Government Contracts Update May 2009

May 2009

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 william.vanhuis@wolterskluwer.com.

Hot Topic

Supreme Court Finds No Authority for Breach of Trust Claim
The United States Supreme Court ordered the dismissal of a claim involving a coal lease because none of the statutes cited by the plaintiff Indian Tribe provided a basis for a breach of trust action against the government. The plaintiff sought damages in connection with the government's approval of amendments to a 1964 coal lease affecting Indian lands. In a prior opinion, the Supreme Court reversed a decision of the Court of Appeals for the Federal Circuit that held the Indian Mineral Leasing Act of 1938 created a fiduciary duty enforceable through suits for monetary damages. After the Court of Federal Claims dismissed the complaint, the Federal Circuit reversed, finding the contractor had a cognizable money-mandating claim under Sections 635(a) and 638 of the Navajo-Hopi Rehabilitation Act of 1950 and Section 1300 of the Surface Mining Control and Reclamation Act of 1977, and the government breached its trust duties.

The Supreme Court reversed the Federal Circuit a second time and remanded with instructions to affirm the CFC's dismissal, holding neither statute provided a basis for a breach of trust suit against the government. First, the lease could not have been issued under Section 635(a) of the NHRA. That provision only authorizes lease terms of up to 25 years, and the lease term here was for an indefinite period, suggesting issuance under the IMLA. Second, the lease was not the type of "program" contemplated by Section 638 of the NHRA, so that provision did not apply. Third, Section 1300 of the SMCRA was irrelevant because it only covers leases issued after 1977, and the lease here was issued in 1964. Also, a governmental fiduciary duty could not be premised on "comprehensive control" over Indian lands, as suggested by the Federal Circuit. Since the contractor failed to identify a "specific, applicable, trust-creating statute or regulation that the [g]overnment violated," there was no basis for jurisdiction under the Indian Tucker Act (28 USC 1500). (U.S. v. Navajo Nation, US SCt, 53 CCF ¶79,086)

States Secrets Doctrine Did Not Support Dismissal
The dismissal of tort claims against a contractor was reversed and remanded by the Court of Appeals for the Ninth Circuit because the state secrets privilege did not bar the suit from proceeding. The plaintiffs, all foreign nationals, sued under the Alien Tort Statute (28 USC 1350), alleging the Central Intelligence Agency operated an "extraordinary rendition program" to gather intelligence by apprehending individuals suspected of involvement in terrorist activities and secretly transferring them to foreign countries for detention and interrogation. The defendant was a government contractor that allegedly provided flight planning and logistical support services for the aircraft and crew on all of the flights transporting the plaintiffs among the various locations where they were allegedly detained and tortured. According to the plaintiffs, the contractor was liable for damages for "actively participating in their forcible and arbitrary abduction" and "conspiring in their torture and other cruel, inhuman, or degrading treatment." Before the contractor filed an answer, the government intervened with a motion to dismiss based on the state secrets privilege. The district court granted the government's motion, holding the privilege categorically barred the suit because the subject matter of the action was a state secret.

On appeal, the Ninth Circuit examined two parallel branches of the state secrets privilege. The appellate court first examined Totten v. U.S. (92 US 105), which held that a suit predicated on the existence and content of a secret agreement between a plaintiff and the government must be dismissed on the pleadings because the "very subject matter" of the suit is secret. The government argued the Totten doctrine barred the suit because the action was based on the alleged existence of a secret agreement with the government. The court rejected this argument as unsupported by the facts and logic because none of the plaintiffs' theories of liability required proof of a secret contractual relationship between the contractor and the government. Moreover, the Totten doctrine bars suits that would reveal a secret agreement between the plaintiffs and the government, which clearly was not the case here. According to the court, "Totten's logic simply cannot stretch to encompass cases brought by third-party plaintiffs against alleged government contractors for the contractors' alleged involvement in tortious intelligence activities."

