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ASBCA Decision a Mixed Bag on Cost Allowability Issues

Client Alert | 1 min read | 05.17.17

In Raytheon Co., ASBCA No. 57743, et al., the Board addressed penalties associated with various unallowable costs, finding that salaries of employees engaged in unallowable lobbying activities were “expressly unallowable” as “directly associated costs,” and subject to level 1 penalties, even though “directly associated costs” are, by definition, not expressly unallowable. The Board also found that costs that Raytheon had previously agreed to treat as unallowable, but erroneously included in incurred cost submissions, were not subject to level 1 penalties because they were not expressly unallowable (the Government apparently did not argue that such costs were subject to level 2 penalties). Finally, the Board held that testimony and other credible evidence can be used to demonstrate allowability of consultant costs in the absence of perfect documentation, and that a contractor must prove the CO’s failure to waive penalties for expressly unallowable costs is an arbitrary and capricious abuse of discretion.

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Client Alert | 5 min read | 12.12.25

Eleventh Circuit Hears Argument on False Claims Act Qui Tam Constitutionality

On the morning of December 12, 2025, the Eleventh Circuit heard argument in United States ex rel. Zafirov v. Florida Medical Associates, LLC, et al., No. 24-13581 (11th Cir. 2025). This case concerns the constitutionality of the False Claims Act (FCA) qui tam provisions and a groundbreaking September 2024 opinion in which the United States District Court for the Middle District of Florida held that the FCA’s qui tam provisions were unconstitutional under Article II. See United States ex rel. Zafirov v. Fla. Med. Assocs., LLC, 751 F. Supp. 3d 1293 (M.D. Fla. 2024). That decision, penned by District Judge Kathryn Kimball Mizelle, was the first success story for a legal theory that has been gaining steam ever since Justices Thomas, Barrett, and Kavanaugh indicated they would be willing to consider arguments about the constitutionality of the qui tam provisions in U.S. ex rel. Polansky v. Exec. Health Res., 599 U.S. 419 (2023). In her opinion, Judge Mizelle held (1) qui tam relators are officers of the U.S. who must be appointed under the Appointments Clause; and (2) historical practice treating qui tam and similar relators as less than “officers” for constitutional purposes was not enough to save the qui tam provisions from the fundamental Article II infirmity the court identified. That ruling was appealed and, after full briefing, including by the government and a bevy of amici, the litigants stepped up to the plate this morning for oral argument....

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