March 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.

Legislative and Regulatory Activity

Executive Order Subjects Guidance Documents to OMB Oversight
President George W. Bush has issued E.O. 13422, entitled "Further Amendment to Executive Order 12866 on Regulatory Planning and Review." E.O. 12866 announced a set of guiding principles for agencies to follow when developing regulatory programs. The order also mandated coordinated review of agency rulemaking by the Office of Management and Budget and required agencies to prepare a regulatory agenda and annual regulatory plans. E.O. 13422 revises the guiding principle in Section 1(b)(1) of E.O. 12866 to require agencies to "[i]dentify in writing the specific market failure (such as externalities, market power, lack of information) or other specific problem that it intends to address (including, where applicable, the failures of public institutions) that warrant new agency action, as well as assess the significance of that problem, to enable assessment of whether any new regulation is warranted." E.O. 13422 also brings "guidance documents" within the scope of E.O. 12866 and makes several process changes. The new executive order defines "guidance document" as "an agency statement of general applicability and future effect, other than a regulatory action, that sets forth a policy on a statutory, regulatory, or technical issue or an interpretation of a statutory or regulatory issue," and makes guidance documents subject to some of E.O. 12866's development principals and OMB oversight. The new executive order also defines "significant guidance documents" as guidance documents that are anticipated to: lead to an annual effect of $100 million or more or adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety; create a serious inconsistency or otherwise interfere with an action taken or planned by another agency; materially alter the budgetary impact of entitlements, grants, user fees, or loan programs or the rights or obligations of recipients thereof; or raise novel legal or policy issues arising out of legal mandates or the President's priorities. Guidance documents falling within this definition are subject to advance notice to and review by OMB's Office of Information and Regulatory Affairs.

DoD Suspends SDB Price Evaluation Preference
The Department of Defense has suspended the use of a 10-percent price evaluation adjustment for small disadvantaged businesses because it exceeded its 5-percent goal for contract awards to SDBs in fiscal year 2006. The suspension will remain in effect for one year and then be reevaluated based on the level of contract awards to SDBs in fiscal year 2007. DoD had previously granted SDBs a 10-percent price preference in certain acquisitions pursuant to the authority granted in 10 USC 2323(e), as implemented by FAR Subpart 19.11. However, Section 801 of the Strom Thurmond National Defense Authorization Act for Fiscal Year 1999 amended 10 USC 2323(e)(3) to prohibit DoD from granting the price preference for a 1-year period following a fiscal year in which DoD achieved the 5-percent goal for contract awards established in 10 USC 2323(a). The suspension applies to all solicitations issued from March 10, 2007, to March 9, 2008. For the text of the notice, see ¶70,245.59.

Executive Order Sets Environmental, Energy and Transportation Goals
The President has issued Executive Order 13423, "Strengthening Federal Environmental, Energy, and Transportation Management," which integrates environmental and energy-efficiency goals of five prior orders and sets out implementation responsibilities. E.O. 13423 sets goals for federal agencies to improve energy efficiency, reduce greenhouse gas emissions and water consumption, increase consumption of energy from renewable sources, use sustainable environmental practices in acquisitions, reduce waste and use of toxic or hazardous chemicals, increase recycling, reduce motor vehicle fuel consumption, and apply energy-saving and environmentally sound practices in using and disposing of electronic equipment. The order also requires new agency construction and major renovations to comply with the Guiding Principles for Federal Leadership in High Performance and Sustainable Buildings and 15 percent of existing agency building inventory to incorporate the principles by 2016. The President will designate a Federal Environmental Executive, whose office will be funded and administered in the Environmental Protection Agency and will report to the President on implementation of the order. New duties of agency heads include designating a senior civilian officer responsible for implementing the order. In addition, the Director of the Office of Management and Budget, in consultation with the Chairman of the Council on Environmental Quality and a steering committee, must periodically evaluate agency implementation.

