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ABA Public Contract Law Section

  

 

Accounting, Costs and Pricing Committee Meeting Agendashorizbluebar

 

AGENDA
January 14, 2003 Meeting

  
The date, time, and location of the next regular meeting of the  
Accounting, Cost & Pricing Committee are as follows:  
			Date:	Tuesday, January 14, 2003  
			Time:	12 noon  
			Location:	Howrey Simon Arnold & White, LLP  
				2nd Floor Reception - Moot Court Room  
				1299 Pennsylvania Avenue, N.W.  
				Washington, D.C. 20004  

Agenda
  
I.	Informational Items  
A.	Rumsfeld v. Applied Companies, Inc., No. 01-1630 (Fed. Cir. Dec. 10,  
2002) (negligent estimate that DLA knew was overstated does not entitle  
requirements contractor to anticipatory profits on estimated quantity).  
B.	Wilkins v. St. Louis Housing Authority, Nos. 02-1332 et al. (8th  
Cir. Dec. 31, 2002) (municipal corporation in an employer subject to suit  
under the whistleblower protection provisions of the False Claims Act).  
C.	E.I. duPont de Nemours and Co. v. United States, No. 99-101C (Fed.  
Cl. Nov. 13, 2002) (open-ended indemnification clause in World War II era  
contract violates Anti-Deficiency Act).  
D.	United States ex rel. Cosens v. Yale-New Haven Hospital, No.  
3:02CV688 (D. Conn. Nov. 14, 2002) (False Claims Act case holding that  
prior, public Medicare fraud allegations did not trigger public disclosure  
bar because defendant hospital was not directly identifiable).  
E.	CACI Inc. - Federal v. General Services Administration, GSBCA No.  
15588 (Dec. 13, 2002) (time and materials contractor entitled to payment for  
services rendered even if it did not complete task, because a T&M order  
"falls within the broad genre of cost-reimbursement type contracts").  
F.	Owens & Hurst Lumber Co., Inc., AGBCA Nos. 2001-140-1 et al. (Dec.  
16, 2002) (contractor who mailed payment more than 5 days in advance is  
liable for late payment fee notwithstanding contract provision that stated:  
"To avoid late payment interest charges, allow at least 5 days mail time.")  
G.	Centurion Electronics Service, ASBCA No. 51956 (Dec. 5, 2002) (ADPE  
maintenance and repair contract was a requirements contract even though it  
lacked the required FAR clause).  
H.	OMB, Final Rule, Prompt Payment, 67 Fed. Reg. 79515 (Dec. 30, 2002).  
I.	E.O. 13279, Equal Protection of the Laws for Faith-Based and  
Community Organizations (Dec. 12, 2002).  
J.	E.O. 13280, Responsibilities of the Department of Agriculture and  
the Agency for International Development with Respect to Faith-Based and  
Community Initiatives (Dec. 12, 2002).  

  
II.	CAS Board Developments  
A.	Post-Retirement Benefits Other than Pension (PRB)  
A.	Employee Stock Ownership Plans (ESOP)  
B.	CAS Streamlining?  

  
  
III.	Regulatory Developments  
A.	DFARS, Proposed Rule, Purchase Card  Internal Controls, 67 Fed. Reg.  
77955 (Dec. 20, 2002) [comments due to Council Feb. 4, 2003].  

  
IV.	Legislative Developments  
A.  

  
V.	Other  
Next AC&P Committee Meeting - Tuesday, February 11, 2003,  
Howrey Simon Arnold & White, LLP, 1299 Pennsylvania Avenue, N.W.,  
Washington, D.C. 20004.  
Marion Kovach (x 7035)

AGENDA
Febuary 11, 2003 Meeting

  
The date, time, and location of the next regular meeting of the  
Accounting, Cost & Pricing Committee are as follows:  
			Date:	Tuesday, February 11, 2003  
			Time:	12 noon  
			Location:	Howrey Simon Arnold & White, LLP  
				2nd Floor Reception -Conference Room 2H  
				1299 Pennsylvania Avenue, N.W.  
				Washington, D.C. 20004  
If you are traveling by Metro, the closest stop is Metro Center.  Exit at F  
& 12th Streets ("Metro Sales Office"), and walk down the sidewalk one block  
to the building entrance on 12th & E Streets.  Please go through the glass  
doors and up the escalator to the second floor receptionist.  There will be  
a charge of $6 to defray the cost of lunch.  If you will attend, please call  
Marion Kovach at 202/383-7035 (or reply by e-mail to kovachm@howrey.com) by  
the close of business Friday, February 7, 2003.  
ABA Section of Public Contract Law  
Accounting, Cost & Pricing Committee  

