Can Contractors Rely on Previous DCAA Audit Findings?
By: John Ford , Senior Consultant, Government Contractor Services Group One of the more frustrating things that contractors face is Defense Contract Audit Agency (“DCAA”) auditors changing their minds about the allowability of costs. This is particularly troublesome if the contractor has been including the cost in its indirect cost pools for years without DCAA questioning the allowability of the cost, then, without warning, DCAA questions the cost and alleges that the cost is expressly unallowable. Compounding this is the fact that the claim by DCAA is asserted several years after the cost was incurred. In the meantime, the contractor has included. Read More.
If the Government Claims a Refund, When did the “Claims Clock” Start Running?
By: David Lundsten , Partner, Government Contractor Services Group and John Ford , Senior Consultant, Government Contractor Services Group The Contract Disputes Act (“CDA”) requires a contract claim by either party (the government or the contractor) to be submitted within six years after accrual of the claim. This six-year “claims clock” is otherwise known as the CDA Statute of Limitations (“SOL”). The CDA does not state the test for determining when a claim accrues. However, the Federal Acquisition Regulation (“FAR”) has filled this gap at FAR 33.201, which states that a claim accrues when “all events, that fix the alleged liability . . .. Read More.
ASBCA Holds that Leases are not Necessarily Subject to CAS 404
In Exelis, Inc., ASBCA No. 60131 (29 Aug. 2016), the Armed Services Board of Contract Appeals (“ASBCA”) held that a concern whether a building lease was a capital lease or an operating lease is not subject to Cost Accounting Standards (“CAS”) 404. In 2007, the Defense Contract Audit Agency (“DCAA”) released its audit of Exelis’ 2004 final indirect cost rates. DCAA questioned Exelis’ lease costs, finding that the building lease was a capital lease instead of an operating lease as claimed by Exelis and that Exelis could only include building depreciation in its indirect cost pool rather than the entire. Read More.
Topics: Armed Services Board of Contract Appeals "ASBCA", Cost Accounting Standards "CAS", Defense Contract Audit Agency "DCAA", Defense Contract Management Agency "DCMA", Federal Acquisition Regulation "FAR", GAAP, Indirect Cost Rates, leases
The ASBCA Issues Two CAS Decisions
By: John Ford , Senior Consultant, Government Contractor Services Group Recently, the Armed Services Board of Contract Appeals (“ASBCA” or “the Board”) issued two decisions relating to the Cost Accounting Standards (“CAS”) that should be of interest to contractors. In the first decision, Raytheon Company, Space and Airborne Systems, ASBCA No. 58608 (August 19, 2016), the Board decided that the contracting officer had abused her discretion by failing to consider all the factors listed in Federal Acquisition Regulation (“FAR”) 9903.305 in determining whether increased costs to the government resulting from an accounting practice change were material. As a large contractor doing billions. Read More.
DCAA and Executive Compensation after Taylor/Metron
By: John Ford , Senior Consultant, Government Contractor Services Group Within a period of approximately six months at the beginning of 2012, the Armed Services Board of Contract Appeals (“ASBCA”; “the Board”) issued two significant decisions concerning the process for determining reasonable compensation under Federal Acquisition Regulation (FAR) 31.205-6(b)(2). These decisions were J.F. Taylor, Inc., ASBCA Nos. 56105 and 56322 (Jan. 18, 2012) and Metron, Inc., ASBCA Nos. 56624, 56751 and 56752 (June 4, 2012). In both cases, the Defense Contract Audit Agency (“DCAA”) had questioned substantial amounts of compensation as being unreasonable. This conclusion was reached by following the standard procedure. Read More.
Topics: Armed Services Board of Contract Appeals "ASBCA", Contract Audit Manual "CAM", Defense Contract Audit Agency "DCAA", Federal Acquisition Regulation "FAR", Upper Limit of Reasonable Compensation "ULRC"