Parsons Global Services, Inc.

Material Facts

• The prime contract was an indefinite delivery indefinite quantity contract for design-build work in Iraq and included FAR 52.216-7, ALLOWABLE COST AND PAYMENT, and FAR 52.249-6, TERMINATION (COST-REIMBURSEMENT).
• Parsons subcontracted with Odell to construct healthcare facilities in Iraq and deliver medical equipment in support of the prime contract.
• The subcontract amendments addressed Odell's G&A, overhead, and other indirect costs through a markup added to direct labor rates.
• During performance, Parsons paid Odell's markup at 75% of Odell's direct labor costs and included those costs in invoices submitted to the government.
• DCAA determined that Odell's provisional indirect cost rate for calendar year 2005 was 187% and later audited Odell's claimed costs associated with the terminated task orders.
• The government terminated Task Orders 4, 11, and 12 for convenience.
• Parsons did not pay the disputed invoiced amounts or submit invoices to the government for the subcontract indirect costs in question.
• Parsons did not enter into a settlement with Odell regarding the disputed costs or amend its termination settlement proposals to recover them.
• Parsons submitted payment approval requests to the TCO and later sponsored Odell's certified claim to the PCO.
• The TCO indicated that he would not act on the payment approval requests because it was not in the government's best interest to settle the subcontract claim separately from the prime contract.
• The government audit report did not question the claimed indirect costs and identified the discrepancy between the 75% rate previously billed and paid and the revised 175% subcontract rate.

Parties

Appellant

Parsons Global Services, Inc.

Respondent Agency

Defense Contract Management Agency

Contracting Agency

Department of the Army

Contract Number

W914NS-04-D-0006