  
AGENDA  

  
February 11, 2003 Meeting  
I.	Informational Items  

  
A.	Allegheny Teledyne Inc. v. United States, Nos. 02-5008 et al. (Fed.  
Cir. Jan. 23, 2003) (affirming the COFC's decision in the Teledyne, GM and  
GE pension cases).  
B.	Eastman Kodak Co. v. United States, No. 02-1058 (Fed. Cir. Jan. 16,  
2002) (contractor must reimburse government for excess contributions to  
overfunded pension plan because costs were not allocable under CAS 412).  
C.	Rumsfeld v. United Technologies Corp., Pratt & Whitney, No. 02-1071  
(Fed. Cl. Jan. 15, 2003) (holding that revenue sharing payments were  
"costs" that should have been included in contractor's indirect cost  
allocation bases, and criticizing ASBCA for relying on expert  
testimony to help interpret CAS).  
D.	Trifax Corp. v. District of Columbia, No. 01-7195 (D.C. Cir. Jan.  
14, 2003) (release of IG report criticizing contractor for violating the  
requirements of its contract and the Service Contract Act by underpaying  
its employees and overcharging DC did not deprive contractor of liberty  
to engage in its chosen business in violation of the Fifth Amendment's  
Due Process Clause).  
E.	American Management Sys., Inc. v. United States, No. 01-586C (Fed.  
Cl. Jan. 9, 2003) (granting certification for interlocutory appeal of  
question whether the Federal Retirement Thrift Board is subject to  
Tucker Act jurisdiction on a contract claim).  
F.	FAR, Advanced Notice of Proposed Rulemaking, Commercially  
Available Off-the-Shelf Items, 68 Fed. Reg. 4880 (Jan. 30, 2003).  
G.	FAR, Notice of Public Meeting, Reimbursement of Relocation Costs  
on a Lump-Sum Basis, 68 Fed. Reg. 4054 (Jan. 27, 2003).  
H.	Comptroller General Decision B-288266, Use of Appropriated Funds  
to Purchase Light Refreshments at Conferences (Jan. 27, 2003) (agencies  
lack authority to use appropriated funds to provide light refreshments  
to employees who are not in travel status).  
I.	Comptroller General Decision B-289801, U.S. Department of  
Education's Use of Fiscal Year Appropriations to Award Multiple Year  
Grants (Dec. 30, 2002) (concluding that it is permissible to use fiscal  
year appropriations to award multiple year grants, and articulating new  
bona fide need rule for grants: (1) for grants, the principle of  
severability is irrelevant to a bona fide need determination, and (2) in  
the grant context, a bona fide need analysis focuses on whether the  
grants are made during the period of availability of the appropriation  
charged and further the authorized purposes of the legislation).  
J.	Draft Comments, DCAA Audit Guidance, Documentation Requirements  
Under FAR 31.205-33(f) (prepared by Stephen Knight).  

 
  
II.	CAS Board Developments  

  
A.	Post-Retirement Benefits Other than Pension (PRB)  
B.	Employee Stock Ownership Plans (ESOP)  
C.	CAS Streamlining?  

 
  
  
III.	Regulatory Developments  
A.	FAR, Proposed Rule, Insurance and Pension Costs, 68 Fed. Reg. 4880  
(Jan. 30, 2003) [comments due to Council Mar. 17, 2003].  
B.	FAR, Proposed Rule, Depreciation Cost Principle, 68 Fed. Reg. 4751  
(Jan. 30, 2003) [comments due to Council Mar. 17, 2003].  
C.	FAR, Interim Rule, Procurements for Defense Against or Recovery From  
Terrorism or Nuclear, Biological, Chemical or Radiological Attack, 68 Fed.  
Reg. 4048 (Jan. 27, 2003) [comments due to Council Mar. 15, 2003].  

 
  
IV.	Legislative Developments  
A.  
IV.	Other  
		PLEASE NOTE: Our next AC&P Committee Meeting will be held in  
conjunction with the Federal Procurement Institute and Section Council  
Meeting - Friday, February 28, 2003, from 5:15 - 6:30 p.m., Loews Annapolis  
Hotel, Skipjack, Room 362, 3rd Floor.  
Marion Kovach (x 7035)

AGENDA
April 8, 2003 Meeting

  
	The date, time, and location of the next regular meeting of the  
Accounting, Cost & Pricing Committee are as follows:  
			Date:	Tuesday, April 8, 2003  
			Time:	12 noon  
			Location:	Howrey Simon Arnold & White, LLP  
				2nd Floor Reception - Moot Court Room  
				1299 Pennsylvania Avenue, N.W.  
				Washington, D.C. 20004  
If you are traveling by Metro, the closest stop is Metro Center.  Exit  
at F & 12th Streets ("Metro Sales Office"), and walk down the sidewalk  
one block to the building entrance on 12th & E Streets.  Please go  
through the glass doors and up the escalator to the second floor  
receptionist.  There will be a charge of $6 to defray the cost of lunch.  
      If you will attend, please call Marion Kovach at 202/383-7035 (or reply  
by e-mail to kovachm@howrey.com) by the close  
of business Friday, April  
4, 2003.  
AGENDA  
April 8, 2003 Meeting  
I.	Informational Items  
A.	Cook County, Illinois v. United States, No. 01-1572 (S. Ct. Mar. 10,  
2003) (local governments are "persons" subject to qui tam actions under the  
False Claims Act).  
B.	Swift v. United States, No. 01-5312 (D.C. Cir. Feb. 11, 2003)  
(government has unfettered right to dismiss qui tam action and need not  
intervene before doing so).  
C.	Holmes v. Consumer Ins. Group, 318 F.3d 1199 (10th Cir. 2003)  
(government employee who discovers fraud on the job and is required to  
report it is nevertheless entitled to bring qui tam action).  
D.	United States ex rel. Costner v. URS Consultants Inc., No. 02-3433  
(8th Cir. Jan. 28, 2003) (affirming district court's award of costs against  
qui tam relator).  
E.	McDonnell Douglas Corp. v. General Dynamics Corp., Nos. 02-5034 et  
al. (Fed. Cir. Mar. 17, 2003) (vacating and remanding to the Court of  
Federal Claims to determine whether there was, in fact, a default of the  
A-12 contract).  
F.	Kearfott Guidance & Navigation Corp. v. Rumsfeld, No. 02-1039 (Fed.  
Cir. Feb. 25, 2003) (contractor that used purchase method of accounting for  
business combination that occurred prior to the effective date of FAR  
31.205-52 cannot use "stepped-up" valuation of assets for government  
contract payment purposes).  
G.	Traction Systems, Inc., ASBCA No. 53081 (Jan. 31, 2003) (contractor  
liquidated under Chapter 7 of the Bankruptcy Code lacks standing to pursue  
appeal).  
H.	McDonnell Aircraft Co., ASBCA No. 44504 (Jan. 27, 2003) (contract  
defectively priced where contractor failed to disclose a prospective  
subcontractor's cost analysis of a prospective second-tier subcontractor's  
proposal).  
I.	FAR, Final Rule, Progress Payment Requests Under Indefinite-Delivery  
Contracts, 68 Fed. Reg. 13206 (Mar. 18, 2003).  
J.	FAR, Final Rule, Contract Types for Commercial Item Acquisitions, 68  
Fed. Reg. 13201 (Mar. 18, 2003).  
K.	DPAP Letter, Waivers of Cost Accounting Standards (Jan. 31, 2003).  
L.	DPAP Letter, Exceptions and Waivers to the Truth in Negotiations Act  
(Feb. 11, 2003).  
M.	PCAOB Release No. 2003-001, Proposal of Registration System for  
Public Accounting Firms (Mar. 7, 2003).  
N.	PCAOB Release No. 2003-002, Proposal for Establishment of Accounting  
Support Fee (Mar. 14, 2003).  

