Sikorsky Aircraft Corp. v. United States
102 Fed. Cl. 38
| Fed. Cl. | 2011Background
- Sikorsky holds multiple federal contracts and faced an $80 million final decision in 2008 for allegedly improper allocation of overhead costs.
- Sikorsky filed a complaint in the Court of Federal Claims in 2009 under the CDA and later, after Maropakis, filed a second complaint in 2010 seeking defenses to the government’s claim.
- Motions by the government sought to define the framework for CAS 418, especially sections 418-50(d) and (e), and to manage discovery in a complex, pre-trial stage.
- Sikorsky changed its materiel overhead allocation method in 1999, shifting to direct-labor-cost basis to address government concerns about government-furnished materiel; the government contested this change.
- The government audited and later challenged the prior practice; in 2007 a final decision ordered payment of $64 million plus interest, prompting the current jurisdictional and interpretive disputes.
- The court must decide, among other things, whether Sikorsky’s second complaint is jurisdictionally viable and how CAS 418-50(d) vs (e) should be applied to Sikorsky’s overhead pool at trial.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Sikorsky’s second complaint is jurisdictionally proper | Sikorsky argues Maropakis applies and either a final decision was issued or the defense claims are in litigation. | The government contends Maropakis forecloses treating the defenses as standalone claims needing a contracting officer’s final decision. | No dismissal; jurisdiction maintained for Sikorsky’s second complaint. |
| How CAS 418-50(d) and 418-50(e) govern Sikorsky’s materiel overhead pool | Sikorsky contends 418-50(d) applies if costs include material management costs; otherwise 418-50(e) governs. | The government argues a direct-labor/direct-material framing governs the allocation, linking 418-50(d) to overhead pools with significant management costs and 418-50(e) to other pools. | Discretionary-in-limine framework denied; materiality issue for trial; both subsections potentially applicable depending on materiality. |
| Whether the government’s interrogatories on cost allocations are permissible | Discovery should be limited; materiality should be resolved before broader allocation questions. | Interrogatories help assess homogeneity of the pools and potential material differences in allocations. | Denied without prejudice to renewal; discovery limited pending materiality determination. |
| Whether the complaint seeks a contract modification defense properly under the CDA | Affirmative defenses are legitimate defenses to the government’s claim and not independent CDA claims needing final decisions. | Maropakis requires CDA-compliant claims even when raised defensively against a government claim. | Affirmative defenses may be adjudicated without creating standalone CDA claims at this stage. |
Key Cases Cited
- M. Maropakis Carpentry, Inc. v. United States, 609 F.3d 1323 (Fed.Cir. 2010) (limits defenses to contract modification claims under CDA unless properly pleaded as independent claims)
- Sharman Co. v. United States, 2 F.3d 1564 (Fed.Cir. 1993) (complementary CDA jurisdiction and final decision dynamics)
- Rumsfeld v. United Techs. Corp., 315 F.3d 1361 (Fed.Cir. 2003) (interpretation of regulations incorporated in government contracts; framework for legal issue analysis)
- Allegheny Teledyne Inc. v. United States, 316 F.3d 1366 (Fed.Cir. 2003) (regulatory history weight in statutory interpretation of CAS provisions)
- Perry v. Martin Marietta Corp., 47 F.3d 1134 (Fed.Cir. 1995) (textual plain meaning governs regulatory interpretation unless clear contrary intent)