On August 7, 2025, President Trump issued an Executive Order (EO) titled, “Improving Oversight of Federal Grantmaking,” setting out the framework for sweeping changes to the grantmaking process. The order purports to address the Administration’s concerns about federal grants supporting controversial or ineffective programs and incurring excessive administrative costs. The EO implements three key changes to federal grant requirements. Continue Reading Grant Slam: New Executive Order Serves Up Changes for Federal Grants
All Together Now: “Many Ways to Calculate Fee After a T4C”
A recent decision by the Armed Services Board of Contract Appeals (ASBCA) reinforces the FAR part 49 provisions governing terminations for convenience, which provide that contractors are entitled to fair compensation and that settlements for such terminations should not rigidly rely on cost and accounting data. In D-STAR Eng’g Corp., ASBCA Nos. 62075, 62780 (Apr. 28, 2025), the government had terminated the contractor’s cost-plus-fixed-fee research and development contract for convenience. Following the contractor’s submission of its termination settlement proposal (TSP), the government questioned certain costs claimed, disputed the fee owed to the contractor, determined it had overpaid the contractor, and issued a debt demand claim for disallowed costs. The contractor then submitted its own, affirmative claim incorporating its TSP and seeking additional costs and interest. The most interesting portion of the ASBCA’s decision is its discussion of the methods available to the parties to calculate the amount of fee to which the contractor was entitled following the termination for convenience, which we describe below. However, the ASBCA also addressed the allowability and allocability of various cost types that may be of interest, including termination settlement costs, direct labor, engineering overhead, and G&A.Continue Reading All Together Now: “Many Ways to Calculate Fee After a T4C”
Contractor Business Systems: Out With the Old, In With the New (Terminology)
On January 17, 2025, the Department of Defense (DoD) issued a final rule replacing the term “significant deficiency” in the Defense Federal Acquisition Regulation Supplement (DFARS) with the term “material weakness” for use in reviews of contractor business systems. Effective immediately, a material weakness is defined as “a deficiency or combination of deficiencies in the internal control over information in contractor business systems, such that there is a reasonable possibility that a material misstatement of such information will not be prevented, or detected and corrected, on a timely basis. A reasonable possibility exists when the likelihood of an event occurring is probable or more than remote but less than likely.” Continue Reading Contractor Business Systems: Out With the Old, In With the New (Terminology)
Third Time’s A Charm? Federal Circuit Once Again Sends CAS Dispute Back to the Court of Federal Claims
The U.S. Court of Appeals for the Federal Circuit has confirmed that the Court of Federal Claims (COFC) has jurisdiction to decide whether contractors may offset cost impacts from multiple, simultaneous cost accounting changes when some changes increase costs to the Government, and other changes decrease costs to the Government.Continue Reading Third Time’s A Charm? Federal Circuit Once Again Sends CAS Dispute Back to the Court of Federal Claims
Taking Care of Business (Systems): DoD Proposes to Change the Definition of a Business System Deficiency
The Department of Defense (DoD) recently announced that it seeks public comments on a proposed change to the contractor business systems regime. The proposed rule would amend the Defense Federal Acquisition Regulation Supplement (DFARS) by replacing the phrase “significant deficiency” with the new defined term “material weakness,” to mean “a deficiency or combination of deficiencies in the internal control over information in contractor business systems, such that there is a reasonable possibility that a material misstatement of such information will not be prevented, or detected and corrected, on a timely basis.” In addition, the term would provide that a “reasonable possibility exists when the likelihood of an event occurring is— (1) Probable; or (2) More than remote but less than likely.” Continue Reading Taking Care of Business (Systems): DoD Proposes to Change the Definition of a Business System Deficiency
False Claims Act Settlement Illustrates Value of Disclosure and Cooperation
A recently-announced False Claims Act (FCA) settlement illustrates how government contractors and other FCA defendants can take advantage of a Department of Justice (DOJ) policy that rewards voluntary self-disclosure to, and subsequent cooperation with, the government.Continue Reading False Claims Act Settlement Illustrates Value of Disclosure and Cooperation
OMB Final Rule Rewrites the Uniform Guidance for Grants, Cooperative Agreements, and Other Federal Financial Assistance
On April 22, 2024, the Office of Management and Budget (OMB) issued a Final Rule significantly revising the Uniform Guidance for grants, cooperative agreements, and other federal financial assistance. The Final Rule (titled “OMB Guidance for Federal Financial Assistance”), and OMB’s accompanying memorandum to agencies and reference guide, state that the revisions aim to streamline and clarify the grant rules and improve management, transparency, and oversight of federal financial assistance. Agencies must implement the Final Rule by October 1, 2024; however, agencies may apply it to federal awards as early as June 21, 2024.Continue Reading OMB Final Rule Rewrites the Uniform Guidance for Grants, Cooperative Agreements, and Other Federal Financial Assistance
Start the Clock: Government’s Indirect Cost Rate Claim Accrued upon Submission of Indirect Cost Rate Proposal
In Strategic Technology Institute, Inc. v. Sec’y of Def., 91 F.4th 1140 (Fed. Cir. 2024), the Federal Circuit affirmed a decision by the Armed Services Board of Contract Appeals (ASBCA), which held that the government’s 2018 claim was not time-barred by the Contract Dispute Act’s (CDA) six-year statute of limitations. The ASBCA found that the government’s claim did not begin to accrue until 2014, the date the government received the contractor’s indirect cost rate proposals for fiscal year (FY) 2008 and FY 2009. Continue Reading Start the Clock: Government’s Indirect Cost Rate Claim Accrued upon Submission of Indirect Cost Rate Proposal
Does Government Disclosure of a Company’s Trade Secrets Amount to an Unlawful Taking Under the Fifth Amendment?
In Vanda Pharmaceuticals, Inc. v. United States, No. 23-629C (Fed. Cl. 2024), 2024 WL 201890, the Court of Federal Claims (COFC) addressed whether government disclosure of a company’s trade secrets and commercial information could create a viable claim for a taking under the Fifth Amendment or for breach of an implied-in-fact contract. The company, Vanda Pharmaceuticals (Vanda), claimed that the government’s disclosure of its confidential trade secrets—including its trademarked drugs’ dissolution rates—to competitors seeking U.S. Food and Drug Administration (FDA) approval of generic drug alternatives was an unlawful regulatory taking that diminished the value of Vanda’s brand name drugs and infringed upon Vanda’s right to exclude generics from the market. The government moved to dismiss Vanda’s claims for lack of subject matter jurisdiction and for failure to state a claim. The COFC denied the government’s motion in part, holding as a matter of first impression that Vanda adequately stated a takings claim based on the government’s disclosures but failed to state a claim for breach of an implied-in-fact contract. The COFC also held that Vanda’s claims involving one generic drug manufacturer were outside the Tucker Act’s six-year statute of limitations and were time barred. Continue Reading Does Government Disclosure of a Company’s Trade Secrets Amount to an Unlawful Taking Under the Fifth Amendment?
Who CARES? The ASBCA Might.
In Aviation Training Consulting, LLC, ASBCA No. 63634 (Jan. 11, 2024), the Armed Services Board of Contract Appeals (ASBCA) confirmed that a contractor’s properly asserted claim for relief under Section 3610 of the Coronavirus Aid, Relief, and Economic Security (CARES) Act is a claim under the Contract Disputes Act (CDA) and denied the Air Force’s motion to dismiss for lack of jurisdiction.Continue Reading Who CARES? The ASBCA Might.