover a portion of its costs. The Centech Group, Inc. v. U.S., et al., FedCl, 52 CCF ¶78,866.

Third-tier Subcontractor Was Entitled to Recover Under Miller Act
According to the Third Circuit Court of Appeals, a third-tier subcontractor on a construction project, whose only contractual relationship was with a steel fabricator used by the prime, was entitled to recover under the contractor's Miller Act payment bond, because the steel fabricator qualified as a "subcontractor" under the Miller Act. The dispute arose out of a contract for the construction of an airplane hangar. The construction contractor arranged to obtain the steel necessary to complete the work from a steel fabricator, who in turn subcontracted with another steel supplier to perform a portion of the steel work. Although the prime contractor paid the steel fabricator, the fabricator declared bankruptcy without paying its subcontractor. The third-tier subcontractor sought to recover under the prime contractor's Miller Act payment bond, asserting entitlement under the Supreme Court's decision in Clifford F. MacEvoy Co. v. U.S. fuo Calvin Tomkins Co. (2 CCF ¶537), which held recovery under a Miller Act payment bond is available to "subcontractors without an express or implied contract with the prime contractor, but with a direct contract with a subcontractor." The District Court for New Jersey denied the claim, asserting the firm did not have a "direct contract with a subcontractor" because the steel fabricator's role in the project was merely that of a material supplier, not a subcontractor (50 CCF ¶78,614).

On appeal, the Third Circuit reversed the district court's decision, finding the steel fabricator qualified as a "subcontractor" under the Miller Act. The court referred to two seminal Supreme Court cases --MacEvoy and F.D. Rich Co. v. U.S. fuo Indus. Lumber Co., 20 CCF ¶83,070 --that define the meaning of "subcontractor" as used in the Act. Noting the plethora of court opinions interpreting the standards of MacEvoy and F.D. Rich, the court cautioned that "the opinions interpreting those two cases often evolve into a process of "color matching" the various precedents rather than focusing on the purpose of the Act, the relationship between the parties, and the middleman's role in the project." After analyzing the facts and circumstances of the case, the court determined, in accordance with the Miller Act's intent to "protect persons who supply labor or materials for government construction projects," that the steel fabricator was indeed a subcontractor, and thus the third-tier subcontractor could recover under the Act. Some of the key facts supporting the court's conclusion were that the steel fabricator supplied a substantial amount of the steel necessary for the project, prepared designs and drawings, and tailored delivery of the steel to fit the contractor's construction schedule. U.S. fuo E & H Steel Corp. v. C. Pyramid Enterprises, Inc., et al., CA-3, 52 CCF ¶78,852.

Tort Liability Dependent on Military Operational Control
Summary judgment on the issue of the government contractor defense was granted to one contractor working in a war zone, but not another, because the contractor receiving relief demonstrated its employees were under the direct authority and exclusive operational control of the military chain of command, according to the District Court for the District of Columbia. The plaintiffs were Iraqi nationals who alleged they or their late husbands were tortured or otherwise mistreated while detained by the United States military at Abu Ghraib and other prisons in Iraq. The contractors provided, respectively, civilian interpreters and interrogators to the military. Each contractor moved for summary judgment on the basis the plaintiffs' common law tort claims were preempted under the government contractor defense. When contractor employees act under the exclusive operational control of the military chain of command, federal preemption pursuant to the combatant activities exception removes potential exposure to state law liability.

With regard to the contractor providing interpreters, its employees were directly attached to military units deployed in support of U.S. military combat operations. The statement of work clearly stated contractor "personnel must adhere to the standards of conduct established by the operational or unit commander." The interpreters were required to follow the tasking requests ordered by their military commander, while contractor supervisors played no role in assigning tasks and did not supervise the interpreters' work. The court reached a different result on the action against the contractor that supplied interrogators. The court concluded a reasonable trier of fact could determine the contractor had significant authority over its personnel. The contractor's site manager effectively co-managed contract interrogators, giving them advice and feedback on performance of their duties. Arguably, those duties were not "identical to those of their military counterparts." Where the military allows a contractor to retain authority to oversee and manage its employees' job performance on the battlefield, no federal interest would relieve the contractor of its state law obligations to select, train and supervise its employees properly. Ibrahim, et al. v. Titan Corp., et al., DC DC, 52 CCF ¶78,848.

