Alabama Aircraft Industries, located in Birmingham, has filed a suit against its former partner Boeing Co., claiming the defense contracting giant won a $1.1 billion Air Force contract by stealing proprietary information stemming from a joint venture between the firms. Alabama Aircraft, which is coming out of bankruptcy, filed the suit in Jefferson County Circuit Court. Alabama Aircraft, which in recent months employed about 325 people, was bought by Virginia-based Kaiser Holdings Group while in Chapter 11 bankruptcy. The new owners cut about 200 jobs from the plant, leaving a work force of about 118 people.
The Boeing lawsuit arises out of the battle for a U.S. Air Force contract to maintain KC-135 aerial refueling tankers. During that time, Boeing and Alabama Aircraft were partners on the maintenance. Before that, Alabama Aircraft was the main contractor, going back to 1969. But for the new 2008 contract – a deal worth $1.1 billion – Boeing was the sole winner over Alabama Aircraft. Now, the Alabama company is alleging unfair tactics in the bidding and award process. Among other claims, the suit alleges:
Boeing was throughout this relevant time period a lawbreaker and chiseler of the government and its business partner, and engaged in patterns of misconduct.
These are very serious charges made against a giant in the government contracting business. A Boeing spokesman says the lawsuit is without merit and is only a re-hash of earlier attempts to get the KC-135 contract stripped from the Chicago-based company. The spokesman had this to say about the suit:
Allegations raised by Alabama Aircraft Industries Inc. in a state lawsuit filed on Friday against the Boeing Co. over the U.S. Air Force KC-135 Programmed Depot Maintenance contract award are baseless. This seems to be an attempt by Alabama Aircraft to re-litigate claims that have already been denied after a thorough review over a 30-month protest of the contract with the Government Accountability Office, the U.S. Court of Federal Claims and the U.S. Court of Appeals.
Boeing is the second-largest U.S. defense contractor, with revenue last year of $65 billion. Alabama Aircraft, formerly known as Pemco Aeroplex, had annual revenue of $54 million the last time it filed Securities & Exchange Commission financial statements in 2007. Haskell Slaughter Young & Rediker, a Birmingham law firm, is representing Alabama Aircraft in the suit. Among the allegations in the lawsuit, which seeks unspecified damages to include lost profits and punitive damages against Boeing, the company claimed:
That Boeing lied to Alabama Aircraft during their joint venture by saying Air Force budget constraints meant the government could only pay $3.25 million for the refurbishing of each KC-135, depriving the Alabama company of the opportunity to earn more from the contract. Boeing, meanwhile, billed the Air Force for Alabama Aircraft’s sub-contracting work at a higher rate and pocketed the difference. That Boeing’s promise to include Alabama Aircraft as a 50% subcontractor on a new KC-135 contract was a ruse designed only to get the larger company an up-close look at the smaller one’s shop techniques, and to sideline it as a competitor for the work.
That Boeing withheld parts during the joint venture on KC-135 work, to prevent Alabama Aircraft from completing planes ahead of schedule and earning bonus payments. Alabama Aircraft filed for bankruptcy protection in February, citing $70 million owed to a union pension plan.
Mike Rediker, a very good and experienced litigator, will be the lead lawyer for the Plaintiff in the case. It will be interesting to watch the developments as this lawsuit goes through the system.
Source: Associated Press
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