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.
The Facts as the ASBCA Set Them Out
- In March of 2019, Northrop sent a letter to the CACO stating it believed the cost in question were allowable and planned to claim the cost in its forward pricing rates and incurred cost submissions.
- In June of 2019, the CACO responded to Northrop stating the costs in question were expressly unallowable and should be excluded from Northrop’s claims.
- In September of 2019, Northrop filed an appeal (ASBCA, 21-1 BCA ¶37,843 Northrop Grumman Corporation, Armed Services Board of Contract Appeals).
April 13, 2021, Board Decision
The Board dismissed the appeal for lack of jurisdiction as it found that the CACO’s letter was not a Contracting Officer Final Decision (COFD) and the Government had not asserted a claim.
The Moral to the Story
While opening a dialog with the contracting officer is a good thing, there are no short cuts to the Contract Disputes Act (CDA) process. If the initial dialog does not come to an agreement, the contractor needs to include the cost in a claim, under a Government contract, and the contracting officer needs to issue a COFD, stating it is a final decision of the Contracting Officer and includes that the contractor may appeal the decision to the agency board of contract appeals within 90 days or to the United States Court of Federal Claims within 12 months. Then the game can begin.
How Redstone GCI can help
Redstone GCI assists contractors throughout the U.S. and internationally with upfront effort to resolve cost allowability issues as well as support during the CDA process, if necessary. Redstone has staff that worked for both DCAA and DCMA to assist with the complex Government contracting processes.
John is a Director with Redstone Government Consulting, Inc. providing government contract consulting services to our clients primarily related to the DFARS business systems, CAS Disclosure Statements, and DCAA/DCMA compliance preparation, advisory, and defense. Prior to joining Redstone Government Consulting, John served in a number of capacities with DCAA/DCMA for more than 30 years. Upon his retirement, he was based in Texas as an SES-level Corporate Audit Director for DCAA, managing a staff of 300 auditors at one of the largest DOD programs. Professional Experience John began his career in the late 80s working in the Clearwater, FL audit office and over the next three decades he progressed through a number of positions within both DCAA and DCMA with career highlights as DCAA Program Manager at Ft. Belvoir, Chief of Technical Programs Division, Deputy Assistant Director-Policy, Director of the DCMA Cost and Pricing Center, the SES-level Lockheed Martin Corporate Audit Director, and Director of Integrity and Quality Assurance. John’s three decades of experience in performing and leading DCAA auditors and DCMA reviewers provides a wealth of expertise to our clients. John’s role, not only in the performance of audits, but also in the development of audit policy affords him unique insights into the defense of audit findings and the linkage of audit program steps to the underlying regulatory framework. He is an expert in FAR, DFARS, and other agency acquisition regulation, as well as a subject matter expert in the Cost Accounting Standards having reviewed and provided audit feedback on many of the largest and most complex cost accounting practices during his tenure with the DCAA. John’s tenure with DCAA and DCMA came at a critical time during each agency’s history where a number of changes were occurring such as the response to the ICS backlog, development of audit approaches to the DFARS Business Systems and implementation of new audit initiatives as a result of Congressional oversight through the NDAA process. John’s leadership at the DCMA Cost & Pricing center saw oversight of all major DOD pricing actions, leadership of should cost review teams, the Commercial Pricing group and many other areas of strategic value to our clients. His involvement in these and other Agency initiatives is of great value to our clients due to his in depth understanding of DCAA and DCMA’s internal policy directives. Education John holds a Master of Business Administration and a B.A. in Accounting from the University of South Florida. Certifications Certified Information Systems Auditor State of Alabama Certified Public Accountant