Defense firm appeals $277M verdict for Humvee maker

Dave Stafford
October 21, 2013
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A defense contractor is appealing an Indiana judge’s order that it pay $277 million to the Mishawaka-based manufacturer of Army Humvee military vehicles. The contractor overcharged for armor kits to retrofit the vehicles during the bloodiest days of the Iraq war, the judge ruled.

United Kingdom-based BAE Systems Inc. and its subsidiary firms last month filed notice with the Indiana Court of Appeals that it would appeal rulings by now-retired St. Joseph Superior Judge Michael P. Scopelitis, who awarded damages to AM General LLC.

Attorneys from Washington, D.C.-based Covington & Burling LLP, an American Lawyer A-List firm, last week applied for temporary admission to represent BAE. No attorneys have appeared on the appellate docket for AM General, which had its own high-powered Washington counsel in the trial court from the firm of Williams & Connolly.

Scopelitis in April issued a series of rulings including a 194-page order that BAE Systems pay AM General judgments totaling $277,939,519 for breach of contract and violations of most-favored customer clauses. 

The notice of appeal indicates it follows denial of a motion to correct error in the trial court. No further proceedings have been scheduled in the case and the trial court transcript has not yet been completed, according to case filings.

Scopelitis’ findings painted a picture of rampant overcharges from BAE and its predecessor companies that AM General passed on to the Army, even as AM General sought to determine true costs. Armor Holdings, which developed the retrofit armor kits, was purchased by BAE, and Armor Holdings’ executives received multi-million-dollar payments and retention bonuses, Scopelitis noted.

But Scopelitis wrote that “BAE was concerned … that disclosing its costs data would reveal excessive profits,” including markups on armor kits of 36 to more than 44 percent, well above the 5 percent to 15 percent profit the Army typically deems reasonable for tank and vehicle purchases.

BAE noted its intent to appeal after the ruling and disagreed with the findings in what it called an “extremely complex contract dispute.”

“BAE Systems is firmly committed to the principles of fair contracting and providing both value and performance in support of its many government and commercial customers,” the company said after Scopelitis’ ruling.



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  1. I have an open CHINS case I failed a urine screen I have since got clean completed IOP classes now in after care passed home inspection my x sister in law has my children I still don't even have unsupervised when I have been clean for over 4 months my x sister wants to keep the lids for good n has my case working with her I just discovered n have proof that at one of my hearing dcs case worker stated in court to the judge that a screen was dirty which caused me not to have unsupervised this was at the beginning two weeks after my initial screen I thought the weed could have still been in my system was upset because they were suppose to check levels n see if it was going down since this was only a few weeks after initial instead they said dirty I recently requested all of my screens from redwood because I take prescriptions that will show up n I was having my doctor look at levels to verify that matched what I was prescripted because dcs case worker accused me of abuseing when I got my screens I found out that screen I took that dcs case worker stated in court to judge that caused me to not get granted unsupervised was actually negative what can I do about this this is a serious issue saying a parent failed a screen in court to judge when they didn't please advise

  2. I have a degree at law, recent MS in regulatory studies. Licensed in KS, admitted b4 S& 7th circuit, but not to Indiana bar due to political correctness. Blacklisted, nearly unemployable due to hostile state action. Big Idea: Headwinds can overcome, esp for those not within the contours of the bell curve, the Lego Movie happiness set forth above. That said, even without the blacklisting for holding ideas unacceptable to the Glorious State, I think the idea presented above that a law degree open many vistas other than being a galley slave to elitist lawyers is pretty much laughable. (Did the law professors of Indiana pay for this to be published?)

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  5. I had a hospital and dcs caseworker falsify reports that my child was born with drugs in her system. I filed a complaint with the Indiana department of health....and they found that the hospital falsified drug screens in their investigation. Then I filed a complaint with human health services in Washington DC...dcs drug Testing is unregulated and is indicating false positives...they are currently being investigated by human health services. Then I located an attorney and signed contracts one month ago to sue dcs and Anderson community hospital. Once the suit is filed I am taking out a loan against the suit and paying a law firm to file a writ of mandamus challenging the courts jurisdiction to invoke chins case against me. I also forwarded evidence to a u.s. senator who contacted hhs to push an investigation faster. Once the lawsuit is filed local news stations will be running coverage on the situation. Easy day....people will be losing their jobs soon...and judge pancol...who has attempted to cover up what has happened will also be in trouble. The drug testing is a kids for cash and federal funding situation.