Ala. Aircraft Indus., Inc. v. Boeing Co.
| Decision Date | 15 August 2018 |
| Docket Number | Case No. 2:11-cv-03577-RDP |
| Parties | ALABAMA AIRCRAFT INDUSTRIES, INC., ALABAMA AIRCRAFT INDUSTRIES, INC. - BIRMINGHAM, AND PEMCO AIRCRAFT ENGINEERING SERVICES, INC., Plaintiffs, v. THE BOEING COMPANY, BOEING AEROSPACE OPERATIONS, INC. AND BOEING AEROSPACE SUPPORT CENTER, Defendants. |
| Court | U.S. District Court — Northern District of Alabama |
This case relates to an award of Programmed Depot Maintenance ("PDM") work for the United States Air Force's KC-135 Stratotanker fleet. (Doc. # 97 at ¶ 8). Since approximately 1969, Alabama Aircraft, Inc. ("AAI" or "Pemco")1 had performed some of this work in Jefferson County, Alabama. In February or March 2004, Boeing2 and AAI began conversations about teaming together to bid jointly on future KC-135 PDM work. (Doc. # 97 at ¶¶ 8, 29). After a long and circuitous series of events, the work was awarded to Boeing. (Doc. # 97). This case relates to the events surrounding that award.
After a number of pleadings and motions, AAI filed its Third Amended Complaint. The claims presently before the court are as follows:
(Doc. # 97).
This case is currently before the court on the parties' respective motions for summary judgment. (Docs. # 340, 343). The Motions have been fully briefed. (Docs. # 341, 342, 344-347, 392-396, 405-409).3 For the reasons discussed below, both Motions are due to be granted in part and denied in part.
The facts set out in this opinion are gleaned from the parties' respective statements of undisputed facts, their responses thereto, and the court's own examination of the evidentiary record. All reasonable doubts about the facts have been resolved in favor of the non-moving party. See Info Sys. & Networks Corp. v. City of Atlanta, 281 F.3d 1220, 1224 (11th Cir. 2002). These are the "facts" for summary judgment purposes only. They may not be the actual facts that could be established through live testimony at trial. See Cox v. Adm'r U.S. Steel & Carnegie Pension Fund, 17 F.3d 1386, 1400 (11th Cir. 1994).
Boeing is an aerospace and defense company with locations across the country. (Doc. # 97 ¶ 2). AAI provided aircraft maintenance, repair, and modification services for government and military customers. (Doc. # 97 ¶ 1).4 Because this case involves department of defense contracting, the parties' briefing and this court's opinion are replete with abbreviations and acronyms. The court apologizes in advance.
AAI has a long history of involvement with refurbishing work on KC-135s. AAI and its predecessors began performing PDM services on KC-135 aircraft in 1968. (Doc. # 349-1). AAI was a prime contractor under a contract with the United States Air Force ("USAF") for KC-135 PDM services from 1994 through 2001. Alabama Aircraft Indus. Inc. - Birmingham v. United States, 83 Fed. Cl. 666, 670 n.6 (Ct. Cl. 2008). In 1998, the USAF awarded Boeing a primecontract to perform PDM services on KC-135 aerial refueling aircraft. (Doc. # 364-5 at 2). Although AAI had performed and was performing KC-135 PDM work, it did not perform other services that the USAF bundled into the 1998 RFP. (Doc. # 349-1).
Historically, Boeing has "experienced performance difficulties associated with the speed and the quality of its work" on the KC-135 aircraft. (Doc. # 349-3 at 12). In 2000, "the USAF 'encouraged' Boeing to take on [AAI] as a major supplier at the end of FY2001." (Doc. # 364-6 at 4). On October 27, 2000, Boeing and AAI entered into a Memorandum of Agreement ("MOA") pursuant to which AAI was made a subcontractor to Boeing for the 1998 KC-135 PDM contract for Fiscal Years ("FY") 2002 through 2007. (Docs. # 364-7, 349-6).5 The 2000 MOA included various grounds for termination, including "[f]ailure of the Customer to award an FY02 KC-135 PDM contract to [Boeing] at the quantity anticipated in Attachment A." (Doc. # 349-6).
Boeing and AAI entered into a formal Long Term Requirements Contract ("LTRC"), titled "Repair Agreement 01-003," with Boeing designated a prime contractor and AAI a subcontractor in relation to PDM work. (Doc. # 349-10). Boeing and AAI amended the terms of the LTRC numerous times. (Docs. # 349-10, 349-11, 349-12).
In 2004, the USAF elected not to exercise the final option years of the 1998 KC- 135 PDM contract (Doc. # 364-8), and decided to "recompete" the KC-135 PDM contract (the "Recompete Contract") and open bidding on the new contract to all bidders. (Doc. # 365-1).
