Boeing Company v. U.S. Department of the Air Force

CourtDistrict Court, District of Columbia
DecidedMay 19, 2009
DocketCivil Action No. 2005-0365
StatusPublished

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Boeing Company v. U.S. Department of the Air Force, (D.D.C. 2009).

Opinion

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

______________________________ ) THE BOEING COMPANY, ) ) Plaintiff, ) v. ) ) Civil Action No. 05-365 (GK) U.S. DEPARTMENT OF THE ) AIR FORCE, ) ) Defendant. ) ______________________________)

MEMORANDUM OPINION

Plaintiff The Boeing Company (“Boeing”) brings this action

against Defendant United States Department of the Air Force Space

and Missile Systems Center (“Air Force”) pursuant to the Freedom of

Information Act (“FOIA”), 5 U.S.C. § 552, as amended by the Freedom

of Information Act of 1986 (“FIRA”), Pub.L. No. 99-570, § 1801-04,

100 Stat. 3207-48, 48-50; the Trade Secrets Act, 18 U.S.C. § 1905;

and the Administrative Procedure Act, 5 U.S.C. § 702.

The present matter is before the Court on Defendant’s Motion

for Summary Judgment [Dkt. No. 20], and Plaintiff’s Motion for

Summary Judgment [Dkt. No. 21].

Upon consideration of the Motions, Oppositions, the entire

record herein, and for the reasons set forth below, Defendant’s

Motion for Summary Judgment is granted, and Plaintiff’s Motion for

Summary Judgment is denied. I. Background1

The Global Positioning System (“GPS”) is a “space-based radio-

positioning system” that depends on a “24-satellite constellation

that provides navigation and timing information to military and

civilian users.” Pl.’s Mot. for Summ. J. at 1. It has become

increasingly widespread as a mapping tool in cars, cell phones, and

fitness monitors used by runners and cyclists.

The technology depends upon a network of satellites that are

updated and replaced over time. Id. at 2. There have been four

generations of satellites: Block I, Block II, Block IIA, and Block

IIR. Id.

After a competitive procurement in April 1996, the Air Force

awarded the production contract for the Block IIF “next generation”

satellites to Boeing. Id. The contract provided for Boeing to

build and launch six satellites and included options for twenty-

seven more. Id. In March 2000, the Air Force decided not to

exercise all twenty-seven options. It contracted with Boeing to

build the first twelve satellites and put the other fifteen

contracts out for competitive bidding. Id.

1 Unless otherwise noted, the facts set forth herein are undisputed. These facts are typically drawn primarily from the parties’ Statements of Undisputed Material Facts submitted pursuant to Local Civil Rule 7(h). However, in this case, only Defendant submitted a Statement of Undisputed Material Facts to accompany its Motion for Summary Judgment. Plaintiff responded to Defendant’s Statement [Dkt. No. 28], but submitted its Motion for Summary Judgment without including its own Statement of Material Facts.

2 On January 22, 2004, the Air Force received a FOIA request

from Federal Sources, Inc. Federal Sources is a fee-based

commercial service that submits FOIA requests on behalf of

companies or individuals. Boeing believes that the requestor is

Boeing’s major competitor, Lockheed Martin.

The request sought a copy of Air Force contract F4701-96-C-

0025, all modifications to that contract, and the Source Selection

Decision Document. The contract was awarded in 1996 and will

continue through 2012. Federal Sources subsequently agreed to

accept a conformed version of the contract in place of the original

contract and all modifications.2

Boeing was notified of this request by a letter from the Air

Force dated January 28, 2004. On March 31, 2004, Boeing responded

to the request for the Source Selection Decision Document. The

parties subsequently resolved their differences about this

document, so it is not an issue in this litigation.

On April 12, 2004, Boeing submitted its objections to the

release of the pricing information or wrap-around rates contained

in sections B and H of the contract. Specifically, Boeing objected

to the release of information in Sections H.17, H.23, and H.24, as

well as the following contract line item numbers (“CLINs”) in

2 Boeing used the term “conformed” in its Motion. Pl.’s Mot. for Summ. J. at 4. Neither party defined the term.

3 section B: CLINs 7, 16, 23, 40, 41, 43, and 45.3 Boeing objected

only to the release of rates, not to the release of the total

contract price. Pl.’s Opp’n at 21. Boeing emphasized in all its

pleadings that it is opposed to disclosing “wrap rates,” i.e.,

rates that combine an employee’s wages, employer-paid taxes,

benefits, and allocated overhead costs. Id. at 23. The wrap rates

include “labor rates, profit rates, or the combination of the two

-- and any information that would enable a competitor to derive

those rates.” Id. at 21.

On October 22, 2004, the Air Force responded that information

from 1996 through 2004 could not be used to produce projections

with “sufficient validity to cause a likelihood of substantial

competitive harm.” It also agreed not to release information from

2005 through 2012.

On December 2, 2004, Boeing submitted additional comments. It

agreed to the release of pricing information for the years 1996

through 1999. However, it objected to the release of such data for

the 2000-2004 period on the ground that it could be used to predict

Boeing’s future labor rates.

On January 25, 2005, the Air Force issued its Final

Administrative Decision Letter (“Decision Letter”). The Decision

3 CLINs are “composed predominantly of the costs of materials and services [Boeing] procures from other vendors.” McDonnell Douglas v. Dep’t of the Air Force, (“McDonnell Douglas II”), 375 F.3d 1182, 1190 (D.C. Cir. 2004).

4 Letter indicated that the Air Force would release all requested

pricing information for the period between 1996 and 2004 within two

weeks of that date, although it agreed not to release prices for

the years 2005-2012. The Decision Letter also indicated that

Boeing was required to submit proposed unit prices when it

submitted its contract bid and that Boeing had failed to establish

that release of the requested information would be likely to cause

substantial harm to Boeing’s competitive position.

On February 16, 2005, Boeing responded to the Decision Letter,

stating its disagreement with the agency’s decision. On February

23, 2005, the Air Force responded further, stating that it had been

careful in reaching its decision and indicating that it planned to

release the contract, including the disputed information in

sections B and H, for all years prior to 2005.

On that same date, Boeing filed its Complaint for Declaratory

and Injunctive Relief. On August 18, 2005, a stay was ordered

until December 28, 2005 to permit Boeing to submit comments in

response to the Air Force’s February 23, 2005 letter and to allow

the Air Force to reply. Boeing submitted its comments on November

23, 2005, and the Air Force issued a final agency decision on

December 27, 2005. In this final decision, the Air Force

reiterated its view that the requested information could be

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