PRIVILEGED AND CONFIDENTIAL ATTORNEY-CLIENT COMMUNICATION ATTORNEY WORK PRODUCT

PRIVILEGED AND CONFIDENTIAL ATTORNEY-CLIENT COMMUNICATION ATTORNEY WORK PRODUCT
CALDERWOOD & HARKNESS LLP Attorneys at Law
600 Lexington Avenue, 28th Floor New York, New York 10022 Telephone: (212) 554-8800 Facsimile: (212) 554-8801
April 2, 2024
VIA ELECTRONIC MAIL — PRIVILEGED AND CONFIDENTIAL / ATTORNEY-CLIENT COMMUNICATION
Gregory Poole, Esq. General Counsel and Vice President, Legal Affairs Whitmore Aerospace LLC 4200 Commerce Park Drive, Suite 600 Chantilly, Virginia 20151
Re: Whitmore Aerospace LLC v. Hargrove-Dalton Defense Systems, Inc., No. 1:22-cv-10147-RMB (S.D.N.Y.) — Quarterly Strategy Update (Q1 2024)
Dear Gregory:
We write to provide Whitmore Aerospace LLC ("WAL" or the "Company") with its quarterly strategy update for the above-referenced matter. This letter is a privileged and confidential attorney-client communication and constitutes attorney work product prepared in anticipation of litigation. It should not be disclosed to any third party without the prior written consent of Calderwood & Harkness LLP.
I. Purpose and Summary
This letter constitutes our quarterly strategy update covering the period from approximately January 1, 2024 through March 31, 2024 (the "Reporting Period") for the declaratory judgment action styled Whitmore Aerospace LLC v. Hargrove-Dalton Defense Systems, Inc., No. 1:22-cv-10147-RMB (S.D.N.Y.) (the "Action" or the "DJ Action").
As you are aware, the Action remains stayed pursuant to the Order entered March 17, 2023 by the Honorable Richard M. Brannigan, United States District Judge, pending the conclusion of the Defense Contract Management Agency ("DCMA") administrative review of cost overruns under Prime Contract No. FA8620-19-C-0337. During the Reporting Period, there were no substantive proceedings before the court, no discovery was conducted, and no dispositive motions were filed or briefed.
The principal activity during Q1 2024 consisted of the preparation and filing of the third joint status report on March 11, 2024. That report advised Judge Brannigan that the DCMA review remains pending and that no Contracting Officer's Final Decision ("COFD") has been issued by Administrative Contracting Officer ("ACO") Lt. Col. Sandra M. Vickers. The parties jointly requested that the stay remain in place and that the next joint status report be filed within 120 days.
The sections below provide a comprehensive overview of key developments across all relevant workstreams, including the status of the litigation, the DCMA administrative review, WAL's litigation position, insurance coverage, credit facility compliance, financial statement treatment, fees and budget, and recommended next steps. We believe the Company's position remains strong, but the prolonged administrative delay warrants careful attention in the coming quarters, and we offer specific strategic recommendations to address the risks associated with continued dormancy.
II. Status of the Declaratory Judgment Action
A. Procedural History
WAL commenced this Action on November 28, 2022, filing a single-count Complaint under the Declaratory Judgment Act, 28 U.S.C. §§ 2201–2202. The Complaint seeks a declaration that WAL is not liable to Hargrove-Dalton Defense Systems, Inc. ("HDDS") under the indemnification provisions of the Teaming Agreement dated June 12, 2019 (the "Teaming Agreement") for cost overruns identified by the DCMA in connection with Prime Contract No. FA8620-19-C-0337. The case was assigned to the Honorable Richard M. Brannigan, United States District Judge for the Southern District of New York.