 
  
II.	CAS Board Developments  
A.	Post-Retirement Benefits Other than Pension (PRB)  
A.	Employee Stock Ownership Plans (ESOP)  
B.	CAS Streamlining  

 
  
III.	Regulatory Developments  
A.	FAR, Proposed Rule, General Provisions of the Cost Principles, 68  
Fed. Reg. 5774 (Feb. 4, 2003) [comments due Apr. 7, 2003].  
B.	DFARS, Proposed Rule, Payment Withholding, 68 Fed. Reg. 9627 (Feb.  
28, 2003) [comments due to Council Apr. 15, 2003].  
C.	DFARS, Interim Rule, Electronic Submission and Processing of Payment  
Requests, 68 Fed. Reg. 8450 (Feb. 21, 2003) [comments due to Council  
Apr. 8, 2003].  

 
  
  
IV.	Legislative Developments  
A.	S. 609, Restoration of Freedom of Information Act of 2003  
(introduced by Sen. Leahy Mar. 12, 2003).  
B.	H.R. 1218, Contractor Responsibility Rule (introduced by Rep. Wynn  
Mar. 12, 2003).  

 
  
V.	Other  
  
		Next AC&P Committee Meeting - Tuesday, May 13, 2003, Howrey  
Simon Arnold & White, LLP, 1299 Pennsylvania Avenue, N.W., Washington, D.C.  
20004.  
Marion Kovach (x 7035)  

  

AGENDA
  
May 2, 2003 Meeting
  
I.	Informational Items  
A.	Abraham v. Rockwell International Corp., No. 02-1277 (Fed. Cir. Apr.  
16, 2003) (costs of defending corporation and its employees against  
allegations of environmental violations that did not result in criminal  
charges are allowable).  
B.	P.J. Dick Inc. v. Principi, Nos. 02-1290 & 02-1401 (Fed. Cir. Apr.  
7, 2003) ("Entitlement to recovery under the [Suspension of Work] clause  
requires proof entirely different, and less demanding, than that required to  show entitlement to Eichleay damages.")  C.	United States ex rel. Siewick v. Jamieson Science and Engineering,  Inc., No. 02-7035 (D.C. Cir. Mar. 28, 2003) (whistleblower cannot bring  False Claims Act retaliation action against the majority stockholder of his  former corporate employer, even though defendant stockholder owned 85% of  the shares of the corporation, served as president and chairman of the board  of directors, ran the day-to-day operations, set salaries, and made hiring  and firing decisions).  D.	United States ex rel. Feingold v. Adminastar Federal, Inc., No.  01-3806 (7th Cir. Mar. 27, 2003) (agency administrative reports are by  definition in the public domain within the meaning of the False Claims Act:  "Because the purpose of a public disclosure is to alert the responsible  authority that fraud may be afoot, and that purpose is served where that  authority has itself issued the reports containing information that  substantiates an allegation of fraud, we hold that the HCFA reports were  placed in the public domain.")  E.	La Gloria Oil and Gas Co. v. United States, No. 02-465C (Fed. Cl.  Apr. 15, 2003) (individual and class deviations that purportedly authorized  DESC's fuel supply EPA clause were invalid, and contractor did not waive  claim of illegality by failing to object at time of contract award).  F.	BAE Systems Information & Electronic Systems Integrations, Inc.,  ASBCA No. 44832 (Feb. 25, 2003) (affirming decision on appellant's motion  for reconsideration that contractor who used purchase method of accounting  for business combination that occurred prior to the effective date of FAR  31.205-52 cannot use "stepped-up" valuation of assets for government  contract payment purposes).  G.	Long Lane Limited Partnership v. General Services Administration,  GSBCA No. 15334 (Apr. 11, 2003) (rejecting government's argument that  Termination for Convenience clause gives it the unconditional right to  terminate regardless of bad faith).  H.	FAR, Final Rule, Federal, State, and Local Taxes, 68 Fed. Reg. 13204  (Mar. 18, 2003).  I.	DHHS, Final Rule, Administrative Wage Garnishment, 68 Fed. Reg.  15092 (Mar. 28, 2003).  J.	DPAP Letter, Class Deviation - Federal Acquisition Regulation (FAR)  Concerning Implementation of the Homeland Security Act Provisions Relating  to Procurements for Defense Against or Recovery from Terrorism or Nuclear,  Biological, Chemical or Radiological Attack (Apr. 18, 2003).  II.	CAS Board Developments  A.	Post-Retirement Benefits Other than Pension (PRB)  B.	Employee Stock Ownership Plans (ESOP)  C.	CAS Streamlining  III.	Sarbanes-Oxley Developments  A.	Public Company Accounting Oversight Board  IV.	Regulatory Developments  A.	FAR, Proposed Rule, Central Contractor Registration, 68 Fed. Reg.  16366 (Apr. 3, 2003) [comments due to Council by May 19, 2003].  B.	DOL Wage and Hour Division, Propose Rule, Defining and Delimiting  the Exemptions for Executive, Administrative, Professional, Outside Sales  and Computer Employees, 68 Fed. Reg. 15560 (Mar. 31, 2003) [comments due to  Council June 16, 2003].  V.	Legislative Developments  A.	Services Acquisition Reform Act  VI.	Other  		Next AC&P Committee Meeting - Tuesday, June 10, 2003, Howrey  Simon Arnold & White, LLP, 1299 Pennsylvania Avenue, N.W., Washington, D.C.  20004.  Marion Kovach, Secretary  (x 7035)  
  
