June 2007

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.

Legal News

Government Officials' Bad Faith Not a "Close Case"
A contractor demonstrated government personnel acted in bad faith in administering a lease, breaching the covenant of good faith and fair dealing as well as express contract provisions, because the Court of Federal Claims found the record to be replete with statements evidencing animus toward the contractor, actions indicative of bad faith, and abuses of the dispute resolution process. During performance of the lease portion of a contract to build and lease military housing, the parties' positive working relationship became increasingly hostile as various disputes arose. The contractor sought breach damages and declaratory relief, alleging the government acted in bad faith. The court opened its analysis of key government officials' conduct by stating "[t]his is not a close case. The bad faith here was pervasive and, over time, metastasized, spreading through and corrupting virtually the entire relationship between [the contractor] and [the government]."

The record contained striking statements by government officials, most notably one official's advice to "following the Miami Hurricane's [g]ame [p]lan" in administering the lease by, for example, drawing the contractor "into a penalty situation" and remembering the government had "home field advantage." The court concluded the record "provide[d] a virtual rancid cornucopia of electronic messages and other communications evidencing a specific intent by key government officials to injure [the contractor]." In addition, government administrators hindered the contractor's performance and breached the lease by increasing the downtime of vacant units; miscalculating downtime; driving up the contractor's costs by, for example, unilaterally imposing a depreciation schedule to adjust reimbursements for carpet damage and refusing to correct occupant damage; and reducing the contractor's compensation by improperly assessing liquidated damages and arbitrarily reducing or eliminating incentive fees. Officials also disrupted the internal dispute resolution mechanism by repeatedly requesting changes to contracting officer decisions and harassed the contractor by recommending a fraud audit for a $135 item, which the contractor readily reimbursed. In the face of pressure from officials plainly driven by animus against the contractor, the CO representative and a successor CO abdicated their responsibility to accord the contractor fair treatment, which was "perhaps the most pernicious form of bad faith." (North Star Alaska Housing Corp. v. U.S., FedCl, 51 CCF ¶78,739)

Modification to 8(a) Set-Aside Did Not Require SBA Approval
According to the Court of Federal Claims, the government's modification of a contract issued under Section 8(a) of the Small Business Act without considering whether other small business concerns would be affected did not violate SBA 124.504(c), because the modification did not amount to a new contract award. A small business concern filed a protest when the government modified another firm's 8(a) set-aside contract for help desk services to include work being performed by the protester under a contract set to expire. The protester sought a permanent injunction compelling the government to terminate the modification. According to the protester, the modification violated the "adverse impact" rule in SBA 124.504(c), which provides that before the government can issue an award under Section 8(a) of the Small Business Act, it must first obtain a written determination from the SBA finding the award will not adversely impact other small business concerns. The protester argued the modification was governed by SBA 124.504(c)(2) because it resulted in a consolidation of services being performed by two different small businesses.

However, the modification was not a "procurement for award," and therefore was not subject to the requirements of SBA 124.504. In determining if SBA 124.504 applied, the critical issue was whether the modification was within the scope of the original contract or whether it was a "cardinal change." A cardinal change to a contract occurs when a modification requires a contractor to perform duties materially different than those originally bargained for, the work exceeds the scope of the contract's changes clause, and the modification could not have been reasonably anticipated under the terms of the original agreement. Here, the original contract was for help desk services, and the modification merely added a comparatively small unit of additional services to a division within the larger business unit to which the contract applied. Therefore, the modification was not a cardinal change and did not constitute a separate contract award. (Management Solutions & Systems, Inc. v. U.S., et al., FedCl, 51 CCF ¶78,735)

