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Textron Defense Systems v. Widnall

May 07, 1998

TEXTRON DEFENSE SYSTEMS, APPELLANT,
v.
SHEILA E. WIDNALL, SECRETARY OF THE AIR FORCE, APPELLEE.



Appealed from: Armed Services Board of Contract Appeals

Before Newman, Plager, and Schall, Circuit Judges.

The opinion of the court was delivered by: Plager, Circuit Judge.

This case involves a research and development contract funded by the Strategic Defense Initiative Office ("SDIO") as part of the so- called `Star Wars' anti-ballistic missile defense system. In a decision by the Armed Services Board of Contract Appeals ("the Board") dated May 2, 1996, ASBCA Nos. 47352 and 47950, the Board denied Textron's appeal for payment of additional costs and fees on a cost-plus-award-fee ("CPAF") contract. Because Textron received all that it was entitled to under the language of the contract, we affirm.

BACKGROUND

The United States Air Force (hereinafter "Government") awarded the CPAF contract to Textron's predecessor in interest, AVCO Everett Research Laboratory, Inc., on November 8, 1984, with an effective date of September 18, 1984. The subject of the contract was the research and development of an excimer laser device ("EMRLD") that could be used as part of the Star Wars program. The stated objective of the contract was "technology development and laser system design leading to the demonstration of a closed cycle repetitively pulsed electron beam pumped excimer laser."

The contract incorporated the DAR 7-402.2(c) Limitation of Funds ("LOF") (1966 OCT) clause, the DAR 7-203.10 Termination (1973 APR) clause, the DAR 7-105.3(c) Stop Work Order (1971 APR) clause, and a version of the AFSC DAR 7-150.3 Award Fee (1977 DEC) clause. The CPAF contract called for a zero base fee and an Award Fee not subject to the Termination or Disputes clauses as to the payment and amount of the award fee, respectively.

The original estimated cost of the contract, as awarded, was $53,144,000. This estimate was revised upwards as a result of a series of contract modifications to a final total of $132,618,264. The contract was incrementally funded. The contract schedule at award allotted only $3,457,992 to the contract. Subsequent adjustments brought the total allotted amount to $113,479,301. Each award fee allotment was made by a contract modification which stated that it was issued pursuant to the Award Fee clause of the contract. All other allotments were made pursuant either to the LOF clause or the Changes clause.

The contract created a series of award fees (i.e., profit) that Textron was eligible to receive at the end of each performance period based on its performance during that period. The decision as whether Textron would receive any such award, and if so, how much, was left to the discretion of a Fee Determining Official ("FDO") based on the FDO's assessment of Textron's performance in several specified areas. Initially, the contract specified four performance periods, with the maximum award fees available in each as follows:

Period Maximum Award Fee

1 $3,095,630

2 $3,018,442

3 $1,508,560

4 $348,964

That award fee schedule was changed on August 3, 1988, pursuant to bilaterally executed Modification P00057. The Modification increased the number of performance periods from four to seven and `back end- loaded' the award fees in order to create more incentives in the ...


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