By Andrea Shalal-Esa
WASHINGTON, Nov 26 (Reuters) - Command Technology Inc, aprivately held firm that developed electronic maintenancemanuals for Lockheed Martin Corp's F-16 fighter jet, haswon a $24.8 million judgment against the Pentagon's biggestsupplier for unfair competition.
Groton, Connecticut-based Command makes similar software formany other U.S. weapons systems, but sued Lockheed after beingshut out of the work on the 4,500 F-16 fighter jets that havebeen sold to the U.S. military and two dozen other countries.
A jury in the Circuit Court of Maryland for MontgomeryCounty, where Lockheed is based, found after a week-long trialthat Lockheed competed unfairly and injured Command, accordingto a verdict sheet filed late Monday with the court.
The jury also found Lockheed "torturously interfered" withCommand's economic relationships.
Lockheed unfairly flunked the Connecticut firm's softwareproduct during testing it conducted on behalf of the U.S. AirForce, but then worked with another software maker, InfoTrustGroup Inc, to develop its own rival product, Command said in itscomplaint.
Given declines in weapons orders, Lockheed and other armsmakers are intensely competing for work on upgrading andservicing existing weapons systems. The companies generate abouttwo-thirds of their revenues on big arms programs from themaintenance, spare parts, upgrades and sustainment of weaponssystems after they are fielded.
The judgment against Lockheed came just hours after thePentagon approved work by Britain's BAE Systems onupgrades for 134 F-16 fighters operated by South Korea, in adeal that could open the door to future orders from othercountries.
Robert MacGill, a lawyer with Barnes & Thornburg who isrepresenting Command, said the company was pleased the jury'sverdict.
Command said in court papers that Lockheed tried to blockits product from the lucrative F-16 market because the smallercompany's software threatened to dislodge Lockheed as theprimary provider of maintenance and sustainment for the weaponsit builds, and billions of dollars of associated sales.
Opening the maintenance system to outside vendors would haveresulted in "dramatic savings" for taxpayers, Command said.
Lockheed said it was disappointed by the judgment andsuggested it would appeal the ruling.
"We are disappointed in the jury's decision and believe thatit will not stand after post-trial review by the circuit courtor on appeal," said spokesman Gordon Johndroe.
The U.S. Air Force declined to comment.
The case stems from a 2005 decision by the U.S. Air Force toswitch to digital maintenance manuals for the F-16 and otherweapons, and the engines that power them.
Command argued that Lockheed and other "original equipmentmanufacturers" have tried to restrict the ability of militaryusers to view the technical data associated with warplanes andother weapons systems.
That in turn allowed those companies to charge the U.S. AirForce and other militaries for the data and the ability to viewit electronically, Command said.
Command said it provided one part of Lockheed withproprietary information to allow it to test its C2Web platform,but the company used the data to develop competing products thatwere structured to preserve Lockheed's profits.
For instance, Command said its product allowed mechanics whowere servicing the planes to choose parts made by other vendors,while the Lockheed system forced users to choose parts made bythe company.
It said Lockheed, BAE Systems and other suppliers"interfered with, impaired and delayed the deployment" ofCommand's product by "falsifying testing procedures and records"and encouraging the Air Force to reject use of the C2Webplatform.
Lockheed falsely led other possible users to believe theC2Web system could not be used for the F-16 fighter, Commandsaid.
Command has also sued InfoTrust Group Inc and othercompanies that work with Lockheed. InfoTrust, in turn, has suedLockheed, according to Command's law firm.
Command argued that Lockheed and other companies werepositioning their products to be used on the $392 billion F-35fighter jet program, also run by Lockheed, shutting Command outof work on the estimated 3,000-plus jets to be built under thatprogram.
Air Force Lieutenant General Chris Bogdan, who runs the F-35program for the Pentagon, has tried to inject more competitioninto the maintenance of the F-35 program, given concerns aboutthe high cost and slow progress of Lockheed's work on the jet'scomputer-based maintenance system.
In its lawsuit, Command said Lockheed was also trying toerode its existing business relationships with the militaries ofOman, Israel, Poland and the United Arab Emirates, by arguingthat its software could not publish technical data on the F-16.
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