On December 18, 2018 the Administrative Judge, in ASBCA No. 61583, denied the contractor’s appeal and granted the Government’s request for summary judgement related to the contractor’s claim that it was entitled to a penalty waiver because the contractor did not demonstrate that it “had adequate policies, training, controls, and review systems, and that it inadvertently incorporated the [unallowable cost]” in its incurred cost proposals. This decision serves as a reminder of the importance of maintaining adequate policies and procedures.
A recent ASBCA decision (No 61583) confirms that Government benevolence does not extend to penalties associated with a contractor’s final indirect cost rate proposal (FICRP) which included expressly unallowable indirect costs. In one case, the issue was unallowable legal costs incurred as a result of the US Department of Justice (DOJ) investigation of the contractor, which was triggered by information suggesting that the contractor claimed indirect salaries for an individual whose services were as the housekeeper for the owners of the company and thus unallowable as costs allowable to Government contracts.
Did you know that The International Traffic in Arms Regulations affects more than just exporters? You may need to register with the Directorate of Defense Trade Controls even if you do not export.