Contractor Was Aware of Possible Radiological Conditions
A claim alleging differing site conditions was denied by the Court of Federal Claims because, based on his experience and knowledge, it was foreseeable to the contractor during the bidding process that the work site could contain radiological contamination. The dispute arose from an indefinite quantity contract for animal control on a site where the government produced radioactive isotopes. The contractor, engaged to trap beavers and remove beaver dams from the site, argued the site conditions were materially different from those represented by the contract because the soil was contaminated by radioactive materials. To establish the differing site conditions claim, the contractor had to show the conditions were reasonably unforeseeable based on all the information available to him at the time of bidding. However, the contractor was very familiar with the site, having previously worked there for nearly 25 years, and he knew that radiation was a concern, as he had extensive radiological training while employed there. He was also familiar with the radiation warning signs posted at the site.

The contractor was also denied an equitable adjustment because damages were speculative and unproven. The contractor sought an adjustment on the basis he might have submitted a higher bid had he known of radioactive contamination. This contention, however, was too speculative to calculate damages. There was no guarantee the contractor would have been awarded the contract had he submitted a higher price. Also, the contractor failed to show dangerous soil levels or that he spent additional time or money because of the soil contamination. The court therefore granted the government's motion for judgment on partial findings. Hooker, dba Georgia Bowhunters Supply v. U.S., FedCl, 52 CCF ¶78,859.

Regulatory News

FAR Councils Issue FAC 2005-23
The Civilian Agency Acquisition and Defense Acquisition Regulations Councils have published Federal Acquisition Circular 2005-23. The Circular contains one interim and two final rules amending the Federal Acquisition Regulation. In order of appearance, the rules address: Item I, Electronic Products Environmental Assessment Tool (EPEAT) (FAR Case 2006-030, Interim); Item II, Contracts with Religious Entities (FAR Case 2006-019); and Item III, Performance-Based Payments (FAR Case 2005-016). The first two rules carry an immediate effective date of December 26, 2007, while the third rule goes into effect January 25, 2008. A Small Entity Compliance Guide also accompanies FAC 2005-23. A complete list of all FAR sections impacted by this FAC appears in the table below. For the text of FAC 2005-23, see ¶70,002.96.

An interim rule, FAR Case 2006-030, amends the FAR to require use of the Electronic Products Environmental Assessment Tool when acquiring personal computer products such as desktops, notebooks or laptops, and monitors pursuant to the Energy Policy Act of 2005 and Executive Order 13423, "Strengthening Federal Environmental, Energy, and Transportation Management." EPEAT is a system that helps purchasers in the public and private sectors to evaluate, compare, and select computers and computer components based on the environmental attributes of the equipment. EPEAT also provides a clear and consistent set of performance criteria for the design of products, and provides an opportunity for manufacturers to secure market recognition for efforts to reduce the environmental impact of their products. Currently, FAR Subpart 23.7 implements the requirements for acquiring environmentally preferable products and services. The interim rule revises FAR Subpart 23.7, and prescribes a new clause, FAR 52.223-16 (also included in FAR 52.212-5 for acquisition of commercial items), for all solicitations and contracts for the acquisition of personal computer products, services that require furnishing of personal computer products for use by the government, and services for contractor operation of government-owned facilities. The rule adds a new provision at FAR 23.701 that defines a "personal computer product" to include notebook computers, desktop computers, or computer monitors, and all peripherals that are integral to the operation of these items, consistent with the IEEE 1680 standard. In accordance with Section 7 of E.O. 13423, the EPEAT requirement applies only to contracts performed in the United States, unless otherwise authorized in agency procedures. This interim rule impacts FAR 11.101, FAR 23.702, FAR 23.705, FAR 23.706, FAR 39.101, FAR 52.223-10, and the other regulations identified above. Comments on the interim rule, identified by FAR Case 2006-030, are due by February 25, 2008.

