Armour Of Am. v. United States

• Decision Date: 30 December 2010
• Docket Number: No. 04-1731C,04-1731C
• Parties: ARMOUR OF AMERICA, Plaintiff, v. UNITED STATES, Defendant, v. ARMORWORKS, LLC, Intervenor-Defendant.
• Court: U.S. Claims Court

ARMOUR OF AMERICA, Plaintiff, v. UNITED STATES, Defendant, v. ARMORWORKS, LLC, Intervenor-Defendant.

No. 04-1731C

United States Court of Federal Claims.

Filed: December 30, 2010

Unsealed and Issued for Publication: January 10, 2011¹

Trial; Breach of Contract; Termination for Default; Bad Faith; Contract Acceleration; Commercial Impracticability; Reprocurement Costs.

Cynthia S. Malyszek, Malyszek & Malyszek, Westlake Village, California, for the plaintiff.

Leslie C. Ohta, Trial Attorney, Commercial Litigation Branch, Civil Division, United States Department of Justice, Washington, D.C., for the defendant. With them were Matthew H. Solomson, Bryant G. Snee, Deputy Director, Jeanne E. Davidson, Director, Commercial Litigation Branch, and Tony West, Assistant Attorney General, Civil Division. Of counsel, Bridget Jarvis, Office of Chief Counsel, Naval Air Systems Command, Patuxent, Maryland.

Steven D. Gordon, Holland & Knight LLP, Washington, D.C., for the intervenor. With him was David J. Craig, Holland & Knight LLP, Washington, D.C.

OPINION

HORN, J.

The government terminated plaintiff Armour of America's contract with the United States Navy for default, based on the alleged failure by Armour of America to make progress in accordance with the terms of the contract, thereby endangering performance of the contract. The Navy completed the contract with a reprocurement contractor, ArmorWorks, also the intervenor in this case.² Armour of America filed a complaint in this court and, then, an amended complaint, which alleges a breach of contract based on bad faith and abuse of discretion (Count I), and a breach of the government's duty to cooperate and not hinder performance (Count II). Plaintiff seeks to convert what it believes was an improper termination of the contract for default into a termination for the convenience of the government (Count III). Plaintiff seeks $3,029, 833.00 in breach of contract damages. Defendant, in a counterclaim, seeks $1,507, 438.00, plus administrative costs of $45,630.00, for a total amount of $1,553, 068.00 from the plaintiff in reprocurement costs. Following extended discovery, in part due to the illness and ultimate passing of a principal witness for the plaintiff, a trial was held in the case, after which the parties filed post-trial briefs.

FINDINGS OF FACT

The Navy issued a Request For Proposals (RFP) for a Light Weight Armor Replacement System (LWARS). The procurement was to replace the existing metallic armor system on the CH-46E helicopter used for military transportation, with lighter weight armor. The Navy's contracting officer, Janice Woehrer, explained during trial that:

The role of the CH-46[E] helicopter is to provide logistical support. It carries equipment, logistics items between ships and it also acts currently, most importantly act [sic] as a Medivac helicopter in war zones like Iraq and Afghanistan, inserting itself on the battlefield picking up wounded soldiers and taking them back to be fixed up.

The metallic armor plates on the helicopter protect its engines and flight controls from small arms fire. The Navy's RFP No. N00019-04-R-0073 stated that:

The Statement of Work (SOW) for this effort is defined in Sections 3 through 8 below. It defines the efforts to be performed by the contractor. In accordance with the SOW, the contractor shall design, test and manufacture a Light Weight Armor Replacement System (LWARS) for the Marine Corps' CH-46E tandem rotor helicopter. The contractor shall meet or exceed all requirements defined by this parent document as well as subordinate documents to the extent they apply, unless otherwise directed by the government.

In addition, Section 4.1 of the Statement of Work stated the weight and ballistics requirements:

4.1. LWARS Requirements (CLIN 0001): The contractor shall design a [sic] LWARS to be a fit and function lightweight replacement for the existing metallic armor system. The existing armor design, installation, marking/identification, and finish requirements are defined by drawing numbers listed in paragraph 4.1.1 below. The LWARS shall provide, at a minimum, a 35% reduction in areal density³ over the existing metallic armor system, and no recurring routine maintenance after installation. The LWARS shall be capable of at least a V50⁴ ballistic limit of 2900 feet per second against a.30 caliber APM2⁵ threat at 30-degree angle of obliquity.⁶ The LWARS shall be able to withstand multiple ballistic impacts, and be made of material that readily accepts the surface finish requirements of the aircraft.

