Court gives $1.1B tanker contract back to Boeing

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A federal appeals court has reversed a ruling that overturned Boeing Co.'s $1.1 billion contract for maintenance of an Air Force refueling tanker jet.

The decision Tuesday by the U.S. Court of Appeals for the Federal Circuit reinstates Chicago-based Boeing's 10-year contract for work on the KC-135 Stratotanker — the Air Force's primary mid-flight refueling aircraft.

Boeing, which built the KC-135, was awarded the maintenance contract in September 2007. The company had already held similar contracts for nearly a decade.

But rival bidder Alabama Aircraft Industries Inc. filed suit, claiming the contract was not properly awarded to Boeing, citing issues such as pricing and past performance. The U.S. Court of Federal Claims ruled for Alabama Aircraft Industries in 2008 and ordered the Air Force to re-solicit bids for the maintenance deal.

Boeing spokesman Dan Beck said the company is pleased with the decision and that Boeing looks forward to beginning work with the Air Force.

An Alabama Aircraft Industries president Ronald Aramini said in a statement that the company was disappointed with the ruling and that it "will be reviewing all legal and strategic options available to us."


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Workers’ Compensation Subrogation of Administrative Fees and Costs

When a worker covered by workers’ compensation makes a claim against a third party, the workers’ compensation insurance retains the right to subrogate against any recovery from that third party for all benefits paid to or on behalf of a claimant injured at work. When subrogating for more than basic medical and indemnity benefits, the Texas workers’ compensation subrogation statute provides that “the net amount recovered by a claimant in a third‑party action shall be used to reimburse the carrier for benefits, including medical benefits that have been paid for the compensable injury.” TX Labor Code § 417.002.

In fact, all 50 states provide for similar subrogation. However, none of them precisely outlines which payments or costs paid by a compensation carrier constitute “compensation” and can be recovered. The result is industry-wide confusion and an ongoing debate and argument with claimants’ attorneys over what can and can’t be included in a carrier’s lien for recovery purposes.

In addition to medical expenses, death benefits, funeral costs and/or indemnity benefits for lost wages and loss of earning capacity resulting from a compensable injury, workers’ compensation insurance carriers also expend considerable dollars for case management costs, medical bill audit fees, rehabilitation benefits, nurse case worker fees, and other similar fees. They also incur other expenses in conjunction with the handling and adjusting of workers’ compensation claims. Workers’ compensation carriers typically assert, of course, that, they are entitled to reimbursement for such expenditures when it recovers its workers’ compensation lien. Injured workers and their attorneys disagree.

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