Over in the nation's capital, the U.S. Court of Appeals
for the Federal Circuit has just overturned a lower court's
ruling that stripped Boeing of its contract to service KC-135
refueling tankers.
As
The
Wall Street Journaldescribed the story, Boeing won
the contract to service the planes back in September 2007.
Alabama Aircraft Industries -- don't laugh:
They were big enough to go toe-to-toe with
L-3 (NYSE: LLL),
Alliant Techsystems (NYSE: ATK), and
Orbital Sciences (NYSE: ORB) for a
NASA contractlast year -- proceeded to file suit,
challenging the award's validity. And AAI was so convincing
that the federal judge apparently agreed to rewrite the rules
of the Air Force's request for proposals, resulting in an
"impermissible substitution of the court's judgment for the
[Air Force's]."
It's ... something ... all over again
Does all this sound eerily familiar? If so,
it's not
deja vuyou're feeling -- you're thinking of the
similar ruling last month, when the Air Force gave a
different refueling contract (
for KC-10 tankers) to Boeing rival
Northrop Grumman (NYSE: NOC). As you may
recall, Boeing broke new ground when it decided
notto challenge that award. But this time, the
situation is different.
For one thing, it wasn't Boeing that started this fight.
Boeingwon the KC-135 contract fair and square; it
was
AAIthat raised a ruckus and
rang up the lawyers. For another thing, Boeing filed its
appeal of the lower court's verdict months before the
Pentagon began pressing contractors to limit their award
challenges to only extreme cases. This being the case, the
precedent Boeing set when it agreed not to fight Northrop's
KC-10 win has not been unsettled by this latest legal
news.
At least, not yet
Or so a Fool can hope. As I argued last month,
this rash of contrary contractors, calling in lawyers
whenever a Pentagon contest doesn't go their way, poses a
clear and present danger to U.S. troops in the field.
Whatever the legal merits, these complaints threatened to
prevent
General Dynamics (NYSE: GD) and
Navistar (NYSE: NAV) from building
armored vehicles for the Armylast year. They delayed
delivery of vital refueling tankers to the Air Force by
more than six years.
And not to sound like a war-profiteer here but ... yeah,
the Pentagon's inability to get a final award out the door on
so many contracts
doeshurt investors. It's hard for our companies to
profit from a contract when they can't even begin work till
the lawyers are done wrangling.
So forgive me for gloating a bit here but ... yes, I am
glad to see AAI
get its comeuppancein court.
Related Foolishness:
lawyers in briefs?
And when did the tide
begin to turn?
Should we heed the Pentagon's plea for
More Guns, Fewer Lawyers?
This article was originally published as
Boeing Wins!on
Fool.com
© 2009 UCLICK L.L.C.
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