Criminal Defense Costs Were Not Indirect Contract Costs
The costs of defending a contractor and its officers in a criminal proceeding were not allocable to government contracts as indirect costs, according to the Armed Services Board of Contract Appeals, because the costs were specifically identified with a commercial contract and there was no evidence they were necessary to the operation of the contractor's business. The contractor, a subsidiary, and two officers were charged with and convicted of conspiracy and export violations for the unlicensed export of equipment used to manufacture missile components. The contractor appealed the administrative contracting officer's unilateral determination of its indirect cost rates for two fiscal years based, in part, on her disallowance of legal and related costs incurred in the criminal proceeding. Because the contractor was a small business, the cost plus fixed fee contracts at issue were not subject to the Cost Accounting Standards except as incorporated in the Federal Acquisition Regulation. The parties disputed the allowability of the legal costs under FAR 31.205-47(b), which disallows costs incurred in criminal proceedings that result in a conviction. The contractor also asserted the costs were reasonable and necessary to the overall operation of its business, while the government contended the costs were unreasonable because they pertained to conduct the trial court found to be reprehensible and heedless of national security interests, and the corporate decision to pay them was not arm's length.

The board determined, regardless of the outcome of the post-conviction appeals, the legal costs were not allowable because they were not allocable to the contractor's government contracts. FAR 31.202(a) provides costs identified specifically with a contract are directs costs that are to be charged directly to the contract. The legal costs were identified specifically with the contractor's commercial contract with a foreign country, and there was no nexus between the costs and the government contracts at issue or any government contract. A cost may also be allocable to a government contract if it is necessary to the overall operation of the contractor's business (FAR 31.201-4(c)). However, there was no evidence the contractor risked going out of business if convicted. The contractor maintained its commercial business and had been awarded and performed government contracts since its suspension had been terminated. (Fiber Materials, Inc., ASBCA, ¶91,997)

Teaming Arrangement Created Privity of Contract
According to the Civilian Board of Contract Appeals, a contractor involved in a teaming arrangement was in privity of contract with the government, even though it was not identified as the prime contractor, because the solicitation and the contractor team agreement manifested the parties' intent to be in contractual privity. The contractor was a party to a CTA with another contractor for performance under a contract for the lease and purchase of computer equipment. The request for quotations giving rise to the contract was open only to contractors participating in the General Services Administration's Federal Supply Schedule program. The RFQ allowed FSS contractors unable to provide the full scope of requirements alone to meet the government's needs by entering into a CTA with another FSS contractor. Pursuant to the contractor's CTA, the contractor was designated the "Buyer" and its teaming partner was designated the "Prime Contractor/Seller." The CTA required the contractor to prepare its own portion of the joint proposal (including cost and pricing), detailed the division of work and responsibility, and provided neither contractor was the agent of the other. The CTA also allowed the government to deal with each individual contractor directly with regard to the performance of its respective portion of the contract. When the contractor sought to recover costs arising out of the government's termination, the government moved to have the appeal dismissed for lack of jurisdiction, arguing the contractor did not meet the definition of a "contractor" under the Contract Disputes Act. According to the government, the fact the contractor's teaming partner was designated the "prime contractor" in the contract meant that firm was the only party with which it was in privity.

However, the provisions of the RFQ created a relationship between the parties sufficient to establish privity of contract. Although the CDA generally restricts privity to the party named on the contract, exceptions have been allowed when the relationship between the government and a party is substantially more extensive than the normal relationship between the government and a subcontractor. Here, the RFQ specifically contemplated the CTA under which the contractor asserted privity, and the government approved the CTA prior to the award. Moreover, subsequent to the award the contracting officer signed an acknowledgement of an assignment instrument directing the contract payments to be made to the contractor. Furthermore, the RFQ referred offerors to the GSA website for guidance on teaming arrangements, which distinguishes CTAs from prime contractor/subcontractor agreements. The website specifically explained one of the differences between a contractor/subcontractor arrangement and a CTA is that in the former case only the prime contractor is in privity with the government, while in the latter instance each team member has privity. By referencing the website, the RFQ incorporated this interpretation of CTAs into the contract. (Key Federal Finance v. GSA, et al., CBCA, ¶91,989)

