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Inclusion of Deferred Compensation Found Proper Where Government Forced Contractor’s Hand

Client Alert | 1 min read | 08.11.17

In Quimba Software, Inc. v. United States (No. 12-142C), the Court of Federal Claims granted Quimba’s Motion for Summary Judgment, finding that “Quimba’s inclusion of deferred compensations costs in its 2004 [Incurred Cost Proposal] [wa]s allowable under the FAR….” Specifically, while the government argued that the FAR and CAS requirements precluded “deferred compensation for closely held companies ‘except in the year in which the compensation [wa]s paid,’” the Court found that Quimba’s situation fell within the “limited exception” to the IRS deductibility-timing rules because “Quimba’s deferral of its FY 2004 compensation was unintended, unavoidable, and unanticipated[,]” and “Quimba’s financial difficulty, which forced payment of the compensation beyond 2004, was unforeseeable through FY 2004.” In this respect, the Court recognized that the government effectively “forced Quimba’s hand” to defer compensation when it failed to make additional payments beyond the first payment as a result of the government’s “updating and approval process” of Quimba’s accounting system, which took “the entirety of FY 2004 and continue[d] through a significant part of FY 2005.”

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Client Alert | 3 min read | 06.12.26

DOJ Guidance Backs Away From Disparate Impact Liability

On June 9, 2026, the U.S. Department of Justice (DOJ) issued a formal opinion concluding that the Equal Opportunity Employment Commission’s (EEOC) existing interpretations of Title VII of the Civil Rights Act of 1964 (Title VII) disparate-impact liability, including the Uniform Guidelines on Employee Selection Procedures (UGESP), are unconstitutional. According to the opinion, EEOC’s prior interpretations contemplate liability based on disproportionately adverse effects alone, without regard to an employer’s likely intent, rather than treating disparate impact as an evidentiary mechanism to “smoke out” intentional discrimination. DOJ found that this approach functions as a “qualified racial-proportionality mandate” that places “a racial thumb on the scales, often requiring employers to evaluate the racial outcomes of their policies, and to make decisions based on (because of) those racial outcomes.” The opinion fulfills one mandate of Executive Order 14281, which rejected disparate-impact liability insofar as it “creates a near insurmountable presumption that unlawful discrimination exists wherever there are any differences in outcomes among different [demographic groups].”...

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