HDDS, represented by the law firm of Voss, Trager & Kendall LLP (Leonard Trager and Megan Forsythe), filed its Answer and Counterclaim on January 13, 2023. The Counterclaim asserts a single cause of action for contractual indemnification under Section 11.6 of the Teaming Agreement and seeks damages in the amount of $14,726,583, representing the total cost overruns identified in the DCMA Contracting Officer's Preliminary Determination ("COPD"). HDDS further seeks recovery of its reasonable attorneys' fees and costs incurred in connection with the indemnification demand, asserting that such fees are recoverable under Section 11.6 of the Teaming Agreement. WAL filed its Reply to the Counterclaim on February 3, 2023, denying liability in full and asserting the affirmative defenses previously discussed with you.
B. The Stay Order
On March 17, 2023, Judge Brannigan granted the parties' Joint Stipulation and Order staying all proceedings in the Action pending the conclusion of the DCMA administrative review. The stay was entered on primary-jurisdiction grounds, with the court reasoning that the DCMA's resolution of the underlying cost-overrun allocation would likely narrow or potentially moot the issues before the court, and that the agency's specialized expertise in defense procurement accounting warranted deference. The stay order requires the parties to file joint status reports every 120 days advising the court of the status of the DCMA proceedings and the parties' positions regarding continuation of the stay.
C. Joint Status Reports
Since the entry of the stay, the parties have filed three joint status reports:
1.  First Joint Status Report — filed July 15, 2023, reporting that the DCMA review remained pending and no COFD had been issued.
2.  Second Joint Status Report — filed November 12, 2023, reporting the same status and noting that the DCMA field audit team was continuing its review of supporting cost documentation submitted by HDDS.
3.  Third Joint Status Report — filed March 11, 2024, again reporting that no COFD had been issued and that the DCMA review remained ongoing. Both parties jointly requested that the stay remain in effect and that the next joint status report be filed within 120 days.
Each of these reports was coordinated with Leonard Trager and Megan Forsythe at Voss, Trager & Kendall LLP ("VTK"), and the process has been cooperative and uneventful. To date, neither party has sought to lift the stay, and VTK has not indicated any intention to do so.
D. Current Posture
The case has been dormant since the stay was entered. No discovery has commenced, no expert disclosures have been made, and no dispositive motions are pending. The fourth joint status report is due on or about July 9, 2024, which is 120 days from the March 11, 2024 filing. We will begin coordinating with VTK on the next report in advance of that deadline.
III. Status of the DCMA Administrative Review
A. The Underlying Government Contract
The administrative proceedings at issue arise under Prime Contract No. FA8620-19-C-0337, awarded to HDDS by the United States Air Force, Air Force Life Cycle Management Center ("AFLCMC"), Wright-Patterson Air Force Base, Ohio, for the Advanced Tactical Airframe Program ("ATAP"). Under the prime contract, HDDS serves as the prime contractor, and WAL participates as a subcontractor and teaming partner pursuant to the Teaming Agreement, performing Work Package 4 ("WP-4"), which encompasses the design, fabrication, and delivery of titanium structural assemblies for the ATAP airframe.
The contract is structured as a cost-plus-incentive-fee ("CPIF") arrangement with the following key economic parameters:
B. The COPD and Identified Cost Overruns
On August 1, 2022, the DCMA ACO, Lt. Col. Sandra M. Vickers, issued a Contracting Officer's Preliminary Determination identifying $14,726,583 in total cost overruns on the prime contract. The COPD attributed $12,817,441 of those overruns — representing 87.03% of the total — to WP-4 (WAL's scope of work), with the remaining $1,909,142 (12.97%) attributed to other work packages outside WAL's responsibility.
The COPD identified the following root causes for the WP-4 overruns:
(a) Titanium Raw-Material Cost Escalation — approximately $4.2 million, reflecting global supply-chain disruptions and pricing volatility in aerospace-grade titanium alloys during 2020–2022;
(b) Rework Due to Non-Conforming Machining Tolerances — approximately $5.1 million, attributed to production rework required when machined titanium components failed to meet engineering specification tolerances;
(c) Schedule Delays Causing Idle-Labor Charges — approximately $2.3 million, resulting from production schedule disruptions that caused WAL manufacturing personnel to incur unproductive labor hours charged to the contract; and
(d) Engineering Change Proposal ("ECP") Implementation Costs — approximately $1.2 million, associated with government-directed and contractor-initiated engineering changes that increased WP-4 costs beyond the original estimates at completion.
