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Accounting, Cost, and Pricing

Overview

Accounting, cost, and pricing requirements are some of the most complex legal issues for government contractors. Efficient resolution of disputes over compliance in these areas requires a deep understanding of the maze of governing statutes and regulations. At Crowell & Moring, we have unparalleled experience navigating the worlds of the Cost Accounting Standards (CAS), cost allowability, Truthful Cost and Pricing (formerly TINA), and contractor business systems.

We are seasoned litigators, and we pride ourselves for achieving favorable settlements in many of the government contracts cost and pricing disputes we handle. Our nationally-recognized practice also prioritizes the proactive resolution of issues before they escalate to formal disputes, whether it's strategically maneuvering through Defense Contract Audit Agency (DCAA) audits, addressing potential noncompliance findings, or conducting compliance reviews. We also counsel our clients to be audit ready, through the development of robust policies and internal guidance and with comprehensive training programs. 

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Insights

Client Alert | 1 min read | 01.21.25

Contractor Business Systems: Out With the Old, In With the New (Terminology)

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.” ...

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Representative Matters

  • Ongoing representation of multiple government contractors in appeals before the Armed Services Board of Contract Appeals (ASBCA) involving government claims for alleged noncompliance with CAS 410, CAS 416, and CAS 420, amounting to over $2 billion.
  • Ongoing representation of a major Defense contractor in an ASBCA appeal of government claims unilaterally setting indirect cost rates and claiming repayment for allegedly unallowable indirect costs.
  • Ongoing representation of a major Defense contractor in an ASBCA appeal of a government claim seeking recovery of allegedly unallowable costs incurred to continue contract performance during the COVID-19 pandemic.
  • Successful zero-dollar resolution of a threatened government claim for $500 million for alleged noncompliance with CAS 410.
  • Represented numerous government contractors to successfully settle proposed pension cost adjustments following segment spinoffs or pension plan freezes under CAS 413.
  • Successful resolution of a show cause letter from the Navy Suspension and Debarment Official, with no action, regarding alleged accounting and estimating system deficiencies.
  • Successful zero-dollar settlement of a government claim for CAS 403 noncompliance.
  • Successful ASBCA appeal of a $24 million government defective pricing claim for a major Defense contractor (government withdrew the claim).
  • Represented a Defense contractor through evidentiary hearing and obtained a judgment entitling the contractor to disputed termination for convenience costs, including precontract costs under FAR 31.205-32.
  • Represented a Department of Energy contractor in False Claims Act litigation in federal district court and a parallel Contract Disputes Act proceeding before the Civilian Board of Contract Appeals, resulting in dismissal of the government’s allegation that the contractor charged unallowable home office expenses.
  • Represented a Defense contractor in a multimillion-dollar government claim for costs disallowed under FAR 31.201-2(d) (supporting documentation), FAR 31.201-3 (reasonableness), FAR 31.205-46 (travel costs), and the Fly America Act, resulting in a withdrawal of the contracting officer’s final decision.
  • Prepared a contractor claim and recovered nearly 100% of costs previously disallowed by the contracting officer in a federal cost reimbursement construction contract.

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Insights

Client Alert | 1 min read | 01.21.25

Contractor Business Systems: Out With the Old, In With the New (Terminology)

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.” ...

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Insights

Client Alert | 1 min read | 01.21.25

Contractor Business Systems: Out With the Old, In With the New (Terminology)

Client Alert | 2 min read | 10.09.24

DoD Proposes To Amend the DFARS to Update TINA Requirements

Client Alert | 3 min read | 10.08.24

Third Time’s A Charm? Federal Circuit Once Again Sends CAS Dispute Back to the Court of Federal Claims

Client Alert | 1 min read | 06.28.24

Taking Care of Business (Systems): DoD Proposes to Change the Definition of a Business System Deficiency

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Professionals

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Insights

Client Alert | 1 min read | 01.21.25

Contractor Business Systems: Out With the Old, In With the New (Terminology)

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.” ...

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