The final rule associated with FAR Case 2005-016 amends the FAR to increase the use of performance-based payments as a method of contract financing on government contracts and improve the efficiency of performance-based payments. These changes originate from recommendations submitted by the Department of Defense Performance-Based Payments Working Group in its March 8, 2005 report. The rule, which finalizes a proposed rule (¶70,006.202), provides policy and procedures for performance-based payments under noncommercial purchases pursuant to FAR Subpart 32.1. Under revised FAR 32.1004, performance-based payments may be made either on a whole contract or on a deliverable item basis, unless otherwise prescribed by agency regulations. The contracting officer must establish a complete, fully defined schedule of events or performance criteria and payment amounts when negotiating contract terms. The basis for performance-based payments may be either specifically described events, such as milestones, or some measurable criterion of performance. Events or criteria may be either severable or cumulative. However, the successful completion of a severable event or criterion is independent of the accomplishment of any other event or criterion. Conversely, the successful accomplishment of a cumulative event or criterion is dependent on the previous accomplishment of another event. If a contract action significantly affects the price, or an event or performance criterion, the CO responsible for pricing the contract modification must adjust the performance-based payment schedule appropriately. The rule amends or revises the following regulations: FAR 32.1000 through FAR 32.1005, FAR 32.1007, FAR 32.1009, and the corresponding contract clause at FAR 52.232-32.

Another FAC 2005-23 rule, FAR Case 2006-019, finalizes a prior interim rule issued with FAC 2005-16 that amended the FAR to add an exemption to equal employment opportunity provisions for religious entities. The FAR Councils received no public comments on the interim rule and therefore adopted the rule as final without change. The interim rule amended FAR 22.807 and the associated clause at FAR 52.222-26, Equal Opportunity, to add an exemption for religious entities from the prohibition of discrimination on the basis of religion. E. O. 13279 amended Section 204 of E.O. 11246 to permit religious entities to consider employment of individuals of a particular religion to perform work connected with carrying on the entity's activities. Accordingly, the requirements of FAR 52.222-26 with respect to employment of individuals of a particular religion to perform work do not apply to a contractor that is a religious corporation, association, educational institution, or society. Religious entities remain subject to other equal employment opportunity requirements, however. This interim rule also made corresponding technical changes to the clauses at FAR 52.212-5, FAR 52.213-4, and FAR 52.244-6.

VA Implements Plain Language Rewrite of VAAR
A rule finalizes, without substantive change, a proposed rule (¶73,010.02) amending the Department of Veterans Affairs Acquisition Regulation. The final rule revises the entire VAAR to incorporate plain language principles, update delegations of authority, and remove non-regulatory material. Changes in format, arrangement, and numbering make the VAAR consistent with the Federal Acquisition Regulation, and content restating FAR provisions has been removed.

Procedures added by the final rule address notice and hearing requirements for resolving possible violations of the Gratuities clause, the establishment of qualified products lists, suspension and debarment, expediting payments to small businesses, and reducing or suspending payments upon a finding of contract fraud. Also, the VAAR clause on organizational conflicts of interest has been expanded to cover a broader range of services that may be subject to OCIs, and additional VAAR clauses have been added to the list of clauses for use in commercial item solicitations and contracts.

The rule also deleted items conflicting with the FAR or other law that addressed requirements for construction and architect-engineer small business set-asides, audits of section 8(a) price proposals, and requesting data from veteran-owned small businesses. Additions include guidance on the types of data that should be requested from a contractor for evaluating the contractor's financial condition, a requirement to use the Assignment of Claims clause in purchase orders, and guidance on criteria for revising payment due dates for invoices. The final rule goes into effect February 14, 2008. For the complete text of the rule, see ¶73,010.03.

BIS Expands Scope of License Exceptions
The Bureau of Industry and Security has issued a final rule amending the Export Administration Regulations to expand the availability of License Exception Temporary Imports, Exports, and Reexports, and License Exception Baggage, to allow for certain temporary exports and reexports of technology by United States persons to U.S. persons or their employees traveling or temporarily assigned abroad. License Exceptions TMP (EAR 740.9) and BAG (EAR 740.14) both contain tools of trade provisions (see EAR 740.9(a)(2)(i) and EAR 740.14(b)(4)) that authorize certain temporary exports and reexports for usual and reasonable kinds and quantities of tools of trade for use in a lawful enterprise or undertaking of the exporter. However, temporary exports and reexports of technology were not originally authorized because TMP and BAG were limited in scope to commodities and software. This rule expands the scope of License Exceptions TMP and BAG to allow for certain temporary exports and reexports of technology by U.S. persons to U.S. persons or their employees traveling or temporarily assigned abroad. The rule implements this change through amendments to EAR 740.9, EAR 740.14, and EAR 772.1. For the text of the rule, effective December 12, 2007, see ¶72,750.136.

