my copy is different ??? will post page 15- 21 from my copy
II. COUNT THREE – AAI CLAIMS REGARDING ITS PROPRIETARY INFORMATION (BREACH OF AGREEMENTS)
A. AAI relies upon the following legal theories in support of its claims against Boeing regarding its proprietary information.
As a result of teaming agreements and other contracts and agreements between Boeing and
AAI, Boeing possessed AAI PI accumulated since 2000 and frequently updated, which was
competition-sensitive, not in the public domain, and valuable. AAI claims that Boeing breached
its several agreements with AAI that required Boeing to protect and not improperly use AAI’s PI,
and to comply with laws and regulations protecting against misuse of PI, because Boeing
knowingly and intentionally:
(1) failed to take appropriate steps to safeguard AAI’s PI after Boeing began
evaluating and pursuing plans in the spring of 2006 to (i) stop teaming with AAI under the
Recompete MOA to obtain a USAF contract to perform PDM services on the KC-135
Aircraft (the “Program”) and (ii) compete against AAI for the Recompete contract;
(2) failed to timely and effectively implement firewall and PI sequestration
measures to protect AAI’s PI after it decided it was in Boeing’s interest to take all PDM
Case 2:11-cv-03577-RDP Document 492 Filed 10/10/19 Page 15 of 35
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work in San Antonio, making AAI its competitor for such work;
(3) failed to ensure that the Boeing’s personnel working on Boeing’s Recompete
team and bid submissions in prospective and in actual competition with AAI, were at all
relevant times permitted to participate under contractually-applicable laws and regulations,
as well as Boeing’s own policies, manuals and procedures (necessary for regulatory
compliance) and industry standards relating to procurement activity;
(4) failed to prevent Boeing employees who had knowledge of AAI’s PI stemming
from Boeing activities under agreements with AAI from working on Boeing’s Solo
Recompete activities and bid submissions in potential or actual competition with AAI, after
Boeing personnel were on reasonable notice of the likelihood of a conflict of interest
between Boeing and AAI arising from Boeing’s potential (and then actual) termination of
the Recompete MOA;
(5) used AAI-PI-knowledge-contaminated Boeing personnel, including those
handling Joint Recompete bid estimating and pricing who were familiar with AAI’s PI
(including estimates, costs, hours, rates, prices and the methods AAI used for estimating
and pricing tasks, staffing, labor, overhead, profit, materials, and other cost and pricing
factors) to develop Boeing’s estimates and prices relevant to its Solo Recompete bid in
competition with AAI after Boeing personnel were on reasonable notice of the likelihood
of a conflict of interest between Boeing and AAI arising from Boeing’s potential (and then
actual) termination of the Recompete MOA and after key Boeing personnel stated that
Boeing personnel with knowledge of AAI’s PI should not work on Boeing’s Solo
Recompete bid;
Case 2:11-cv-03577-RDP Document 492 Filed 10/10/19 Page 16 of 35
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(6) deleted, destroyed, and concealed evidence in order to cover up Boeing’s
misconduct with AAI’s PI and to impede AAI’s ability to prove that misconduct; and
(7) misappropriated and misused AAI’s PI, and used AAI-PI-knowledge
contaminated Boeing personnel to facilitate the misappropriation and misuse of AAI’s PI,
to frame Boeing’s Solo Recompete bid submissions to underbid AAI and to win the
Recompete contract award; all of which damaged AAI.
AAI’s breach of agreements claim is based on the following agreements that were in force
in 2005-2007 between AAI and Boeing: (1) the PI-protection provisions of “The Boeing Company
General Provisions (Fixed Price Services Contract) GP2,” generally referred to as GP2, for both
the 0054 and Bridge contract work; (2) the NDA; (3) the PI-protection provisions of Recompete
MOA §§ 5, 6 and 7; (3) the government laws and regulations and Boeing-government agreements
regarding procurement integrity and protections against misuse of PI with which, by contract
(Recompete MOA § 9.0 and NDA §9.0), Boeing agreed to implement and comply; and (4) the
agreements reached between Mark Rabe (counsel for Boeing) and Doris Sewell (counsel for AAI).
Therefore, AAI will prove at trial that: (1) Boeing and AAI entered into contracts governing
the parties’ PI; (2) AAI performed, or substantially performed its obligations pursuant the
contracts’ terms; (3) Boeing failed to perform things the contracts required it to do; and (4) AAI
was harmed by that failure. (Paraphrasing SAK Constr. of CA, L.P., supra.).