Labor Department Establishes Chief Acquisition Officer
The Department of Labor has issued Secretary's Order 2-2007 to delegate authorities and assign responsibilities for implementation of the Services Acquisition Reform Act of 2003 and related laws, and to formally establish the position of Chief Acquisition Officer within DOL. Section 1421 of SARA (41 USC 414) amends the Federal Procurement Policy Act to create the position of CAO. The CAO will supersede the Assistant Secretary for Administration and Management as the DOL official having principal responsibility for agency acquisition policy and activities. SARA also requires agencies to designate a Senior Procurement Executive, who must either be the CAO or report directly to the CAO, to direct the management of agency procurement. SARA further creates a CAO council, a principal interagency forum tasked with monitoring and improving the federal acquisition system. The CAO Council replaces the Federal Acquisition Council pursuant to Office of Management and Budget Memorandum M-04-13. DOL SO 2-2007 also updates the roles and responsibilities of DOL agency heads to reflect current law. DOL SO 2-2007 repeals and supersedes DOL SO 4-76.

The CAO will report to the Secretary of Labor and may receive day-to-day guidance and direction from the Deputy Secretary. The primary duty of the CAO will be acquisition management. The CAO will also have the duties specified by Section 1421 of SARA, including: advising and assisting the Secretary of Labor on business strategy and acquisition activities; promoting full and open competition and performance-based contracting; establishing clear lines of authority, responsibility, and accountability for acquisition decisions; developing and maintaining a DOL acquisition career management program to ensure maintenance of an adequate professional acquisition workforce; and serving on the Chief Acquisition Officers Council. The CAO will also be delegated with several other responsibilities, including: carrying out certain authorities and responsibilities of the Secretary of Labor under specific laws and related regulations, executive orders, and OMB circulars and memoranda; prescribing regulations, policies and procedures regarding solicitation, award, and administration of DOL acquisitions of goods and services; assisting and coordinating with other agencies and DOL officials to ensure acquisitions and related procedures comply with applicable laws, regulations, executive orders, and OMB guidance; establishing and overseeing an acquisition advisory board; and maintaining and publishing a list of DOL contracting and grant officers that identifies the limits on their authority.

DOL SO 2-2007 also delineates the responsibilities of several other DOL officials, including the Director of the Office of Small Business Programs, the Director of the Center for Faith-Based and Community Initiatives, the Assistant Secretary for the Office of Disability Employment Policy, the Solicitor of Labor, the Chief Information Officer, the Assistant Secretary for Administration and Management, the Chief Financial Officer, and DOL Agency Heads. For the text of DOL SO 2-2007, effective February 5, 2007, see ¶70,375.10.

BIS Imposes New Export/Reexport Controls on North Korea
In accordance with recent United Nations Security Council resolutions and the foreign policy interests of the United States, the Bureau of Industry and Security has issued a final rule amending the Export Administration Regulations to impose license requirements for the export and reexport to North Korea of virtually all items subject to the EAR, except food and medicines not listed on the Commerce Control List. On October 14, 2006, the UNSC adopted Resolution 1718, which obligates UN member states to prevent the direct or indirect supply, sale, or transfer to North Korea of: certain arms and related materiel; items that could contribute to North Korea's nuclear-related, ballistic missile-related, and other weapons of mass destruction-related programs; and luxury goods. BIS is therefore amending the EAR to impose new export and reexport controls on North Korea consistent with UNSCR 1718 and a presidential directive issued on January 16, 2007 (72 FR 1899) imposing the sanctions described in Section 102(b) of the Arms Export Control Act, as amended (22 USC 2799aa-1). For the text of the final rule, effective January 26, 2007, see ¶72,750.110.

Pursuant to new EAR 746.4(c), BIS will review license applications for the export or reexport of luxury goods to North Korea under a general policy of denial. BIS will generally deny applications to export and reexport luxury goods such as luxury automobiles, yachts, gems, jewelry, other fashion accessories, cosmetics, perfumes, furs, designer clothing, luxury watches, rugs and tapestries, electronic entertainment software and equipment, recreational sports equipment, tobacco, wine and other alcoholic beverages, musical instruments, art, and antiques and collectible items including but not limited to rare coins and stamps. A new Supplement No. 1 to EAR Part 746 will provide further detail regarding the illustrative list of luxury goods set forth in EAR 746.4(c). BIS will continue to generally deny applications to export and reexport arms and related materiel controlled by the CCL and items controlled under the multilateral export control regimes, including items specified in UN documents S/2006/814, S/2006/815 and S/2006/853. Even though a license is already required to export and reexport to North Korea all items controlled on the CCL for nuclear nonproliferation and missile technology reasons, BIS will also require a license for these items, except for items classified under Export Control Classification Number 7A103. These licenses will be reviewed under a general policy of denial. Applications to export or reexport other items on the CCL will be reviewed in accordance with the licensing policy set forth in EAR 742.19.