C. HDDS Response and COFD Request
HDDS filed a formal response to the COPD and requested a Contracting Officer's Final Decision from Lt. Col. Vickers on October 15, 2022. In its response, HDDS contested certain aspects of the COPD's cost-overrun allocation methodology and advocated for adjustments favorable to its position. As of the date of this letter, no COFD has been issued, and no firm timeline for issuance has been communicated by DCMA or by ACO Vickers.
D. Coordination with Government-Contract Counsel
We continue to coordinate with Ashford & Reeves LLP, WAL's government-contract regulatory counsel. Harold Reeves and Natalie Cheng at that firm have been monitoring the DCMA administrative proceedings on WAL's behalf. Based on the most recent information received from Ashford & Reeves, the DCMA field audit team is continuing its review of the cost and accounting documentation submitted by HDDS under the prime contract, but the audit remains incomplete. No interim findings, draft COFD, or other formal agency communication has been issued since the COPD.
WAL's Vice President, Government Contracts & Compliance, Catherine Soo-Hyun Park, continues to serve as the primary point of contact for operational coordination with Ashford & Reeves and has been in regular communication with their team regarding any administrative developments.
E. Assessment of the Delay
The delay in the issuance of the COFD is notable — the pendency now exceeds 17 months since HDDS filed its formal response and COFD request in October 2022 — but it is not extraordinary in the context of Contract Disputes Act proceedings of this complexity and dollar magnitude. DCMA field audits of CPIF contracts frequently involve detailed review of contractor cost accounting systems, incurred-cost submissions, and compliance with CAS and FAR Part 31 allowability standards. That said, the prolonged pendency is creating sustained uncertainty for WAL and, as discussed in Section IX below, may warrant a reassessment of the stay posture if the COFD has not issued by approximately November 2024.
IV. WAL's Litigation Position — Recap of Key Defenses
We continue to assess WAL's litigation position as strong. For completeness, and to ensure alignment among all stakeholders, we briefly recap below the principal defenses that WAL will advance if and when the stay is lifted and the litigation proceeds.
A. Three Principal Defenses
WAL's defense strategy rests on three interrelated arguments:
1. Section 11.4(b) Causation Requirement. The indemnification obligation set forth in Section 11.4(b) of the Teaming Agreement is expressly limited to claims that are "caused by Team Member's acts or omissions." WAL maintains that the cost overruns identified in the COPD were not caused by WAL's acts or omissions but instead resulted from factors outside WAL's control or attributable to HDDS itself. Specifically:
•  The titanium raw-material cost escalation (approximately $4.2 million) was caused by global supply-chain disruptions — including pandemic-related logistics constraints and geopolitical supply restrictions — and constitutes a force-majeure event or, at minimum, a condition that WAL could not reasonably have anticipated or mitigated. The Teaming Agreement's force-majeure provision (Section 14.2) expressly encompasses "material shortages, supply disruptions, and governmental actions affecting the availability of raw materials."
•  The rework costs attributable to non-conforming machining tolerances (approximately $5.1 million) were the direct result of HDDS-supplied engineering specifications that contained ambiguities and dimensional errors. WAL followed the specifications as provided and performed rework only after HDDS issued clarifying Engineering Change Notices. WAL intends to demonstrate through documentary evidence and expert testimony that the root cause of the non-conformances lay in the specifications, not in WAL's manufacturing processes.
•  The schedule delays giving rise to idle-labor charges (approximately $2.3 million) were caused by HDDS's late delivery of government-furnished equipment ("GFE") to WAL's manufacturing facility in Chantilly, Virginia. The GFE delays are well documented in WAL's subcontract administration correspondence and in the integrated master schedule maintained by HDDS's program management office.
