March 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

Pelosi Calls for Congressional Review of Air Force Contract
House Speaker Nancy Pelosi, D-Cal., called on the Air Force to explain its decision to award a $40 billion contract to a team led by the European Aeronautic Defense and Space Co. (EADS), the parent company of the French aircraft manufacturer Airbus. The contract award for aerial refueling tankers drew immediate criticism from several observers concerned that American jobs would be lost as a result of the deal.

"Given the ramifications of this decision for the United States, the Air Force must explain to Congress how it meets the long-term needs of our military and the American people," Pelosi said in a March 3 statement. In calling for a congressional review of the deal, Pelosi cited concerns about national security and job losses in the United States.

The International Association of Machinists and Aerospace Workers (IAM) expressed outrage over the decision to award the contract to EADS, which will partner with Northrop Grumman on the project. "The decision means billions of taxpayer dollars will be used to create and sustain jobs in foreign countries, rather than here in the United States," said Tom Buffenbarger, the union's president. "Giving this contract to EADS further hollows out America's industrial base and rewards a company that has already used $100 million in European government subsidies to grab nearly 50 percent of the U.S. commercial aircraft market."

Rep. John Murtha, D-Pa., added his voice to the chorus of protesters. Murtha, chairman of the House Appropriations Subcommittee on Defense, said he considers the Air Force's aerial refueling program to be a major weapons system essential to national security. "Having said that, when I look at our banks being bailed out by foreign countries, when I see a rising trade deficit with China and the rest of the world, and when my staff gives me a paper that shows our Treasury and other U.S. agencies owe China $922 billion in debt, I think it's imperative that the Air Force explain to this committee its decision to award a major U.S. weapons system to a foreign company," Murtha said in a March 5 statement.

Rep. Todd Tiahrt, R-Kansas, serves on Murtha's subcommittee. Tiahrt joined the entire Kansas congressional delegation in calling on the Defense Department to suspend the contract until Congress can review the matter. "During a time of economic uncertainty, it is baffling why the Department would decide to send at least 19,000 jobs overseas," the delegation wrote in a March 4 letter to Defense Secretary Robert Gates. "This proposal benefits European aerospace workers at the expense of American national and economic security." Had the contract been awarded to Boeing rather than EADS, Kansas would have been among the states where the tankers would have been built. Government Contract Reports, No. 1949, March 12, 2008.

Boeing Protests Aerial Tankers Contract
Boeing has filed a formal protest over the decision by the Air Force to award a team from Northrop Grumman and the European Aeronautic Defense and Space Company (EADS) a $35 billion contract for new aerial refueling tankers. EADS is the parent company of the French aircraft manufacturer Airbus. Citing irregularities with the competition process and the evaluation of bids, Boeing asked the Government Accountability Office to review the decision.

"Our analysis of the data presented by the Air Force shows that this competition was seriously flawed and resulted in the selection of the wrong airplane," said Mark McGraw, a Boeing vice president and program manager. "It is clear that the original mission for these tankers --that is, a medium-sized tanker where cargo and passenger transport was a secondary consideration --became lost in the process, and the Air Force ended up with an oversized tanker," McGraw charged.

Boeing claims the Air Force failed to properly evaluate the company's proposal. The company further claims that frequent and unstated changes by the Air Force during the competition process resulted in the selection of a very different aircraft than originally sought. Other Boeing claims involve the improper treatment by the Air Force of the company's cost/price data and failure to recognize the company's past experience in producing tankers.

When it was announced, the Air Force's decision drew immediate criticism from several observers concerned that national security could be compromised and American jobs would be lost as a result of the deal. House Speaker Nancy Pelosi, D-Cal., and several other lawmakers have urged congressional review of the Air Force's decision.

Northrop Grumman defended the deal, saying the selection process was "fair, open and fully transparent." Paul Meyer, a Northrop Grumman vice president, said in a March 10 statement, "According to the Air Force, Northrop Grumman's KC-45A was selected because it is more advantageous to the government in the key areas of Mission Capability, Past Performance, Cost/Price, and Integrated Fleet Aerial Refueling Assessment. ...We are under contract and moving out to get badly needed new tankers into the Air Force fleet as soon as possible."

The Air Force weighed in with its own statement on March 12, saying the bidding process was "sound and thorough." "The proposal from the winning offeror is the one Air Force officials believe will provide the best value to the American taxpayer and to the warfighter," the statement said.

