Lockheed Martin held a cost plus fixed fee prime contract to provide demonstration of antenna and transmitters for the Navy’s AEGIS missile program.  Its subcontract for antenna work was cost type while its subcontract on transmitter work was fixed price.  The Navy terminated the contract for convenience where each subcontractor submitted a termination proposal to its next upper tier contractor where Lockheed included these proposals in its settlement proposal to the government and Lockheed sought recovery of fee for work performed by its subcontractors.  Citing FAR 49.305-1 covering terminations for cost type work, the Government refused fee on the cost type subcontract work.  Before the Board, Lockheed argued that FAR Parts 15 and 16 showed an intent to treat cost-type and fixed-price contracts the same for recovery of fee or profit, arguing it would be “incongruous” for different treatment.  The Board sided with the government claiming that FAR 49.305-1(a) is clear that fee for subcontractor effort would not be included in subcontractors’ settlement proposals for cost type work and called Lockheed’s claim about equal treatment a “nebulous” assertion (Lockheed Martin Corp. v. England, 2005 WL 2293084).

{TAG_FORM_TITLE}