BIS will generally approve applications to export or reexport non-food, non-medical humanitarian items intended for the benefit of the North Korean people, such as blankets, basic footwear, heating oil, and other items meeting subsistence needs. BIS will also generally approve items in support of UN humanitarian efforts as well as agricultural commodities and medical devices not deemed to be luxury goods. Applications to export or reexport computer laptops and luxury automobiles will be approved if the items are being transferred to organizations legitimately involved in humanitarian relief efforts, other internationally sanctioned efforts, or efforts in the interests of the U.S. government. BIS will also generally approve applications for agricultural commodities (as defined in section 102 of the Agricultural Trade Act of 1978) and medical devices (as defined in section 201 of the Federal Food, Drug, and Cosmetic Act) that are not deemed to be luxury goods. BIS will review on a case-by-case basis applications to export and reexport all other items subject to the EAR.

Items not requiring a license for export or reexport to North Korea prior to this final rule that are on dock for loading, on lighter, or laden aboard a carrier to a port of export on January 26, 2007, may be exported or reexported without being subject to this rule if the items are exported or reexported before midnight as of February 9, 2007. Exporters holding valid licenses for export or reexport to North Korea prior to January 26, 2007, are authorized to continue shipments pursuant to the terms and conditions of their licenses.

GSA Authorizes Use of FSS Program During State/Local Disasters
The General Services Administration has issued an interim rule amending the General Services Administration Acquisition Regulation to allow state and local governments to take advantage of the GSA Federal Supply Schedule program in the event of major disasters, acts of terrorism, or nuclear, biological, chemical, or radiological attacks. The FSS program allows the government to acquire commonly used commercial supplies and services at prices associated with volume buying through the use of streamlined competitions among schedule contractors. The rule implements Section 833 of the John Warner National Defense Authorization Act for Fiscal Year 2007 (PL 109-364), which amends 40 USC 502 to authorize the Administrator of General Services to provide GSA schedules to state and local governments for the purchase of FSS products and services used to facilitate disaster recovery efforts. For the text of the rule, see ¶70,030.100.

FMR Amendment Clarifies Building Accessibility Standards
The General Services Administration has issued a final rule making technical corrections to the Federal Management Regulation. The final rule (¶72,500.35) extending the implementation date of the Real Property Policies section entitled "What standards must facilities subject to the Architectural Barriers Act meet?" inadvertently deleted reference to facilities other than those that were federally owned or leased. The technical amendment corrects the oversight by adding language to FMR 102-76.5 making the accessibility standards in FMR 102-76 Subpart C applicable to federal agencies and other entities whose facilities are subject to the Act. The amendment also deletes the phrase "Federally-owned facilities" in FMR 102-76.65(a)(1) and replaces it with the phrase "facilities subject to the [Act]." Except as expressly modified by the technical amendment, all other terms and conditions of the Architectural Barriers Act standards remain in effect. For the text of the rule, effective February 8, 2007, see ¶72,500.37.

GSA Increases Reimbursement for Privately Owned Vehicles
The General Services Administration has published a final rule amending the Federal Travel Regulation to increase the mileage reimbursement rate for use of a privately owned automobile on official travel to reflect current costs of operation as determined in cost studies conducted by GSA. GSA has taken this action in accordance with 5 USC 5704(a)(1), which prohibits GSA from exceeding the single standard mileage rate established by the IRS. The IRS has announced a new single standard mileage rate for automobiles of $0.485 per mile effective January 1, 2007. Accordingly, the mileage allowance for the cost of operating a privately owned automobile as specified in FTR 301-10.303 has been raised from $0.445 to $0.485 per mile. For the text of the final rule, effective February 1, 2007, see ¶70,030.99.

Court and Administrative Board Decisions

Illegal Kickbacks Also Violated False Claims Act
Ruling on a commission-splitting arrangement between bond brokers and a construction contractor that it previously determined violated the Anti-Kickback Act of 1986, the Court of Federal Claims held the False Claims Act was also violated because the contractor's progress payment applications and certifications were knowingly false and, as acts of fraud, the same conduct violated both statutes. The courthouse and customs house construction contracts conditioned progress payments for reimbursement of performance and payment bond premiums on the contractor furnishing evidence of full payment to the surety, and the progress payment certification form required the contractor to represent requested amounts were only for performance in accordance with the terms of the contracts. The contractor presented for payment bond premiums marked as having been paid, knowing they had not been paid. The contractor also presented applications for reimbursement of bond costs that were inflated to include a "rebate" amount the bond brokers had agreed to pay to the contractor's fifty-percent owner. The government sought summary judgment that the submission of unpaid costs that included an undisclosed "rebate" violated the False Claims Act.