Boeing filed its complaint with the GAO on March 11. The GAO is required under law to issue a decision within 100 days of the filing date, which will be June 19. The agency will determine whether the Air Force complied with the statutes and regulations controlling government procurement. Government Contracts Reports, No. 1950, Mach 19, 2008.

Legal News

Diminution in Value Damages Realized upon Sale of Nuclear Reactor
A contractor power company was entitled to $40.03 million in damages for the diminution in value of its nuclear reactor, according to the Court of Federal Claims, because this sum represented the present value of the bargained-for amount to account for spent nuclear fuel storage costs caused by the government's breach of the standard SNF disposal contract. The contractor sought damages measured by diminution in the value of a reactor it sold as reflected in three aspects of the sale: the addition to a decommissioning fund to cover on-site storage of SNF that the government failed to dispose of as required under the standard contract, a reduction in the purchase price for the projected capital cost of installing additional storage racks in the reactor's spent fuel pool, and a price reduction for the added risk of operating the reactor absent the government's performance.

After concluding the damages sought were foreseeable, caused by the government's breach rather than the industry's deregulation and particular aspects of the sale, and were actual rather than speculative, the court determined the amount of diminished value the contractor proved with reasonable certainty. With respect to the first element, the $466 million decommissioning fund included both SNF disposal and greenfielding costs. Applying the buyer's cost-escalation and growth-discounting factors to its value of $50 million for SNF storage costs resulted in a present value as of the sale date of $40.03 million for SNF storage costs. This amount represented the best evidence of what the buyer bargained for to account for SNF storage costs and corresponded to subsequent damage calculations. However, the contractor was not entitled to additional diminished-value damages, because it failed to establish the projected costs of additional fuel racks or risks associated with long-term SNF storage further diminished the reactor's sale price.

The court also rejected the government's contention that, to the extent the contractor was awarded any damages for diminution in the reactor's value, the government was entitled to a corresponding offset against the buyer with respect to the damages the buyer sought in its separate claim. According to the government, a diminution in damages award represented a benefit to the buyer because it already had recovered for the government's breach by paying less for the reactor and receiving a larger decommissioning fund. However, offsets, or setoffs, are typically used to reconcile competing claims between the same parties. Thus, the offset would be properly addressed in an action brought by the buyer to recover its mitigation costs, not in the action brought by the contractor for diminution in value damages as of the date of the sale. Boston Edison Co. v. U.S., FedCl, 52 CCF ¶78,889.

Government Liable for Cleanup Costs Long After Performance
Contractors were entitled to reimbursement from the government for environmental cleanup costs incurred after fuel contracts expired, according to the Court of Federal Claims, because the costs were charges covered under the contracts and the contracts did not limit recovery to costs incurred during contract performance. Nearly 50 years after performance ended, several contractors that produced aviation gasoline during World War II were held liable under the Comprehensive Environmental Response, Compensation and Liability Act for the costs to clean up waste produced during production of the "avgas." The contractors filed suit for reimbursement and moved for partial summary judgment on the government's liability for the cleanup expense. The government moved to dismiss, arguing the claims sought indemnification but the contracts did not contain an indemnification clause. However, the contracts contained language in the "Taxes" clause that required the government to pay for new or additional charges, as mandated by federal law, that were incurred as a result of the production and distribution of the avgas. The government contended the "Taxes" clause was expressly limited to taxes, fees and charges incurred during contract performance and CERCLA liability did not fit into those cost categories.

However, the word "charges" in the Taxes clause encompassed costs and expenses beyond tax obligations. Also, while not contemplated by the parties at the time they executed the contracts, CERCLA liability was clearly a new charge that was contemplated by the parties under the language of the contracts. The government further argued the additional charges had to have been imposed during contract performance and the contractors did not incur the cleanup costs "by reason of "their performance. According to the government, nothing in the contracts indicated the obligations extended into the "indefinite future." However, looking at the plain and ordinary meaning of the Taxes clause language, the contract did not distinguish between new costs imposed during performance and additional charges imposed after production of the avgas ended, a limitation the government could have required. Moreover, because the only alternative to dumping waste was a reduction of avgas production, it was clear the dumping and subsequent cleanup occurred "by reason of" the production of avgas. Thus, the cleanup costs were "properly seen as part of the war effort for which the American public as a whole should pay." Shell Oil Co., et al. v. U.S., FedCl, 52 CCF ¶78,888.

