Two cases being argued in December at the Federal Circuit attracted amicus briefs. One is Lockheed Martin Aeronautics Co. v. Secretary of the Air Force, which concerns whether the federal government’s resort to unilateral price determinations under two F-16 Aircraft contracts constituted government claims under the Contract Disputes Act of 1978. Specifically, in this case, the Federal Circuit will review a determination by the Armed Services Board of Contract Appeals that it lacked subject matter jurisdiction because the government’s price modifications did not constitute government claims. This is our argument preview.
In its opening brief, Lockheed Martin makes four arguments. First, it argues “the plain language of the CDA [Contract Disputes Act], the FAR [Federal Acquisition Regulation], the DFARS [Defense Federal Acquisition Regulation Supplement], and this Court’s precedent interpreting those authorities make clear that modifications unilaterally imposing prices, requiring a contractor to continue performing at no additional costs, and adjusting the contract terms constitute . . . Government nonmonetary ‘claims’ under the CDA.” To support this argument, Lockheed Martin asserts that “[f]or decades this Court has construed CDA jurisdiction over nonmonetary claims broadly to encompass analogous unilateral decisions, because the CDA is ‘expansive’ and has ‘substantial breadth.'” Second, Lockheed Martin advances its position that the “[g]overnment’s definitization decisions [the government’s decisions to unilaterally adjust the pricing terms of its contracts with Lockheed Martin] are cognizable as Government ‘other relief’ claims under the plain language of the CDA and FAR.” Third, and in the alternative, Lockheed Martin argues “definitization decisions are cognizable as Government ‘adjustment’ claims under the plain language [of the CDA].” Fourth, Lockheed Martin asserts “[t]he ASBCA Majority Decision incorrectly relied upon and found controlling a single, virtually uncited, 33-year old Board decision.”
The government, in its response brief, argues the Board correctly held it “lacked jurisdiction over these appeals because Lockheed Martin never submitted a written, certified claim to the contracting officer requesting a final decision in either of the appeals.” Moreover, it asserts, the “definitizations at issue here do not constitute Government claims under the definition provided in the CDA . . . because they are not ‘against a contractor.'” Instead, the government maintains, “the contracting officers simply performed their duties to definitize the contracts and establish prices.” Further, the government argues, “[b]ecause definitizations are not Government claims under the CDA’s definition, the definition of ‘claim’ in the CDA’s implementing regulations—the FAR and, specifically, FAR 2.101—cannot independently make definitizations ‘Government claims,’ as Lockheed Martin asserts.” The government also contends that, even if the FAR’s definition were relevant, it “could not be interpreted to encompass the definitizations and convert them into Government claims” because “definitizations, unlike Government claims, are not set forth in a contracting officer’s final decision that could be appealed directly to the board.”
Lockheed Martin, in its reply brief, reasserts the arguments made in its opening brief. For example, it asserts “[n]othing in the CDA suggests that the Board lacks jurisdiction over a CO’s [Contracting Officer’s] unilateral definitization decision.” It also maintains the “[g]overnment proposes various selfserving, narrowing interpretations of the words in FAR 2.101 and the Definitization clauses.”
The National Defense Industrial Association submitted an amicus brief in favor of Lockheed Martin. The NDIA argues “a unilateral definitization modification meets the definition of an immediately appealable government ‘claim’ under” the CDA, FAR, and caselaw. Moreover, it asserts, “confirming the immediate appealability of a unilateral definitization modification furthers the fundamental purpose of the CDA to provide an efficient mechanism for resolving disputes between the Government and its contractors.”
This case will be argued on Thursday, December 8. We will report on any developments.