Government Contracts Legal Forum

Category Archives: Cost/Cost Accounting

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The End is Near: DCAA Projects End of Incurred Cost Backlog by FY 2018

Posted in Cost/Cost Accounting, Legal Developments
The Defense Contract Audit Agency (“DCAA”) recently made public its Fiscal Year 2017 Report to Congress, which, among other things, provides an update on incurred cost audits.  Specifically, the report explains that DCAA: Closed “6,786 incurred cost years” using a variety of methods, namely reports and memos, but also for other reasons (e.g., per the… Continue Reading

Hidden in Plain Sight: Where, Oh Where, Have the Compensation Caps Gone?

Posted in Cost/Cost Accounting, Legal Developments
Contractors looking for updates to the statutory allowable cost limits on employee compensation may be looking in the wrong place.  But what was once lost can easily be found, at least for the moment, by simply navigating to a different website. The Cost Principles and the Compensation Cap FAR 31.205-6(p)(4) governs the allowable compensation of… Continue Reading

Steel and Aluminum Tariffs: Recovery and Risk Reduction for Federal Contractors

Posted in Cost/Cost Accounting, Legal Developments
On March 1, the President announced his intention to impose tariffs of 25% on all imported steel and 10% on all imported aluminum. A more formal announcement of the tariffs is expected in the coming week and, while many might have been surprised by the timing of the President’s initial statement, it came after a… Continue Reading

Commitment to Training — Join Crowell & Moring for Gov Con 101

Posted in Bid Protest, Claims, Cost/Cost Accounting, Cybersecurity, Suspension & Debarment
Crowell & Moring is hosting Government Contracts 101 in our Washington, D.C., office on Thursday, October 26, 2017.  This all-day event will last from 8:30 a.m. to 6:30 p.m. at 1001 Pennsylvania Ave, N.W., and provide an overview of the full scope of issues that government contractors face on a daily basis.  We will cover FAR,… Continue Reading

Government Claims on Incurred Cost Submissions

Posted in Claims, Cost/Cost Accounting
Contractors that use a fiscal year ending 12/31 submit their annual cost submissions in June of the following year.  For 2010 incurred cost submissions (ICS) submitted in June 2011, many contractors may receive affirmative claims from the Government seeking to disallow some or all of those incurred costs, because the Government has a 6-year statute… Continue Reading

That’s a Wrap: OOPS 2017 Concludes

Posted in Cost/Cost Accounting, Cybersecurity, Events, International Contracting/FCPA, Labor & Employment, Legal Developments
Our 33rd annual Ounce of Prevention Seminar has come to a close and was a great success. Thank you to all of our attendees and panelists who participated in the event, which covered a range of topics from investigations and cybersecurity to labor and employment. This year’s agenda particularly focused on how contractors are navigating… Continue Reading

OOPS Starts Tomorrow!

Posted in Cost/Cost Accounting, Cybersecurity, International Contracting/FCPA, Legal Developments
We’ve wrapped up our preview posts, which gave a sneak peek at just a few of tomorrow and Friday’s OOPS panels, including investigations, privacy and cybersecurity, international procurement, and cost and pricing issues. It’s not too late to register for the event! Click here for details and directions. We’ll see you tomorrow at the Renaissance Hotel… Continue Reading

OOPS 2017 Preview: Cost and Pricing Issues

Posted in Cost/Cost Accounting, Legal Developments
During the past year, we have continued to see developments on cost and pricing issues, particularly with respect to the 2017 National Defense Authorization Act (“NDAA”). On May 5, 2017 from 11:00 am – 12:00 pm, Crowell & Moring attorneys Terry Albertson, David Bodenheimer, Chris Haile, Steve McBrady and Liz Buehler will highlight some of the… Continue Reading

OOPS 2017 Preview: Strategizing for Government Contractors’ Game Plan Under the New Administration

Posted in Cost/Cost Accounting, Cybersecurity, International Contracting/FCPA, Legal Developments
The Government Contracts Group is counting down to Crowell & Moring’s 33rd annual Ounce of Prevention Seminar (OOPS), which will be held on May 4 and 5 at the Renaissance Hotel in Washington. This year’s seminar, “Strategizing for Government Contractors’ Game Plan Under the New Administration,” will provide insider insight and practical advice across a… Continue Reading

ASBCA Dismisses Army’s $100 Million Cost Disallowance for Failure to State a Plausible Claim

Posted in Cost/Cost Accounting
In Lockheed Martin Integrated Systems, Inc. (ASBCA Dec. 20, 2016), a case involving a $100 million breach of contract claim stemming from purportedly unallowable direct subcontractor costs, the Board granted Lockheed Martin’s motion to dismiss the Army’s untenable claim “for failure to state a claim on which relief could be granted,” concluding that the government… Continue Reading

OOPS 2016 Starts Tomorrow!