2. Overbreadth of HDDS's Demand. HDDS has demanded indemnification for the full $14,726,583 identified in the COPD, notwithstanding that $1,909,142 of the total (12.97%) is attributable to cost overruns in work packages entirely outside WAL's scope of work under the Teaming Agreement. WAL has no conceivable liability for these non-WP-4 overruns, and HDDS's inclusion of those amounts in its demand is unsupportable and, in our view, undermines the credibility of the demand as a whole.
3. Prematurity. The DCMA's findings remain preliminary. The COPD is, by its nature, a preliminary assessment — not a final agency determination. No costs have been formally disallowed through a COFD. Section 11.4(b) of the Teaming Agreement contemplates indemnification in response to a "claim by the U.S. Government that costs incurred under the Prime Contract are unallowable, unreasonable, or otherwise subject to disallowance." WAL can credibly argue that no such "claim" has yet crystallized, as the government has not issued a final determination that any costs are unallowable or subject to disallowance. Until the COFD issues, HDDS's indemnification demand is premature and not yet ripe under the contractual indemnification framework.
B. Section 11.5 Liability Cap
We also note that Section 11.5 of the Teaming Agreement imposes an aggregate liability cap on each Team Member's indemnification obligations equal to 120% of the value of such Team Member's work package. For WAL, the value of WP-4 is $74,160,000, resulting in an aggregate liability cap of $88,992,000 ($74,160,000 × 1.20). HDDS's current demand of $14,726,583 is well within this cap, so the cap does not presently limit WAL's potential exposure. However, the cap provides important protection against any future escalation of the claimed overruns and should be preserved as a defense in all circumstances.
C. Governing Law
The Teaming Agreement is governed by the laws of the State of New York, without regard to conflicts-of-law principles, pursuant to Section 18.1 of the Teaming Agreement. This governing-law provision has not been challenged by HDDS and is expected to be applied by the court.
V. Insurance Coverage Posture
A. Tender and Policy Information
WAL tendered HDDS's indemnification demand to Meridian Surety & Insurance Group ("Meridian") on September 22, 2022, seeking coverage and a defense under the following policies:
B. Reservation of Rights
On November 1, 2022, Meridian issued a reservation-of-rights letter in response to the tender. In its letter, Meridian reserved its rights to deny coverage on two principal grounds:
(a) Contractual-Liability Exclusion — Exclusion (b) of the CGL policy form, which excludes coverage for liability that the insured has assumed under a contract or agreement (here, the Teaming Agreement's indemnification provisions); and
(b) Government-Contract Exclusion — Endorsement GC-04 to the CGL policy, which excludes coverage for claims arising out of or relating to the performance of contracts with the United States government, including claims related to cost disallowance, contract disputes, or regulatory proceedings under the Contract Disputes Act.
C. Follow-Up Correspondence
Calderwood & Harkness sent a detailed follow-up letter to Rachel Underwood, Senior Claims Counsel at Meridian, on March 10, 2023, requesting that Meridian issue a definitive coverage determination. In that letter, we argued that the contractual-liability exclusion should not apply because the underlying "occurrence" giving rise to the claim is not WAL's assumption of an indemnification obligation but rather the alleged deficiencies in WAL's performance under WP-4, which would constitute an "occurrence" triggering CGL coverage independent of the Teaming Agreement's indemnity provisions. We further argued that the government-contract exclusion is inapplicable because the claim at issue is a private-party contractual indemnification demand by HDDS, not a direct government claim.
D. Current Status
As of the date of this letter — over 17 months since the initial tender and over 12 months since our follow-up letter — no definitive coverage determination has been received from Meridian. Meridian is neither providing a defense in the DJ Action nor funding WAL's litigation costs. The matter remains in limbo under the reservation-of-rights posture communicated in November 2022.