AGENDA
  June 10, 2003 Meeting
  I.	Guest Speaker:  Dr. Louis I. Rosen, Ernst & Young  II.	Informational Items  A.	National Park Hospitality Ass'n v. Department of the Interior, No.  02-196 (S. Ct. May 27, 2003) (vacating judgment for lack of ripeness and  leaving open issue of whether the Contract Disputes Act applies to national  parks' concession contracts).  B.	Rumsfeld v. Freedom NY, Inc., Nos. 02-1105 & 02-1130 (Fed. Cir. May  22, 2003) (wrongful withholding of progress payments constituted duress  sufficient to invalidate modification, but contractor's compensation is for  government-caused delay, not breach).  C.	Johnson v. All-State Construction, Inc., No. 02-1442 (Fed. Cir. May  21, 2003) (Navy entitled to withhold progress payments in excess of 10%  retainage by virtue of its common law right of set-off).  D.	Charles G. Williams Construction, Inc. v. White, 326 F.3d 1376 (Fed.  Cir. 2003) (Eichleay damages requires showing that contractor was on  standby).  E.	United States v. Donald, No. 01-17039 (9th Cir. May 21, 2003) (qui  tam relators not entitled to share of proceeds from False Claims Act case  brought against state-run hospital system, because a state agency is not a  "person" for purposes of the FCA's qui tam provisions).  F.	AINS, Inc. v. United States, No. 02-133C (Fed. Cl. May 23, 2003)  (holding that U.S. Mint is non-appropriated fund instrumentality immune from  suit).  G.	Environmental Chemical Corp., ASBCA No. 53958 (Apr. 29, 2003)  (dismissing appeal for lack of jurisdiction because claim did not identify  contract).  H.	FAR, Final Rule, Application of Cost Principles and Procedures and  Accounting for Unallowable Costs, 68 Fed. Reg. 28108 (May 22, 2003).  I.	FAR, Final Rule, Miscellaneous Cost Principles, 68 Fed. Reg. 28091  (May 22, 2003).  J.	FAR, Final Rule, Prompt Payment Under Cost-Reimbursement Contracts  for Services, 68 Fed. Reg. 28092 (May 22, 2003).  K.	OFPP, Determination of Compensation Benchmark Amount Pursuant to  Section 808 of Public Law 105-85, 68 Fed. Reg. 23501 (May 2, 2003).  L.	DFARS, Final Rule, Transactions Other Than Contracts, Grants, or  Cooperative Agreements for Prototype Projects, 68 Fed. Reg. 27452 (May 20,  2003).  III.	CAS Board Developments  A.	Post-Retirement Benefits Other than Pension (PRB)  B.	Employee Stock Ownership Plans (ESOP)  C.	CAS Streamlining  IV.	Sarbanes-Oxley Developments  A.	SEC Final Rule on Auditor Independence  V.	Regulatory Developments  VI.	Legislative Developments  A.	H.R. 1588 and S. 1050, National Defense Authorization Act for Fiscal  Year 2004 (House and Senate bills passed in respective chambers May 22,  2003)  B.	H.R. 1837, Services Acquisition Reform Act of 2003 (Passed in House  on May 22, 2003).  VII.	Other  		Next AC&P Committee Meeting - Tuesday, July 08, 2003, Howrey  Simon Arnold & White, LLP, 1299 Pennsylvania Avenue, N.W., Washington, D.C.  20004.  Marion Kovach, Secretary  (x 7035)  
  
