Crowell Secures $131 Million Trial Win for Lockheed Martin in C-5 Aircraft Case

Washington – June 11, 2024: The Armed Services Board of Contract Appeals ruled in favor of Crowell & Moring client Lockheed Martin in the C-5 Reliability Enhancement and Re-engineering Program dispute (Appeal of Lockheed Martin, ASBCA No. 62209), holding that Lockheed Martin is entitled to $131,888,860 plus interest under the Contract Disputes Act. The decision follows a four-week bench trial in October 2022.

Crowell filed an appeal at the Board in October 2019, seeking to recover from the U.S. Air Force for the substantial cost impacts of extra work ordered by the government during a major refurbishment program related to the C-5 Galaxy Aircraft. The C-5 is the largest military aircraft in the world, with a heavy intercontinental-range strategic airlift capability critical to U.S. military operations across the globe.

The dispute arose when the U.S. Air Force refused to pay for the cumulative impacts to the main Reliability Enhancement and Re-engining Program caused by excessive over and above work, which took place between 2012 and 2018, arguing that the parties’ contract did not entitle Lockheed Martin to any payment. Moreover, the Air Force asserted that Lockheed Martin’s lawsuit was barred by the applicable statute of limitations; barred by the alleged lack of notice provided to the Air Force; barred by the equitable doctrine of laches; and finally, barred by Lockheed Martin’s inability to prove any specific dollar quantification of the additional work ordered by the Air Force and its impact on Lockheed Martin.

The Board sustained Lockheed Martin’s appeal after finding that the company had met its burden of proof on entitlement and quantum, using the measured-mile methodology, which compares an affected period of performance with an unaffected period. The decision sided with Lockheed Martin in every material respect, rejecting each of the Air Force’s affirmative defenses, and granting Lockheed Martin every dollar of claimed impact, plus interest, dating back to the company’s initial claim in 2018. This case is a prime example of marshalling fact and expert witness testimony, and documentary evidence, to demonstrate the impacts of cumulative disruption on performance to justify causation and damages.

The Crowell team was led by partner Steve McBrady and included partners Michelle Coleman, Skye Mathieson, and Chris Haile; counsel John Nakoneczny; and associate Amanda McDowell.

Click here to read the decision.

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