The parties have stipulated that the solicitation called for designing, testing and fabricating a Light Weight Armor Replacement System for the CH-46E helicopter, with a 35% reduction in weight from the existing armor, capable of withstanding a threat with a V50 ballistics limit of 2900 feet per second, against a.30 caliber armor piercing missile at a 30 degree angle of obliquity. The RFP did not specify what armor material must be used; instead, the requirements the armor had to meet were specified.

Armour of America proposed its own KSP-60⁷ armor in response to the RFP: Armour of America's proposed armour system to be supplied as a lightweight substitute for the current metallic armour is our Grades [sic] KSP-60.

Grade KSP-60 armour has an areal density of 6.1 lbs per square foot. This areal density, based on an approximate areal density of the current metallic armour of 11.0 lbs per square foot will offer a weight savings of 43%.⁸

Armour of America's proposed 43% weight savings was greater than the 35% weight reduction required by the Statement of Work.

Nine proposals were received by the Navy in response to the solicitation. A competitive range was established with five offerors, including plaintiff Armour of America and intervenor/reprocurement contractor ArmorWorks. The Navy's evaluation factors were Technical, Past Performance, and Price. The Technical and Past Performance factors combined were significantly more important than Price. The Technical subfactors were Weight Reduction, Ballistics, Environmental Compatibility, Fit (conformance to the armor mounting layout), and Technical Capability. Of these Technical subfactors, Weight Reduction was more important than the other four Technical subfactors combined, with each of the other four subfactors of equal importance.

During the initial technical evaluation, Armour of America received an overall Technical rating of Highly Satisfactory, with Medium Risk. For the Ballistics subfactor, however, Armour of America received a rating of Unsatisfactory, with High Risk. Armour of America's initial evaluation on all of the Technical subfactors, including Ballistics, was as follows:

+---------------------+----------------+--------+
                | Technical Subfactor | Rating         | Risk   |
                +---------------------+----------------+--------+
                | Weight Reduction    | Outstanding    | Medium |
                +---------------------+----------------+--------+
                | Ballistics          | Unsatisfactory | High   |
                +---------------------+----------------+--------+
                

+-----------------------------+--------------+--------+
                | Environmental Compatibility | Satisfactory | Medium |
                +-----------------------------+--------------+--------+
                | Fit                         | Satisfactory | Low    |
                +-----------------------------+--------------+--------+
                | Technical Capability        | Marginal     | Medium |
                +-----------------------------+--------------+--------+
                

In response to the ballistics requirements, Armour of America submitted ballistics test data, but for different threats and velocities than called for by the RFP. During discussions, the contracting officer asked Armour of America and the other offerors in the competitive range nineteen questions, several of which were related to the ballistics requirements of the RFP. The contracting officer's Question 3 was: "Provide an assessment of whether your proposed LWARS will meet the Government's ballistics requirements to include documentation, analysis or examples for how your proposed LWARS material will meet the V50 [sic] specification."

In its response to the contracting officer's discussion questions on ballistics, Armour of America stated: "During ballistic testing validation and verification, AOA will demonstrate the multiple hit capabilities." In the same response to the contracting officer, Armour of America also stated: "Per the RFP the armour will be tested to V50 [sic] ballistic limits." Armour of America's also responded to Question 3 as follows:

3. Ballistic Capability-As discussed in the original proposal, Armour of America's KSP-60 will stop the following rounds at velocities shown.

+------------+-----------------+----------+---+-----------+
                | 7.62 x 39  | Russian/Chinese | Hardcore | @ | 2400 FPS9 |
                +------------+-----------------+----------+---+-----------+
                | 7.62 x 54R | Russian/Chinese | Hardcore | @ | 2800 FPS  |
                +------------+-----------------+----------+---+-----------+
                | 7.62 x 51  | NATO            | Ball     | @ | 2700 FPS  |
                +------------+-----------------+----------+---+-----------+
                | 5.56 x 109 | NATO            | Ball     | @ | 3300 FPS  |
                +------------+-----------------+----------+---+-----------+
                | 5.56 x 885 | NATO            | Hardcore | @ | 3200 FPS  |
                +------------+-----------------+----------+---+-----------+
                | 5.56       | NATO            | AP       | @ | 3150 FPS  |
                +------------+-----------------+----------+---+-----------+
                

Thus, Armour of America did not address the exact threat contained in the RFP involving a.30 caliber armor piercing round at 2900 feet per second.

The initial Technical Evaluation Report Summary stated that:

AOA [Armour of America] failed to provide a test plan or other documentation to demonstrate their ability to design armor to meet the.30 caliber APM2 threat. AOA submitted ballistic test data summaries for different threats (not.30 caliber APM2), at lesser velocities than the LWARS requirement, and not in the

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