The court then looked to another case, U.S. v. Reynolds (345 US 1), which held the state secrets doctrine is an evidentiary privilege that prevents the discovery of secret evidence when disclosure would threaten national security. Application of the Reynolds privilege involves a "formula of compromise" in which the court must weigh "the circumstances of the case" and the interests of the plaintiff against the "danger that compulsion of the evidence will expose military matters which, in the interest of national security, should not be divulged." The government argued Reynolds barred the suit because "[p]rivileged information would be essential for plaintiffs to make out a prima facie case on, and to prove, their claims." The court rejected the argument, holding the government misconstrued the object of the state secrets doctrine under the Reynolds framework, as the privilege applies to evidence, not information. Pursuant to Reynolds, a court should not determine which facts are secret and may not be alleged. Rather, it should determine which evidence is secret and may not be disclosed in a public trial. Thus, the privilege is properly invoked to prevent discovery of secret evidence, but not to protect disclosure of the underlying facts, so long as the facts can be proven without resorting to privileged materials. The case, therefore, should not have been dismissed at the outset. (Mohamed, et al. v. Jeppesen Dataplan, Inc., et al., CA-9, 53 CCF ¶79,098)

Legal News

Coal Was Not Acceptable Bid Bond Asset
The Court of Appeals for the Federal Circuit affirmed the dismissal of a bid protest because the Court of Federal Claims correctly concluded coal was not an acceptable bid bond asset. The invitation for bids for the construction of a traffic circle required bidders to submit a bid bond. The contracting officer rejected the protester's low bid on the grounds its individual surety bond, which was secured by approximately $191 million in mined coal, did not constitute an acceptable bid bond under FAR 28.203. The Government Accountability Office and the CFC both denied protests on the basis that the CO reasonably rejected the bid as unacceptable, finding mined coal is not an acceptable asset because it cannot be placed into an escrow account, as required for pledges of assets under FAR 28.203-1(b)(1). On appeal from the CFC's dismissal, the protester argued the CFC affirmed the government's rejection of the bid on a ground not invoked by the government, in violation of the principle enunciated by the Supreme Court in SEC v. Chenery Corp. (332 US 194).

However, there was no need to determine whether the government violated the Chenery doctrine because the rejection of the bid bond was sustainable based on the CO's finding that the coal was not an acceptable bid bond asset. "The purpose of a bid bond is to protect the government in the event that the bidder withdraws its bid." Consistent with this purpose, FAR 28.203-2 defines acceptable bid bond assets as "those that have an identifiable value and are readily marketable, so that they can easily be sold to cover any expenses incurred by the government as a result of the bidder's failure to satisfy its obligation." FAR 28.203-2 distinguishes between acceptable assets, such as cash, stocks, and bonds, and unacceptable assets, such as jewelry, antiques, and furs, to reflect this concern with discernible value and liquidity of pledged assets. Despite the protester's contention that coal is a readily marketable mineral with a known value that is defined by national price indices, mined coal is "clearly less liquid than cash, stocks, certificates of deposit, and bonds," which are highly liquid assets with readily identifiable values. Further, the fact that there is some market for a product does not mean that the product is readily marketable. As shown by the protester's own submissions, mined coal is a speculative asset, as its value is difficult to ascertain and is highly dependent on variables such as the type, quality, and provenance. Pledges of speculative assets increase the risk of loss to the government, as was the case here, "as it became evident in the GAO proceedings that the pledged coal actually consisted of coal refuse that would likely require further processing before it could be liquidated." (Tip Top Construction, Inc. v. U.S., CA-FC, 53 CCF ¶79,099)

Costs of Reducing Maintenance Backlog Awarded
The Court of Federal Claims awarded a vehicle maintenance contractor and its subcontractor direct labor and material costs incurred in performing additional work on a government fleet because they sufficiently established the size of the maintenance backlog they assumed and the costs associated with reducing the backlog. In a prior decision on a claim brought on behalf of the subcontractor, the court concluded the contractor was entitled to special compensation for the government's breach of contract. The contract provided for recovery if the contractor inherited more than 355 labor hours' worth of repairs. However, the contractor was required to expend labor hours far in excess of that number to reduce the maintenance backlog, and the government compensated the contractor for only a portion of the additional work. Also, the government constructively changed the contract by ordering work that was beyond the contract requirements.