E. Recommendations.  We recommend that Calderwood & Harkness send another formal follow-up letter to Meridian pressing for a final coverage determination. The letter should emphasize the passage of over 17 months since the original tender and over 12 months since our last correspondence, and should note that Meridian's prolonged failure to issue a definitive coverage position is prejudicial to WAL's interests and potentially inconsistent with Meridian's obligations under applicable insurance regulations.
If Meridian continues to decline to respond definitively, WAL should evaluate whether to pursue a declaratory judgment action for insurance coverage or a formal demand under the insurance regulatory frameworks of New Jersey (Meridian's state of domicile) or Virginia (WAL's principal place of business). We are prepared to provide a more detailed coverage litigation analysis upon your request.
We also note that the D&O and CGL policies have been renewed annually. The current policy period runs from July 1, 2023 through July 1, 2024. WAL should ensure that the HDDS indemnification claim is properly noticed on each renewal application and on the current-year policies to preserve coverage continuity and avoid any late-notice defense.
VI. Credit Facility Compliance
A. The Credit Facility
WAL maintains a $75 million senior secured revolving credit facility (the "Facility") with Ridgeline National Bank, N.A., as administrative agent, pursuant to the Credit Agreement dated March 15, 2021 (as amended from time to time, the "Credit Agreement").
B. Litigation-Notice Covenant
Section 6.07(b) of the Credit Agreement requires WAL to provide prompt written notice to the administrative agent of any litigation, arbitration, or governmental proceeding that, if adversely determined, could reasonably be expected to result in liability to WAL in excess of $5 million. Because HDDS's indemnification demand exceeds the $5 million reporting threshold, WAL has delivered the following notices to David Kreutz, Senior Vice President, Defense & Aerospace Lending, at Ridgeline National Bank:
(a) Initial Notice — delivered September 28, 2022, advising Ridgeline of HDDS's indemnification demand and the COPD; and
(b) Supplemental Notice — delivered December 5, 2022, advising Ridgeline of the filing of the DJ Action.
C. Current Status
No event of default has been triggered under the Credit Agreement in connection with this matter. The Facility remains fully available, and WAL's current drawn amount is approximately $31.2 million. We are not aware of any concerns expressed by Ridgeline regarding the pending litigation or the DCMA review.
No further notices to Ridgeline are required at this time unless there is a material development in the litigation or the DCMA administrative review — for example, the issuance of a COFD, the lifting of the stay, or a material increase in the claimed amount. WAL should continue to disclose the pendency of the matter in any borrowing-base certificates, compliance certificates, or other periodic deliverables submitted to Ridgeline under the Credit Agreement, as applicable.
VII. Financial Statement Treatment
A. ASC 450 Assessment
Pinnacle Advisory Partners LLC ("Pinnacle"), WAL's independent auditor (Thomas Brennan, CPA, engagement partner), assessed the HDDS indemnification contingency in connection with WAL's fiscal year 2022 audit, which was completed on April 14, 2023. Pinnacle concluded that the contingent liability associated with the indemnification demand is "reasonably possible" but not "probable" within the meaning of ASC 450-20 (Contingencies — Loss Contingencies). This assessment was based on the strength of WAL's defenses, the preliminary nature of the COPD, and the absence of a COFD.
B. Financial Statement Disclosure
Consistent with Pinnacle's assessment, the HDDS indemnification contingency was disclosed in the footnotes to WAL's FY 2022 audited financial statements as a contingent liability of up to approximately $14.7 million, but no accrual was recorded on the balance sheet. The same treatment was maintained in the FY 2023 audited financial statements, with no change in Pinnacle's assessment of the probability or estimated range of loss.
C. Recommendation.  We recommend that WAL continue to coordinate with Pinnacle and with Calderwood & Harkness to ensure consistent treatment for FY 2024 financial reporting purposes. As of the date of this letter, we do not believe that a change in assessment is warranted. However, should the COFD issue and confirm or increase the cost-overrun allocation to WP-4, or should there be other material developments in the litigation or the DCMA review, the probability assessment may need to be revisited, and an accrual could become necessary. We will advise you promptly of any developments that, in our judgment, would warrant a reassessment.