Posted in Cost/Cost Accounting, Cybersecurity, Events, Labor & Employment
We’ve wrapped up our preview posts, which gave a sneak peek at a few of tomorrow and Thursday’s OOPS panels including cybersecurity (OOPS Preview: Regulating Information: Cybersecurity, Internet of Things, and Exploding Rules), costs & accounting OOPS Preview: Cost & Accounting: Items at the Top of the Ledger) , and labor and employment (OOPS Preview:… Continue Reading

No Double-Dipping: Board Lacks Jurisdiction Over New Theories Asserted in Government’s Amended Answer

Posted in Claims, Cost/Cost Accounting
In AeroVironment, Inc. (Mar. 30, 2016), following an apparent settlement of the government’s cost disallowance claim, the ASBCA denied the government’s request to amend its answer (in order to “clarify” entitlement to additional quantum) because the proposed amendments constituted new “claims” that required new final decisions.  Acknowledging that parties may ordinarily revise quantum without running… Continue Reading

Acting Army Secretary Directs the End of “Use or Lose” Spending

Posted in Cost/Cost Accounting
On April 15, 2016, the Acting Secretary of the Army issued Army Directive 2016-16 (Changing Management Behavior: Every Dollar Counts) stating that the Army will “eliminate ‘use or lose’ funding practices,” i.e., “commanders and staffs will not automatically decrement commands or programs in future allotments when they do not spend all funds without further investigation… Continue Reading

Proposed Rule Would Nix Allowability of Congressional Investigation Costs

Posted in Cost/Cost Accounting
On February 17, the Federal Register published a proposed rule that would amend the FAR to implement section 857 of the National Defense Authorization Act, making unallowable any “costs incurred by a contractor in connection with a Congressional investigation or inquiry into an issue that is the subject of a proceeding resulting in a disposition… Continue Reading

DoD’s Guerilla War on IR&D

Posted in Cost/Cost Accounting
In a notice published in the Federal Register on February 8 that will almost certainly be unpopular with contractors and their customers, DoD asked for comments on its consideration of adding a requirement to the DFARS that would “require offerors to describe in detail the nature and value of prospective IR&D projects on which the… Continue Reading

New Guidance Allows Limited Role for DCAA Audit of Non-DOD Contracts

Posted in Cost/Cost Accounting
The 2016 National Defense Authorization Act prohibits the Defense Contract Audit Agency from providing “audit support” to any non-DOD agency until the Secretary of Defense certifies that DCAA has reduced its backlog of incurred cost audits to 18 months or less, a restriction that could cause some disruption for contractors when DOD contracts are not… Continue Reading

IG Report Whacks DCMA’s Oversight of Contractors’ Business Systems

Posted in Cost/Cost Accounting
On October 1, the DoD IG released a report titled “Evaluation of Defense Contract Management Agency Actions on Reported DoD Contractor Business System Deficiencies,” asserting that DCMA contracting officers “repeatedly” failed to comply with DFARS requirements involving reported business system deficiencies.  The report, which is similar to a report issued on June 29, 2015 regarding DCMA’s… Continue Reading

DoD White Paper Takes Aim at IR&D Costs

Posted in Cost/Cost Accounting
While DOD’s August 26 white paper “Enhancing the Effectiveness of Independent Research and Development” explains that the intent of new requirements announced in the white paper is “not to reduce the independence of IR&D investment selection, nor to establish a bureaucratic requirement for government approval prior to initiating an IR&D project,” contactors have good reason to doubt… Continue Reading

Bad News for Contractors: ASBCA Decision Bars Offsets of Simultaneous Accounting Changes Under FAR 30.606

Posted in Cost/Cost Accounting
In Raytheon Co., ASBCA Nos. 57801 et al. (May 7, 2015), the Board held that under FAR 30.606 contractors may not offset cost impacts from simultaneous accounting changes within the same business segment, which if not reversed on appeal will cause major disruptions when contractors make multiple changes in cost accounting practices made after 2005 (the date of the FAR change),… Continue Reading

DCAA Issues (Mis)Guidance on Expressly Unallowable Costs

Posted in Cost/Cost Accounting
On January 7, 2015, DCAA issued guidance to auditors for determining whether certain costs are “expressly unallowable” – and therefore subject to penalties – even when the regulations “do not state in direct terms that the cost is unallowable.” This guidance, which is intended to “enhance” the equally troubling December 18 guidance to similar effect,… Continue Reading

Join Us for a Legal and Accounting Webinar

Posted in Cost/Cost Accounting
On Wednesday, July 23rd from 11:30 am -1:30 pm, Cathy Kunz will join Rubino & Company to discuss critical issues in cost law. As contractors face more scrutiny and review of their cost and accounting practices, we will address recent cost-related court decisions and legal changes including the new caps on executive compensation, application of… Continue Reading

Join Us For a Cost and Accounting Roundtable

Posted in Cost/Cost Accounting
On April 2nd, Cathy Kunz joins Paul Calabrese of Rubino & Company for an important roundtable for government contractors. During this ½ day presentation sponsored by Bank of America and Merrill Lynch, participants will get both the legal and accounting perspective. From the legal side, Cathy will review recent cost-related court decisions and legal changes,… Continue Reading

Applicable Statute of Limitations for CAS Violations Comes into Focus

Posted in Cost/Cost Accounting
The Contract Disputes Act, 41 U.S.C. §§ 7101-7109, sets forth certain prerequisites for the exercise of jurisdiction over claims. Among these prerequisites is a six-year statute of limitations, which is applicable to Government and contractor claims alike. With few exceptions, claims submitted more than six years after “accrual” are not valid and cognizable under the… Continue Reading