Legislative and Regulatory Activity

FAC 2005-17 Revises Government Property Provisions
The Civilian Agency Acquisition and Defense Acquisition Regulations Councils have published Federal Acquisition Circular 2005-17. The Circular contains one rule (FAR Case 2004-025) that finalizes a proposed rule issued September 19, 2005 (¶70,006.183), implementing a policy that fosters efficiency, flexibility, innovation, and creativity while continuing to protect the government's interest in its property. The rule simplifies procedures, clarifies language, and eliminates obsolete requirements related to the management and disposition of government property in the possession of contractors by: moving, clarifying, and deleting definitions; establishing a life-cycle approach to property management; and sanctioning the use of consensus standards and/or industry-leading standards and practices for property management. This rule also deletes outdated clauses, combines selected FAR property clauses into a single clause (FAR 52.245-1), and implements a new clause designed for military base and installation-level contracts awarded under the OMB Circular A-76 process (FAR 52.245-2). FAC 2005-17 also includes a Small Entity Compliance Guide. For the text of FAC 2005-17, which takes effect on June 14, 2007, see ¶70,002.89.

DHS Finalizes Rule Transferring Appeals Jurisdiction to CBCA
The Department of Homeland Security has finalized, without change, an interim rule (¶72,300.04) amending the Homeland Security Acquisition Regulation to reflect a statutorily mandated jurisdictional change for the Department's board of contract appeals. The rule revises HSAR 3001.104, HSAR 3002.270, and HSAR 3033.201 through HSAR 3033.214 to implement Public Law 109-163, Title VIII, Section 847, which mandates the jurisdictional change to the Civilian Board of Contract Appeals. DHS contract appeals were previously handled by the Department of Transportation Board of Contract Appeals. The rule also makes several nonsubstantive amendments to reflect other organization changes, including technical amendments at HSAR 3001.105-2 and HSAR 3002.101, to correct nomenclature for the Federal Emergency Management Agency. For the text of the final rule, effective May 3, 2007, see ¶72,300.07.

Final Rule Clarifies DoD's Small Business Program
The Department of Defense has issued a final rule (DFARS Case 2006-D047) amending Defense Federal Acquisition Regulation Supplement text addressing small business programs. The rule amends DFARS Part 219 and corresponding contract clauses to update and clarify DoD policy for contracting with small business and small disadvantaged business concerns and to relocate text to the DFARS companion resource, Procedures, Guidance, and Information. The rule, first proposed February 23, 2006 (¶70,020.223), adds a new regulation at DFARS 219.1101 that identifies the URL of the website determining the use or suspension of the price evaluation adjustment. Numerous DFARS provisions and clauses are revised. The rule also relocates text containing procedures for referring matters to the Small Business Administration, procedures for processing contract awards under the 8(a) Program, and information on the DoD test program for negotiation of comprehensive small business subcontracting plans to the PGI. For the text of the final rule, effective April 26, 2007, see ¶70,016.433.

DFARS Interim Rule Prohibits Excessive Pass-Through Charges
A Department of Defense interim rule (DFARS Case 2006-D057) amends the Defense Federal Acquisition Regulation Supplement to implement Section 852 of the National Defense Authorization Act for Fiscal Year 2007, which requires DoD to prescribe regulations to ensure that pass-through charges on DoD contracts or subcontracts are not excessive in relation to the cost of work performed by the contractor or subcontractor. To ensure pass-through charges are not excessive, this interim rule adds two new solicitation provisions and contract clauses at DFARS 252.215-7003 and DFARS 252.215-7004 that require offerors and contractors to identify the percentage of work that will be subcontracted and, when subcontract costs will exceed 70 percent of the total cost of work to be performed, to provide information on indirect costs and profit and value added with regard to the subcontract work. The rule adds allowability provisions at DFARS 231.201-2 and DFARS 231.203, and makes a corresponding technical change to DFARS 215.408. This interim rule contains a new information collection requirement, approved by the Office of Management and Budget, for use through October 31, 2007, under OMB Control Number 0704-0443. Comments on the proposed rule, identified by DFARS Case 2006-D057, are due by June 25, 2007. For the text of the rule, effective April 26, 2007, see ¶70,016.432.

