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Cost Disallowance Claim Accrued When the Government Paid Invoices

Client Alert | 1 min read | 09.11.18

In United Liquid Gas Co. v. GSA (July 12, 2018), the Civilian Board of Contract Appeals found that the government’s cost disallowance claim was untimely under the Contract Disputes Act’s six-year statute of limitations. Following an audit, GSA filed a $3.3 million claim alleging that the contractor overbilled GSA on a fixed-price per gallon propane contract. The Board held that GSA’s claim began to accrue on the date that the Government paid each invoice. GSA argued unsuccessfully that, before the audit, it could not have known of the overbilling because the invoices were paid by a separate agency (the Defense Finance and Accounting Service). The Board responded that GSA was “obligated to monitor [the] payments” and thus “should have known about the overpayment[s].” Because each invoice payment was treated as a separate event for claim accrual purposes, the Board denied as time-barred roughly $280,000 of GSA’s claim that involved payments more than six years before the claim was filed.

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Client Alert | 1 min read | 07.08.26

CAS Board Publishes Final Rule Rescinding CAS 404, 408, 409, and 4117

As part of its ongoing effort to conform the Cost Accounting Standards (“CAS”) to generally accepted accounting principles (“GAAP”), the CAS Board published a final rule rescinding CAS 408 (Accounting for costs of compensated personal absence) and CAS 411 (Accounting for acquisition costs of material).  The CAS Board also rescinded CAS 404 (Capitalization of tangible assets) and CAS 409 (Depreciation of tangible capital assets) but retained certain requirements of CAS 404 and 409, which will be located in new paragraphs of CAS 405 (Accounting for unallowable costs).  Specifically, the CAS Board retained the requirements currently located at CAS 404-50(d)(1), CAS 409-50(e)(5), CAS 409-50(j)(1), and CAS 409-50(j)(4), which the CAS Board explained are necessary to protect the Government’s interests.  Otherwise, the CAS Board determined that the requirements of CAS 404, 408, 409, and 411 overlapped with GAAP such that GAAP “may be applied reasonably as a substitute for CAS to support contract cost and pricing.”...

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