VIII. Fees and Budget
A. Engagement Terms
Calderwood & Harkness was retained for this matter pursuant to an engagement letter dated November 1, 2022. The matter is staffed by the following attorneys at the hourly rates set forth below:
B. Budget.  The original estimated budget for the matter through trial, assuming full litigation without a stay, was $1,800,000 to $2,400,000. Following the entry of the stay order on March 17, 2023, Douglas Carmichael prepared a revised budget memorandum dated April 15, 2023, which projected reduced expenditures during the dormancy period. The revised budget estimated dormancy-period monitoring costs of approximately $100,000 per year, covering the preparation and filing of joint status reports, coordination with Ashford & Reeves and with Pinnacle, insurance coverage follow-up, periodic client communications, and general case monitoring.
C. Q1 2024 Activity
Activity during Q1 2024 consisted principally of the following:
•  Preparation and filing of the third joint status report on March 11, 2024, including coordination with VTK on the content of the report;
•  Coordination with Ashford & Reeves LLP regarding the status of the DCMA field audit and the anticipated timeline for issuance of a COFD;
•  Client communications, including periodic updates to Catherine Soo-Hyun Park and internal case-management activities; and
•  Preparation of this quarterly strategy update letter.
D. Fee Status
Fees incurred to date remain well within the revised budget parameters established in April 2023. Detailed invoices covering the Reporting Period have been provided under separate cover. We do not anticipate any material deviation from the revised budget for the remainder of the stay period. Should the stay be lifted and active litigation resume, we will prepare an updated budget reflecting the anticipated discovery, motion practice, and trial preparation phases.
IX. Recommended Next Steps and Strategic Considerations
Based on the foregoing, we recommend the following action items and strategic considerations for the coming quarter and beyond:
1. Fourth Joint Status Report. We will prepare and file the fourth joint status report on or about July 9, 2024, consistent with the court's 120-day reporting requirement. We will coordinate with Leonard Trager and Megan Forsythe at VTK in advance of the filing deadline. Unless there has been a material development in the DCMA review by that time, we anticipate that the report will be substantially similar in content to the prior three reports, advising the court that the COFD remains pending and requesting that the stay continue in effect.
2. DCMA Review Timeline and Potential Lift of Stay. If the COFD has not been issued by the time the fifth joint status report is due — which we estimate to be approximately November 2024 — we recommend that WAL seriously consider seeking to lift the stay and reactivate the litigation. At that point, the DCMA review will have been pending for over two years since HDDS submitted its COFD request, and the Action will have been stayed for approximately 20 months. While the administrative delay is not extraordinary in absolute terms, the prolonged uncertainty is prejudicial to WAL's business interests and financial reporting obligations, and the court may independently raise concerns about the indefinite dormancy of its docket. Lifting the stay would allow WAL to pursue its declaratory judgment claim on the merits, notwithstanding the continued pendency of the administrative review, and could also create settlement leverage. We will continue to monitor the situation and provide a more detailed analysis on this issue in our next quarterly update.
3. Insurance Follow-Up. As discussed in Section V above, we recommend sending a renewed formal demand to Meridian Surety & Insurance Group for a definitive coverage position. We will prepare a draft of this letter for your review and approval. Should Meridian continue to fail to respond, we will provide a memorandum analyzing the viability and advisability of a coverage action.
4. Ashford & Reeves Coordination. We recommend continuing regular check-ins with Harold Reeves and Natalie Cheng at Ashford & Reeves LLP on a monthly cadence. These check-ins provide our best source of intelligence regarding the DCMA's internal timeline and any developments in the field audit process. Catherine Soo-Hyun Park has been highly effective in this coordination role, and we appreciate her continued engagement.