Rule Sets Procedures for Inherently Governmental Determination
The Department of Defense has issued a final rule (DFARS Case 2007-D019) amending the Defense Federal Acquisition Regulation Supplement to address procedures for preparing the written determination required by the Federal Acquisition Regulation (FAR 7.503(e)) that none of the functions to be performed by the contract are inherently governmental. The rule amends DFARS 207.503 by adding a paragraph (e) to provide that the written determination must be must be prepared using DoD Instruction 1100.22, Guidance for Determining Workforce Mix, and must include a determination that none of the functions to be performed are exempt from private sector performance, as addressed in DoD Instruction 1100.22. The rule also adds a new policy provision at DFARS 237.102. The text of this final rule, which carries a January 10, 2008, effective date, appears at ¶70,016.459.

DoD Issues Rule on Online Representations and Certifications
The Department of Defense has issued a final rule (DFARS Case 2006-D032) amending the Defense Federal Acquisition Regulation Supplement to address the DFARS provisions included in the Online Representations and Certifications Application. Subpart 4.12 of the Federal Acquisition Regulation requires prospective contractors to complete electronic annual representations and certifications in ORCA, in conjunction with required registration in the Central Contractor Registration database. The FAR also provides direction to contracting officers to exclude those representations and certifications from solicitations that contain the clause at FAR 52.204-7, Central Contractor Registration. Similarly, this DFARS rule contains a list of the DFARS representations and certifications in ORCA, and provides direction to COs to exclude those representations and certifications when using the provision at FAR 52.204-8. In addition, the DFARS rule contains a substitute paragraph (c) for use with the provision at FAR 52.204-8 to permit inclusion of information relating to both the FAR and the DFARS. An offeror must include information in paragraph (c) only if changes to the offeror's annual representations and certifications apply to a particular solicitation. Use of ORCA eliminates the need for offerors to submit the same repetitive information in response to government solicitations. The rule adds a new DFARS Subpart 204.12, consisting of DFARS 204.1202, and a new contract clause at DFARS 252.204-7007. This rule also makes a corresponding change to DFARS 212.301. The proposed rule, issued February 12, 2007, appears at ¶70,020.238. For the text of this final rule, effective January 10, 2008, see ¶70,016.457.

FAR Rule Would Restrict Use of Commercial Purchase Card
The Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council are proposing to amend the Federal Acquisition Regulation to prohibit use of the governmentwide commercial purchase card as a method of payment for contractors with debts subject to the Treasury Offset Program. To collect delinquent debts owed to federal agencies and states, the Financial Management Service uses the TOP to offset a person's overdue federal debt, child support obligation, or state tax debt. FMS is currently unable to offset or apply a continuous levy to payments made to contractors with delinquent debts when the governmentwide commercial purchase card is used as the method of payment. To increase the collection of delinquent debts owed to the government, this rule proposes to amend the FAR to require contracting officers to determine whether the Central Contractor Registration indicates the contractor has delinquent debt that is subject to collection under the TOP. The CO must check for the flag at the time of contract award, order placement, and again before exercising any options. The rule proposes to amend the applicable governmentwide commercial purchase card payment clause at FAR 52.232-36 to advise contractors the governmentwide commercial purchase card is not authorized as a method of payment if a debt indicator is included in the CCR for the contractor. The rule would also make corresponding changes to FAR 4.1103, FAR 8.405-7, FAR 13.003, FAR 13.301, FAR 17.207, and FAR 32.1108. Comments on the proposed rule, identified by FAR Case 2006-026, are due February 29, 2008. For the text of the rule, see ¶70,006.218.

