Don't Risk A "Jury Verdict"

The ASBCA decision in States Roofing Corp. (Jan. 19, 2010) reminds us that contemporaneously tracking the costs of preparing and negotiating REAs can be critical to recovering them from the government as contract administration costs. The ASBCA found that the contractor's REA proposal efforts included in-house labor, legal, and accounting costs that were properly classified as contract administration costs, but found inter alia that personnel did not track those efforts separately from other contract work and the contractor's post-hoc allocations were unreliable - leading the ASBCA to use a "jury verdict" approach and award less than 12% of the contractor's claim.