The court concluded a preponderance of evidence established the contractor's progress payment applications were false and knowingly used by the contractor to obtain payment of fraudulent claims in violation of the False Claims Act. The contractor's practice of submitting unpaid premiums resulted in two district courts entering judgments of criminal conduct and major fraud against the contractor. The contractor's controller also testified statements of payment were false. In addition, the court incorporated its prior opinion holding the contractor violated the Anti-Kickback Act (49 CCF ¶78,435). Because FAR 52.203-7(a) defines a kickback as an act of fraud, the Anti-Kickback Act violations also violated the False Claims Act. An additional consequence of the contractor's fraud was the forfeiture of its claims under the Forfeiture of Fraudulent Claims Act. Morse Diesel International, Inc. v. U.S., FedCl, 51 CCF ¶78,699.

Indian Incentive Program Firms May Subcontract to Non-Indian Firms
The Armed Services Board of Contract Appeals ruled a construction contractor was entitled to an adjustment for using an American Indian subcontractor pursuant to the Indian Incentive Program clause in DFARS 252.226-7001, even though the subcontractor in turn subcontracted the work to non-Indian firms, because neither DFARS 252.226-7001 nor its governing statute require Indian subcontractors to perform the work with their own forces. The IIP is a portion of the Indian Financing Act of 1974 (25 USC 1451-1544) and allows a contractor to obtain additional compensation based on amounts paid to subcontractors that qualify as Indian organizations. 25 USC 1544 provides "a contractor ... may be allowed an additional amount of compensation equal to 5 percent of the amount paid, or to be paid, to a subcontractor or supplier, in carrying out the contract if such subcontractor or supplier is an Indian organization ...." The design and construction contract incorporated the Department of Defense regulation implementing the IIP, DFARS 252.226-7001. The contractor used an Indian subcontractor, but the Indian subcontractor subcontracted all of the work, except for home office and supervisory functions, to non-Indian subcontractors. When the contractor requested IIP funding, the contracting officer forwarded the request to the Office of Small and Disadvantaged Business Utilization in accordance with DFARS 226.103. SADBU denied the request, stating the fact the Indian subcontractor was unable to submit payrolls proving the work had been performed with its own forces meant the firm was not utilized as contemplated by the IFA. The contracting officer in turn denied IIP funding.

However, the plain language of DFARS 252.226-7001 established the contractor's entitlement to the IIP payment. DFARS 252.226-7001(b) states a contractor shall give Indian organizations "the maximum practicable opportunity to participate in the subcontracts it awards, to the fullest extent consistent with efficient performance of the contract." Neither the government nor the SADBU were able to identify any statutory or contractual provisions that would supersede this language to preclude the IIP payment. In addition, portions of the comment/response field published with the final rule (¶70,016.245) that implemented the most recent version of DFARS 252.226-7001 expressly suggested the regulation did not restrict participating Indian organizations from subcontracting work to non-Indian firms. Here, the Indian-owned firm administered the subcontracts, and supervised, inspected, and bore ultimate responsibility for the subcontracted work. The contractor was therefore entitled to an adjustment equal to five percent of the amount paid to the Indian subcontractor. C.F. Jordan, L.P., ASBCA, ¶91,914.

Override of Fee Determinations Breached Contract
The government's mandate of lower award fees breached a cost-plus-award-fee contract, according to the Court of Federal Claims, because the government failed to comply with the contractual requirement that designated a specific official to determine the award fees. The contract to manage and operate the Rocky Flats Nuclear Weapons Plant required "[t]he amount of the award fee actually to be paid to the Contractor shall be determined by the Award Fee Determination Official (Manager, or anyone acting as Manager, Albuquerque Operations)." Based on an assessment of environmental conditions at the facility, the Secretary of Energy or his headquarters staff disregarded the fee determinations of the manager and his successor and "mandated" lower award fees, which the contractor actually received.