Major Contract Awards

Multiple Firms - $4 Billion. AMEC Earth and Environmental, Inc., of Plymouth Meeting PA, CDM Constructors Inc. of Cambridge MA, CH2M-Hill Facilities and Infrastructure, Inc. of Englewood, CA, Earthtech Inc., of Long Beach, CA, ECC of Burlington, VA, Innovative Technical Solutions Inc. of Walnut Creek, VA, Jacobs Government Services Co., of Pasadena, CA, Parsons Infrastructure and Technology Group, Inc., of Pasadena, CA, Perini Corp of Farmington, MA, Toltest of Maumee, OH, North Wind of Idaho Falls, ID, SEI Group, Inc. of Huntsville, AL, Barlovento, LLC of Dothan, AK, J2 Engineering of Tampa, FL, Charter Environmental of Wilmington, MA, and DWG and Associates, of Bluffdale, UT are being awarded an indefinite delivery/indefinite quantity contract for $4,000,000,000. The ceiling established for the Sustainment, Restoration, and Modernization (SR&M) Task Order Contract (SATOC) program is $4 Billion. $4 billion is the maximum total of all task orders on all contracts (multiple contracts to be awarded) over the life of the program (up to 10 years). There is no pre-determined contract value for the individual contracts to be awarded; however, the minimum order amount for contract awarded is $2,500. The actual contract value for each contract will be determined by total value of all task orders against each contract, over the life of each contract (up to 10 years). At this time $2,500 has been obligated (per awardees). AETC CONS/LGCK, Randolph Air Force Base Texas is the contracting activity (Multiple contract numbers). Government Contracts Report Letter No. 1941, January 16, 2008.

Seven Seas Shiphandlers - $1.8 Billion. Seven Seas Shiphandlers, Dubai, United Arab Emirates,* is being awarded a maximum $1,825,000,000 fixed price with economic price adjustment, indefinite delivery, indefinite quantity, prime vendor contract for Maintenance, Repair, and Operations (MRO) for the CENTCOM region. There are no other locations of performance. Using services are Army, Navy, Air Force, Marine Corps, and Federal Civilian Agencies. This proposal was originally Web solicited with 3 responses. This contract is exercising the 2nd one-year option. Contract funds will not expire at the end of the current fiscal year. Date of performance completion is January 2, 2009. The contracting activity is Defense Supply Center Philadelphia (DSCP), Philadelphia, PA (SPM500-05-D-BP05). Government Contracts Report Letter No. 1940, January 9, 2008.

SupplyCore - $1.8 Billion. SupplyCore, Rockford, IL, is being awarded a maximum $1,825,000,000 fixed price with economic price adjustment, indefinite delivery, indefinite quantity, prime vendor contract for Maintenance, Repair, and Operations (MRO) for the CENTCOM region. There are no other locations of performance. Using services are Army, Navy, Air Force, Marine Corps, and Federal Civilian Agencies. This proposal was originally Web solicited with 3 responses. This contract is exercising the 2nd one-year option. Contract funds will not expire at the end of the current fiscal year. Date of performance completion is January 2, 2009. The contracting activity is Defense Supply Center Philadelphia (DSCP), Philadelphia, PA (SPM500-05-D-BP04). Government Contracts Report Letter No. 1940, January 9, 2008.

Theodor Wille Intertrade - $1.8 Billion. Theodor Wille Intertrade (TWI), Zug., Switzerland,* is being awarded a maximum $1,825,000,000 fixed price with economic price adjustment, indefinite delivery, indefinite quantity, prime vendor contract for Maintenance, Repair, and Operations (MRO) for the CENTCOM region. There are no other locations of performance. Using services are Army, Navy, Air Force, Marine Corps, and Federal Civilian Agencies. This proposal was originally Web solicited with 3 responses. This contract is exercising the 2nd one-year option. Contract funds will not expire at the end of the current fiscal year. Date of performance completion is January 2, 2009. The contracting activity is Defense Supply Center Philadelphia (DSCP), Philadelphia, PA (SPM500-05-D-BP02). Government Contracts Report Letter No. 1940, January 9, 2008.

McDonnell Douglas Corp. - $1.3 Billion. McDonnell Douglas Corp., A Wholly-Owned Subsidiary of the Boeing Co., Long Beach, CA, is being awarded an indefinite delivery/indefinite quantity contract for $1,300,000,000. This contract is a follow-on contract to the PE/PI contract awarded in January, 2001. The contract is for continued efforts associated with the analysis, study, plan, design, development and qualification/test and kit prototype of enhancements and improvements to the C-17 weapon system. This is an indefinite delivery/indefinite quantity contract with a five-year ordering period. The contract ceiling is $1.3 billion. Funding will be identified on individual delivery orders. Delivery Order 0001 is the initial delivery order to be awarded with the basic contract. Delivery order 0001 is for efforts which support Air Mobility Command requirements to participate in planning, provisioning, conducting, analyzing, and documenting and integrated Follow-On Flight Test program. At this time $13,600,000 (Delivery Order 0001) has been obligated. 516 AESG/PKP (C-17), Wright-Patterson Air Force Base, OH, is the contracting activity (FA8614-08-D-2080). Government Contracts Report Letter No. 1940, January 9, 2008.