Performance of Delivery Orders Did Not Waive Right to Contest
The Armed Services Board of Contract Appeals denied cross-motions for summary judgment on whether e-mailed delivery orders amounted to a constructive change for which the contractor was entitled to an equitable adjustment because there were material issues of fact as to whether the contractor waived its right to enforce contract requirements regarding issuance of delivery orders. The contractor sought an equitable adjustment for costs incurred in performing certain delivery orders under an indefinite delivery, indefinite quantity contract to supply digital modular radios. The contract's Ordering clause provided that, if mailed, delivery orders were considered "issued" when deposited in the mail. The clause also provided orders could by issued orally, by facsimile, or by electronic commerce methods if authorized in the schedule, but the contract schedule did not authorize alternate methods. Seeking an increase in the contract price, the contractor asserted the disputed delivery orders were invalid because they were transmitted as PDF e-mail attachments and the government's insistence on performance of the invalid orders constituted a constructive change. The government countered the contractor waived the right to contest the validity of the delivery orders because it performed them and accepted other e-mailed delivery orders without protest.

The parties did not dispute the issuance of a delivery order is comparable to the exercise of an option. Precedent established the government's failure to exercise an option in strict compliance with its terms, while requiring the contractor to perform, is a constructive change absent waiver or estoppel (see, e.g., 80-2 BCA ¶14,728). The contract clearly did not authorize issuance of delivery orders via e-mail. As to waiver, the contractor's performance of the disputed delivery orders was not dispositive because the contract's Disputes clause required continued performance, and the contractor was justified in interpreting the contracting officer's letter requesting reasonable assurances as a demand for performance. There also was no support for the government's alternative contention the CO's letter constituted an unauthorized unilateral order issued after the contract period expired. However, the record presented material issues of fact as to whether certain delivery orders were the product of negotiations that resulted in bilateral modifications, whether the contractor was estopped by accepting certain e-mailed delivery orders, and whether the government e-mailed the disputed orders in reliance on the contractor's prior acceptance. General Dynamics C4 Systems, Inc., ASBCA, 08-1 BCA ¶33,779.

Regulatory News

FAR Councils Issue FAC 2005-24
The Civilian Agency Acquisition and Defense Acquisition Regulations Councils have published Federal Acquisition Circular 2005-24. The Circular contains one interim and five final rules amending the Federal Acquisition Regulation. In order of appearance, the rules address: Item I, Contractor Personnel in a Designated Operational Area or Supporting a Diplomatic or Consular Mission (FAR Case 2005-011); Item II, Numbered Notes for Synopses (FAR Case 2006-016); Item III, Trade Agreements --New Thresholds (FAR Case 2007-016, Interim); Item IV, New Designated Countries --Dominican Republic, Bulgaria, and Romania (FAR Case 2006-028); Item V, FAR Part 30 --CAS Administration (FAR Case 2005-027); and Item VI, Common Security Configurations (FAR Case 2007-004). See the various rules for effective dates and comment period. A complete list of all FAR sections impacted by this FAC appears in the table below. For the text of FAC 2005-24, see ¶70,002.97.

A FAC 2005-24 final rule (FAR Case 2005-011) amends the FAR to address issues involving contractor personnel who are not authorized to accompany the Armed Forces but provide support to the mission of the United States in a designated operational area or support a diplomatic or consular mission outside the U.S. The rule clarifies that contractor personnel are only authorized to use deadly force in self-defense or in the performance of security functions, when use of such force reasonably appears necessary to execute their security mission. The purpose and effect of the rule is to relieve the perceived burden on contractors operating without consistent guidance or a standardized clause in a contingency operation or otherwise risky environment. Accordingly, the rule adds a new FAR Subpart 25.3, consisting of FAR 25.301-1 through FAR 25.301-4, and a new contract clause at FAR 52.225-19. The rule makes corresponding changes to the definitions at FAR 2.101, and the provisions at FAR 7.104, FAR 7.105, FAR 12.301, FAR 25.000, and FAR 25.002. The rule goes into effect March 31, 2008.