NASA Updates Security Requirements for Unclassified IT Resources
The National Aeronautics and Space Administration has finalized, with minor changes, a proposed rule (¶70,048.52) amending the clause at NFS 1852.204-76, Security Requirements for Unclassified Information Technology Resources, to reflect updates to NASA Procedural Requirements 2810, "Security of Information Technology." The NPR was recently revised to address increasing cyber threats and to ensure consistency with the Federal Information Security Management Act, which requires agencies to protect information and information systems in a manner commensurate with the sensitivity of the information processed, transmitted, or stored. The revised clause applies to all NASA contracts that require contractors to have physical or electronic access to NASA's computer systems, networks, or IT infrastructure; or use information systems to generate, store, or exchange data with NASA or on behalf of NASA, regardless of whether the data resides on a NASA or a contractor's information system. Changes to the proposed rule were made to improve readability and clarify specific requirements of the clause. The final rule also revises the administrative procedures at NFS 1804.470 through NFS 1804.470-4, and deletes NFS 1804.402, because it contained obsolete references. The final rule has an effective date of May 10, 2007. For the text of the rule, see ¶70,047.196.

Final Rule Amends EAR to Conform with Missile Control Regime
The Bureau of Industry and Security has issued a final rule amending the Export Administration Regulations to reflect changes to the Missile Technology Control Regime Annex agreed to by MTCR member countries at the October 2006 Plenary in Copenhagen, Denmark. The MTCR is an export control arrangement among 34 nations, including the world's most advanced suppliers of ballistic missiles and missile-related materials and equipment, that establishes a common export control policy based on a list of controlled items (the Annex) and on guidelines (the Guidelines) that member countries implement according to their national export controls. The goal of the Annex and the Guidelines is to stem the flow in the global marketplace of missile systems capable of delivering weapons of mass destruction. In January 1993, complete rocket systems and unmanned aerial vehicle systems capable of a range equal to or greater than 300 kilometers, regardless of their payload, were added to the MTCR Annex. To accommodate this change, at the 2006 Plenary the MTCR members decided to clarify controls applicable to certain Export Control Classification Numbers of the Commerce Control List (Supplement No. 1 to EAR Part 774).

Accordingly, this final rule amends ECCNs 1A102, 1C101, 1C107, 6A108, 6B108, 7A102, 7A103, 9A111, and 9B105 to clarify that these ECCNs apply to all systems capable of a range of at least 300 km, regardless of payload capacity. Prior to publication of this rule, these ECCNs utilized the defined term "missile," which meant they only controlled items "capable of delivering at least 500 kilograms payload." Other amendments regarding materials of proliferation concern are made to ECCNs 1C107 and 1C111, and ECCNs 6A108 and 9B117 are amended to clarify control parameters. Also, new ECCN 7A107 is added to control three axis magnetic heading sensors that are being added to the EAR to address concerns about their use in unmanned aerial vehicle systems, and conforming amendments to the addition of ECCN 7A107 are made to ECCNs 7D101 and 7E101. Additionally, ECCN 9A101 is amended by deleting extraneous language in order to better focus its controls.

Finally, the rule amends the definitions of the terms "range" and "payload" in EAR 772.1 by adding double quotes around the terms to signify they are defined terms under the EAR. Similarly, ECCNs 9A120 and 9C110 are amended by placing double quotes around specific words and phrases to identify them as defined terms. In ECCN 9A120, double quotes are added around the word "payload." In ECCN 9C110, double quotes are placed around the phrases "specific tensile strength" and "specific modulus." ECCNs 7A002 and 7A102 are amended by adding technical notes to define the term "stability" as it pertains to these entries only. For the text of this final rule, effective May 7, 2007, see ¶72,750.118.

Executive Order Prohibits Expert Witness Contingency Fees
President George W. Bush has issued Executive Order 13433, entitled "Protecting American Taxpayers From Payment of Contingency Fees." E.O. 13433 proclaims as policy a requirement that organizations or individuals that furnish legal and expert witness services for the United States must be "compensated in amounts that are reasonable, not contingent upon the outcome of litigation or other proceedings, and established according to criteria set in advance of performance of the services." Consequently, beginning May 16, 2007, agencies are prohibited from entering into contingency fee agreements for legal or expert witness services unless the Attorney General has determined the agency must enter into the agreement by law. A "contingency fee agreement" is defined as "a contract or other agreement to provide services under which the amount or the payment of the fee for the services is contingent in whole or in part on the outcome of the matter for which the services were obtained." The prohibition does not apply to "qualified tax collection contracts," as defined in 26 USC 6306, or contracts described in 31 USC 3711 (Collection and compromise) or 3718 (Contracts for collection services).