L.N. Curtis & Sons - $800 Million. Contract Number SPM8EG-08-D-0013 released on Dec. 28, 2007, was awarded to a small business, L.N. Curtis & Sons. Oakland, CA, for a maximum of $800,000,000.00 indefinite quantity, two year base with three one-year options contract for tailored logistics support program for fire and emergency services. Using services are Army, Navy, Air Force, Marine Corps, Federal Civilian Agencies, and State and Local Governments. The original proposals were solicited on FEDBIZ with 12 responses. The contracting activity is Defense Supply Center Philadelphia, Philadelphia, PA. Government Contracts Report Letter No. 1941, January 16, 2008.

Northrop Grumman - $595.9 Million. Northrop Grumman Newport News, Newport News, VA, is being awarded a $595,944,566 modification to previously awarded contract (N00024-04-C-2118) for the continuation of CVN 78 class design effort; long lead time material procurement; and non-nuclear advance construction for the lead ship of the class, Gerald R. Ford (CVN 78), including system development, engineering services, and feasibility studies for the Future Aircraft Carrier Program. Northrop Grumman Newport News will provide all services and material in preparation for construction of CVN 78 including necessary research studies; engineering; design; related development efforts, including required engineering development models and prototypes for engineered components; advanced planning; advanced procurement for detailed design and procurement/fabrication of long lead material; advanced construction; system specifications; design weight estimate; logistics data; lists of government-furnished equipment; production planning; further definition of initiatives to reduce CVN 78 class total ownership costs; and other data to support an integrated product data environment for the CVN 21 program. Work will be performed in Newport News, VA (92 percent) and Groton, CT (8 percent), and is expected to be completed by July 2008. Contract funds will not expire at the end of the current fiscal year. The Naval Sea Systems Command, Washington Navy Yard, D.C. is the contracting activity. Government Contracts Report Letter No. 1941, January 16, 2008.

Boeing Co. - $505.3 Million. Boeing Co. of Huntington Beach, CA, is being awarded a contract for $505,300,000. This contract is for the purchase of launch services using Delta IV heavy and medium launch vehicles under the Evolved Expendable Launch Vehicle program for launch of the National Reconnaissance Office mission's 32, 27 and 49 missions. At this time $252,650,000 has been obligated. Space and Missile Systems Center, Los Angeles CA, is the contracting activity (FA8811-08-C-0005). Government Contracts Report Letter No. 1943, January 30, 2008.

Muliple Firms - $500 Million. R. A. Burch Construction Co., Inc.*, Ramona, CA; Douglas E. Barnhart, Inc., San Diego, CA; Solpac Construction, Inc. dba Soltek Pacific Construction Co., San Diego, CA; Straub Construction, Inc., Bonsall, CA; Harper Construction Company, Inc., San Diego, CA; and T. B. Penick & Sons, Inc., San Diego, CA, are each being awarded a firm-fixed-price, indefinite-delivery/indefinite-quantity multiple award construction contract for commercial and institutional building construction at various locations within the Naval Facilities Engineering Command (NAVFAC) Southwest area of responsibility (AOR). The maximum dollar value, including the base period and four option years, for all six contracts combined is $500,000,000, with a guaranteed minimum of $25,000 for each contract. The work to be performed provides for new construction, repair, and renovation, primarily by design-build or secondarily by design-bid-build of commercial and institutional buildings and related structures. Types of projects may include, but are not limited to: administration buildings, school buildings, hospitals, auditoriums, fire stations, gymnasiums, office buildings, hangars, laboratories, and parking structures. Work will be performed at various Navy and Marine Corps installations within the NAVFAC Southwest AOR including, but not limited to, Southern California, (94 percent), Arizona, (five percent), and New Mexico (one percent). The term of the contract is not to exceed 60 months, with an expected completion date of Jan. 2013 (Jan. 2009 for the base period). Contract funds will not expire at the end of the current fiscal year. This contract was competitively procured via the NAVFAC e-solicitation website with 23 proposals received. These six contractors may compete for task orders under the terms and conditions of the awarded contract. The Naval Facilities Engineering Command Southwest, San Diego, CA, is the contracting activity (contract numbers N62473-08-D-8607/8608/8609/8610/8611/8612). Government Contracts Report Letter No. 1941, January 16, 2008.

