Client Alerts & Newsletters

Failure to Consider CAS Materiality Criteria Dooms Gov’t Claim


In Raytheon Co. (ASBCA Aug. 9, 2016), a case involving disallowed cost increases following voluntary accounting changes, the board ruled that the CO violated FAR 30.602 and abused her discretion by considering only the amount of the dollar impact of the accounting changes and, thus, “fail[ed] to analyze the materiality of the cost impacts at issue” pursuant to the criteria set out in CAS 9903.305. Noting (without deciding) that a cost impact of less than 0.005 percent across affected contracts (roughly $142 per contract) might not be “material,” the board held that the government cannot recover on its claim when the CO “simply disregard[s],” rather than evaluates, the CAS materiality factors.

For more information, please contact the professional(s) listed below, or your regular Crowell & Moring contact.

Robert A. Burton
Partner – Washington, D.C.
Phone: +1 202.624.2982

Stephen J. McBrady
Partner – Washington, D.C.
Phone: +1 202.624.2547

Skye Mathieson
Counsel – Washington, D.C.
Phone: +1 202.624.2606

Crowell & Moring LLP is an international law firm with approximately 550 lawyers representing clients in litigation and arbitration, regulatory and policy, and transactional matters. The firm is internationally recognized for its representation of Fortune 500 companies in high-stakes litigation, as well as its ongoing commitment to pro bono service and diversity, equity and inclusion. The firm has offices in Brussels, Doha, London, Los Angeles, New York, Orange County, San Francisco, Shanghai, and Washington, D.C.

View Desktop Site | Mobile Sitemap |

Contact | Subscribe | Terms of Use | Privacy Statement | Alumni

© Crowell & Moring LLP 2021
Attorney advertising - prior results do not guarantee a similar outcome.