A final rule (FAR Case 2007-004) amends the FAR to require agencies to include common security configurations in new information technology acquisitions, as appropriate. Common security configurations provide a baseline of security, reduce risk from security threats and vulnerabilities, and save time and resources. This allows agencies to improve system performance, decrease operating costs, and ensure public confidence in the confidentiality, integrity, and availability of government information. This final rule, which amends FAR 39.101, requires contracting officers to consult with the requiring official to ensure the proper standards are incorporated in their requirements. The effective date for this rule is March 31, 2008.

The final rule associated with FAR Case 2006-016 amends the FAR to update and clarify policy for synopses of proposed contract actions and to delete all references to Numbered Notes in the FAR and the Federal Business Opportunities (FedBizOpps) electronic publication. The prescriptions for Numbered Notes were deleted from the FAR in a former FAR case and transitioned from the Commerce Business Daily to FedBizOpps actions (see FAC 97-26). This transition resulted in other synopses-related changes that were not captured in the associated FAR language revision. Additionally, the transition to the electronic FedBizOpps publication for solicitation and other announcements rendered these Notes obsolete or outdated. Therefore, the rule amends the following provisions: FAR 5.203, FAR 5.205, FAR 5.207, FAR 6.302-1, FAR 10.002, FAR 12.603, and FAR 25.408. This final rule (see ¶70,006.206 for proposed rule) carries a March 31, 2008, effective date.

A final rule (FAR Case 2005-027) amending the FAR implements revisions to the regulations related to the administration of the Cost Accounting Standards. Among the changes, the final rule streamlines the process for submitting, negotiating, and resolving cost impacts resulting from a change in cost accounting practice or noncompliance with stated practices. Accordingly, the rule amends FAR 30.001, FAR 30.601, FAR 30.602, FAR 30.604, FAR 30.605, and the contract clause at FAR 52.230-6. For the text of the proposed rule, see ¶70,006.199. The final rule goes into effect March 31, 2008.

An interim rule (FAR Case 2007-016), effective February 28, 2008, amends the FAR to implement the increased thresholds for the World Trade Organization Government Procurement Agreement and Free Trade Agreements. Trade agreement thresholds are increased every two years according to a predetermined formula set forth in the agreements. The changes made to the FAR result from new thresholds published by the United States Trade Representative in the Federal Register (72 FR 71166 and 72 FR 73904). A table showing the new dollar thresholds appears at revised FAR 25.402. The other provisions affected by the rule are: FAR 22.1503, FAR 25.202, FAR 25.1101, and FAR 25.1102, and the contract clauses at FAR 52.212-5, FAR 52.213-4, and FAR 52.222-19. Comments on this interim rule are due by April 28, 2008.

The FAR Case 2006-028 rule finalizes without change an interim rule issued with Federal Acquisition Circular 2005-19. The interim rule amended the Federal Acquisition Regulation to implement the Dominican Republic-Central America-United States Free Trade Agreement with respect to the Dominican Republic. This trade agreement waives the applicability of the Buy American Act for some foreign supplies and construction materials from the Dominican Republic and specifies procurement procedures designed to ensure fairness in the acquisition of supplies and services. Accordingly, the interim rule added the Dominican Republic to the definition of "Free Trade Agreement country" and deleted the Dominican Republic from the definition of "Caribbean Basin country" because, in accordance with Section 201(a)(3) of PL 109-53, when the CAFTA-DR agreement enters into force with respect to a country, that country is no longer designated as a beneficiary country for purposes of the Caribbean Basin Economic Recovery Act. The Dominican Republic has the same thresholds as the other CAFTA-DR countries. The rule also added Bulgaria and Romania to the list of World Trade Organization Government Procurement Agreement countries. This final rule impacts the following provisions: FAR 22.1503, FAR 25.003, FAR 25.402, FAR 52.212-3, FAR 52.212-5, FAR 52.222-19, FAR 52.225-3 through FAR 52.225-5, FAR 52.225-11, and FAR 52.225-12. The final rule is effective February 28, 2008.