Muliple Firms - $500 Million. R. A. Burch Construction Co., Inc.*, Ramona, CA; Douglas E. Barnhart, Inc., San Diego, CA; Straub Construction, Inc., Bonsall, CA; Solpac Construction, Inc. dba Soltek Pacific Construction Co., San Diego, CA; Harper Construction Co., Inc., San Diego, CA; and T. B. Penick & Sons, Inc., San Diego, CA, are each being awarded a firm-fixed price, indefinite delivery indefinite quantity multiple award construction contract for commercial and institutional building construction at various locations within the NAVFAC Southwest area of responsibility (AOR). The maximum dollar value, including the base period and four option years, for all six contracts combined is $500,000,000, with a guaranteed minimum of $25,000 for each contract. The work to be performed provides for new construction, repair, and renovation primarily by design-build or secondarily by design-bid-build of commercial and institutional buildings and related structures. Types of projects may include, but are not limited to: administration buildings, school buildings, hospitals, auditoriums, fire stations, gymnasiums, office buildings, hangars, laboratories, and parking structures. Work will be performed at various Navy and Marine Corps installations within the NAVFAC Southwest AOR including, but not limited to, Northern California (82 percent), Nevada (14 percent), Utah (2 percent), and Colorado (two percent). The term of the contract is not to exceed 60 months, with an expected completion date of Jan. 2013 (Jan. 2009 for the base period). Contract funds will not expire at the end of the current fiscal year. This contract was competitively procured via the NAVFAC e-solicitation website with 18 proposals received. These six contractors may compete for task orders under the terms and conditions of the awarded contract. The Naval Facilities Engineering Command, Southwest, San Diego, CA, is the contracting activity (contract numbers N62473-08-D-8613/8614/8615/8616/8617/8618). Government Contracts Report Letter No. 1941, January 16, 2008.

Lockheed Martin Corp. - $498 Million. Lockheed Martin Corp., Lockheed Martin Aeronautics of Fort Worth, TX, is being awarded a firm fixed price contract modification for $498,206,058. This action will provide Foreign Military Sales of F-16C/D new aircraft for the (Pakistan) program for F-16 Block 52 aircraft. The procurement of 12 operational single place F-16C Block 52 aircraft and 6 operational two place F-16D Block 52 aircraft will be accomplished under the firm fixed price portion. This effort supports foreign military sales to Pakistan. At this time $497,551,058 has been obligated. 312 AESF/PKA, Wright-Patterson Air Force Base, OH, is the contracting activity (FA8615-07-C-6031-P0002). Government Contracts Report Letter No. 1940, January 9, 2008.

Honeywell Technology Solutions Inc. - $389.6 Million. Honeywell Technology Solutions Inc. of Colorado Springs, CO is being awarded a modification to an indefinite delivery/indefinite quantity contract for $389,649,504. This action will increase the number of hours on the contract the government may order during FY's 08, 09, and 10. Hours will be ordered as required and money obligated on delivery orders issued under the contract terms and conditions. The contract provides for systems and maintenance engineering, network support integration, on-site and off-site depot level maintenance and software maintenance of the Air Force Satellite Control Network. At this time no funds have been obligated. SMC SLG/PK, Peterson Air Force Base CO is the contracting activity (F04701-02-D-0006, P00036). Government Contracts Report Letter No. 1941, January 16, 2008.

Lockheed Martin Corp. $335.9 Million. The Lockheed Martin Corp. Lockheed Martin Integrated Systems and Solutions of San Jose, CA, is being awarded a contract modification for $335,978,665. This modification of the Mission Operations Systems (TMOS) contract will synchronize the TMOS contract to support ongoing business execution and support ongoing program evolution. This includes updates to align the program with significant FY06/FY07 changes to TSAT funding and schedule. In addition, the modification made changes to the statement of work to accommodate concept of operations changes as well as accommodate new DoD policies such as revised security certificate requirements. These changes are necessary to accommodate the continuing evolution of TSAT. At this time no funds have been obligated. Space and Missile Systems Center, El Segundo CA, is the contracting activity (FA8808-06-C-0003/P00022). Government Contracts Report Letter No. 1943, January 30, 2008.