Given the contract's specificity in designating the AFDO, the court concluded the government's contention more than one person could serve as the AFDO lacked merit, and the word "acting" did not support the government's argument the "Manager" encompassed anyone performing some of the manager's functions. In addition, the contract did not provide for concurrence by DOE's headquarters and, although the Secretary of Energy's authority over personnel decisions would have allowed him to replace the manager, it did not excuse the government from performing the terms of the contract. Moreover, because the contract required the award to be determined subjectively by the AFDO, the Secretary's mandated award could not be sustained on administrative-deference grounds. The fee determinations of the manager and his successor served as the benchmarks for measuring the contractor's damages. The Boeing Company v. U.S., FedCl, 51 CCF ¶78,695.

Reissuance of RFQ No Basis for Reimbursement of Costs
A protester was not entitled to protest costs, despite the government's corrective action, because the issue of whether a solicitation needed more specific performance requirements presented a close question. The protester alleged a request for quotations for a mobile field hospital system lacked certain critical performance information regarding functional characteristics. At a pre-hearing status conference, an attorney from the Government Accountability Office advised the government there were serious concerns about the allegations, a response to the protester's comments on the agency report was needed, and a hearing was likely. The government subsequently advised it intended to cancel, revise, and reissue the RFQ, and agreed to further define its needs and provide certain load requirements, environmental conditions, and durability requirements for the system. The protest was therefore dismissed as academic. The protester then sought a recommendation that the government reimburse its costs of filing and pursuing the protest.

The Comptroller General denied the request for costs, finding reimbursement was not appropriate because the protest was not clearly meritorious. As an initial matter, the GAO attorney advised the parties at the status conference he did not consider the protest to be clearly meritorious. A response to the protester's comments was requested and a hearing was contemplated because the merits of the parties' positions could not be determined from the existing record. The government had maintained it could not provide performance requirements because the end-user did not have them, and argued it was procuring a commercial item and the description of the agency's needs contained sufficient detail for the preparation of quotations. The protester had argued the end-user's lack of knowledge on where the system would be used did not preclude it from developing minimum performance criteria or relieve the government from providing sufficient information to compete intelligently. Since further development of the record was necessary, the protest presented a close question, and was not clearly meritorious. Alaska Structures, Inc., 22 CGEN ¶112,309.

Justification for Default Terminations Scrutinized
An appeal of the default termination of two mail delivery contracts produced mixed results because the Postal Service Board of Contract Appeals determined performance deficiencies justified one termination but not the other. With respect to one of the contracts, the contractor argued his efforts to ensure mail delivery by combining trips excused exact compliance with the contract schedule. However, the government was entitled to strict performance of its contract schedule requirements, and the contractor failed to show omitted trips and his repeated refusal to follow instructions and stop combining mail for separate trips were excusable. The contractor also contended the termination should be set aside because the government failed to follow its own instructions for progressive discipline. This argument also lacked merit because the guidelines were instructions for government officials that did not confer any procedural rights upon contractors. Moreover, the contractor had been advised of the consequences of failing to comply with contract requirements and had ample opportunity to correct his performance.

The contractor fared better with respect to the second contract. The board found late performance on certain routes was not grounds for termination because the parties recognized the contract schedule did not include sufficient time for performance but failed to establish an adjusted schedule, a government official instructed the contractor to empty an additional collection box with assurances he would not be "written up" for being late, and two late route completions were identified "for information only" and should not have been listed as chargeable irregularities. The government also failed to show combining mail from separate trips was a problem during the months leading up to the termination, and the contractor's initial refusal to pick up mail from the additional collection box had been resolved. Although the contractor' lateness and omission of trips on a few dates were technically defaults under the contract's Termination for Default clause, the relatively few deficiencies were not significant compared to the number of trips required under the contract. In addition, the contractor's failure to pay invoices under the fuel program was not a basis for termination because the government was able to withhold from the contractor's payments and the last incident of an unpaid invoice was seven months before the termination. Derrick Van Greene, PSBCA, ¶91,905.

