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Government Charged With Knowledge of Unapproved Subcontractors Listed on Invoices

Oct.02.2019

In URS Federal Services, Inc. (Sept. 3, 2019), the ASBCA found on summary judgment that the government’s 2017 claim to recover $698,685 in allegedly unallowable direct subcontractor costs was time-barred by the CDA’s six-year statute of limitations because the claim accrued in 2006, when the government paid URS’s invoices that included those costs. In arguing that it could only have “known” about the basis of its claim in 2012 when URS resubmitted its final indirect cost rate proposal for FY 2006, the government alleged that URS: (1) failed to receive contractual approval to subcontract, and (2) lacked adequate documentation (now) demonstrating that the costs at issue were incurred and allocable to the contract. Regarding the first basis, the Board found that the invoices listing the allegedly unapproved subcontractors demonstrated the government had knowledge that URS was using them when the government paid the invoices. The Board declined to grant summary judgment on the documentation issue. 

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