Textron, Inc. - $227.7 Million. Textron Marine & Land Systems, Textron Inc., New Orleans, LA, was awarded on Jan. 18, 2008, a $227,798,613 firm-fixed-price contract for armored security vehicles. Work will be performed in New Orleans, LA, and is expected to be completed by June 30, 2009. Contract funds will not expire at the end of the current fiscal year. One bid was solicited on May 9, 2005, and one bid was received. U.S. Army TACOM LCMC, Warren, MI, is the contracting activity W56HZV-05-C-0470. Government Contracts Report Letter No. 1943, January 30, 2008.

Jacobs Technology, Inc. - $197 Million. Jacobs Technology, Inc., Tullahoma, TN, is being awarded a $197,936,311 cost-plus-award-fee, firm-fixed-price contract for the services and materials necessary to support the analysis, design, development, test, integration, deployment, and operations of information technology systems and services. Work will be performed in China Lake, CA, (90 percent) and Pt. Mugu, CA, (10 percent), and is expected to be completed in March 2013. Contract funds will not expire at the end of the current fiscal year. This contract was competitively procured via an electronic request for proposals and seven offers were received. The Naval Air Warfare Center Weapons Division, China Lake, CA, is the contracting activity (N68936-08-D-0016). Government Contracts Report Letter No. 1940, January 9, 2008.

Lockheed Martin - $171.8 Million. Lockheed Martin Missiles and Fire Control, Orlando, FL, was awarded on Jan. 24, 2008, a $171,847,946 firm-fixed price contract for modernized target acquisition designation night vision sensors for the Apache aircraft. Work will be performed by Lockheed Martin Systems in Orlando, FL, and is expected to be completed by Sep. 30, 2011. Contract funds will not expire at the end of the current fiscal year. There was one bid solicited on April 19, 2007, and one bid received. The Aviation and Missile Command, Redstone Arsenal, AL, is the contracting activity W58RGZ-06-C-0169. Government Contracts Report Letter No. 1943, January 30, 2008.

Raytheon Missile Systems - $126.6 Million. Raytheon Missile Systems, Tucson, AZ, is being awarded a $126,617,404 firm-fixed-price contract for the Lot 8 production of AIM-9X tactical missiles for the Navy (100) and Air Force (89), and for the governments of Korea (102) and Australia (47). In addition, this contract provides for the procurement of Captive Air Training Missiles for the Navy (70), Air Force (60) and the government of Australia (20); 16 special air training missiles for the government of Australia; and containers for the Navy (48), Air Force (50), and the governments of Korea (26), Australia (24), and Finland (11). Work will be performed in Tucson, AZ (52.71 percent); Austin, TX (11 percent); Valencia, CA (8 percent); Goleta, CA (7 percent); Rocket Center, WV (7 percent); Glostap, Denmark (4 percent); Cheshire, CT (3 percent); Midland Ontario, Canada (3 percent); Anniston, AL (2.29 percent); Claremont, CA (1 percent); and Longmount, CO (1 percent), and is expected to be completed in April 2010. Contract funds will not expire at the end of the current fiscal year. This option combines purchases for the U.S. Navy ($39,544,455; 31.23 percent), U.S. Air Force ($34,860,071; 27.54 percent), and the Governments of Korea ($31,068,566; 24.54 percent); Australia ($21,024,181; 16.60 percent), and Finland ($120,131; 0.09 percent) under the Foreign Military Sales Program. This contract was not competitively procured. The Naval Air Systems Command, Patuxent River, MD is the contracting activity (N00019-08-C-0018). Government Contracts Report Letter No. 1941, January 16, 2008.

McDonnell Douglas Corp. - $115.6 Million. McDonnell Douglas Corp., A Wholly-Owned Subsidiary of the Boeing Co., of St. Louis, MO is being awarded a firm-fixed price contract for $115,613,146. This action will provide for Joint Direct Attack Munition (JDAM) Lot 12 Guided Vehicle kits quantity of 4,907. The JDAM weapon system provides the Air Force and the Navy with an improved aerial delivery capability for existing 500, 1000, 2000 pound bombs. The JDAM is a strap-on kit with Inertial Navigation System/Global Positioning System capability. At this time all funds have been obligated. 678 ARSS/PK, Eglin Air Force Base, FL is the contracting activity (FA8681-08-C-0001). Government Contracts Report Letter No. 1941, January 16, 2008.