Following a trial on damages, the contractor and its subcontractor were awarded direct costs attributable to the work that was "over and above" the 355 hours budgeted to reducing the maintenance backlog. Notwithstanding the difficulties caused by the size of the backlog, the shortcomings of the government's management system, and the government's restrictions on system use, the contractor identified the direct costs associated with reducing the backlog "with more than sufficient precision." The primary direct costs, consisting of labor, parts, and contracted-out work, were carefully documented in a binder, using thousands of lines of information. "Other direct costs, such as repair materials, shop and office supplies, and uniforms, were reasonably estimated based on the percentage of related work," and communications, travel, and supervision costs were reasonably apportioned to "O&A" work. Government audits confirmed the accuracy of the contractor's figures. The subcontractor was also awarded the costs it incurred in developing a database for tracking and measuring the maintenance backlog. (Tecom, Inc. v. U.S., FedCl, 53 CCF ¶79,089)

Government Disregarded Mandatory HUBZone Statute
A sole-source award to an Alaska Native Corporation was improper because the Historically Underutilized Business Zone statute required the government to first consider whether two or more qualified HUBZone small businesses could be expected to submit offers, and whether an award could be made to one of them at a fair market price. Following an award of a sole-source information technology contract under the Small Business Administration's 8(a) program, the anticipated value of the follow-on contract precluded another award to the incumbent (FAR 19.805-1). The procuring agency then elected to award the follow-on contract on a sole-source basis to an ANC participating in the SBA 8(a) program. The incumbent, which was also an eligible HUBZone participant, protested, arguing the HUBZone statute (15 USC 657a) required the procurement to be set aside for competition among HUBZone small businesses. The SBA, a participant in the protest, noted its regulations provide that HUBZone set-asides are not required if there was prior performance by an 8(a) contractor, or the contracting officer chooses to offer the requirement to the 8(a) program. The procuring agency conceded it must first follow the HUBZone set-aside prescription before making an award, but asserted it complied with the statute when the original contract was awarded and that any protest should have been raised at that time.

The Comptroller General sustained the protest, finding the plain meaning of the HUBZone statute made its provisions mandatory and rendered the SBA's position unreasonable. While the statutory language authorizing the 8(a) program gives the government the discretion to decide whether to offer an opportunity pursuant to its terms, the HUBZone statute uses the term "shall," and as set forth in a prior decision, the 8(a) program's discretionary nature "does not supersede the mandatory nature of the HUBZone set-aside program." Further, contrary to the procuring agency's position, "a separate 'contract opportunity' arises every time [the government] prepares to award a new contract." This view is supported by SBA 126.103, which defines a "contract opportunity" as a situation in which "a requirement for a procurement exists." Accordingly, as the protester filed its protest within 10 days of learning of the award of the follow-on contract to the ANC, its protest was timely. The Comptroller General recommended the procuring agency comply with the HUBZone determination requirements, and if appropriate under that statute, terminate the existing contract and resolicit the requirement on the basis of competition restricted to HUBZone small business concerns. (Mission Critical Solutions, 24 CGEN ¶112,839)

Regulatory News

GSAR Rewrite Continues with Three Final Rules
The General Services Administration has issued three final rules that revise the GSA Acquisition Regulation. The rules are a result of the GSA Acquisition Manual rewrite initiative undertaken by GSA to revise the GSAM to maintain consistency with the Federal Acquisition Regulation, and to implement streamlined and innovative acquisition procedures that contractors, offerors, and GSA contracting personnel can use when entering into and administering contractual relationships. The GSAM incorporates the GSAR, as well as internal agency acquisition policy. The rules make changes to GSAR Part 525, Foreign Acquisition (GSAR Case 2006-G520), GSAR Part 537, Service Contracting (GSAR Case 2008-G510), and GSAR Part 549, Termination of Contracts (GSAR Case 2008-G515).