5. Settlement Posture. We continue to recommend that WAL defer any affirmative settlement overture to HDDS until after the COFD issues. The outcome of the COFD will significantly affect the parties' respective leverage and the settlement calculus. If the COFD substantially reduces the cost overruns allocated to WP-4, WAL's negotiating position will be materially strengthened. Conversely, if the COFD confirms or increases the WP-4 allocation, early engagement on settlement terms may become advisable. We note that HDDS has not communicated any interest in settlement discussions since the senior executive negotiations that took place between representatives of both companies in September and October 2022. We will continue to monitor the situation and advise promptly if circumstances change.
6. Document Preservation. The litigation hold issued by WAL's legal department on November 2, 2022 remains in full force and effect. We recommend that WAL circulate a periodic reminder to all custodians and affected personnel reaffirming their obligation to preserve all potentially relevant documents, electronically stored information, and communications. We are happy to assist in preparing such a reminder notice if that would be useful.
7. Upcoming Prime Contract Milestone. We draw your attention to a significant upcoming milestone: the base period of performance for Prime Contract FA8620-19-C-0337 ends on August 31, 2024. WAL should monitor whether the Air Force exercises any option years under the prime contract. The exercise (or non-exercise) of option years could have implications for the DCMA cost-overrun analysis, the scope of WAL's work under WP-4, and the universe of costs at issue in the dispute. We recommend that Catherine Soo-Hyun Park coordinate with Ashford & Reeves and with HDDS's contracts administration team to obtain timely information on any option exercise decisions.
X. Closing
We trust this update provides a comprehensive overview of the current status of the matter and the strategic considerations facing WAL. We ask that you share this letter with Marcus J. Whitmore, Chief Executive Officer, and Elaine Whitmore, Chief Financial Officer, as you deem appropriate, subject to the privilege and confidentiality protections noted herein.
We are available at your convenience to schedule a call or meeting to discuss any aspect of this update in further detail. Please do not hesitate to reach out to me directly at (212) 554-8812 or panand@calderwoodharkness.com, or to Douglas Carmichael at (212) 554-8819 or dcarmichael@calderwoodharkness.com, with any questions or concerns.
Please be reminded that this letter is a privileged and confidential attorney-client communication and constitutes attorney work product. It is intended solely for the use of the addressee and other authorized recipients within WAL and should not be disclosed, distributed, or otherwise made available to any third party without the prior written consent of Calderwood & Harkness LLP. Inadvertent disclosure of this letter does not constitute a waiver of any applicable privilege.
We appreciate the opportunity to continue representing Whitmore Aerospace in this important matter.
Very truly yours,
CALDERWOOD & HARKNESS LLP
By: ________
Priya Anand Partner 600 Lexington Avenue, 28th Floor New York, New York 10022 Telephone: (212) 554-8812
Email: panand@calderwoodharkness.com
cc: Douglas Carmichael, Partner, Calderwood & Harkness LLP Patrick Gallagher, Senior Associate, Calderwood & Harkness LLP Simone Laroche, Associate, Calderwood & Harkness LLP
This letter is a privileged and confidential attorney-client communication and attorney work product. It is not intended for distribution beyond the addressee and the individuals listed on the cc line without the prior written consent of Calderwood & Harkness LLP.
Parameter | Value
Target Cost | $412,000,000
Target Fee | 8% ($32,960,000)
Ceiling Price | $470,000,000
Share Ratio (Overruns) | 70/30 (Government / Contractor)
Share Ratio (Underruns) | 60/40 (Government / Contractor)
Policy | Policy Number | Aggregate Limit | Retention / SIR
Directors & Officers Liability ("D&O") | MSI-DO-2022-07814 | $10,000,000 | $250,000 retention
Commercial General Liability ("CGL") | MSI-CGL-2021-33291 | $25,000,000 | $500,000 self-insured retention
Attorney | Title | Hourly Rate
Priya Anand | Partner | $1,150/hr
Douglas Carmichael | Partner | $1,150/hr
Patrick Gallagher | Senior Associate | $725/hr
Simone Laroche | Associate | $575/hr