Major Contract Awards

SAIC - $6.2 Billion. Science Applications International Corp., Fairfield, NJ, won a maximum $6,200,000,000 fixed price with economic price adjustment contract for privatization of chemicals and packaged petroleum, oils and lubricants (POL). SAIC will provide services previously supplied by the Defense Logistics Agency for the comprehensive management of chemicals and POL. Using services are Army, Navy, Air Force, Marine Corps, and Federal civilian agencies. This is an indefinite quantity contract with a five-year base period and one 5-year option periods. Date of performance completion is May 1, 2012. Contracting activity is Defense Supply Center Richmond, Richmond, VA.

Haas TCM - $2 Billion. Haas TCM, Inc., West Chester, PA, is being awarded a maximum $2,000,000,000 fixed price with economic price adjustment for the management of compressed gases and cylinders. Using services are Army, Navy, Air Force, Marine Corps, and Federal civilian agencies. This is an indefinite quantity contract with a five-year base period and one 5-yr option periods. Date of performance completion is April 29, 2012. Contracting activity is Defense Supply Center Richmond, Richmond, VA.

Applied Research - $928 Million. Applied Research Laboratories, University of Texas at Austin, Austin, TX, is being awarded a $928,325,956 cost-plus-fixed fee, indefinite-delivery/indefinite-quantity order type modification to previously awarded contract (N00024-07-D-6200) for approximately 45,653 staff months of research and development and specialized engineering support. ARL:UT, as a Navy University Affiliated Research Center, will provide research and development, test and evaluation and specialized engineering capabilities. Work is expected to be completed by March 2012. The Naval Sea Systems Command, Washington, D.C., is the contracting activity.

Multiple Contractors - $750 Million. The General Services Administration (GSA) awarded contracts totaling $750 million for the provision of satellite communications services through the SATCOM-II program. The contracts are five-year, indefinite delivery, indefinite quantity contracts. They will replace the existing GSA Satellite Services program. Large business awardees are Americom Government Services, Inc., Arrowhead Global Solutions, Inc., ARTEL, Inc., AT& T Corp., DRS Technical Services, EDS Corp., Global Communications Solutions, Inc., Hughes Network Systems, LLC, Intelsat General Corporation, Mackay Communications, Inc., Segovia, Inc., Stratos Mobile Network, Inc., Telecommunications Systems, Inc., Telenor Satellite Services, and ViaSat, Inc. Small businesses are CVG, Inc., DasNet Corporation, E& E Enterprises Global, Knight Sky Consulting and Associates, LLC, New Orleans Teleport, Inc., Psi Systems, Inc., RiteNet Corporation, Satellite Communication Systems, Inc., and Skjei Telecom, Inc. The network begins with a compact satellite station that fits in a car trunk but provides all computer, e-mail and broadband Internet capability normally found only in the office. SATCOM-II's broadband access also makes possible broadcast services as well as distance learning for federal customers in areas throughout the world that don't have a normal communications network, because it enables audio and video transmission of educational material.

Force Protection Industries - $481 Million. Force Protection Industries, Inc., Ladson, SC, is being awarded $481,414,500 for firm-fixed-priced delivery order under a previously awarded contract for additional Mine Resistant Ambush Protected (MRAP) Low Rate Initial Production (LRIP) vehicles. The Government shall purchase 300 Category I Vehicles and 700 Category II Vehicles, for a total of 1,000 vehicles. Work is expected to be completed by May 2008. This contract was competitively procured. The Marine Corps Systems Command, Quantico, VA, is the contracting activity.

