Opinion ID: 186249
Heading Depth: 2
Heading Rank: 5

Heading: Over and Above Work CLINs

Text: 26 Finally, McDonnell Douglas challenges as arbitrary and capricious the decision of the Air Force to disclose CLINs containing the hourly labor rates McDonnell Douglas charges the Air Force for Over and Above Work, that is, maintenance and repair work not required under the contract, which the Air Force is not required to direct to McDonnell Douglas. The Company first complains a competitor with knowledge of these rates would be able to underbid it for Over and Above Work. Because McDonnell Douglas did not make this specific argument to the Air Force prior to its issuance of the Final Decision, we shall not consider it. McDonnell Douglas also complains, however, that knowledge of these CLINs would clearly place such a competitor at a distinct advantage over [McDonnell Douglas] in any contract (commercial or military) awarded on the basis of a price comparison. Specifically, McDonnell Douglas claims it was no secret — based upon local newspaper articles published in 1996 — the Company paid the going wage at its new Boeing Aerospace Support Center (BASC), located at the former Kelly Air Force Base in San Antonio; releasing the labor rates it charges for Over and Above Work, therefore, would enable its competitors to calculate the overall markup (or labor pricing factor) McDonnell Douglas uses, to its detriment in bidding on future contracts. 27 In an effort both to make sense of and to refute this claim, the Air Force responds that a competitor could not safely assume McDonnell Douglas either pays its blue collar employees the prevailing wage or meets the standard for fringe benefits in the area, both as determined by the Department of Labor. Moreover, the Air Force found McDonnell Douglas submitted significantly different rates for Over and Above Work in the present contract and in a contract to service KC-135 aircraft at the BASC; a competitor therefore could not reasonably infer the Over and Above Work CLINs in the present contract accurately reflect the Labor Pricing Factor McDonnell Douglas will use in bidding on some future contract. 28 McDonnell Douglas presents neither a viable theory nor any evidence to support its claim that release of the Over and Above Work CLINs would enable a competitor to derive its Labor Pricing Factor. The 1996 newspaper articles McDonnell Douglas submitted to the Air Force to prove its competitors know how much the Company pays its mechanics are not persuasive. For example, a newspaper report that the average blue collar worker at Kelly AFB earned $28,352 per year two years before the BASC was established there, see http://www.boeing.com/defensespace/aerospace/maintenance/basc.html, does not reveal anything about the prevailing wage for McDonnell Douglas employees performing work under the contract at the BASC — then or now. Nor does McDonnell Douglas present any evidence that the cost of the benefits it currently provides to mechanics is publicly known; the average salary at Kelly AFB reported in 1996 specifically exclud[ed] benefits, and incoming contractors (such as McDonnell Douglas) had announced that retirement and vacation [benefits] would differ from what civil servants [were then receiving]. 29 Based upon the publicly available information the Company submitted to the Air Force, the agency reasonably concluded McDonnell Douglas failed to carry its burden of showing release of the Over and Above CLINs was likely to cause it substantial competitive harm. Therefore, the decision of the Air Force to release the CLINs was not arbitrary and capricious. See CNA Fin. Corp., 830 F.2d at 1155-56.