The ASBCA Giveth and the Federal Circuit Taketh Away

In a saga which conjures up the phrase: “It ain’t over till it’s over” (quotation attributed to the late, great Yogi Berra), the US Court of Appeals for the Federal Circuit (Case 21-2304) in a decision dated 01-3-2023, reversed an ASBCA Decision (60091, et al), the latter having found Raytheon’s policies for tracking potentially unallowable Lobbying and Organization costs to be reasonable, thus allowable.

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Topics: Incurred Cost Proposal Submission (ICP/ICE), DFARS Business Systems

Can a Government Contractor Compensate Its Remote Employees For Travel From Home To The Office?

In order to fulfill project requirements, there are times necessitating that remote employees travel into the contractor’s site of operations for a meeting, special project, training, performance review, etc. The US Department of Labor, Wage and Hour Division, Fair Labor Standards Act (FLSA) states that the time employees spend commuting from home to their normal place of work before the beginning of the workday and from work back home at the end of the workday is not considered compensable time worked and therefore is not time for which employees must be paid. What if the employer wants to compensate remote employees for this travel time? The available guidance doesn’t seem to say an employer can’t pay an employee for this time, and many employers do, however, should they, and what things should an employer consider?

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Topics: DFARS Business Systems, DCAA Audit Support, Cost Accounting Standards (CAS)

Did the Door Just Open for Inflation Relief on DoD Fixed-Priced Contracts?

Yes, the door just opened for potential relief from unanticipated inflation on fixed-priced contracts, but what’s beyond the door is still unclear. This year’s National Defense Authorization Act (NDAA) includes Section 822, Modification of Contracts to Provide Extraordinary Relief Due to Inflation Impacts, which builds upon DoD’s September 9, 2022, inflation guidance through use of FAR Part 50, Extraordinary Contractual Actions and the Safety Act, requests submitted to your contracting officer to provide an upward adjustment (increase contract value) and this can be done for prime and subcontractors. Note that this NDAA section does not create an obligation for the Government to pay for unanticipated inflation, but it is a “discretionary” expenditure where the Government may pay for the effects of unanticipated inflation. What remains to be seen is exactly how and how much will be provided to your contract(s).

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Topics: Compliant Accounting Infrastructure, Contracts and Subcontracts Administration, DFARS Business Systems, Government Regulations

Does Your Company Have Research and Development Expenses? If so, Get Ready for an Increase in Your 2022 Taxes

Effective for tax years after December 31, 2021, companies that have research and development expenditures will be required to amortize their R&D costs instead of deducting them in the current year. So, what is the impact – an increased tax bill beginning in 2022.

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Topics: Compliant Accounting Infrastructure, DFARS Business Systems, Cost Accounting Standards (CAS), Federal Acquisition Regulation (FAR)

Are the New DoD Final Rulings Important for Government Contractors?

The Department of Defense (DoD) released new final rulings on October 28, 2022, but what are they and are they really important? Let’s look at significant ones and what’s important:

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Topics: DFARS Business Systems, Government Regulations

OMB Issues New Cyber Security Requirements for Federal Agencies that Impacts Companies that Sell Software to the Government

Office of Management and Budget (OMB) issued a memorandum dated September 14, 2022, Subject Enhancing the Security of the Software Supply Chain through Secure Software Development Practices. This is a result of the President’s Executive Order on Improving the Nation’s Cybersecurity.

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Topics: DFARS Business Systems, Contractor Purchasing System Review (CPSR), Cybersecurity

DOJ settles Cybersecurity Related False Claims Act for $9M

The Department of Justice (DOJ) settled one of the first lawsuits related to alleged cybersecurity fraud by Aerojet Rocketdyne, a defense contractor. So how did it begin. Aerojet Rocketdyne hired an employee as the Senior Director for Cyber Security, Compliance and Controls. The employee asserts that Aerojet misrepresented its compliance with the cyber requirements in DFARS 252.204-7012 when communicating with government officials to obtain DOD and NASA contracts between 2013 and 2015. The employee later refused to sign documents stating Aerojet was compliant with the cybersecurity requirements and reported it to the company’s ethics hotline and filed an internal company report. The employee was terminated and filed a qui tam suit alleging cybersecurity fraud under the False Claims Act.

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Topics: DFARS Business Systems, Contractor Purchasing System Review (CPSR), Cybersecurity

FAR Final Rule: Small Business Opportunities Overseas – Don't Pack Your Bags Yet


DoD issued a final rule on April 26, 2022, amending the FAR to support the Small Business Administration regulation of including overseas contracts in agency small business contracting goals. The final rule is effective May 26, 2022.

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Topics: Proposal Cost Volume Development & Pricing, Small Business Compliance, Contracts and Subcontracts Administration, DFARS Business Systems

Finally – Prior FAR 12 Contract = Commercial Item Determination, for the Most Part


DoD issued a final rule under DFARS Case 2020-D033, effective April 28, 2022, that allows Contracting Officers to rely on a contract issued under FAR Part 12 procedures to serve as a prior commercial item determination on future buys. It only makes sense, that Contracting Officers rely on prior FAR 12 contracts instead of recreating the wheel each time a contractor submits a commercial product/service and making the contractor continually support a product/service already determined commercial.

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Topics: DFARS Business Systems, Contractor Purchasing System Review (CPSR)

One More Required Company Executive Certification Under CMMC 2.0


CMMC was put on hold until recently – but is rolling forward again at a high speed. DOD held a CMMC Day Conference in May 2022 stating its goal of submitting a proposed rule in July 2022 ( no proposed rule to date) and issuing two interim final rules by March 2023. If DoD is able to stay on track (which does not appear to be the case) and issue the final interim rule by March 2023, contractors could start seeing CMMC requirements in solicitations soon after.

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Topics: DFARS Business Systems, Contractor Purchasing System Review (CPSR), Cybersecurity