Honeywell International Inc. has filed a suit against aerospace contractor Moog Inc. The suit seeks $20 million in damages for repair and replacement costs for providing aircraft engine parts that did not perform as promised. Honeywell’s suit accuses Moog of breaking a supply contract by providing defective inlet guide vane actuators, or IGVAs, that contained unapproved seal materials. The parts were then used by Honeywell as a component for engines called auxiliary power units, or APUs, that were installed into aircraft to provide power while they are on the ground, according to the Arizona federal suit. It was alleged in the complaint:
Moog has breached, and continues to breach, its contractual obligation to meet specified requirements. To date, Honeywell has incurred significant damages in payments to Moog for repairs and replacements that Moog is contractually obligated to make.
Honeywell, which contracted with Moog to obtain IGVAs that met certain specifications, claims that Moog failed to inform Honeywell that its parts supplier changed materials for manufacturing seals that Moog later used to manufacture the IGVAs.
Under the terms of the contract, Moog was precluded from substituting new materials or making any design or configuration changes to the IGVAs without Honeywell’s knowledge and approval. Any such changes by Moog, including the use of different seal material, constituted a breach of the agreement, Honeywell says. After delivery, the IGVAs supplied by Moog for Honeywell’s APUs began failing, the suit claims. An investigation as to the cause of the failures revealed that the unapproved seal material was the root cause, according to the complaint.
The problems with the seal material, according to Honeywell, were not apparent during the initial testing phase of the IGVAs because the unapproved seal material had not yet been substituted in place of the original material, which met the contract’s procurement specifications. Specifications for the IGVAs included requirements that they perform within several specified temperature ranges, according to the complaint.
Honeywell returned the faulty IGVAs to Moog for repair or replacement as specified in their contract. But Moog allegedly ignored this contractual obligation and tried to force Honeywell to pay for the repairs. Through December 2013, Honeywell has incurred approximately $21.4 million in payments to Moog to conduct repairs and overhauls that Moog is contractually required to cover, including about $910,000 in costs associated with investigating and mitigating the failures, the suit says.
Additionally, Honeywell alleges that Moog has flouted agreed-upon turnaround times that the company has to make repairs to defective IGVAs – delays that Honeywell said harms the integrity of the engine components and forces Honeywell to perform more expensive overhauls of the entire APU. At $4,400 per overhaul, Honeywell claims that delays have cost it $4.6 million in excess fees for work not associated with the defective seal modifications “that should have been repairs but for Moog’s failure to comply with repair turnaround times.”
Some repairs and overhauls that were covered by two-year warranties provided by Moog were also charged to Honeywell without Moog providing warranty credits, which would amount to an additional $3 million in costs incurred, Honeywell says. Under the terms of the contract, Moog guaranteed IGVA reliability of 60,000 hours mean time between failures, but the units haven’t met that threshold, according to the complaint. The suit also names subsidiary Moog Inc. Aircraft Group as a defendant.
Honeywell wants a jury trial for its case. The company is seeking damages, pre- and post-judgment interest, and attorneys’ fees. Honeywell is represented by Dawn L. Dauphine and David B. Rosenbaum, who are with the Phoenix, Ariz.,-based firm Osborn Maledon. The case was filed in the U.S. District Court for the District of Arizona.
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