Jacobs Technology - $480 Million. Jacobs Technology Inc., Tullahoma, TN, is being awarded a $480,000,000 indefinite-delivery/indefinite-quantity contract to procure engineering and technical advisory and assistance services for the Air Force's Electronic Systems Center for the next three years. These services include but are not limited to providing a broad range of engineering acquisition support such as engineering services, engineering support, technical support, provisioning and logistics support, modeling and simulation, configuration, and data management, architectural support, text and evaluation, security engineering and certification, capability based planning , commercial off-the-shelf integration, support, integration master plans, integration scheduling, and technical reviews in support of various research, development and production activities. This work will be complete May 2010. Headquarters Electronic Systems Center, Hanscom Air Force Base, MA, is the contracting activity.

International Oil Trading - $457 Million. International Oil Trading Co., Boca Raton, FL, is being awarded a maximum $456,802,652.00 fixed price with economic price adjustment contract for aviation turbine fuel, diesel fuel, and motor gasoline. Using service is Defense Energy Support Center (DESC). Date of performance completion is April 30, 2008. Contracting activity is DESC, Fort Belvoir, VA.

Lockheed Martin - $447 Million. The U.S. Army Corps of Engineers issued a Letter of Obligation to the Government's Most Efficient Organization (MEO) to provide Information Management and Information Technology (IM/IT) services. Lockheed Martin, Bethesda, MD, will partner with the Government's Most Efficient Organization (MEO) to provide information management and information technology (IM/IT) services to the U.S. Army Corps of Engineers. The agreement is valued at approximately $447 million over the next five years. The MEO, supported by Lockheed Martin, will provide Direct IM/IT services and contractor support at 55 major locations throughout the Continental United States and the Pacific Ocean Division Office, including the Alaska and Honolulu Districts. The MEO won the public-private competition under the Office of Management and Budget Circular A-76. The Letter of Obligation calls for support to the Corps' civil works, military construction and research and development missions, providing infrastructure systems management, records management and document management, communications, desktop support, service desk, strategic planning, testing and solutions, information security, visual information, and printing and publications.

Harris Corp. - $422 Million. Harris Corp., RF Communications Division, Rochester, NY, is being awarded a $422,000,000 not to exceed ceiling, indefinite delivery/indefinite quantity five year contract (with an optional five year ordering period) for the procurement of Improved Special Operation Forces High-Frequency Multi-Band Radio System in support of the Special Operations Acquisition and Logistics, Intelligence and Information Systems, Program Management of Command, Control and Communications Office.

Sikorsky Aircraft - $394 Million. Sikorsky Aircraft, Stratford, CT, is being awarded a $73,705,470 firm-fixed-price, indefinite-delivery/ indefinite-quantity long-term contract for repair, overhaul, and modification of various configurations for the main rotor head, sleeve and spindle assemblies, main gearbox assemblies, free wheel units, as well as other components for the CH-53E, MH-53E and CH-53D helicopters. This contract contains one five-year base period and four one-year option periods, which if exercised, bring the total estimated value of the contract to $394,212,081. Work is expected to be completed by September 2007. The Naval Inventory Control Point is the contracting activity.

Lockheed Martin - $380 Million. The U.S. Army awarded Lockheed Martin, Bethesda, MD, a performance based logistics (PBL) contract, with a potential value of $380 million over four years, to support the Target Acquisition Designation Sight/Pilot Night Vision Sensor (TADS/PNVS™) and Modernized TADS/PNVS (M-TADS/PNVS) systems on the AH-64 Apache helicopter. The contract provides complete post-production supply chain management, including spares planning, procurement, repairs, maintenance, modifications and inventory management of fielded systems. Support under this four-year contract will continue through 2010. The first year's contract value is expected to be approximately $123 million.

Northrop Grumman - $371 Million. Northrop Grumman Systems Corp., Integrated Systems Air Combat Systems, San Diego, CA, is being awarded a $371,376,333 fixed-price-incentive / firm-target contract modification to provide for 5 Global Hawk Air Vehicles, 3 Mission Control Elements, 3 Launch and Recovery Elements, along with associated equipment. This work will be complete March 2010. Headquarters Aeronautical Systems Center, Wright-Patterson Air Force Base, OH, is the contracting activity.