AGENDA
  July 08, 2003 Meeting
  I.	Informational Items  A.	Nicon v. United States, No. 02-5097 (Fed. Cir. Jun. 10, 2003)  (contractor on "standby" for 288-day delay that is never allowed to begin  performance cannot recover under Eichleay formula but may be entitled to  compensation as part of termination for convenience settlement).  B.	United States ex rel. Laird v. Lockheed Martin Eng'g & Science  Servs. Co., No. 02-40504 (5th Cir. Jun. 24, 2003) (to qualify as "original  source", qui tam relator need only have direct and independent knowledge of  information on which the publicly disclosed allegations are based, not each  false claim alleged in relator's complaint).  C.	Marathon Oil Co. v. United States, No. 02-102C (Fed. Cl. Jun. 19,  2003) (denying claim for post-judgment interest because Federal Circuit's  ruling entitling plaintiff to compensation was not a "final judgment" within  the meaning of 28 U.S.C.  1261(c)(2)).  D.	Commonwealth Edison Co. v. United States, No. 98-621C (Fed. Cl. Jun.  10, 2003) (dismissing takings claim because plaintiff's rights are  enforceable through a contract remedy).  E.	Westinghouse Electric Co. v. United States, No. 02-1420C (Fed. Cl.  Jun. 5, 2003) (acquirer of M&O contractor's assets barred by Anti-Assignment  from claiming costs incurred in cleaning up prior contractor's  contamination).  F.	Contel Advanced Systems, Inc., ASBCA Nos. 50648 et al. (Jun. 11,  2003) (Navy breached contract by failing to timely definitize lease to  ownership price, and is therefore liable for resulting damages, including  interest on excessive financing required).  G.	Northrop Grumman Corp., ASBCA Nos. 52785 et al. (Jun. 11, 2003)  (denying Northrop's motion for summary judgment on Navy's claims under  contract's warranty clause and implicitly rejecting argument that Navy  improperly used total cost method).  H.	DFARS, Final Rule, Payment Bonds on Cost-Reimbursement Contracts, 68  Fed. Reg. 36944 (Jun. 20, 2003).  I.	OMB, Revision of OMB Circular No. A-133, Audits of States, Local  Governments, and Non-Profit Organizations, 68 Fed. Reg. 38401 (Jun. 27,  2003).  J.	GAO Press Statement, Release of New Edition of Government Auditing  Standards (Jun. 25, 2003).  II.	CAS Board Developments  A.	Post-Retirement Benefits Other than Pension (PRB)  B.	Employee Stock Ownership Plans (ESOP)  C.	CAS Streamlining?  III.	Sarbanes-Oxley Developments  		A.  IV.	Regulatory Developments  A.	OMB, Notice of Proposed Relocation of Policy Guidance for Grants and  Other Agreements, 68 Fed. Reg. 33883 (Jun. 6, 2003).  V.	Legislative Developments  A.	H.R. 1588, National Defense Authorization Act for Fiscal Year 2004.  VI.	Other  		PLEASE NOTE: Our next AC&P Committee Meeting will be held in  conjunction with the ABA Annual Meeting, August 10, 2003, from 2:30 - 4:00  p.m., Golden Gate Room, Arcade Level, Mark Hopkins Inter-Continental, San  Francisco, California.  Marion Kovach, Secretary  (x 7035)

AGENDA
August 10, 2003 Meeting

I.               Informational Items

A.            First Commerce Corp. v. United States, No. 02-5183 (Fed. Cir. Jul. 16, 2003) (reversing COFC for failing to consider that government made counteroffer which may have given rise to a binding contract for favorable regulatory accounting treatment in exchange for investor's acquisition of failing thrift).

B.             Production Packaging, ASBCA No. 53662 (Jul. 23, 2003) (purchase agent with "micro-purchase" authority placed order exceeding $225,000 and directed contractor to process daily orders of $2500; although ratification approved, board holds that Prompt Payment interest applies only to authorized invoices).

C.             Dawkins General Contractors & Supply, Inc., ASBCA No. 48535 (Jul. 14, 2003) (relying on Christian doctrine to incorporate Payments Under Time-and-Materials and Labor-Hour Contracts clause).

D.            Lockheed Martin Corp., ASBCA No. 53834 (Jul. 11, 2003) (holding that board lacks jurisdiction over contractor's claim for interest on refund of amount paid in response to defective pricing allegations because contractor failed to submit claim to CO for final decision).

E.             FAR, Final Rule, Selling Cost Principle, 68 Fed. Reg. 43871 (Jul. 24, 2003).

F.             FAR, Final Rule, Compensation Cost Principle, 68 Fed. Reg. 43863 (Jul. 24, 2003).

G.            OFPP Memorandum, Applicability of FAR Part 12 to Construction Acquisitions (Jul. 3, 2003).

H.            DPAP Memorandum, Contract Closeout - Additional Funds (Jul. 18, 2003).

I.               GAO Report, Public Accounting Firms, Mandated Study on Consolidation and Competition (Jul. 2003).

 

II.             CAS Board Developments

A.            Post-Retirement Benefits Other than Pension (PRB)

 

B.             Employee Stock Ownership Plans (ESOP)

C.             CAS Streamlining?

 

III.           Sarbanes-Oxley Developments

A.             

 

IV.           Regulatory Developments

A.            FAR, Proposed Rule, Gains and Losses, Maintenance and Repair Costs, and Material Costs, 68 Fed. Reg. 40466 (Jul. 7, 2003) [comments due to Council by August 22, 2003].

