Redstone Government Consulting Blog | Litigation Consulting Support

Recently, we conducted research related to some incurred cost audit findings for a client and came across an Armed Services Board of Contract Appeals (ASBCA) case that highlighted key information every contractor, especially small businesses, should know. The Technology Systems, Inc. ASBCA No. 59577 reads like a soap opera. It starts with some ups and downs. There were audit findings in Fiscal Year (FY) 2001, which the contractor and the Administrative Contracting Officer (ACO) negotiated. For FY 2002 to 2006, the contractor’s indirect rates were accepted as proposed. This was followed by relationship issues during the FY 2007 audit between the Defense Contract Audit Agency (DCAA) auditor and the contractor (No surprise to most of us). Then, a period of separation occurred, from FY 2009 to 2013, when DCAA decided that proposal pricing supporting new contract awards was the priority. During this time, the contractor’s FY 2007 incurred cost audit was shelved, along with significant potential questioned costs. Then, in an act of desperation, the ACO issued a Contracting Officer’s Final Decision (COFD) based on a DCAA memorandum for the FY 2007, which questioned costs to avoid the statute of limitations running out. Ok, enough of the soap opera, let’s go through the things you need to know.

Topics: Compliant Accounting Infrastructure, Proposal Cost Volume Development & Pricing, Litigation Consulting Support, Incurred Cost Proposal Submission (ICP/ICE), DFARS Business Systems, DCAA Audit Support, Government Regulations, Federal Acquisition Regulation (FAR)

Late yesterday, President Trump signed another Executive Order related to employment laws. This Executive Order (“Restoring Equality of Opportunity and Meritocracy”) takes aim at the use of “disparate impact liability,” which, the EO proclaims, “undermines our national values [and] also runs contrary to equal protection under the law and, therefore, violates our Constitution.”

Topics: Litigation Consulting Support, Human Resources, Government Regulations, Office of Federal Contract Compliance Programs, Service Contract Act

The Department of Justice (DOJ) implemented an initiative to pursue cybersecurity fraud in 2021 (see our article on DOJ Initiative on Cyber Security Incident Reporting), and it is apparently working.

Topics: Litigation Consulting Support, Government Regulations, Federal Acquisition Regulation (FAR), Cybersecurity

On April 24, 2024, the US District Court for the Western District of Pennsylvania issued a decision on the Defendant’s request to dismiss a False Claims Act brought by a relator alleging violations and retaliation by Magee-Womens Research Institute and Foundation (Foundation), University of Pittsburgh, University of Pittsburgh Medical Center and UPMC Magee-Womens Hospital under the False Claims Act. The decision identified the areas of the False Claims Act that pertained to the case as follows:

• Knowingly present, or cause to be presented, a false or fraudulent claim for payment or approval
• Knowingly make, use, or cause to be made or used, a false record or statement material to a false or fraudulent claim
• Conspire to commit a violation
• Knowingly make, use, or cause to be made or used, a false record or statement material to an obligation to pay or transmit money or property to the Government, or knowingly conceal or decrease an obligation to pay or transmit money.

Topics: Compliant Accounting Infrastructure, Litigation Consulting Support, Government Regulations

While the cost principle is titled “Rental Costs,” it addresses the cost of renting and leasing real and personal property utilized in the performance of US Government procurement contracts and subcontracts. The way I read the cost principle, FAR 31.205-36(b) provides that rental and leasing costs are allowable with the following limitations:

Topics: Compliant Accounting Infrastructure, Litigation Consulting Support, Contracts & Subcontracts Administration, Government Regulations, Federal Acquisition Regulation (FAR)

Yet another interesting case to consider from United States Court of Appeals for the Federal Circuit – ACLR, LLC v. United States Court of Appeals 2013-1190.

Topics: Litigation Consulting Support, Contracts & Subcontracts Administration, Government Regulations, Federal Acquisition Regulation (FAR)

Lessons Learned from a recent Armed Services Board of Contract Appeals (ASBCA) case – Platinum Services, Inc. ASBCA Nos. 62199, 62200.

Bottom Line Up Front

The contractor (Platinum Services, Inc. – PSI), the Army, and even the Board all agree the services were rendered, however, since an official certified claim was not filed within six years from the date of the initial invoicing, the Government does not have to pay.

Topics: Compliant Accounting Infrastructure, Litigation Consulting Support, Contracts & Subcontracts Administration, Government Regulations, Federal Acquisition Regulation (FAR), REAs, Claims & Terminations

The Court of Appeals decision came out on June 26, 2024, and I have been trying work it through my head how they got to their decision. I for sure do not have an answer but I have come up with some ideas and concerns. International Development Solutions, LLC v. Secretary of State, U.S. Court of Appeals, Federal Circuit, 68 CCF ¶82,658, (Jun. 26, 2024)

Topics: Compliant Accounting Infrastructure, Litigation Consulting Support, Incurred Cost Proposal Submission (ICP/ICE), DCAA Audit Support, Federal Acquisition Regulation (FAR)

Investigations, internal or otherwise, are necessitated for a variety of reasons and take many different forms. Internal complaints of misconduct, harassment, discrimination or ethical violations must be addressed timely and thoroughly. Failure to do so can lead to legal exposure, whistleblower complaints and even poor morale among your employees. It is always preferable to address complaints internally before an investigation is initiated by the Department of Labor (DoL) after an employee (current or former) goes to them because they believe you failed to take their concerns seriously. Likewise, you hope that the first time you hear about a complaint of discrimination or harassment is not when you receive a Charge of Discrimination from the Equal Employment Opportunity Commission (EEOC). Establishing an internal reporting and investigation process that ensures prompt and fair action will provide the assurances your employees need so they feel comfortable raising their concerns internally and will position your company to defend any potential complaints made to outside agencies.

Topics: Litigation Consulting Support, Government Compliance Training, Human Resources

Recent Northrop Appeal

Northrop attempted to open up a dialog with Government as to the allowability of litigation settlement costs it planned to include in its 2019-2023 Sector Home Office Allocation Submission. Of course, Northrop believed the cost was allowable, and the Corporate Administrative Contracting Officer (CACO) believed the costs to be unallowable.

Topics: Non-US Government Contractor, Litigation Consulting Support, Incurred Cost Proposal Submission (ICP/ICE), DCAA Audit Support, Government Regulations, Federal Acquisition Regulation (FAR)