The GSAR Case 2006-G520 final rule effectively deletes all of the provisions of GSAR Part 525, Foreign Acquisition, by removing GSAR Subpart 525.3, GSAR Subpart 525.5, and GSAR Subpart 525.11. The rule also removes the related clause at GSAR 552.225-70, Notice of Procurement Restriction -- Hand or Measuring Tools or Stainless Steel Flatware. This rule, which finalizes a July 30, 2008, proposed rule without change, revises and updates GSA's implementation of FAR Part 25. For the text of the final rule, which goes into effect July 6, 2009, see ¶70,030.126.

Another final rule, GSAR Case 2008-G510, makes changes to GSAR Part 537, Service Contracting. The rule deletes the definitional provision at GSAR 537.101, which contained only a definition for "contracts for building services," because the language is being incorporated as nonregulatory GSAM language. New defined terms from GSAM 537.201 are added at new GSAR 537.201. Also, the rule updates a cross-reference at GSAR 537.110 and prescription references in the clauses at GSAR 552.237-71 and GSAR 552.237-72, and makes technical changes to the clauses at GSAR 552.237-70 and GSAR 552.237-73. This rule finalizes a June 6, 2008, proposed rule, with changes. The final rule, effective June 4, 2009, appears at ¶70,030.125.

The GSAR Case 2008-G515 rule finalizes, without substantive change, an August 13, 2008, proposed rule addressing requirements for terminating contracts. The final rule effectively deletes GSAR Part 549, Termination of Contracts, by removing and reserving GSAR Subpart 549.5, which consisted of GSAR 549.502. The rule also deletes the obsolete clauses at GSAR 552.249-70 and GSAR 552.249-71. These GSA-unique clauses addressed the acquisition and maintenance of telephone systems funded through the Information Technology Fund, which no longer exists. Corresponding changes are made to GSAR 501.106. For the text of the final rule, effective June 8, 2009, see ¶70,030.127.

PSBCA Issues Final Rules of Practice
The Postal Service Board of Contract Appeals has issued its final rules of practice. On February 11, 2009, the PSBCA published and invited comments on proposed rules that were intended to better reflect actual practice in board proceedings, such as board precedent permitting notices of appeal to be filed either with the contracting officer or directly with the board, and permitted the board to consider the Federal Rules of Civil Procedure and the Federal Rules of Evidence (74 FR 6845). Adopting several suggestions by commentators, the PSBCA finalized 39 CFR Part 955, which governs standard and optional small claims and accelerated contract dispute proceedings. Among the revisions included in the final rules, the board specified its working hours for purposes of filing and required filings by fax to be followed by a mail filing. The board also revised the rule regarding depositions to leave the admission of deposition testimony in a hearing to the board's broad discretion and allow for production of a deposition transcript before as well as during a hearing. The final rules also clarify transcripts of proceedings will be provided to both parties without additional request or payment, delete a standard for motions for reconsideration to allow the board to address such motions on a case-by-case basis, and add disqualification from practice before the board to the board's sanction power. The final rules, found at 74 FR 20590, go into effect June 1, 2009.

