L-3 Communications Integrated Systems v. United States

84 Fed. Cl. 768, 2008 U.S. Claims LEXIS 354, 2008 WL 5248758
CourtUnited States Court of Federal Claims
DecidedNovember 25, 2008
DocketNo. 06-396C
StatusPublished
Cited by14 cases

This text of 84 Fed. Cl. 768 (L-3 Communications Integrated Systems v. United States) is published on Counsel Stack Legal Research, covering United States Court of Federal Claims primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
L-3 Communications Integrated Systems v. United States, 84 Fed. Cl. 768, 2008 U.S. Claims LEXIS 354, 2008 WL 5248758 (uscfc 2008).

Opinion

OPINION AND ORDER DENYING DEFENDANT’S MOTION TO DISMISS

WILLIAMS, Judge.

In this post-award bid protest, L-3 Communications Integrated Systems, L.P. (“L-3”) challenges the Air Force’s award of two contracts to Lockheed Martin Aeronautics Company (“Lockheed Martin”) to modernize the C-5 Galaxy aircraft (“C-5 AMP”), and seeks its bid preparation and proposal costs.2 This protest was filed in the wake of the former Principal Deputy Secretary of the Air Force’s conviction for violating conflict of interest laws. Specifically, the former Principal Deputy Secretary, Darleen Druyun, admitted that she allowed her personal interest to influence her procurement decisions with respect to the Boeing Company—she, her daughter and son-in-law negotiated for employment with Boeing while she was a top Air Force procurement official.3

Plaintiff has raised several grounds of protest, claiming that through Druyun’s unauthorized assumption of the SSA duties and her change of evaluation ratings to justify the selection of Lockheed Martin’s higher cost proposal, the Air Force improperly compromised the integrity of the procurement process, breached its implied contract to treat proposals fairly, honestly, and in good faith, and violated a panoply of procurement statutes and regulations.4 L-3 further claims that Druyun was biased in favor of Lockheed Martin and acted in bad faith in the C-5 AMP procurement. Finally, L-3 asserts that the Air Force acted arbitrarily and capriciously in making award to Lockheed Martin.

This matter comes before the Court on Defendant’s motion to dismiss on three grounds.5 First, Defendant contends that this Court lacks jurisdiction under 28 U.S.C. § 1491(a)(1) because the Administrative Dispute Resolution Act of 1996 (“ADRA”) displaced this Court’s implied-contraet jurisdiction in bid protests. This Court put that argument to rest in resolving Defendant and Intervenor’s first motion to dismiss, finding that while ADRA obviated the need to premise jurisdiction on breach of a implied-in-fact contract, the Act in no way prohibited a plaintiff from alleging such a breach as a legal theory of recovery. Second, Defendant claims that the action is barred by the Anti-Assignment Act, 31 U.S.C. § 3727, because the Act prohibits L-3 as the successor-in-interest to the bidder on this procurement, Raytheon Systems Corporation, from pursuing its claim for bid and proposal preparation costs. Because L-3 acquired Raytheon Systems Corporation’s Aircraft Integration Systems business unit in toto by operation of law, the Act does not bar L-3 from pursuing this claim. By virtue of this acquisition, only L-3 possesses the right to pursue this claim, and the evil the Act was designed to prevent—subjecting the Government to multiple lawsuits for the same claim—is not present here. Third, Defendant contends that L-3 lacks standing because it was not an actual [771]*771or prospective offeror in the C-5 AMP procurement. Because L-3 stands in the shoes of Raytheon Systems Corporation as its successor-in-interest, it is in essence the same entity which submitted the offer and possesses standing to seek bid and proposal preparation costs. As such, Defendant’s motion to dismiss is denied.

Background6

L-3’s Acquisition of Raytheon Company’s AIS Business Unit

L-3 Communications Corporation (“L-3 Communications”) is a wholly owned subsidiary of L-3 Communications Holdings, Inc. On March 8, 2002, L-3 Communications acquired Raytheon Company’s Aircraft Integration Systems (the “AIS Business”). Defendant’s Motion to Dismiss (“Def.’s Mot.”) at A16, A149-A151. To effect the acquisition, an Asset Purchase Agreement (“the Agreement”), dated January 11, 2002, was executed among Raytheon Company, Ray-theon Australia Party Limited (“Raytheon Australia”),7 and L-3 Communications. Def.’s Mot. at A5-A148.8 The Agreement identified Raytheon Company and Raytheon Australia individually and collectively as the Sellers, and L-3 Communications as the Buyer. Id. at A16. The Agreement provided for the purchase of “the assets of the Sellers relating exclusively or primarily to the AIS Business.” Id.

The Agreement defined the AIS Business as follows:

[T]he “AIS Business” means those operations of Raytheon [Company] or any of its Subsidiaries that are conducted as of the Closing Date through its Aircraft Integration Systems business unit principally at facilities located in Greenville, Texas,
Waco, Texas, Lexington, Kentucky, and Avalon, Australia (but expressly excluding any business or operations similar or identical to the type performed by Raytheon [Company] or its Subsidiaries at facilities other than those named above which are managed by personnel other than AIS management, including, but not limited to, the business and operations of the type performed at [Raytheon Company’s] Wichita, Kansas, McKinney, Texas, Garland, Texas, El Segundo, California, Goleta, California, Fort Wayne, Indiana, Indianapolis, Indiana, and Falls Church Virginia facilities).

Id.

Article I of the Agreement provided for a transfer of assets at the Closing as follows:

(a) Transfer of Assets. On the basis of the representations ... each Seller shall sell, convey, and assign and transfer to the Buyer, and the Buyer shall purchase and acquire from such Seller, all such Seller’s right, title and interest in and to the assets, properties and rights of such Seller, of every kind, nature, character and description (accrued, contingent or otherwise), tangible and intangible, real, personal or mixed, wherever located, existing as of the Closing which are utilized exclusively or primarily in the AIS Business (the “Acquired Assets ”), including, without limitation, the following assets, properties and rights, in each case to the extent the assets or properties are owned or the rights are held by a Seller as of the Closing and exclusively or primarily utilized in or relating to the AIS Business:
(xiv) all actions, claims, causes of action, rights of recovery, choses in action, rights of setoff of any kind, and all rights under [772]*772and pursuant to all indemnities, warranties, representations and guarantees arising before, on or after the Closing relating exclusively or primarily to the AIS Business, any Acquired Assets or any Assumed Liabilities____

Id. at A17-20. L-3 also assumed all liabilities and obligations of each Seller, “related exclusively or primarily to the AIS business,” at the Closing. Id. at A22-23.

Article II of the Agreement included the following paragraph in the “Representations and Warranties of Sellers”:

2.14 Entire Business. Except for (i) the Excluded Assets, (ii) any services or functions provided to the Buyer under the Transition Services Agreement, (iii) any Assigned Contracts covered by Section 1.5 and (iv) those items listed in Schedule 2.14,

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Bluebook (online)
84 Fed. Cl. 768, 2008 U.S. Claims LEXIS 354, 2008 WL 5248758, Counsel Stack Legal Research, https://law.counselstack.com/opinion/l-3-communications-integrated-systems-v-united-states-uscfc-2008.