Dalton v. Cessna Aircraft Company

98 F.3d 1298 (1996)

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Dalton v. Cessna Aircraft Company

United States Court of Appeals for the Federal Circuit
98 F.3d 1298 (1996)

Facts

The United States Navy (plaintiff) issued a Request for Quotations (RFQ) for a firm fixed-price service contract to provide training services for undergraduate naval flight officers (UNFOs). The RFQ stated that proposals should include an “annual rate of 17,000 airborne training hours (approximately 58 airborne training hours per graduated student)” using contractor-provided aircraft. The Navy provided its current training curriculum, which totaled 12,000 flight hours per year at the maximum rate of 58 hours per UNFO, as a guideline for contractors. The Navy stated that it had no plans to alter the curriculum but that annual flight hours would increase to 17,000 if Congress approved a battle-group increase. Cessna Aircraft Co. (Cessna) (defendant) submitted a proposal based on the Navy’s current 12,000-flight-training-hours curriculum; however, pulling from the RFQ requirements, Cessna’s proposal stated, without qualification, that it would provide the Navy with 17,000 annual flight hours. The Navy accepted Cessna’s proposal. After three years, the Navy ordered Cessna to provide additional, non-training-related services in order to use all 17,000 flight hours. Cessna requested an equitable adjustment from the Navy, but its request was denied. Cessna appealed to the Armed Services Board of Contract Appeals (the Board), arguing that it was only required to provide services at the rate of 58 hours per UNFO, for a current total of 12,000 annual hours, and that the Navy was only entitled to 17,000 annual hours if Congress granted a battle-group increase. The Board granted Cessna’s request. The Navy appealed to the Federal Circuit, arguing that Cessna’s interpretation of the contract terms must be disregarded because Cessna’s interpretation created a patent ambiguity, which Cessna failed to resolve before submitting its proposal.

Rule of Law

Issue

Holding and Reasoning (Schall, J.)

Dissent (Newman, J.)

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