Cost/CAS

Cost Allowability and the Cost Accounting Standards Overview. Crowell & Moring's expertise about issues involving the Cost Accounting Standards ("CAS") and the FAR cost allowability rules is widely recognized. While we have litigated many significant cases, we are most proud of our successes in achieving favorable settlements in the vast majority of cost and accounting disputes in which we have been involved. We have unparalleled experience in counseling clients on how to deal with the results of troublesome internal findings and how to respond to DCAA audit reports. Our clients also regularly call upon us to conduct compliance reviews, provide training, and structure accounting policies so as to minimize risk.

Representative Matters.

The Government claimed entitlement to a refund of pension costs in connection with Unisys' sale of government contracts business units in 1995 to Loral. The Court of Federal Claims granted motions for summary judgment concerning reduction of the amount of the claim to reflect the benefit the Government received from Unisys' transfer of pension assets to the buyer. The same opinion was issued in cases involving three contractors pending before the same judge, largely on the basis of an argument made in our brief for Unisys.
Successfully argued as amicus curiae for reversal on reconsideration of an ASBCA decision holding that the inclusion of expenses related exclusively to performance of commercial contracts in an overhead pool allocable to commercial and Government contracts was a violation of the requirement in CAS 418 that indirect costs must be allocated on the basis of causal/beneficial relationships. AM General LLC, ASBCA Nos. 53610 & 54741, 07-1 B.C.A. ¶ 33,498
Successfully argued as amicus curiae that an ASBCA decision finding that the failure of a contractor to complete a "segment-closing" adjustment under CAS 413 during the same year as the closing had damaged the Government should be reversed on reconsideration. Raytheon Co., ASBCA No. 54907, 07-1 B.C.A. ¶ 33,655
Successfully argued to the Army Contract Adjustment Board that Holston Defense Corporation (HDC) should be awarded extraordinary contractual relief under Public Law 85-804 in the amount of $90 million, plus interest, for the projected costs of post-retirement benefits earned by HDC employees under a series of contracts with the United States Army. Application of Holston Defense Corporation, ACAB No. 1250, 2006 WL 4591482 (Sept. 27, 2006).
Successfully argued that a cost-reimbursement contract that was repriced because of Congressional funding changes after the contractor had made changes in its cost accounting practices was not an "affected contract" and therefore was not subject to a price adjustment reflecting the impact of the accounting changes. Lockheed Martin Corp., ASBCA No. 53822, 07-2 BCA ¶ 33,614.
Successfully argued that the Government was not entitled to a price adjustment for CAS-covered firm-fixed price contracts due to a change in accounting practice because the change did not cause the Government to incur increased costs. E-Systems, Inc., ASBCA Nos. 45771, 46409, 00-2 BCA ¶ 30,982
Achieved dismissal of qui tam case brought by DCAA auditors based on information they obtained in the course of their own audit. Wercinski v. IBM Corp., 982 F. Supp. 449 (S.D. Texas 1997).
Successfully argued that an internal corporate reorganization was not a "change in cost accounting practice" requiring a contract price adjustment under the CAS clause. Perry v. Martin Marietta Corp., 47 F.3d 1134 (Fed. Cir. 1995)
Achieved favorable decision on the allowability of lump sum wage payments in lieu of salary increases. Boeing Aerospace Operations, Inc., ASBCA No. 46275, 94-2 BCA ¶ 26,802, aff'd on reconsideration, 94-3 BCA ¶ 27,281
Successfully argued that the Administrative Contracting Officer is the only Government official with authority to decide CAS issues. Bell-Boeing Joint Venture, ASBCA No. 39681, 93-1 BCA ¶ 25,791.