General Dynamics - $227 Million. The U.S. Department of Homeland Security (DHS) awarded General Dynamics, Falls Church, VA, a task order to provide Technology Operations and Maintenance Infrastructure Support (TOMIS) services for the U. S. Citizenship and Immigration Services (USCIS). The initial award is valued at approximately $24 million; the task order has a total potential value of approximately $227 million over a 77-month period if all options are exercised. General Dynamics will support the USCIS information technology (IT) infrastructure by providing TOMIS services to approximately 16,000 Federal and contractor employees at more than 280 U.S. Citizenship and Immigration Services (USCIS) locations nationally through the implementation of an IT Infrastructure Library (ITIL) set of best practices. These services include program management, service desk operations, hardware maintenance, infrastructure operations server and PC management, mainframe computer operations and problem management.

Northrup Grumman/MPRI/Blackwater - $200 Million. The U.S. Department of State has selected Northrop Grumman, Los Angeles, CA, MPRI, Alexandria, VA, and Blackwater USA, Moyock, NC, for its Global Peace Operations Initiative (GPOI). The companies will provide training to militaries and peacekeeping forces worldwide. The GPOI contracts have a potential value of $200 million, collectively, over five years. The Department of State created the GPOI to build worldwide capacity to provide well- trained troops for international peacekeeping. The GPOI incorporates lessons learned and peacekeeping successes of the African Contingency Operations Training Assistance (ACOTA) program, under which Northrop Grumman has provided peacekeeping training to 13 African nations since the 1990s.

Raytheon - $184 Million. Raytheon Company, Waltham, MA, finalized a $184 million U.S. Navy contract for radar equipment for the Royal Australian Navy's Air Warfare Destroyer (AWD) and the Spanish Navy's F-105 Frigate. Under the Foreign Military Sales contract, Raytheon IDS will manufacture, integrate and test AN/SPY-1 D(V) system transmitters and MK99 Fire Control Systems for the AWD and F-105 programs. The so-called "definitized "contract reflects the fully negotiated firm fixed price and includes an increase in funding over the original $72 million contract awarded June 2006.

Raytheon - $144 Million. Raytheon Company, Waltham, MA, won a $144 million contract modification by the U.S. Army Aviation and Missile Command to provide engineering services for the Patriot Air and Missile Defense program. This award represents the third of four annual options to the base contract awarded in fiscal year 2004. The contract embodies the U.S. Army's Air and Missile Defense visionary commitment for a cost-effective approach to systems enhancements and capabilities. Raytheon Integrated Defense Systems (IDS), prime contractor for Patriot, manages the contract.

Raytheon Missile Systems - $141 Million. Raytheon Missile Systems of Tucson, AZ, is being awarded a sole source $140,696,593 cost contract for long lead material required for the manufacture and delivery of thirty-six Standard Missile-3 Block IA missiles to meet U.S. and Foreign Military Sales requirements in support of the Aegis Ballistic Missile Defense System. Work is expected to be complete by May 2008. The Naval Sea Systems Command, Washington, D.C. is the contracting activity.

Lockheed Martin - $125 Million. Lockheed Martin Corp., Bethesda, MD, was awarded a $124,981,841 modification to a firm-fixed-price contract for the guided multiple launch rocket system; dual purpose improved conventional munitions, and unitary GMLRS rockets. Work is expected to be completed by Nov. 30, 2008. The U.S. Army Aviation and Missile Command, Redstone Arsenal, AL, is the contracting activity.

Osborne Construction - $118 Million. Osborne Construction Co., Kirkland, WA, was awarded an $117,508,318 firm-fixed-price contract for design and construction of family housing replacements. Work is expected to be completed by Dec. 31, 2009. The U.S. Army Engineer District, Elmendorf, AK, is the contracting activity.

Sabre Systems - $117 Million. Sabre Systems, Inc., Warminster, PA, was awarded a $117,193,273 cost-plus-fixed-fee modification to their previously awarded indefinite-delivery/indefinite-quantity (IDIQ) for RDT & E Technical and Scientific Support of Sensor Systems for AIR 4.5 Avionics. Sabre is one of 5 primes on this multiple award contract to provide for the research, development, integration, analysis, assessment and test and evaluation of avionics and sensor systems equipment.