 

V.             Legislative Developments

A.            H.R. 2767, Contractor Accountability Act of 2003.

Marion Kovach, Secretary (x 7035)

 

AGENDA

September 9, 2003 Meeting

The date, time, and location of the next regular meeting of the Accounting, Cost & Pricing Committee are as follows:

      DATE:                  Tuesday, September 9, 2003

      TIME:                   12 Noon

      LOCATION:        Tucker Alan Inc., Main Conference Room just off reception area

                                    The Investment Building

                                    1501 K Street, N.W., Suite 525 Fifth Floor

                                    Washington, D.C. 20005

 

The Investment Building is located at the corner of 15th and K Streets.  If you are traveling by Metro, the closest stop is McPherson Square.  If you will be driving, there is parking located in the building (parking entrance on K Street) as well as in a garage just across 15th Street.  The walk-in entrance to the Investment Building is on K Street.  You will need to sign in at the reception desk and take the elevator to the fifth floor.  There will be a charge of $8 to defray the cost of lunch.  If you will attend, please call Allen Johnson at 202 326-9208 (or reply by e-mail to aljohnson@tuckeralan.com) by the close of business Thursday, September 4, 2003.  If you would like to call into the meeting, please indicate this to Allen Johnson when you respond.

I.               Informational Items

A.            United Technologies Corp. Pratt & Whitney v. Secretary of Defense, Petition for certiorari filed July 21, 2003.

B.             General Motors Corp. v. United States, Petition for certiorari filed _____, 2003.

C.             Anthony Perri (also known as Anthony Marino) v. U.S., CAFC No.03-5012, August 18, 2003. Plaintiff was promised portion of forfeited property for cooperation/assistance to Justice in criminal case. Affirmed COFC decision dismissing case. CAFC reiterates that equitable remedy of quantum meruit is not available to COFC in absence of some contractual arrangement between parties.

D.            Tommy G. Thompson, Secretary of Health and Human Services, v. Cherokee Nation of Oklahoma, CAFC No.02-1286, July 3, 2003. CAFC affirms a decision of the IBCA that found the Secretary of the DHHS breached his contracts with the Cherokee Nation of Oklahoma.  Court held ...that there were available appropriations to pay the appellee its full indirect costs, because there were no statutory caps on funding in the appropriations acts for the relevant fiscal years, and that the Secretary has not shown that full payment would require the Secretary to reduce funding for programs, projects, or activities serving [another] tribe.  Judge Dyk discussed appropriations law, including a holding that the language available until expended in the statutes at issue did not denote a statutory cap on funding to a particular source, but as an authorization of carryover authority.

E.             Hermes Consolidated, Inc. d/b/a Wyoming Refining Company v. U.S., COFC No.02-1460C, August 07, 2003.  Jet fuel case used unlawful price adjustment clause. Judge Block writes opinion that raises issues of whether plaintiff has waived its rights to pursue its claim. Judge Block denies both parties motions for summary judgment and asks them to address 3 questions:

1.     In the context of this case, can knowledge of this courts decision in MAPCO be imputed to Wyoming such that waiver would apply?

2.     Is a hearing or trial necessary in order to develop a factual record on the issue of waiver?

3.     Does the doctrine of laches apply in this case, and if so, whether the court may raise the issue sua sponte? Assuming laches applies, is a hearing or trial necessary to resolve the matter?


 

F.             Raytheon Company, ASBCA Nos. 51652, 53509, July 30, 2003.  Board denies attempt by Army to declare void a termination contracting officers final decision on a settlement proposal submitted by Raytheon as well as the settlement agreement subsequently entered into by the termination contracting officer and Raytheon.

G.            GAO Bid Protest Decision: Real Estate Brokers Commissions, B-291947, August 15, 2003.  Digest: The General Services Administration (GSA) may enter into proposed contracts with real estate brokers without augmenting its appropriations since the proposed contracts do not contemplate the government receiving funds from the brokers.

H.            Federal Prison Industries, Inc. - On August 15, 2003, Deidre Lee, Director Defense Procurement and Acquisition Policy, issued a memorandum on Federal Prison Industries, Inc. with an attachment which updates contracting officers on recent FAR and DFARS changes that allow increased competition and provide additional small business opportunities when purchasing items typically reserved for Federal Prison Industries, Inc.

I.               Defense Contract Audit Agency Testing of Employee Time Records - June 23, 2003. New audit guidance relating to Mandatory Annual Audit Requirements (MAAR) No. 6 reviews.  These reviews relate to labor cost charging and allocation evaluation (interviews) and/or observations of work areas (floor checks).

J.              Government Auditing Standards - June 25, 2003. Comptroller General David M. Walker announced release of a new edition of Government Auditing Standards (Yellow Book).

 

II.             CAS Board Developments

A.            Employee Stock Ownership Plans (ESOPs) - Cost Accounting Standards Board (CASB), Office of Federal Procurement Policy, invites public comments on proposed amendments to the Cost Accounting Standards (CAS), Cost accounting standard for composition and measurement of pension cost, and Accounting for the cost of deferred compensation. Proposed amendments address recognition of the costs of Employee Stock Ownership Plans (ESOPs) under Government cost-based contracts and subcontracts issues. Proposed amendments provide criteria for measuring costs of ESOPs and clarify that accounting for the costs of ESOPs will be covered by the provisions of Accounting for the cost of deferred compensation, not by any other Standard. Comments are due on or before November 18, 2003.  See August 20, 2003, Federal Register.