Major Contract Awards

Multiple Contractors - $800 Million. ATK Space Systems, Inc., Dayton, Ohio, (N00014-09-D-0699); Argon ST, Inc., Fairfax, Va., (N00014-09-D-0708); BAE Systems, Nashua, N.H., (N00014-09-D-0690); Ball Aerospace & Technologies Corp., Broomfield, Colo., (N00014-09-D-0711); The Boeing Co., Seattle, Wash., (N00014-09-D-0705); Cobham Defense Systems, Landsdale, Pa., (N00014-09-D-0703); Colorado Engineering, Inc., Colorado Springs, Colo., (N00014-09-D-0707); DRS Signal Solutions, Inc., Gaithersburg, Md., (N00014-09-D-0698); FTL Systems, Inc., Rochester, Minn., (N00014-09-D-0706), General Dynamics Advanced Information Systems, Fairfax, Va., (N00014-09-D-0709); HYPRES, Inc., Elmsford, N.Y., (N00014-09-D-0700); ITT Corp., Electronic Systems & Radar Systems, Van Nuys, Calif., (N00014-09-D-0704) ; ITT Force Protection Systems, Thousand Oaks, Calif., (N00014-09-D-0701); Lockheed Martin Corp., Moorestown, N.J., (N00014-09-D-0702); Northrop Grumman Corp., Baltimore, Md., (N00014-09-D-0710); Raytheon Co., Tewksbury, Mass., (N00014-09-D-0696); S2 Corp., Bozeman, Mont., (N00014-09-D-0697); and Southwest Research Institute, San Antonio, Texas, (N00014-09-D-0691), are each being awarded an indefinite-delivery/indefinite-quantity multiple-award contract for the Integrated Topside Program. The Integrated Topside (InTop) Program encompasses the technology development and system development and demonstration phases of a Navy acquisition program. The program will develop in a spiral manner InTop technology development phase advanced development models suitable for proof-of-concept, and subsequent SDD phase systems for full system demonstration prior to installation and deployment on various Navy platforms. Each contractor will provide efforts that lead to the appropriate integration and management of radio frequency sensor and communications functions into future platforms, with reduced cost, manning and impact on ship design relative to an assembly of federated systems with similar capability. The ordering ceiling for each contract is between $50,000,000 to $800,000,000. Work will be performed Dayton, Ohio; Fairfax, Va.; Nashua, N.H.; Broomfield, Colo.; Seattle, Wash, Landsdale, Pa., Colorado Springs, Colo., Gaithersburg, Md., Rochester, Minn., Fairfax, Va., Elmsford, N.Y., Van Nuys, Calif., Thousand Oaks, Calif., Moorestown, N.J., Baltimore, Md., Tewksbury, Mass., Bozeman, Mont., and San Antonio, Texas, as determined by each delivery order, and the end of ordering period is May 2014. Contract funds will not expire at the end of the current fiscal year. This contract was competitively procured via electronic solicitation. These 18 contractors may compete for delivery orders under the terms and conditions of the awarded contract. The Office of Naval Research, Arlington, Va., is the contracting activity. Government Contracts Reports 2010, May 27, 2009.

Multiple Contractors - $650 Million. The U.S. Army Corps of Engineers awarded eight contracts with a shared capacity of $650 million to eight contractors who will perform utility monitoring and control systems work throughout the continental U.S. and overseas. These contracts are for the procurement and installation of utility monitoring and control systems; heating, ventilation and air conditioning systems to include chiller/boiler systems installation and/or integration, supervisory control and data acquisition systems; and other automated control systems including fire alarm and life safety systems, chemical/biological/radiological contaminant detection/filtration/response, utilities (electric/gas/water/steam) metering; electronic security systems; and security and/or force protection measures worldwide. The multiple award task order indefinite-delivery, indefinite-quantity service contracts have a three-year base period and one optional two-year period for a total of five years. The total capacity of these contracts is $650 million, with shared capacity among eight contractors: Ameresco, Inc., Framingham, Mass.; Honeywell Products, Inc., Austin, Texas; Johnson Controls Building Automation, Huntsville, Ala.; Siemens Government Services, Inc., Reston, Va.; TAC Americas, Carrollton, Texas; Teng & Associates, Inc., Chicago, Ill.; Trane U.S. Inc., La Crosse, Wis.; and Williams Electric Company, Inc., Fort Walton Beach, Fla. The Huntsville Center solicited this acquisition on a competitive basis. Government Contracts Reports 2007, May 6, 2009.