On April 1, 2005, Boeing and AAI entered into a Memorandum of Agreement (the "Bridge MOA") for KC-135 PDM work for the Bridge Contract for FY06 and FY07. (Doc. # 365-9). On October 1, 2005, the USAF awarded Boeing the Bridge Contract to perform KC-135 PDM work for FY2006 and FY2007, pending the award of the Recompete Contract. (Docs. # 365-10, 365-11, 349-23).
On October 17, 2005, Boeing and AAI entered into a Long Term Requirements Contract (the "LTRC") whereby AAI would be a subcontractor to Boeing for the Bridge Contract, sharing the aircraft "on a fifty-fifty split." (Doc. # 365-12). The LTRC provided for a "basic period effective 1 Oct 05 through 30 Sep 07 [FY06-07] and two six-month option periods effective October 1, 2007 through September 30, 2008 [FY08]." (Docs. # 365-12, 365-10 at 9-19). For each year of the Bridge Contract, the parties negotiated the prices Boeing would pay AAI. (Docs. # 365-13 through 365-17).
After the USAF decided to recompete the KC-135 PDM, Boeing and AAI each expected a Request for Proposal ("Recompete RFP") for the Recompete Contract to be issued. (Docs. # 365-19 at 6, 365-20 at 4). In January 2005, Boeing and AAI separately evaluated various options to compete for the KC-135 Recompete Contract, including whether to bid independently, team with each other, or team with other companies. (Docs. # 365-19, 365-20, 365-22 at 23, 349-20).
In a January 18, 2005 e-mail among Boeing employees, an "exit strategy with [AAI]" was mentioned. (Doc. # 350-2 at 2). In a January 21, 2005 KC-135 PDM Re-compete "Campaign Review" presentation, Boeing's "Proposed Win Strategy" included "[b]ecom[ing]single source of repair/overhaul on KC-135 for recompete," but its evaluation of AAI recognized that AAI "[c]ould provide a benefit to any competitor that competes against Boeing." (Doc. # 350-3 at 9, 12).
In April and May 2005, AAI and Boeing were negotiating language for a new MOA, Work Share Agreement ("WSA"), and Non-Disclosure Agreement ("NDA"), where it was contemplated that Boeing would act as the prime contractor, and AAI as a subcontractor. (Docs. # 365-23, 395 at 11, 296-19, 350-12). A separate Proprietary Information Agreement was AAI's idea. (Doc. # 350-12 at 2).
On April 28, 2005, Boeing internally circulated a first draft of the Recompete MOA which included a limitation of liability clause at Section 11.0. (Doc. # 367-4). On May 3, 2005, AAI sent its first draft of the Recompete MOA to Boeing, which contained the following provision: "IN NO EVENT SHALL ANY PARTY HERETO BE LIABLE FOR ANY LOST PROFITS, LOST SAVINGS, CONSEQUENTIAL, INCIDENTAL, OR SPECIAL DAMAGES, EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES." (Docs. # 367-5 at 10; 377-17 at 5). On May 6, 2005, Boeing sent AAI a revised draft Recompete MOA, which included a different limitation of liability clause at Section 11.0. (Doc. # 367-6 at 2, 11). On May 11, 2005, AAI sent Boeing a revised draft of the Recompete MOA that accepted Boeing's May 6 the limitation of liability language. (Doc. # 367-7 at 2, 11). The clause provided that the parties disclaimed any incidental damages, punitive and exemplary damages and any consequential damages, including but not limited to any profits that theNon-breaching Parties expected to earn. (Doc. # 367-7 at 11). After May 11, 2005, no further changes were made to the limitation of liability clause. (Docs. # 367-7 at 11, 367-8 at 9-10).
AAI and Boeing both had some concern about the number of aircraft (Best Estimated Quantity or "BEQ") which would be subject to the Recompete MOA, and whether two sources of repair would be feasible. (Docs. # 341 at 16, 349-5 at 34-35, 350-9, 350-10). In May 2005, the parties exchanged various drafts of the Recompete MOA. (Docs. # 367-9, 367-10, 367-11). Early drafts of MOA § 5.0(c) allowed for termination by either party if the USAF failed to award a KC-135 PDM contract to Boeing at a quantity that would support two contractor sources of repair, but in the final MOA language Boeing accepted AAI's proposed revision to § 5.0(c) which allowed either party to terminate the MOA at the time of "any RFP or amendments thereto" rather than at the time of "award." (Docs. # 341 at 15, 395 at 13). AAI wanted "to make sure that if the quantities dropped below a level that they could support work for both of us, that [the planes] would come to [AAI]." (Doc. # 349-5 at 35).
After several months of negotiations, and after multiple drafts of the MOA had been exchanged, Boeing sent AAI "Boeing's final offer for the Re-compete MOA for KC-135 PDM." (Doc. # 350-28). The final MOA was signed on June 3, 2005. (Doc. # 365-18). Exhibit A to the MOA was the WSA, and Exhibit B was the...
To continue reading
Request your trial