B.             Cost Impact Assessments FAR Case 1999-025, CAS Administration; Proposed Rule, 68 FR 40103, July 03, 2003.  The Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council (Councils) are proposing to amend the FAR to delineate the process used to determine and resolve cost impacts on contracts/subcontracts when a contractor makes a compliant change to a cost accounting practice or follows a noncompliant practice.  Submit comments in writing on or before September 2, 2003 to be considered in the formulation of a final rule.  A public meeting was held August 5, 2003.

 

III.           Sarbanes-Oxley Developments

A.             

 

IV.           Regulatory Developments

A.            DoD Grant and Agreement Regulations; Final Rule, 68 FR 47149, August 07, 2003.  DoD is adding a part to the DoD Grant and Agreement Regulations (DoDGARs) to incorporate policies and procedures for the award and administration of technology investment agreements (TIAs). TIAs are a new class of assistance instruments used to support or stimulate defense research projects involving for-profit firms; especially firms that do business primarily in the commercial marketplace. The new part gives DoD agreements officers greater flexibility to negotiate award provisions in areas that can present barriers to commercial firms (e.g., intellectual property, audits, and cost principles). DoD also is revising additional parts of the DoDGARs to conform to the new part. Final rules are effective September 8, 2003.

B.             Office of Personnel Management Federal Employees Health Benefits Acquisition Regulation; Proposed Rule - 68 FR 48851.  The Office of Personnel Management (OPM) is issuing a proposed regulation to amend the Federal Employees Health Benefits Acquisition Regulation (FEHBAR). [the] new policy establishes notification and information requirements, including audit, for Federal Employees Health Benefits (FEHB) Program experience rated carriers large provider agreements [and] modifies the threshold for review of carrier subcontracts; revises the definitions of Cost or Pricing Data and Experience Rate to reflect mental health parity requirements effective with the 2001 contract year; updates the records retention period, updates the FEHB Program Clause Matrix, and conforms various subpart and paragraph references in the Federal Acquisition Regulation (FAR) revisions made since we last updated the FEHBAR.  Comments must be received on or before October 14, 2003.


C.             Revision to the Department of Labor Acquisition Regulations, Notice of Proposed Rulemaking, 68 FR 48995, August 15, 2003. Document sets forth a revised Department of Labor Acquisition Regulation (DOLAR).  DOLAR was last revised in 1986. The regulation has been substantially revised to:

1.     In the context of this case, can knowledge of this courts decision in MAPCO be imputed to Wyoming such that waiver would apply?

2.     Update references to obsolete policies, procedures, and organizations;

3.     Incorporate electronic links to reference such as revised provisions of the FAR, U.S. Code, and the Code of Federal Regulations;

4.     Incorporate Office of Federal Procurement Policy Letters, and Executive Orders; and establish revised procedures that follow current established best practices.

5.     The DOLAR provides a definition for Agency Head, which is inconsistent with the internal Department of Labor Manual Series (DLMS) Chapters 2-800 and 2-900 that establishes DOL procurement operating procedures and policies. Future changes to the DLMS will comport with this definition. 

6.     Interested parties should submit comments on the proposed rule at the address, shown below, on or before October 14, 2003 to be considered in the formulation of the final rule.

D.            FAR, Proposed Rule, Gains and Losses, Maintenance and Repair Costs, and Material Costs, 68 Fed. Reg. 40466, July 7, 2003. [Comments submitted to Council on ____].

 

V.             Legislative Developments

 

 

AGENDA

October 14, 2003 Meeting

I.      Informational Items

A.   Propellex Corporation v. Les Brownlee, Acting Secretary Of The Army, CAFC No. 02-1538, September 9, 2003. Army contract. Court affirms the ASBCA which had denied contractor’s modified total cost claim because Propellex had failed to establish that it was impracticable for it to prove its actual losses directly. Judge Schall’s opinion notes that to prevail on a modified total cost theory the contractor must prove: “(1) the impracticability of proving its actual losses directly; (2) the reasonableness of its bid; (3) the reasonableness of its actual costs; and (4) lack of responsibility for the added costs.” The court found substantial evidence supporting the ASBCA decision and holds that “Where it is impractical for a contractor to prove its actual costs because it failed to keep accurate records, when such records could have been kept, and where the contractor does not provide a legitimate reason for its failure to keep the records, the total cost method of recovery is not available to the contractor.”

B.    Anchor Savings Bank, FSB v. US, COFC No. 95-39C, September 29, 2003. Judge Block grants two of the government’s motion for summary judgment on plaintiff’s alternate claims for damages, but denies the government’s other three motions for summary judgment. Good discussion of the damages issue in a Winstar case at the motion for summary judgment phase.

C.    Newport News Shipbuilding, And Dry Dock Company v. US, COFC No. 98-183C, September 10, 2003. CAS 415 (Accounting for the cost of deferred Compensation) case. Judge Smith grants Newport’s motion for summary judgment finding that the “measurement date” of CAS 415-50(e)(1) for valuing Newport’s costs was the period when the stack was awarded to individual employee accounts. The court rejected the government’s argument that the proper date for evaluation of the shares was when the company had first transferred stock to a trust fund for the deferred compensation plan.