B. AAI expects to prove the following categories of factual allegations in support of its claims against Boeing concerning AAI’s PI6
1. The facts and circumstances relating to AAI’s development, accumulation and
6 As a number of fact elements cited under Count One, supra, are also relevant to AAI’s PI-misuse claims under Count Three here, they are not repeated here but are incorporated here from Count One, supra, by reference.
Case 2:11-cv-03577-RDP Document 492 Filed 10/10/19 Page 17 of 35
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possession of extensive and invaluable trade secrets and proprietary information connected with
KC-135 work (“PI”) which was not in the public domain and which would be valuable to anyone
seeking to compete with AAI or others for KC-135 repair and depot work.
2. The facts and circumstances relating to the 1998 RFP “bundling” which directly
led to the situation of AAI having to share its PI with Boeing.
3. The facts and circumstances, including the nature, terms, conditions and
requirements of the parties’ several contracts for KC-135 work, relating to AAI having to provide
Boeing with AAI’s PI and to update such PI, including AAI’s compliance with such terms and
requirements.
4. The facts and circumstances relating to Boeing’s obligations to protect AAI’s PI at
all relevant times.
5. The facts and circumstances relating to Boeing’s access to and possession and use
of AAI’s PI from 2000 through 2007 and relating to Boeing’s continuous access to AAI’s
Birmingham facility under the parties’ several contracts.
6. The facts and circumstances relating to the unequal (non-reciprocal) levels of
access to and possession of the other party’s PI, between Boeing as prime contractor and AAI as
subcontractor.
7. The facts and circumstances relating to Boeing’s knowledge from at least 2004
onward that it would eventually compete with AAI for all KC-135 PDM work (including AAI’s
share under the parties’ contracts), and how this related to the need for Boeing to avoid conflicts
of interest and to protect against misuse of AAI’s PI.
8. The facts and circumstances relating to Boeing’s knowledge that AAI’s economic
Case 2:11-cv-03577-RDP Document 492 Filed 10/10/19 Page 18 of 35
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survival was dependent upon AAI’s retention of KC-135 PDM work, and implications of that
knowledge on the protection of AAI PI.
9. The facts and circumstances relating to Boeing’s use and handling of firewalls to
protect AAI PI prior to termination of the MOA.
10. The facts and circumstances relating to Boeing’s internal evaluations, analyses and
strategies for taking all KC-135 PDMs to its San Antonio facility and for terminating AAI as a
teaming partner, and implications of such facts and circumstances on Boeing’s need to protect
AAI’s PI.
11. The facts and circumstances relating to AAI’s delivery to prime contractor Boeing
of AAI PI under stipulations of confidentiality, including the nature and extent of such PI.
12. The facts and circumstances relating to Boeing personnel performing internal
studies, comparisons, and evaluations of AAI’s PI, including the familiarity of such personnel with
such AAI PI, and how such AAI PI was maintained, stored and disseminated within Boeing.
13. The facts and circumstances relating to Boeing’s Blue Team modeling of L-3 and
of Lockheed.
14. The facts and circumstances relating to Boeing’s formulation and implementation
of a Win Price.
15. The facts and circumstances relating to Boeing not having its Blue Team perform
a public-domain-information-based analysis of AAI, as Boeing had done for L-3 and Lockheed.
16. The facts, circumstances and time frames relating to which AAI PI was sequestered
and protected by Boeing and which AAI PI was not sequestered or otherwise protected against
misuse.
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17. The facts, circumstances and timing of Boeing’s knowledge that it had entered into
a conflict of interest position with AAI (by reason of becoming a competitor with AAI, to take all
PDM work into San Antonio) and the effects of such conflict and knowledge on Boeing’s
obligations to protect AAI PI, including sequestration of PI and change of Boeing Recompete
personnel who were knowledge-contaminated.
18. The facts and circumstances relating to Boeing’s secret internal price modeling that
used AAI’s PI without AAI’s knowledge or permission, and relating to whether such use went
beyond what was reasonably necessary if Boeing and AAI were to remain a bidding team.
19. The facts, circumstances and timing relating to Boeing’s institution of a firewall in
2006, its ineffectiveness, and Boeing’s failure to enforce adequate compliance.