DFARS Berry Amendment Changes Finalized
A Department of Defense rule (DFARS Case 2002-D002) finalizes, with changes, an interim rule (¶70,016.171) amending the Defense Federal Acquisition Regulation Supplement to implement Section 832 of the National Defense Authorization Act for Fiscal Year 2002 (PL 107-107). Section 832 codified and made modifications to the Berry Amendment, which requires the acquisition of certain items from domestic sources. The interim rule amended DFARS 225.7001, DFARS 225.7002-1 through DFARS 225.7002-3, and DFARS 252.212-7001 to update references, clarify domestic source restrictions apply whether the items are acquired as end products or components of end products, and make clear exceptions for foods manufactured or processed in the United States apply regardless of where the foods are grown or processed. The rule also amended the contract clause at DFARS 252.225-7012 to provide the clause does not apply to end products incidentally containing minor amounts of cotton, wool, or other natural fibers. The final rule further amends DFARS 225.7002-2 and DFARS 252.225-7012 to clarify the de minimis exception for cotton, wool, and other natural fibers. For the text of this final rule, effective March 3, 2008, see ¶70,016.471.

Proposed Rule Clarifies SBA Socioeconomic Program Parity
The Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council are proposing to amend the Federal Acquisition Regulation to make certain the FAR reflects the Small Business Administration's interpretation of the Small Business Act and SBA regulations with regard to the relationship among various small business programs. Specifically, the rule's purpose is to clarify the order of precedence that applies when deciding whether to satisfy a requirement through an award to a small business, a HUBZone small business concern, a service-disabled veteran-owned small business concern, or a small business participating in the 8(a) Business Development Program. Among the changes, the proposed rule would make clear there is no order of precedence among the 8(a), HUBZone, or SDVOSB programs. However, if a requirement has been accepted by SBA under the 8(a) Program, it must remain in the 8(a) Program unless SBA agrees to its release in accordance with SBA Part 124, SBA Part 125, and SBA Part 126. In addition, for acquisitions exceeding $100,000, the contracting officer must consider making award under the 8(a), HUBZone or SDVOSB Programs (either set-aside or sole source) before proceeding with a small business set-aside. SBA also maintains progress in fulfilling the various small business goals, as well as other factors such as the results of market research and the acquisition history, should be considered in making a decision as to which program to use for the acquisition. The rule would amend FAR 13.003 and FAR 19.202, add a new provision at FAR 19.203, and modify FAR 19.501, FAR 19.502-2, FAR 19.800, FAR 19.1305, FAR 19.1405, and FAR 19.1406. Comments on the proposed rule, identified by FAR Case 2006-034, are due by May 9, 2008. For the text of the rule, see ¶70,006.220.

Major Contract Awards

Bahrain Maritime and Merhcantile International - $2.8 Billion. Bahrain Maritime and Merchantile International, Sitra, Bahrain, is being awarded a maximum $2,801,334,120 firm fixed price, prime vendor contract for supply and distribution of food and non-food products. Using services are Army, Navy, Air Force, Marine Corps and other approved customers located in the Middle East countries of Bahrain, Qatar and Saudi Arabia. This proposal was originally Web solicited with 5 responses. This contract is exercising its first term option period. Date of performance completion is March 10, 2009. The contracting activity is Defense Supply Center Philadelphia, Philadelphia, PA (SPM300-08-D-3131). Government Contracts Reports, No. 1950, Mach 19, 2008.

Northrop Grumman - $1.5 Billion. Northrop Grumman Corp., of Los Angeles, CA, is being awarded a cost plus incentive/award fee, fixed price incentive, firm fixed price contract for the newly-named KC-45. This contract is awarded after full and open bidding, and provides for the system design and development of four test aircraft for $1.5B. This contract also includes five production options targeted for 64 aircraft at $10.6B. At this time no funds have been obligated. Contracting activity is the Aeronautical Systems Center, Wright-Patterson Air Force Base, OH (contract number FA8625-08-C-6451). Government Contracts Reports, No. 1948, March, 5, 2008.

McKesson Corp. - $821.8 Million. McKesson Corp., San Francisco, CA, is being awarded a maximum $821,876,947.00 firm fixed price, prime vendor contract for pharmaceutical supplies in support of the TRICARE Mail Order Pharmacy (TMOP). Other location of performance is Arizona. Using service is Department of Defense. This proposal was originally solicited on Fed Biz Ops with 2 responses. Contract funds will not expire at the end of the current fiscal year. This contract is exercising option year five. Date of performance completion is February 28, 2009. The contracting activity is Defense Supply Center Philadelphia (DSCP), Philadelphia, PA. (SPM200-03-D-1666). Government Contracts Reports, No. 1948, March, 5, 2008.

