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DOD Required to Reimburse Pension Cost Deficit

Client Alert | 1 min read | 07.18.12

In Raytheon Co. v. U.S. (July 16, 2012), the Court of Federal Claims awarded Raytheon $59.2 million for the "segment closing adjustment" required by CAS 413 to cover unreimbursed pension costs in two business units sold by Raytheon in 2001 and 2002, finding on virtually every contested issue that the calculation of Raytheon's expert actuarial witness was reasonable and that the government's expert had not carried the burden of proving that the Raytheon calculations were noncompliant with CAS. In addition, effectively reversing a prior decision in Raytheon Co. v. U.S., 96 Fed. Cl. 548 (2011), and addressing an issue that will have potentially broader implications beyond CAS 413 segment closing cases, the court found that Raytheon's agreement to the standard form novation language under which the seller "waives" all claims against the Government on novated contracts did not result in a waiver of the CAS 413 segment closing claim on several grounds.

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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  The CAS Board also rescinded CAS 404 (Capitalization of tangible assets) and CAS 409 (Depreciation of tangible capital assets) but retained certain requirements of CAS 404 and 409, which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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