Raytheon - $521 Million. The Air Force is awarding a firm-fixed-price contract to Raytheon Co., of Tucson, Ariz., for $521,236,837. This contract action is for the 105 Advanced Medium Range Air-to-Air, Missile Air Intercept Missile All-Up-Round missiles, 11 AIM-120 D air vehicles instrumented, two AIM-120D Integrated test vehicles, 72 AIM-120D captive air training missiles, 495 AIM-120C7 FMS All up rounds, warranty for 72 CATMS, 106 non-developmental item Airborne instrumentation units, test equipment, radome Phase 1A activities, obsolescence to quad target detection device parts replacement, USN AIM 120 D test asset, USN AIM 120D guidance section and development infrastructure support equipment 7 upgrades. At this time, the entire amount has been obligated. 695ARSS, Eglin Air Force Base, Fla., is the contracting activity (FA8675-09-C-0052). Government Contracts Reports 2009, May 20, 2009.

McDonnell Douglas - $400 Million. The Air Force is awarding an indefinite-delivery, indefinite-quantity contract to McDonnell Douglas Corp., of Long Beach, Calif., for an amount not to exceed $400,000,000. This contract is for the procurement of two Foreign Military Sales C-17 aircraft. At this time, $318,873,120 has been obligated. 516 AESG/SYK, Wright Patterson Air Force Base, Ohio is the contracting activity (FA8614-06-D-2006). Government Contracts Reports 2008, May 13, 2009.

Multiple Contractors - $300 Million. Humphrey Mechanical, Inc., Jacksonville, N.C.; MechWorks Mechanical Contractors, Inc., Beaufort, N.C.; North State Mechanical, Inc., Jacksonville, N.C.; R & W Construction Co. Inc., Jacksonville, N.C.; T. A. Woods Company, Wilmington, N.C.; and Virtexco Corp., Norfolk, Va., are each being awarded an indefinite-delivery, indefinite-quantity multiple award construction contract for mechanical construction type projects at Marine Corps Base Camp Lejeune and Marine Corps Air Station Cherry Point. The total contract amount for all six contracts combined, including the base period and four option years, is $300,000,000. The work to be performed provides for mechanical construction services including demolition, repair, replacement, modification, and new installation of various mechanical systems including heating, ventilation, and air conditioning, boilers, high pressure steam distribution, electrical distribution, motors, generators, potable water distribution, sanitary sewer, storm water control, communications, and incidental work such as general construction, specialty trades, and removal of asbestos or lead contaminated materials. Work will be performed in Jacksonville N.C. (75 percent) and Cherry Point, N.C. (25 percent), and work expected to be completed April 2014. Contract funds will not expire at the end of this fiscal year. This contract was competitively procured via the Navy Electronic Commerce Online website, with 11 proposals received. These six contractors may compete for task orders under the terms and conditions of the awarded contract. The Naval Facilities Engineering Command Mid-Atlantic, Norfolk, Va., is the contracting activity (contract numbers N40085-09-D-5340/5341/5342/5343/5344/5345). Government Contracts Reports 2007, May 6, 2009.

Lockheed Martin - $293 Million. The Air Force is modifying a firm-fixed-price contract with Lockheed Martin Corp., of Marietta, Ga., for an amount not to exceed $292,800,000. This contract will provide four C-130J aircraft for the Iraq government. At this time, $6,920,907 has been obligated. 657 AESS, Wright-Patterson Air Force Base, Ohio is the contracting activity (FA8625-06-C-6456,P00080). Government Contracts Reports 2007, May 6, 2009.