Major Contract Awards

Vion Corp. - $700 Million. The VION Corporation, Washington, D.C., received an indefinite delivery/indefinite quantity firm-fixed price performance contract with the award of the Enterprise Storage Services (ESS) contract. The maximum ceiling amount of the contract is $700,000,000. The goal of the ESS project is to obtain a reliable, responsive, and cost effective information storage infrastructure family of "on-demand" enterprise services for the specified operating environment at DISA and/or DISA approved processing locations. The period of performance is for a five year base period with three one-year option periods. The Defense Information Technology Contracting Organization, (DITCO) Scott AFB, IL is the contracting activity. Government Contracts Report Letter No. 1894, February 7, 2007.

General Dynamics - $400 Million. General Dynamics NASSCO, a wholly-owned subsidiary of General Dynamics, Falls Church, VA, has been awarded a seven-year contract for the maintenance and emergent repair of San Diego-based LHA and LHD class amphibious assault ships. The contract includes options to be exercised by the U.S. Navy through fiscal year 2013. The value of the contract, if all options are exercised, could total approximately $400 million. Under the contract, NASSCO will perform 12 scheduled maintenance availabilities aboard USS Tarawa (LHA 1), USS Peleliu (LHA 5), USS Essex (LHD 2), USS Boxer (LHD 4), USS Bonhomme Richard (LHD 6) and the Makin Island (LHD 8), once the latter is commissioned and homeported in San Diego next year. Government Contracts Report Letter No. 1894, February 7, 2007.

Lockheed Martin - $294 Million. Lockheed Martin Missiles and Fire Control, Orlando, FL, is being awarded a $294,000,000 firm-fixed-price contract for production of the Joint Air-to-Surface Standoff Missile (JASSM). This contract allows for purchase of USG requirements and potential foreign military countries as may be identified during the life of this contract. This work will be complete March 2008. Headquarters 308th Armament Systems Wing, Eglin Air Force Base, FL, is the contracting activity. Government Contracts Report Letter No. 1894, February 7, 2007.

Northrop Grumman - $268 Million. Northrop Grumman Ship Systems, Pascagoula, MS, is being awarded a $268,099,114 cost-plus-award-fee/cost-plus-fixed-fee modification under previously awarded contract (N00024-06-C-2304) to exercise an option to complete the detail design of the DDG 1000 Zumwalt Class Destroyer. The mission of the DDG 1000 Zumwalt Class is to provide affordable and credible independent forward presence/deterrence and to operate as an integral part of the Naval, Joint, or Combined Maritime Forces. The total value of the detail design effort is $307,511,633. The Naval Sea Systems Command, Washington, D.C., is the contracting activity. Government Contracts Report Letter No. 1894, February 7, 2007.

Bath Iron Works - $257 Million. Bath Iron Works Inc., Bath, ME, is being awarded a $257,473,700 cost-plus-award-fee/cost-plus-fixed-fee modification under previously awarded contract (N00024-06-C-2303) to exercise an option to complete DDG 1000 Zumwalt Class Destroyer detail design. The mission of DDG 1000 Zumwalt Class Destroyers is to provide affordable and credible independent forward presence/deterrence and to operate as an integral part of the Naval, Joint, or Combined Maritime Forces. DDG 1000 will provide advanced land attack capability in support of the ground campaign and contribute Naval, Joint, or Combined battle-space dominance in littoral operations. The Naval Sea Systems Command, Washington, D.C., is the contracting activity. Government Contracts Report Letter No. 1894, February 7, 2007.

Raytheon Co. - $212 Million. Raytheon Company, Waltham, MA, has been awarded a $212 million contract by the Missile Defense Agency for the manufacture, delivery and integration support of one Terminal High Altitude Area Defense radar, also called the AN/TPY-2 radar. Under the terms of the contract, Raytheon Integrated Defense Systems will manufacture one AN/TPY-2 radar. The AN/TPY-2 is a high-power, transportable X-Band radar designed to detect, track and discriminate ballistic missile threats. Raytheon IDS designed and built the AN/TPY-2 radar for the Ballistic Missile Defense System and the Terminal High Altitude Area Defense weapon system. Government Contracts Report Letter No. 1896, February 21, 2007.

United Technologies - $170 Million. United Technologies, East Hartford, CT, is being awarded a maximum $169,785,585 firm fixed price contract for engine lines. Using services are Navy and Air Force. Date of performance completion is Feb. 15, 2008. Contracting activity is the Defense Supply Center Richmond, Richmond, VA. Government Contracts Report Letter No. 1896, February 21, 2007.

