In Honeywell International, Inc., the ASBCA declined to dismiss a roughly $151 million claim by DCMA alleging a violation of CAS 410, holding that the government’s allegations were sufficient to state a claim for improper treatment of G&A expenses. The Board’s decision provides guidance on how to interpret CAS 410 — a topic that is often addressed by auditors, but has rarely been the subject of written opinions by the courts or boards of contract appeals.Continue Reading ASBCA: Government Can Pursue $151 Million Claim Under CAS 410
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