Raytheon - $260 Million. Raytheon Co., Tucson, Ariz., is being awarded a $259,904,116 modification to previously awarded contract (N00024-07-C-5444) for MK15 Phalanx Close-In-Weapon System (CIWS) Block 1B upgrades and conversions, system overhauls, and associated hardware. Phalanx CIWS is a fast reaction terminal defense against low and high flying, high-speed maneuvering anti-ship missile threats that have penetrated all other ships' defenses. The CIWS is an integral element of the fleet defense in-depth concept and the Ship Self-Defense Program. Phalanx CIWS is currently installed on approximately 187 USN ships and is in use in 20 foreign navies. The Phalanx Block 1B CIWS weapon systems are also being installed on low-boy trailers with self contained diesel electric power and cooling water. This configuration of the Phalanx CIWS is the MK 15 MOD 29 land-based Phalanx Weapon System and has been deployed to Iraq. Work will be performed in Louisville, Ky., (30 percent), Andover, Mass., (19 percent), Tucson, Ariz., (16 percent), Syracuse, N.Y., (7 percent), Long Beach, Calif., (6 percent), Radford, Va., (6 percent), Burlington, Vt., (6 percent), Palm Bay, Fla., (2 percent), Pittsburg, Pa., (2 percent), Bloomington, Minn., (2 percent), Salt Lake City, Utah, (2 percent), Norcross, Ga., (1 percent), and New Albany, Ind., (1 percent), and is expected to be completed by September 2012. Contract funds in the amount of $8,756,580 will expire at the end of the current fiscal year. The Naval Sea Systems Command, Washington, D.C., is the contracting activity. Government Contracts Reports 2009, May 20, 2009.

McDonnell Douglas - $250 Million. McDonnell Douglas Corp., a wholly owned subsidiary of the Boeing Co., of St. Louis, is being awarded a one-year, indefinite-delivery, indefinite-quantity contract with four annual options. The contract has predominantly firm-fixed-price items, and a not-to-exceed value of $250,000,000. The contract is for Mid Endurance Unmanned Aircraft System (MEUAS) Information Gathering, Target Surveillance, and Reconnaissance (ISR) Services in support of the U.S. Special Operations Command Program Executive Office - Fixed Wing. The work will be performed in St. Louis and overseas locations and is expected to be completed by April 30, 2014. This contract was awarded through full and open competition. The contract number is H92222-09-D-0015. Government Contracts Reports 2007, May 6, 2009.

Southern Maryland Electric Cooperative - $154 Million. Southern Maryland Electric Cooperative, Inc. (SMECO), Hughesville, Md., is being awarded a $154,000,000 utilities privatization contract for electric distribution services to Naval Air Station Patuxent River, Patuxent River, Md. The initial two years of the contract are fixed-price. The work to be performed provides for installation of metering during the initial two-year fixed-price period; operation, maintenance and repair of the systems as well as renewal and replacement of the system's components over the term of the contract. This procurement was initiated and procured under the authority of 10 USC 2688. At the conclusion of the two-year period, the contract will be subject to SMECO's Retail Electric Service Tariff. The facilities covered under this contract include Naval Air Station, Patuxent River, Webster Field Annex, and Solomon's Island Annex. The contract consists of a utilities service contract which provides the electrical distribution services for a period not to exceed fifty years. The utility assets will be conveyed via a sale and quitclaim deed. Contract funds will not expire at the end of the current fiscal year. This contract was competitively procured via the Navy Electronic Commerce Online website, with two offers received. The Naval Facilities Engineering Command Atlantic, Norfolk, Va. is the procuring contracting activity and the Naval Facilities Engineering Command Washington, Washington, D.C., is the administrative contracting activity (N62470-09-C-9026). Government Contracts Reports 2007, May 6, 2009.

Campbell Ewald Co. - $146 Million. Campbell Ewald Co., Warren, Mich., is being awarded a $146,209,282 indefinite- delivery/indefinite-quantity contract (N00189-09-D-Z040) for advertising and marketing services in support of Navy recruiting for the Navy Recruiting Command, Millington, Tenn. This contract contains four additional one-year options, which if exercised, would bring the total value of the contract to $806,524,158. Work will be performed in Warren, Mich., (99 percent) and Millington, Tenn., (1 percent), and work is expected to be completed by May 2010. Contract funds in the amount of $20 million will expire before the end of the current fiscal year. This contract was competitively procured via Navy Electronic Commerce Online website, with four offers received. The Fleet and Industrial Supply Center Norfolk, Contracting Department Philadelphia, Pa., office is the contracting activity (N00189-09-D-Z040). Government Contracts Reports 2009, May 20, 2009.