Lockheed Martin Corporation

Material Facts

• The Air Force and Lockheed Martin entered into a firm fixed-price contract for the Sniper XR on 20 August 2001.
• Lockheed Martin's proposal identified Sniper XR development efforts as company-funded IR&D and stated that the efforts were not required by the contract.
• The government's technical evaluation stated that the Sniper XR IRAD efforts supported the contract and that a separate distinction between contract and IRAD work could not be made.
• DCAA conducted annual audits of Lockheed Martin's fiscal year IR&D costs for CFY 2001 through CFY 2006.
• DCAA's December 2002 and March 2004 letters questioned the Sniper XR IR&D costs but did not identify overbillings or increased costs paid by the government.
• DCAA's September 2005 draft/preliminary audit report stated that the alleged CAS and FAR noncompliance resulted in overbillings to the government.
• Lockheed Martin's 2009 cost-impact figures stated that the impact on the Sniper program was $144,000, approximately 1% of the total impact.
• The DACO's 8 December 2010 final decision asserted a claim for alleged CAS 420 and CAS 418 noncompliance and stated that the IR&D costs were unallowable under FAR 31.205-18.

Parties

Appellant

Lockheed Martin Corporation

Contracting Agency

Air Force

Contract Number

F33657-01-D-2029