Lockheed Martin - $166 Million. Lockheed Martin, Bethesda, MD, has received a $166 million contract to provide 44 High Mobility Artillery Rocket Systems (HIMARS) to the U.S. Army and 16 to the U.S. Marine Corps. Work is scheduled for completion in February 2009. HIMARS can accommodate the entire family of Multiple Launch Rocket System (MLRS) munitions, including all variants of the Guided MLRS rocket and ATACMS missiles. Designed to enable troops to engage and defeat artillery, air defense concentrations, trucks, light armor and personnel carriers, as well as support troop and supply concentrations, HIMARS can move away from the area at high speed following missile launch, well before enemy forces are able to locate the launch site. Government Contracts Report Letter No. 1894, February 7, 2007.

Computer Sciences Corp. - $151 Million. Computer Sciences Corporation, El Segundo, CA, won a contract to provide systems engineering and integration support to the Department of Defense's Missile Defense Agency (MDA). CSC estimates the value of the contract, which has a one-year base period and four one-year options, to be $151 million if all options are exercised. This contract follows an agreement CSC signed with the MDA in 2002. Under the terms of the new agreement, CSC will continue to provide scientific, engineering and technical assistance for the U.S. Ballistic Missile Defense System, which is designed to intercept and destroy enemy ballistic missiles and defend the U.S., its deployed forces and its allies. Government Contracts Report Letter No. 1895, February 14, 2007.

Raytheon Co. - $144 Million. Raytheon Co., Waltham, MA, was awarded a $144,040,148 modification to a cost-plus-fixed-fee contract for FY07 PATRIOT engineering services. Work is expected to be completed by Jan. 9, 2009. The U.S. Army Aviation and Missile Command, Redstone Arsenal, AL, is the contracting activity. Government Contracts Report Letter No. 1894, February 7, 2007.

McDonnell Douglas - $137 Million. McDonnell Douglas Helicopter Co., Mesa, AZ, was awarded on Jan. 31, 2007, a $136,900,000 modification to a firm-fixed-price contract for procurement of war replacement AH-64D Apache Longbow aircraft. Work will be performed in Mesa, AZ, and is expected to be completed by April 10, 2011. Contract funds will not expire at the end of the current fiscal year. This was a sole source contract initiated on Jan. 31, 2007. The U.S. Army Aviation and Missile Command, Redstone Arsenal, AL, is the contracting activity. Government Contracts Report Letter No. 1895, February 14, 2007.

McDonnell Douglas - $114 Million. McDonnell Douglas Corp., Long Beach, CA, is being awarded a $113,700,000 cost-plus-fixed fee and firm-fixed-price contract modification. This is a contract modification to the C-17 Globemaster III Sustainment Partnership (GSP) contract to incorporate the CY07 Global Reach Improvement Program (GRIP) Follow-On Retrofit Projects. The CY07 GRIP Non-Block, Block 14-16 and Block 17 Follow-On Retrofit Projects incorporated retrofit efforts for the following projects: Block 14-16: 1) Mobility 2000 (M2K) Airline Operational Capability and Printer, 2) Secure Enroute Communications Package-Improved (SECOMP-1), 3) Communication Open Systems Architecture (COSA), 4) Weather Radar Replacement, 5) Stabilizer Struts System Redesign, Block 17: 1) Formation Flight System (FFS), 2) Required Navigational Performance-Improved (RNP-I) and High Frequency Data Link (HFDL), 3) Combat Lighting, Non-Block: 1) 400lb Troop Seats 2) Defensive System (AAR 47) (Group A Kits/Install only), 3) Extended Range/On-Board Inert Gas Generating System (ER/OBIGGS) II 4) OBIGGS II. This work will be complete July 2009. Headquarters Aeronautical Systems Center, Wright-Patterson Air Force Base, OH, is the contracting activity. Government Contracts Report Letter No. 1895, February 14, 2007.

Raytheon Co. - $101 Million. Raytheon Co., Waltham, MA, is being awarded a $101,089,119 firm-fixed-price contract for the third full rate production (FRP-3) of 376 AGM-154C Unitary Joint Stand-Off Weapon (JSOW-C), special tooling and special test equipment (ST/STE), technical and financial data, an inert unit for ordnance testing, containers for the missiles, performance characterization test, and cost reduction initiatives. Work is expected to be completed in February 2009. The Naval Air Systems Command is the contracting activity. Government Contracts Report Letter No. 1894, February 7, 2007.