Stewart & Stevenson Tactical Vehicle - $481.8 Million. Stewart & Stevenson Tactical Vehicle, Division of Armor Holdings, Sealy, TX, is being awarded $481,835,008 for firm-fixed-priced delivery order #0004 under previously awarded contract (M67854-07-D-5030) for the purchase of 1,024 Mine Resistant Ambush Protected Category (CAT) II vehicles with CAT I seating configuration. MRAP vehicles are required to increase the survivability and mobility of troops operating in hazardous fire areas against known threats such as small arms fire, improvised explosive devices, and other explosive threats. Work will be performed in Sealy, TX, and work is expected to be completed November 2008. Contract funds will not expire by the end of the current fiscal year. This contract was competitively procured. The Marine Corps Systems Command, Quantico, VA, is the contracting activity. Government Contracts Reports, No. 1950, Mach 19, 2008.

International Oil Trading Co. - $456.8 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. Locations of performance are Al Asad, Al Taqqadem, Trebil, and Korean Village, Iraq. Using service is Defense Energy Support Center. This proposal was originally Web-solicited and 6 responded. This contract represents a first option year. Contract funds will not expire at the end of the current fiscal year. Date of performance completion is Apr. 30, 2009. The contracting activity is Defense Energy Support Center, Fort Belvoir, VA (SP0600-07-D-0483). Government Contracts Reports, No. 1948, March, 5, 2008.

International Military and Government LLC - $410.7 Million. International Military and Government LLC (IMG), Warrenville, IL, is being awarded a $410,730,320 firm-fixed-priced delivery order #0007 under previously awarded contract (M67854-07-D-5032) for additional Mine Resistance Ambush Protected (MRAP) Low Rate Initial Production (LRIP) vehicles. This delivery order is for the purchase 743 Category I vehicles. The Category I is an MRAP vehicle used by the Marine Corps and other Joint Forces for convoy operations. MRAP vehicles are required to increase the survivability and mobility of troops operating in hazardous fire areas against known threats such as small arms fire, improvised explosive devices, and other explosive threats. Work will be performed in WestPoint, MS, and work is expected to be completed November 2008. Contract funds will not expire by the end of the current fiscal year. This contract was competitively procured. The Marine Corps Systems Command, Quantico, VA, is the contracting activity. Government Contracts Reports, No. 1950, Mach 19, 2008.

Hensel-Phelps Construction Co. - $369.6 Million. The U.S. Army Corps of Engineers, Baltimore District, has awarded a contract to Hensel-Phelps Construction Co., of Chantilly, VA, to construct the Defense Information Systems Agency headquarters at Fort Meade, MD. DISA is a combat support agency of the U.S. Department of Defense. The contract, which the Corps awarded Feb. 29, was issued in accordance with the Department of Defense Base Realignment and Closure actions that became law in Nov. 2005. It also adheres to the U.S. Army's Nov. 11, 2007, Record of Decision for Base Realignment and Closure Actions at Fort Meade, MD. The headquarters complex, to be constructed on a 95-acre site on the grounds of the 91-year-old Army installation, will consolidate the operations of approximately 4,000 DISA employees who presently work in a number of locations in Northern VA and elsewhere in the U.S. and other tenants. The single design-build contract, worth $369,605,000 will allow Hensel-Phelps to begin construction of the approximately 1,070,000-square-foot, multi-story campus facility. The construction is anticipated to take three years to complete. The U.S. Army Corps of Engineers, Baltimore District, is a full-spectrum engineer force of Soldiers and Civilians dedicated to serving the Armed Forces and the Nation with innovative and effective solutions to a broad range of engineering challenges. Government Contract Reports, No. 1949, March 12, 2008.

Sikorsky Aircraft Corp. - $368.3 Million. Sikorsky Aircraft Corp., Stratford, CT, was awarded on March 6, 2008, a $368,385,849 firm-fixed price contract for six UH-60M and twenty HH-60M Black Hawk helicopters and post DD250 Installation of auxiliary power unit kits. Work will be performed in Stratford, CT, and is expected to be completed by Dec. 31, 2012. Contract funds will not expire at the end of the current fiscal year. There was one bid solicited on Oct. 20, 2005, and one bid was received. The U.S. Army Aviation & Missile Command, Redstone Arsenal, AL, is the contracting activity W58RGZ-08-C-003. Government Contract Reports, No. 1949, March 12, 2008.

