1. Home
  2. |Insights
  3. |Novation Trap For The Unwary

Novation Trap For The Unwary

Client Alert | 1 min read | 02.04.11

In Raytheon Co. v. U.S. (Jan. 26, 2011), the Court of Federal Claims held that a contractor's claim for the pension cost adjustment due under CAS 413 for pension plans with funding deficits at the time of a "segment closing" could be barred by the standard language required in novation agreements providing that the contractor "waives any claims and rights against the Government that it now has or may have in the future in connection with the [novated] contracts."  Because the Government takes the position that its agreement to novate contracts is completely within the untrammeled discretion of the Government, the Government could effectively negate the requirements of CAS 413 if this decision is correct by refusing to novate contracts unless the contractor agrees to waive its rights to an adjustment under CAS 413. 

Insights

Client Alert | 4 min read | 08.21.25

FLSA Overtime Reporting and Withholding

The One Big Beautiful Bill Act (the Act), signed on July 4, 2025, allows a deduction from an individual’s personal tax return on Form 1040 for “qualified overtime compensation” as defined in new Code § 225. The amount that can be deducted from the employee’s return is capped at $12,500 with the maximum then adjusted down if the employee’s AGI exceeds certain limits. This deduction is permitted in 2025....