D.   Marketing and Management Information, Inc. v. United States, COFC No. 99-194C, August 25, 2003. Defense Commissary Agency contract. A very interesting opinion. Judge Bruggink finds that: (1) The now repealed Brooks Act only applied to contracts with appropriated funds; (2) the FAR only applies to contracts with appropriated funds; and (3) at least in dicta, that procurement under the FAR does not include barter.

E.    Singleton Contracting Corporation, ASBCA 51692, August 8, 2003. Board sustains appeal for termination for convenience settlement costs, but denies appeal for unabsorbed overhead and overhead on contractor’s direct costs. Fixed-price construction contract was terminated for convenience of the Government prior to issuance of notice to proceed (NTP). Appellant (“SCC”) submitted a T/C settlement claim and a claim for unabsorbed overhead resulting from delay in issuing the NTP. SCC is not entitled to recover for Government delay that was fully concurrent with SCC-caused delay. SCC’s unabsorbed overhead claim was rejected based on the recent Federal Circuit holding in Nicon, Inc. that precluded unabsorbed claims prior to the start of contract performance. Although overhead on SCC’s direct costs may have been proper, SCC never met its burden in proving such costs.

F.    GAO Report-High-Level Attention Needed to Transform DOD Services Acquisition, GAO 03-935, September 2003. DOD should strengthen its contracting management structure for services and business processes to promote use of best practices such as centralizing key functions, conducting spend analyses, using commodity teams, achieving strategic orientation, reducing purchasing costs, and improving performance. DOD also needs a strategic plan on how the military departments could best accomplish this.

G.   United States v. Newport News Shipbuilding, Inc., No. CIV.A. 03-142-A, August 14, 2003. Government sued shipbuilder that held government contracts for construction of military transport vessels, claiming that shipbuilder violated FAR and False Claims Act (FCA) by charging efforts to develop commercial transport vessels as Independent Research and Development (IR&D), as indirect expense allocable to government contracts. Shipbuilder moved for summary judgment. The District Court, Ellis, III, J., held that (1) general practice of charging efforts to IR&D, to extent that efforts were mandated under commercial contracts, was FAR violation; (2) there were fact issues as to whether certain efforts were properly allocated to IR&D; (3) fact issues as to whether IR&D allocations were made knowingly or recklessly, precluded summary judgment of liability under FCA; (4) fact issues precluded summary judgment whether shipbuilder violated FCA by not disclosing its practice of charging IR&D; and (5) there were fact issues precluding summary judgment that shipbuilder reasonably relied on counsel in charging IR&D. Motion Denied.

II.    CAS Board Developments

A.   OMB: Cost Accounting Standards Board; Accounting for the Costs of Post-Retirement Benefit Plans Sponsored by Government Contractors, Notice of withdrawal of Advance Notice of Proposed Rulemaking, 68 FR 53312, September 10, 2003. The CAS Board is providing public notification of the decision to discontinue the development of a CAS addressing the recognition of costs of post-retirement benefit plans under government cost-based contracts and subcontracts.

B.    Employee Stock Ownership Plans (ESOP) - Comments Due To Public Contract Section Council by October 31. Being drafted by Lynda O'Sullivan, Rein Abel, Nick Sanders and Joseph Barsalona. Cost Accounting Standards Board (CASB), Office of Federal Procurement Policy, invites public comments on proposed amendments to the Cost Accounting Standards (CAS), “Cost accounting standard for composition and measurement of pension cost”, and “Accounting for the cost of deferred compensation”. Proposed amendments address recognition of the costs of Employee Stock Ownership Plans (ESOPs) under Government cost-based contracts and subcontracts issues. Proposed amendments provide criteria for measuring costs of ESOPs and clarify that accounting for the costs of ESOPs will be covered by the provisions of “Accounting for the cost of deferred compensation”, not by any other Standard. Comments are due on or before November 18, 2003. See August 20, 2003, Federal Register.

III.  Regulatory Developments

A.   DOD, GSA, NASA: Final Rule Re: Economic Planning, Employee Morale, and Travel Cost Principles, 68 FR 56686, October 1, 2003. Final rule amending the FAR to revise cost principles concerning economic planning costs; employee morale, health, welfare food service, and dormitory costs and credits; and travel costs. According to the agencies, the revisions were written to remove unnecessary and duplicative language.

 

B.    DOD, GSA, NASA: Advanced Notice of Proposed Rulemaking, Share-in-Savings Contracts, 68 FR 56613, October 1, 2003. Would amend the FAR to implement section 210 of the E-Government Act of 2002 (Pub. L. 107-347) to authorize the use of Share-in-Savings contracts for information technology. Agencies government-wide may lower costs and improve service delivery without large initial investments by having the contractor provide technology investment and share with the government in any savings achieved. Draft comments due by October 15, 2003.

IV.  Sarbanes-Oxley

A.            New Accounting Board Proposes Expanding The Role Of Auditors, The Public Company Accounting Oversight Board proposed their first set of audit standards, expanding the role of auditors in ensuring adequate controls are in place to prevent fraud at their clients. Under the proposed rules, auditors would have to give their assessment of the effectiveness of a company’s internal controls. Currently, the SEC has required only company executives assess the adequacy of internal controls. The SEC and PCAOB rules go into effect in June 2004 for most public companies, and April 2005 for small businesses and foreign private issuers.

V.    Legislative Developments

 

The next meeting will be on Tuesday November 18, 2003.

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