Lockheed Martin Space Systems Corp. - $350 Million. Lockheed Martin Space Systems Corp. in Sunnyvale, CA, is being awarded a firm fixed price contract for $350,000,000. This action is for the Space Based Infrared Systems (SBIRS) Geostationary Earth Orbit satellite 3 (GEO 3) and Highly Elliptical Earth Orbit payload 3 (HEO 3) long-lead effort. The intent of the letter contract is to maintain the best possible GEO 3 and HEO 3 delivery dates for replenishment of strategic missile warning satellites and payloads. In addition, the letter contract facilitates the retention of critical payload engineering skills required to start the long lend redesign activities. At this time $175,000,000 has been obligated. Space Based Infrared Systems, Los Angeles Air Force Base, CA, is the contracting activity (FA8810-08-C-0002). Government Contracts Reports, No. 1950, Mach 19, 2008.

General Dynamics - $324.9 Million. General Dynamics, Electric Boat Corp., Groton, CT, is being awarded a not-to-exceed $324,937,789 modification to previously awarded contract (N00024-03-C-2101) for long lead time material associated with the FY 09 VA, Class Submarine (SSN 784) and the FY 11 VA, Class Submarine (SSN 787). This contract provides long lead time material for steam and electric plant components; the main propulsion unit and ship service turbine generator set; components that are critical to maintaining the submarine component industrial base; and miscellaneous Hull, Mechanical and Electrical system components to support ship construction of SSN 784 and SSN 787. Work will be performed in Groton, CT/Quonset Point, RI, (7 percent); Newport News, VA, (7 percent); Sunnyvale and South El Monte, CA, (50 percent); Coatesville, York and Cheswick, PA (5 percent); Linden, Philipsburg, and Florence, NJ (5 percent); and at various sites throughout the United States (26 percent), and is expected to be completed by Mar. 2013. 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 Reports, No. 1951, March 26, 2008.

Tyson Fresh Meats - $308.6 Million. Tyson Fresh Meats, Incorporated, 800 Stevens Port Drive, Dakota Dunes, SD 57049, is being awarded an indefinite delivery, requirements type contract on Mar. 20, 2008, to provide as needed, case ready, primal and sub-primal pork products for resale to the commissary stores located in the DeCA East and West Regions, including AK, and HI. The estimated award amount is $308,640,542.70. The contract is for a two year base period with performance starting May 4, 2008 through May 3, 2010. Three one-year option periods are available. If all option periods are exercised, the contract will be completed May 3, 2013. Contract funds will not expire at the end of the current fiscal year. Sixty-five firms were solicited and five offers were received. The contracting activity is the Defense Commissary Agency, Resale Contracting Division, Produce Support Branch, 1300 E Avenue, Fort Lee, VA 23801-1800. (HDEC02-08-D-0005). Government Contracts Reports, No. 1951, March 26, 2008.

Beaufort-Jasper Water & Sewer Authority - $251.4 Million. Beaufort-Jasper Water & Sewer Authority (BJWSA), Okatie, SC, a quasi-state organization categorized as other than small business and the regional water and wastewater utility provider in the Beaufort-Jasper County Region, is being awarded an estimated $251,486,063 utilities privatization contract for the operation and maintenance of the water and wastewater utility system of Marine and Naval activities in the Beaufort, S.C. area. The work to be performed provides for initial system modifications required to bring the systems up to industry standards, operation, maintenance and repair of the systems, as well as renewal and replacement of the system's components over the term of the contract. 10 U.S.C. 2688 authorized the privatization of Government utility systems if certain criteria were met. The water and wastewater utility systems will be conveyed to BJWSA through a quit claim deed. The contractual instrument is a fixed price contract with prospective price redetermination with a term of 50 years. Work will be performed in the Beaufort, SC area. Contract funds will not expire at the end of the current fiscal year. This contract was competitively procured via the Naval Facilities Engineering Command e-solicitation website with five proposals received. BJWSA is the current provider of water for the Beaufort facilities. The Naval Facilities Engineering Command Southeast, Jacksonville, FL, is the contracting activity (N69450-08-C-0070). Government Contracts Reports, No. 1948, March, 5, 2008.