Lockheed Martin Aeronautics Company v. Secretary of the Air Force
66f4th1329
| Fed. Cir. | 2023Background:
- The Air Force issued two Undefinitized Contract Actions (UCAs) to Lockheed Martin (2015 Singapore; 2016 Korea) for F‑16 upgrades; the contracts included FAR/DFARS definitization clauses permitting the Contracting Officer (CO) to determine a "reasonable price" if parties could not agree by the target date.
- After multi‑year negotiations failed, the COs unilaterally definitized each UCA at ~ $1 billion and required Lockheed to continue performance per the clauses.
- Lockheed appealed to the Armed Services Board of Contract Appeals (ASBCA), arguing the COs’ definitizations did not comply with the requirement to determine a "reasonable price" under subpart 15.4 and part 31 of the FAR.
- The government moved to dismiss for lack of jurisdiction because Lockheed had not submitted certified contractor claims to the COs; Lockheed contended the COs’ unilateral definitizations were "government claims" under the Contract Disputes Act (CDA) and thus directly appealable.
- The ASBCA dismissed, following its Bell Helicopter precedent, holding unilateral definitizations are contract‑administration actions, not government claims; the Federal Circuit affirms.
Issues:
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a CO's unilateral definitization of a UCA price is a "government claim" under the CDA | Lockheed: COs’ unilateral insertion of definitive prices constitutes a government claim that is directly appealable to the ASBCA | Government: Definitizations are contract administration under the agreed clause, not demand/claim seeking relief; Lockheed must submit a contractor claim to the CO | The definitizations are not government claims; appeal dismissed for lack of CDA jurisdiction (affirmed) |
| Whether the clause language "subject to Contractor appeal" makes definitizations government claims | Lockheed: "Subject to Contractor appeal" implies an appealable government claim | Government: That language contemplates contractor appeals from the CO decision but does not transform the CO action into a government claim; underlying disputes were contractor claims | The phrase does not convert definitizations into government claims; it contemplates contractor remedies such as submitting a contractor claim |
Key Cases Cited
- Garrett v. Gen. Elec. Co., 987 F.2d 747 (Fed. Cir. 1993) (government may directly appeal a government claim to a board; analysis of what constitutes a government claim)
- Placeway Constr. Corp. v. United States, 920 F.2d 903 (Fed. Cir. 1990) (CO decision withholding payment for alleged late performance treated as government claim)
- Malone v. United States, 849 F.2d 1441 (Fed. Cir. 1988) (CO termination for default is a government claim appealable under the CDA)
- Alliant Techsystems, Inc. v. United States, 178 F.3d 1260 (Fed. Cir. 1999) (contractor’s written demand was a contractor claim seeking adjustment/interpretation)
- Todd Construction, L.P. v. United States, 656 F.3d 1306 (Fed. Cir. 2011) (analysis of when contractor responses constitute CDA claims)
- Reflectone, Inc. v. Dalton, 60 F.3d 1572 (Fed. Cir. 1995) (en banc) (FAR requires a claim to be a written demand seeking relief "as a matter of right")