20. The facts and circumstances relating to Boeing’s knowledge of the need to replace
its PI-knowledge-contaminated Recompete personnel and Boeing’s failure to do so, including its
concealment of material facts relating to the foregoing.
21. The facts and circumstances of Boeing’s secretly-conducted internal competition
against AAI (including writing AAI out of the upcoming bid submission and using AAI’s PI) while
still teamed with AAI under the MOA before June 6, 2006, using AAI PI, with no PI protections
being implemented.
22. The facts and circumstances relating to the applicable standards (including methods
and procedures) to which Boeing was obligated to adhere in order to effectively and completely
protect AAI’s PI against misuse, and relating to Boeing’s failure to adhere to such applicable
standards, methods and procedures.
23. The facts and circumstances relating to the 2006 agreements between Boeing and
Case 2:11-cv-03577-RDP Document 492 Filed 10/10/19 Page 20 of 35
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AAI concerning protection of the parties’ respective PI, and the parties’ compliance (or not) with
such agreements.
24. The facts and circumstances relating to Boeing’s spoliation of evidence relevant to
AAI’s PI and Boeing’s handling or use thereof.
25. The facts and circumstances relating to Boeing’s evaluations and analyses of AAI
and Lockheed as competitive threats during the parties’ independent bid preparation activities
between 2006 and final Recompete submissions in 2007.
26. The facts and circumstances relating to the means and methods by which Boeing
took improper advantage of its possession and knowledge of AAI PI to underbid AAI and
otherwise frame its bid submissions to defeat AAI’s competing bid, in order to win the Recompete
award.
27. The facts and circumstances relating to the result that but for the knowledge,
ongoing unauthorized possession and misuse and misappropriation of AAI’s PI by Boeing, Boeing
would not have been able to underbid or otherwise prevail over AAI in the Recompete bidding.
28. The facts and circumstances relating to AAI’s compliance with its own contractual
obligations respecting Boeing PI, including AAI’s comparative lack of knowledge of material,
relevant and useful Boeing PI and AAI not misusing Boeing PI.
29. The facts and circumstances relating to the impacts on AAI of Boeing’s breaches
of its several agreements to safeguard, protect and not use or misuse AAI’s PI, including forcing
AAI to incur substantial expense in a Recompete effort for its economic survival, while Boeing’s
contract breach ensured such AAI effort would be frustrated, and the harm and damage to AAI.
Case 2:11-cv-03577-RDP Document 492 Filed 10/10/19 Page 21 of 35
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III. DAMAGES
Recognizing the Court’s prior rulings, over AAI’s objections, on available damages, AAI
will claim the following damages:
1. Count I – as a direct result of Boeing’s breach of the Recompete MOA, AAI was
damaged in the following amounts: (i) actual reliance damages in the amount of the expenses it
had incurred in teaming with Boeing to submit a joint bid and (ii) actual damages in the amount
of the expenses it had incurred in submitting a solo bid. These actual incurred costs total
$2,132,062.53.
“A plaintiff claiming a breach of contract has available and need not choose between three
types of damages—actual, consequential, and benefit-of-the-bargain—as such damages are not
necessarily inconsistent with one another; a plaintiff may not, however, be made whole more than
once.” Catroppa v. Metal Building Supply, Inc., 267 S.W.3d 812, 817 (Mo. Ct. App. 2008).
“‘Actual damages are compensatory and are measured by the loss or injury sustained’ as a direct
result of the wrongful act.” Id. at 818 (quoting Stiffelman v. Abrams, 655 S.W.2d 522, 531 (Mo.
1983)). Reliance damages are a form of actual or direct damages. See, e.g., Nashville Lodging Co.
v. Resolution Trust Corp., 59 F.3d 236, 246 (D.C. Cir. 1995) (“The fact that reliance damages are
backward-looking does not destroy their pedigree as a species of compensatory relief. . . .
[R]emedies calibrated to putting the claimant back in the position he occupied before making the
repudiated agreement are ‘actual direct compensatory damages’ no less than those aimed to put
him where he would have been if the contract had been fulfilled.’”) “Reliance damages are
designed to compensate the plaintiff for any reasonably foreseeable costs incurred or expenditures
made in reliance on the promise that has now been broken.” Richard A. Lord, 24 Williston on
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