CAS Offsets Permitted Among Different Contract Types
In an important case of first impression, the Court of Federal Claims in Lockheed Martin Corp. v. United States (Mar. 29, 2006, http://www.uscfc.uscourts.gov/Opinions/Allegra/06/ALLEGRA.LockheedMartn.pdf) has held that the cost impact of a Cost Accounting Standard (CAS) noncompliance is the net of all increased costs and all decreased costs that result from the noncompliance on all CAS-covered contracts. The Court rejected the government's argument that decreased costs paid on fixed-price contracts could not be offset against increased costs paid on cost-reimbursement contracts, finding that it "is -- in a word -- wrong."
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