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)
Federal Circuit Affirms COFC Decision Limiting Infringement Damages to Copies of Software Actually Used Rather Than Made
In Bitmanagement Software GMBH v. United States, Case No. 23-1506 (Fed. Cir. Jan. 7, 2025), the U.S. Court of Appeals for the Federal Circuit (Federal Circuit) denied the appeal of Bitmanagement Software Gmbh (Bitmanagement) challenging the Court of Federal Claims’ (COFC) $154,400 damages award, and denying its demand for $85 million in damages resulting from the Navy’s infringement of Bitmanagement’s software copyright. The Federal Circuit affirmed the COFC’s (1) use of a hypothetical negotiation approach to compute damages; and (2) decision to award damages using a “per use” rather than a “per copy” approach.Continue Reading Federal Circuit Affirms COFC Decision Limiting Infringement Damages to Copies of Software Actually Used Rather Than Made
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
At Long Last: CAS Board Seeks Input Regarding CAS Coverage of Indefinite Value Contract Vehicles
The Cost Accounting Standards Board (CASB) recently announced that it seeks public comments on “whether and how” to amend the rules to clarify whether the CAS apply to indefinite value contract vehicles (or IDVs, otherwise known as indefinite-delivery / indefinite-quantity, or IDIQ, contracts). Comments are due no later than August 19, 2024. The full text of the notice is available here. The CASB also published a paper discussing six possible approaches and the criteria it will use to evaluate those approaches, but welcomed the public to identify alternatives for the CASB to consider. Continue Reading At Long Last: CAS Board Seeks Input Regarding CAS Coverage of Indefinite Value Contract Vehicles
Contractor’s Copyright Infringement Claims Raise Issues That “Must be Addressed at Trial”
On May 3, 2024, in Geospatial Technology Associates, LLC v. United States, COFC No. 16-346C, the U.S. Court of Federal Claims denied the government’s motion to dismiss for lack of jurisdiction and, alternatively, for summary judgment due to alleged inaccuracies in a copyright registration, holding that plaintiff Geospatial Technology Associates, LLC’s (“plaintiff” or “GTA”) patent and copyright infringement claims pursuant to 28 U.S.C. § 1498 raise issues that “must be addressed at trial.” This newest development follows GTA’s original March 2016 lawsuit against several government agencies—including the Department of the Army, the Department of the Air Force, and the National Geospatial-Intelligence Agency (“NGA”)—alleging patent and copyright infringement of the underlying software code of its product, “NINJA.pro.” Continue Reading Contractor’s Copyright Infringement Claims Raise Issues That “Must be Addressed at Trial”
Government Contracts
It All Adds Up
Nicole Owren-Wiest and Erin Rankin continue their discussion of TINA. In this episode, they dive into the definition of cost or pricing data. Spoiler alert: the devil’s in the details. “It All Adds Up” is Crowell & Moring’s podcast covering the latest government contract accounting, cost, and pricing developments.
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It All Adds Up
Cards Face Up
Nicole Owren-Wiest and Erin Rankin talk TINA. What is the Truthful Cost or Pricing Data Act, formerly known as the Truth in Negotiations Act? When are contractors and subcontractors required to provide certified cost or pricing data? And what does Nicole’s Cookie Monster coffee mug have to do with it?
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It All Adds Up
What’s the Point?
To set the groundwork for future episodes, Nicole Owren-Wiest and Erin Rankin talk fundamentals: What is the purpose behind the often counter-intuitive and complex government contracts cost and pricing rules? What are the various price analysis techniques available to the world’s largest buyer of goods and services? “It All Adds Up” is
It All Adds Up
Our Two Cents
In this second inaugural episode of It All Adds Up, Nicole Owren-Wiest and Erin Rankin riff on why they care so much about government contracts cost and pricing – and why you should, too. “It All Adds Up” is Crowell & Moring’s podcast covering the latest government contract accounting, cost, and pricing