Earlier this week, the Federal Circuit issued a decision in The Boeing Company v. United States that clears the way for resolution of Boeing’s substantive challenge to a controversial FAR provision that can give the government windfall recoveries in Cost Accounting Standards (CAS) matters.  The Federal Circuit decision is notable for three reasons.  First, in rejecting the government’s argument that Boeing had waived its right to attack the relevant FAR provision, the court clarified the circumstances in which a contractor will be found to have waived its rights to object to FAR provisions.  Second, in concluding that the Court of Federal Claims had jurisdiction to consider the dispute, the court provided a useful primer on the three different kinds of jurisdiction available under the Tucker Act.

Finally, the Federal Circuit’s remand means the Court of Federal Claims will now address Boeing’s substantive challenge to FAR 30.606, which directs contracting officers to ignore offsets that save the government money when calculating the impact of changes to a contractor’s cost accounting practices.  Boeing’s argument that this provision amounts to a breach of contract and an illegal exaction will now be resolved on the merits.

Continue Reading Federal Circuit Rejects Government’s Waiver and Jurisdiction Defenses, Paving the Way for a CAS Showdown at the Court of Federal Claims

The Court of Federal Claims recently issued an opinion in the long running litigation between Sikorsky Aircraft Corporation (“Sikorsky”) and the United States regarding Sikorsky’s cost accounting practices. In this new decision, the court rejected a government attempt to pursue a new legal theory to challenge Sikorsky’s compliance with the Cost Accounting Standard (“CAS”), which contradicted a legal theory the government had pursued in an earlier round of litigation. During the first round of litigation, the government had claimed that Sikorsky’s accounting practices violated a specific CAS – CAS 418. In the second round, the government demanded payment from Sikorsky on the theory that those same accounting practices were actually compliant and therefore a subsequent change triggered a violation of a different CAS regulation. This new legal theory was inconsistent with the government’s original claim. In rejecting this aggressive tactic, the court indicated its displeasure at the government’s legal arguments, and the decision may help contractors in future attempts to curtail the government’s appetite for aggressive CAS litigation tactics.
Continue Reading In Long-Running CAS Case, the Court of Federal Claims Rejects a Government Attempt to Get Another Bite at the Apple