In 2009, KDH and Eagle Industries entered into a teaming agreement to bid on production of the USMC’s Improved Modular Tactical Vests and Plate Carriers. KDH was awarded contracts for production of both systems by the Marines. Initial production samples were made but some issues arose over the Government’s design and consequently costs rose. Eagle says that KDH couldn’t come to an agreement on pricing so, in September, Eagle Industries sued KDH alleging, “refusing to honor previously established prices, by offering Eagle only take-it-or-leave-it pricing, and by threatening to use entities other than Eagle to perform work encompassed by the Teaming Agreement.”
Eagle vs KDH
Naturally, KDH filed their own suit against Eagle. However, this one is a little tougher to follow. Had they just countersued they would have had to file in Missouri. But their suit alleges an entirely different set of circumstances. This means that the KDH suit was filed in North Carolina. You might think that KDH is a Pennsylvania company but you see, they moved to their current ISO 9001 facility in Eden, North Carolina from Johnstown, Pennsylvania in early 2010 after the passing of defense appropriations sugar daddy Rep John Murtha. At any rate, according to KDH, Eagle bought some armor to fulfill a contract, that they never paid for. They want their paper!
KDH vs Eagle
Now, it doesn’t take a rocket scientist to see that these two suits, while focusing on two seemingly separate issues, are actually symptoms of a larger issue of corporate discord.
The defense budget is shrinking. There won’t be as many contracts in the future, as we have seen over the last 10 years, so expect to see more of these types of suits filed as companies begin to deal with the new reality. Things are getting tough. However, considering what lawyers cost, they both may well end up losing even more money on these lawsuits than they would have had they just sucked it up and made things happen.
